The used-vehicle industry in Australia is specific compared to North America and Europe. Since it is an island continent, Australia has no secondary market for cars. This is the reason why Australians show preference for second-hand vehicles. Their love for the used, instead of new is seen in the fact that Japan exported approximately 6000 used vehicles to Australia in 2015 alone.
These facts are backed up by a 2016 Manheim used car report showing that the size of the used car market in Australia is around 3.7 million units sold in 2014. Additionally, experts predict the annual growth of 5.2 % per annum for the 2014-19 period. The statistics indicate that this part of the world provides fertile ground for the thriving used car industry. And this is where upstream remarketing can facilitate business growth.
Downstream vs. Upstream Remarketing
Broadly speaking, remarketing is defined as reselling the vehicle fleet and leased vehicles. On one hand, downstream remarketing includes selling the vehicle after the end of the contract. On the other hand, businesses can sell the car before it has reached the end of the contract and this is called upstream remarketing. B2C remarketing has existed for ages. Selling leased vehicles to employees is only one example. However, B2B methods have emerged in the last couple of years, as well.
The downstream remarketing process begins when a unit becomes available for sale. It is then transported to the auction location. If it is sold, a purchasing dealer receives the unit. If the vehicle is not sold, it is usually kept on the auction location for another sale day, or it is transported to the seller’s. Transportation costs are reduced significantly if the seller opts for upstream remarketing, especially if online selling is taken into consideration. “Cost savings are the main benefit of this kind of remarketing for both sellers and buyers”, say highly-rated asset remarketing specialists.
The Rise of Cross-Border Trade
The rise of cross-border trade is one of the positive impacts of online upstream remarketing. The risk involved in selling and buying vehicles and vehicle fleet abroad is greatly reduced. A couple of years ago, the European Car Remarketing Association was founded paving the way for a more systematic application of upstream remarketing in business as well as for a more regulative framework across the world.
From Reactive to Proactive
Being proactive, not reactive is especially important when selling depreciating assets. In the context of upstream remarketing, being proactive includes creating a premarketing plan. When they have a plan, fleet managers do not wait until the last minute for the vehicles to be sold. This also means that every vehicle can be sold and that the traditional wholesale process can be completely avoided.
Electronic remarketing tools have facilitated sale programmes over the past decade. Online platforms allow fleet managers to include detailed condition reports, maintenance guides and a large number of photos for each unit. In addition, certain remarketers offer custom sale programmes. All in all, upstream remarketing helps fleet managers come up with a solution for every unit.
What Should Fleet Managers Pay Attention to?
Fleet managers should establish a written policy regarding an upstream remarketing programme. Performance evaluations are crucial as well as setting benchmarks on return of investment. Although upstream remarketing is an attractive solution for businesses, fleet managers should always have other options as a part of their back-up plan, too.
To conclude, every fleet portfolio is specific, especially if you choose online upstream remarketing programmes. What you should do first is carry out market research and then you design a remarketing strategy. One last piece of advice is to make sure you communicate with buyers throughout the entire process.