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VRS in talks over single site plans

Vehicle Remarketing Services, the new operation backed by auctions giant Manheim, is looking to fill a gap in the market for a business offering logistics and refurbishment from a single site.

Although not launched until January, VRS is in talks with several fleets which will supply the bulk of its cars. It is targeting 20,000 transactions in the third year and says around eight companies, likely to include some carmakers, could sustain these volumes. Key to the proposition is the ability to mask the volumes of cars returning to the market, protecting residual values.

VRS has this month acquired the former Excel site in Coventry where it will refurbish and stock a range of multi-marque cars, the majority under two years old/40,000 miles. It will also accommodate a call centre - VRS believes this will help to establish relationships and loyalty with dealers - although they can also register interest for stock online.

Headed by former GRS sales and marketing director Mike Pilkington, VRS will be independent from major shareholder Manheim, including separate branding. But it will seek synergies with other Manheim operations like Portfolio for Cars and Kah Systems. Pilkington believes the company is in tune with the way the car market is developing. Higher new car sales will increase the number of used cars, which means more choice for dealers but also greater pressure on residuals.

“Dealers want cars delivered quickly with no additional costs on refurbishment and that's the niche we want to fill,” he says. VRS hopes to sign up 1000 retailers by January, with independents accounting for 75 per cent. Registration is free, with each transaction costing a “token” flat rate.

The company doesn't expect to make “meaningful profits” much before 2006, but is already suggesting a second centre in northern England or Scotland once the Coventry site reaches full capacity. It is also likely to expand into continental Europe, where the used car infrastructure is less mature.

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