Case study: Peugeot closed auction sourcing

Peugeot has had a solus contract with Manheim for several years.

Regular closed auctions take place at four sites – Leeds, Brunthingthorpe, Colchester and Bristol – and are open to any dealer who has a sales contract with the manufacturer.

In excess of 200 vehicles go through each sale, and all cars are generally less than three years old and with under 20,000 miles on the clock.

Steve Wass, manager of Peugeot’s used vehicle operations, explained: “The cars that go to closed auctions are the ones we believe will be of most interest to the network.

"We take a very hands-on approach to this, micro-managing our stock vehicle by vehicle to make sure it goes to the optimum channel.”

The cars come from three sources, the primary one being daily rental firms Avis and Europcar. Vehicles are under 12 months old with less than 15,000 miles.

Peugeot Contract Hire, the company’s lease division, also provides vehicles, and the rest are defleeted company cars from Peugeot employees and those at sister firms, such as parts supplier Faurecia.

Peugeot also stages online closed sales, which are operated in-house using the Peugeot Direct software.

There are two types. Click & Buy is the most popular with dealers and is like an electronic stock catalogue.

“Today it has around 600 cars on it, and our dealers will sit down with customers and use it to source them a car,” explained Wass.

The second type is sequential auctioning. The sale runs at a certain time, with dealers able to bid on each car for a number of minutes. The one who offers the most wins.

“As a remarketer, it’s about speeding up the process of getting the car from its defleet centre to where it’s going to be sold,” said Wass.

“We try to keep as many vehicles as we can inside the network – currently around 90% – but some go outside because they are older or have higher mileage. These will go through open auctions, which our dealers are free to attend as well.”

Electronic media accounts for 60% of Peugeot’s remarketing, while physical auctions represent 40%.

Of the latter figure, a quarter will be closed sales. Wass added: “All the talk is that physical is diminishing and it’s all going electronic.

"It will increase in the future, but there’s a sense of community that comes from a physical sale.

"Dealers from different areas might not see each other that often, but they will do at a closed auction.

"We view it as a great opportunity to see them too. Even if they’re not buying we encourage them to come because they will get an overall feel of the market conditions.”

Wass said the benefit for dealers is that the number one source of Peugeot cars is Peugeot.

“They have the choice to get cars elsewhere – which they never tire of reminding us – but we have defined processes so they know they’re getting the highest quality product that’s ready to retail.”

For Peugeot, it’s a contribution to the well-being of the network. “Closed auctions ensure dealers have a strong and capable business by allowing them to stock their used car department with quality product,” he said.