UK – Q&A with Jonathan Holland, Managing Director, OPENLANE UK
Apr 20, 2022
What wholesale trends have you seen over Q1?
With leasing companies still working through new car supply challenges, defleet activity was subdued across the remarketing sector. While the order banks for new cars is now quite large, the supply is still not coming through so leases are being extended. What this means is that the profile of these vehicles will be different, they will be older although not necessarily with significantly higher mileages as working patterns have changed so much since the beginning of the pandemic.
Likewise, activity in the dealer sector has also slowed with retailers inclined to try and retail part-exchange vehicles they would normally trade-out. Many franchised dealers tell us retail activity is subdued, so the requirement to restock has not been as pressing as we’ve seen in recent months.
Used car values across the wholesale sector have softened as reflected by the recent analysis by cap-hpi showing a slight drop in March, although values remain a long way ahead of where they were 12 months ago.
What remarketing trends are you seeing with light commercial vehicles?
Volumes across the market have grown somewhat. That’s mostly due to a number of rental companies defleeting at the same time at the beginning of the year following an increase in demand for delivery vans in the pre-Christmas period. This has resulted in a slightly better supply of vans into the wholesale sector. Also, with new van supply improving slightly, we expect to see some older vans being remarketed.
In May KAR Global, your US parent, sold its physical auction business in North America, what are the ramifications for OPENLANE UK?
When KAR announced the sale of the OPENLANE physical auction business in the US to Carvana, Peter Kelly, CEO of KAR Global said: “KAR has always been a leader in the digital transformation of remarketing, and this transaction firmly positions us as the premier digital marketplace provider for wholesale used vehicles.”
KAR’s focus is now very much digital based and that fits perfectly with the strategy we have here in the UK and across Europe.
How closely is OPENLANE UK working with OPENLANE Europe?
We’re working very closely with our colleagues in Europe. We are currently looking to align our platform with the European platform to benefit from its maturity and rich set of functionalities.
Will UPSTREAM look different as a result of this alignment?
Yes, it will. We expect the core functionality to remain the same but there will be many different enhancements that will be available to our customers which will make the whole buying experience even better.
You’ve recently announced a new collaboration in the UK with Automotive Transformation Group, to deliver a digital aged stock solution. What will this cover?
Dealers using Automotive Transformation Group’s services now have the option of listing used vehicles from their retail inventory on our UPSTREAM platform, in a move to help them trade-out overage stock.
Automotive Transformation Group’s analysis of dealers using its NetDirector® Auto-e platform found 46% of used stock is sold in the first 30 days of being listed. However, this percentage drops to 25% for 31-60 days, 16% for 61-90 days and just 13% for over 90 days.
In a changing retail landscape, the need to implement an overage strategy for cars listed over 30 days is paramount, so we’re delighted to be working with Automotive Transformation Group to deliver a digital solution to help dealers achieve this.