Rupert Pontin, Commercial Director, One Auto API – Associate Sponsor of the VRA Seminar 2022
It is widely accepted that the automotive sector has experienced some extremes over the course of the last two years and despite the change in consumer confidence in the last 6 months, the good news is that the sector continues to outperform economic expectations. However, with new car supply still under pressure and a move to the agency model by the OEMs, the focus on the used car market has been far greater as retailers seek to ensure that they have enough used cars to meet consumer demand and also to make enough profit to supplement the reduced income from the new car market.
This presents a number of challenges for almost every business that works with vehicles of one type or another. The need to both wholesale a vehicle effectively and also retail it at the most competitive yet profitable price has never been stronger. The market has rightly shifted in recent years to look at pricing points from both a retail and wholesale perspective ensuring that the return on a vehicle, whether it be retail or wholesale, is as great as possible. Using more than one view of pricing is considered essential these days, and rightly so as the number of pricing data providers in global markets has increased markedly and the methodology used by the different companies is key to providing a rounded fully informed whole market view.
But it is not just the implementation of varied pricing policies tuned to commercial strategy that is important. A true understanding of every individual vehicle is also imperative. Presenting the high-level detail of a vehicle is no longer enough and ensuring the data description of the asset is as accurate as possible means it can be priced and sold effectively. Unfortunately, sometimes vehicles are not adequately described, and this has a material impact on those pricing decisions. In addition, getting the complete specification including recognising what has been fitted as an optional extra at the factory is now critical. Those that do not seek to take the full data on each vehicle stand the risk of not only misdescribing but also underselling their assets.
On the subject of risk, today’s market conditions and the increased consumer protection means that wholesalers and retailers need to be absolutely clear on the provenance of each car that they sell. These days that does not just mean checking if the vehicle is clear of finance or not on VCar but also making sure a number of other provenance checks have been made. New data suppliers are consistently coming to market with vital insight that can highlight further details of a vehicle’s previous history and usage that if left unfound at the point of sale could result in the vendor having to buy the car back. These data sets also have immense value for those involved in the lending and insurance spaces too.
Ultimately industry standards have changed immensely over the last two years, forced by the impact of the pandemic and the rapid evolution of the economy as a whole. Whether involved in remarketing, retailing, lending, or manufacturing of vehicles, the value of data and the impact it has on effective asset management has accelerated beyond expectation. In a competitive market the winners will be those who are able to quickly integrate new sources of data and leverage them for competitive advantage.