BCA and Manheim have dominated the auction and remarketing market for a long time.
But in recent years smaller rivals have appeared, particularly in the online arena.
It’s hard to imagine any of these overtaking the huge output of the formidable top two, but do they at least represent a threat? And what can these alternative firms offer dealers that the big two can’t?
The bigger the better
BCA acknowledges “every new company is a potential threat but also a stimulus”.
But communications director Tony Gannon said: “Dealers go where the best source of vehicles is and no company can provide a wider selection than BCA.
“BCA regularly will have at any one time in excess of 13,000 vehicles consigned for sale. This is at least twice and often three times the volume that our nearest competitor will offer.”
Vehicle auction group Aston Barclay argues differently. With only three facilities in Press Heath, Westbury and Chelmsford, it said its success is based on these strategically located sites.
National sales director David Scarborough said: “This smaller size means we offer a more focused, personal approach and a service that’s more flexible for our customers.
“Decision making is streamlined too – a small team at each site means our key people can respond immediately to demands.
Scarborough said competing was not simply about size or number of sites and that success ultimately came down to the service provided.
“We’re able to compete because we’re closer to our customers. After all, we can get hold of the same
technology as BCA and Manheim and our three sites give us the scale we’re after. Buyers are willing totravel, so even if it means a 100-mile journey, they’ll return to you as long as the volume and quality of service is there.”
Manheim Remarketing managing director Mike Pilkington said that to lead the market, the company would continue to innovate by providing products and services to meet current and future remarketing needs.
Pilkington acknowledged technology has been a key driver enabling new competitors to enter the market.
However, he said many were not able to provide the range of services a customer needed and therefore occupy niche areas within the remarketing value chain.
“Manheim offers an unmatched product portfolio ranging from specialist vehicle inspection and collection through to direct, fixed price disposal channels, online remarketing services and onsite customer auctions,” he said.
Ever-expanding Scottish Motor Auctions (see panel p32) launched two new products at the end of 2009.
The Information Management System (IMS) provides both buyers and sellers with immediate access to detailed reporting.
Managing director Bob Anderson said: “The important factor of this resource is the transparency of the product – never before have buyers and vendors been able to access such extensive information at the touch of a button, affording a uniquely bespoke approach to information management and reporting.”
Doing things differently
Traders can save an average £21,000 a week in auction fees by using auction-fee free Auction4Cars, according to the company.
The Motorpoint subsidiary said all vehicles listed had no auction fee to pay or hidden costs and this would not change.
“It is one of its biggest USPs,” said Neil Prescott, Motorpoint group disposals manager.
“Essentially, we have done something the market has not seen before by creating an online auction site similar to Ebay that dealers can feel they can trust,” said Prescott.
December feedback was positive on this business model, with 92% of dealers extremely satisfied with the functionality of the website and 95% saying Auction4Cars provided clear and concise information.
Prescott added: “Bottom line, this is an alternative method for dealers to source stock with no auctions.
“Each vehicle is listed on average for three days on the website, giving the dealer more time to decide than at the auction.”
It also offers a ‘‘Buy It Now’ option which allows traders to buy a vehicle immediately.
At the other end of the online spectrum is Autoquake.com which is a direct to consumer remarketing route. In essence it can be a competitor to dealers – the website claims its model, which removes dealers from the supply chain, is equivalent to a 20-25% margin.
Autoquake.com does have some traders buying from it who are attracted by cars that are “retail-ready” and have 40-plus pictures available to show potential customers to pre-sell the cars before buying from the website.
Online versus auction hall
Companies that sell predominantly on physical auctions will always say nothing beats seeing a car in the flesh.
Those veering towards online claim the convenience and comfort of being able to buy cars from your office/sofa add a new dimension to the market.
Gannon said: “The majority of dealer and trade customers continue to use physical auctions to buy and sell. Physical auction is unsurpassed in dealing with large volumes of used vehicles and getting them sold quickly and efficiently.”
Prescott at Auction4Cars responded: “Dealers can view from their office or home 24 hours a day, seven days a week.
"There is no need to sit in the cold through an auction and wait for a specific vehicle.”
Manheim’s Pilkington said that while it would continue to invest in online services, it was “committed to providing customers with solutions across the remarketing spectrum”.
Its growth plans were driven by the needs of customers rather than the threat these new rivals represented, he added.
Unsurprisingly, it all comes down to a dealer’s personal preference and their relationship with a preferred auction and remarketing company. But the big players are definitely aware of fresh competition on their heels.
Gannon said: “No-one would deny these new operators are stimulating the industry and challenging the status-quo.”
One thing’s for certain – to keep in the game companies will constantly need to look at innovative technologies and ever-improving customer relations to keep dealers on the books.
Wilsons doubles capacity at two auction houses
Wilsons Auctions is doubling capacity at two of its auctions houses following a £2 million investment.
The independent auction house, founded in Northern Ireland, has also announced a strategic partnership with Jet Logistics in Stratford-upon-Avon to create a service where fleet vehicles can be de-fleeted, refurbished and sold at one facility. The Jet Logistics auctions, managed by Wilsons Auctions, will take place weekly.
Wilsons says the concept will save fleet users “thousands of pounds” in transport charges.
The investment into the UK operations at Telford and Queensferry will create more than 20 new jobs.
Jacqui Le Put has joined the Wilsons Auctions team as UK sales director and will be supported by Andy Conde who joins as director of auction development.
Peter Johnston, group operations director at Wilsons Auctions, said: “The expansion is exciting and gives the staff at both complexes the opportunity to double the throughput at each site, enabling Wilsons Auctions to target fleet vendors who want a fresh approach to fleet sales in the UK.”
Wilsons Auctions currently have six permanent auction complexes based in Mallusk and Portadown Northern Ireland, Dublin, Dalry in Scotland, Queensferry in Wales and Telford in England.
Developments in sector due this year
Scottish Motor Auctions
SMA will open its fifth centre in Birmingham in mid to late 2010, expanding its coverage further. It is also investing in a 360-degree camera system which allows prospective purchasers the opportunity to view the interior and exterior of the vehicle prior to bidding.
SMA said this would increase residual values achieved by the vendor, therefore improving conversions and volumes across the group.
The company anticipates increased demand from the leasing sector in 2010 and will be adding additional sales dates across its three sites to cope with extra volumes.
It has also just launched a new van sale at its Chelmsford site in response to growing demand for light commercial vehicles.
Services like Live Online will continue to grow in importance, said BCA. It is also focusing development time on its capability to remarket fleet vehicles not yet off-contract with the vendor, thanks to its acquisition of JFK.
A revamp of its online proposition will see a number of platform launches in 2010 and 2011 said the company.