As Canada’s largest vehicle remarketing service provider, ADESA continues to look for ways to provide dealers with the best products and solutions
With a total of 14 physical auction locations across the country, ADESA has been making some significant investments both in its physical and online businesses, to better help serve the needs of its dealer customers.
One of them was the recent 50 per cent acquisition of TradeRev. Trevor Henderson, COO at ADESA Canada, says that TradeRev’s approach to online vehicle wholesale provides an effective complement to ADESA’s core business and helps address long-standing challenges in the remarketing space. Prior to the introduction of such services, it was often difficult for dealers to sell their inventory in a fast and cost-effective manner.
“As we move forward, you’ll see ADESA bring TradeRev into more markets across Canada, as we leverage our national footprint and capitalize on a strong dealer base,” says Henderson.
Trevor Henderson
He says that significant changes in the used vehicle marketplace have had a major impact at the auction level. “With a shortage in lease returns, we’ve seen a shift in the types of vehicles that are being remarketed.” He points to the growth in demand for older, higher mileage dealer consignment units, which tend to perform better when run through physical auctions. “The market has shown that bidders are more comfortable in a live auction environment when it comes to older inventory.” Henderson says that as a result of that comfort, sellers are more likely to get higher and faster returns on their vehicles.
With more aged inventory heading to physical auctions, ADESA has also been expanding capacity at its locations across the country, as well as bolstering its transportation services. “We want to ensure we can facilitate the inbound flow of vehicles to the auction, so we make it as seamless as possible to have cars picked up from a dealer’s location and transported to the auction.” Henderson says it’s of particular benefit in major metro markets where space is at a premium and dealers don’t want to hold onto pre-owned units they might have difficulty retailing.
On the buying side of the business, the growth in mobile technology has led to new developments to help facilitate online bidding. ADESA has continued to enhance its LiveBlock online auction platform by adding mobile tools so dealers can participate and bid competitively on vehicles in real time, no matter where they happen to be. “Dealers have seen a significant benefit from this, since they don’t have to miss an auction because they aren’t tied to a desk,” Henderson says.
Henderson says that while there’s been an increase in online transactions because overall numbers have grown in the last decade, online business has remained relatively stable, accounting for around a third of all business. “We’ve seen a slightly higher percentage in online bidding for commercial cars (off-lease and off-rental type vehicles),” he says but notes that it has been offset somewhat by the swell in dealer consignment units running through the physical lanes.
With used prices still relatively high, purchasing dealers want to make sure they get the best value. Besides enhanced vehicle inspection technology that provides purchasing dealers with added peace of mind and helps smooth the transaction process, Automotive Finance Corporation (AFC), an ADESA affiliate, continues to help dealers with liquidity by providing short-term inventory floorplan financing.
As we look to the future, Henderson says that based on ALG’s forecasting, the Canadian used vehicle market is expected to see prices decline as volumes start to increase and more off-lease cars and trucks begin to return to the marketplace. Nevertheless, he notes that with dealer consignment volumes expected to grow, that in turn will continue to ensure that physical auctions will continue to play a major part in the remarketing process. “We completely agree with the notion that the Internet is here to stay, but the physical auctions are such a fundamental part of the business that we don’t see them disappearing anytime soon.”
For more information, visit: Adesa.ca.
