Inchcape and Avis Europe have united to form a pan-European vehicle remarketing joint venture, AutoCascade, designed to provide manufacturers, and rental and leasing companies with an improved method of selling pre-owned cars.
Operating initially in the UK market, AutoCascade will pre-sell vehicles nearing the end of their rental or leasing life through a variety of channels, including the original manufacturer's own franchised dealer network, independent dealers using Inchcape's Vehicle Sourcing division and directly to private customers via Autobytel UK.
AutoCascade will focus on nearly new vehicles where the total UK market is around 450,000 vehicles a year and the continental European market is estimated at 2,000,000. A motivating factor, the two companies say, is that on average, a nearly new vehicle returned to the manufacturer can spend three months in storage once its rental life is over which results in lower residual values and higher costs. AutoCascade will reduce the time and costs involved in remarketing for vehicle providers and offer more effective nearly new car sourcing for dealers and end customers.
In addition to the new joint venture between the parties, the Avis-owned yourautochoice.com sales channel will be amalgamated into Inchcape-owned Autobytel UK in return for a 10% shareholding in Autobytel UK. The benefits of this consolidation include the sharing of IT, marketing, call centre and back office functions and a more “comprehensive” car service offering to customers through the combination of Autobytel UK's new and used car products with yourautochoice's nearly-new car product.
Mark McCafferty, CEO Avis Europe said: “This new joint venture will further improve the way nearly new vehicles are sold within the trade and into the market and we believe that there can be residual value improvement for car manufacturers exploiting these opportunities. The amalgamation of yourautochoice.com and Autobytel UK is an appropriate consolidation in the online car retailing sector.”
Peter Johnson, Inchcape group chief executive, said: “This joint venture enables Inchcape to broaden its vehicle remarketing activities in the UK and provides a strong platform for entry into Europe. AutoCascade, in combination with Inchcape Vehicle Sourcing, Autobytel UK and Eurofleet, will significantly reduce remarketing timescales, lower storage costs and ultimately maximise residual values for fleet owners.” AutoCascade will be owned equally by the shareholders, Avis and Inchcape.