Are car auctions still doing what car auctions do best – bringing vendors and purchasers together and independently facilitating the trade of vehicles?
That’s why they exist after all.
It’s no mean feat, of course, balancing the interests of all parties.
Sellers seek to maximise their sale price and buyers want to pay a reasonable price for reasonable cars.
But with careful planning and incentives such as lower buyer premiums, it is possible to maintain satisfaction levels across the board.
However, I fear that, as the remarketing landscape evolves, things are becoming increasingly incongruent.
Three years ago British Car Auctions acquired We Buy Any Car, a move that was quickly followed by Manheim’s purchase of We Want Any Car.
Smaller car buying companies were subsequently also bought out.
These brands’ knowledge of the automotive industry means that, at first glance, such acquisitions make perfect sense.
It also ensures their auctions have guaranteed stock to sell.
But give it some further thought and does it actually mean the lines are becoming blurred in the remarketing sector?
In every physical auction, there are prime selling slots that a vendor will strive to secure.
In fact, the auctioneer will proudly promote that the best vendors will naturally be given this coveted time. But increasingly, it seems the best slots are being allocated to the auction house’s own vehicles, to maximise the return from the cars they themselves need to sell.
But this is to the detriment of the other vendors. It seems entirely at odds with what an auction should be – an independent remarketer.
Add to this the fact that organisations such as We Want Any Car buy the type of vehicles that main dealers and car supermarkets would ordinarily ‘recycle’ in the part exchange process, and the playing field is further imbalanced.
Of course, it could be argued that everyone has the same opportunity to purchase these cars from members of the public, and the consumer will simply go wherever they get the best return.
But I do believe this situation represents a significant conflict of interest for any auction that buys and resells stock.
Neither customer – the vendor or the purchaser – truly comes first anymore.
I suppose my fear is that, as these big brands continue on their acquisition trail, where will it stop?
Is there a danger they will move into the fleet and lease markets too to secure more guaranteed stock to support their remarketing operations?
Could they eventually monopolise the whole lifecycle of automotive retail?
It’s perhaps unlikely but is a possibility – only time will tell.
But I think this is a paradigm shift in the entire remarketing chain that should be viewed with caution.
Author: Matt Dale (pictured), joint director, G3 Remarketing