Independent Dealers Set to Continue Battle For Used Stock
- May 13, 2019
- Posted by: John Swift
- Category: Automotive Industry, News
Independent dealers are facing a tougher challenge to source stock as demand grows from franchised retailers looking to make up ground with used sales as registrations of new cars slows.
Market analysis shows that manufacturers are increasingly pushing more ex-lease cars and vans straight back into their franchised networks, taking them out of the open market supply chain.
1link Disposal Network, an approved supplier to the Independent Motor Dealers Association, and which works with companies like Volkswagen Financial Services in its online auctions, says it is seeing more `repatriation’ with a direct channel from manufacturer to the main dealers and bypassing the usual route of being put into open auctions.
Vicky Gardner, Head of Remarketing at the parent company, epyx, said:
“Repatriation is a long-term trend most manufacturers have been following for several years, aiming to strengthen residual values and provide an early opportunity for franchise dealers to acquire the best stock.
“However, the balance of activity in franchise dealerships has recently shifted decisively away from new to used car sales; over the last year, this process has very much accelerated. Increasingly, cascade models for disposal offer the best stock to franchisees on more than one occasion before offering it to other dealers.
“This works for manufacturers because they can achieve the best values and for franchise dealers because they get the best stock.
Significant influence on used car and van sales
“What is interesting at the moment is the degree to which this is occurring. Even lower grade stock that would quite recently have been offered at open sales is now being shown to franchises first.”
She said that this repatriation trend underlines manufacturers’ increased interest in the used car sector.
“Issues that are affecting the new car sector such as Brexit are not within the gift of manufacturers to resolve. However, they are able to have a significant influence on used car and van sales by controlling how and where stock is sold as much as possible. With no obvious end date in sight for a recovery in the new car sector, we expect this focus on used vehicles to continue.”
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