CHICAGO -

Fleet remarketers would like to sell more units upstream, but the sales channel may expand only so much. Simulcast and grounded auctions remain fleet companies’ remarketing bread and butter.

“Increasing upstream sales is still a point of emphasis, and at ARI we’re working on developing a direct sales portal to further enhance the upstream experience for our clients and their employees while also allowing us to continue to grow our overall upstream volume,” said Chris Clarke, manager of North American remarketing operations at ARI.

ARI manages 1.7 million car and truck fleet vehicles in North America, the U.K. and Europe.

 ARI’s upstream channel — remarketing vehicles to clients’ employees or for those companies to purchase — is about 25% of its total remarketing volume, Clarke said.

“This channel focuses on the best net return for a client, because it reduces the cost of transport and extra selling expenses they would incur if sold through auction. Upstream is a win,” Clarke said.

Upstream remarketing is an important addition to Element Fleet Management’s in-lane Mega Sale approach. “The upstream channel both augments and compliments our in-lane strategy,” said Paul Seger, executive vice president, asset remarketing.

While Element conducts these events in more than 50 markets nationwide, Seger said, “the upstream channel serves to expand our geographic reach, enhance time- and cost-efficiencies, and broadens our ability to conveniently reach our elite buyers.”  

Element markets globally, managing more than 1 million commercial vehicle and equipment fleets.

Mike Pitcher was chief executive officer at LeasePlan for nearly 12 years. He now consults with fleet management companies. “Fleet management companies are close to their customers, and they know these remarketing vehicles are well-maintained, and potential buyers can see the service record, which means we’ll see upstream selling increase,” he said.

“The leasing companies are trying to move forward (in their remarketing channels). Before upstream, we waited to get the keys back at the end of the term, but with upstream channels, cars already have buyers. Upstream selling reduces the days the cars sit idle, which lessens depreciation. That is a win-win for the person purchasing off-lease, who is paying a price between wholesale and retail, which is good for the leasing company because these cars turn faster,  so those assets come off their books,” Pitcher said.

Big data, big benefits

Upstream remarketing is simplified through digital technology that fleet remarketers leverage in many forms, including simulcast-type auctions and emerging virtual platforms. Behind the technology is these companies’ use of big data to identify channels affording the least cost and most profit, for them and their customers’ portfolios.

“The biggest trend influencing the marketplace is the continued growth of virtual platforms to help sell vehicles,” said ARI’s Clarke. “ARI was an early adaptor of this virtual marketplace technology and we’ve put considerable focus on continuing to nurture a healthy base of users on virtual platforms, whether using our internal properties or external ones, such as the OVEs of the world.”

 The priority is to put inventory where it will attract the most potential buyers and deliver the best return.

“The technology is evolving so rapidly for the way assets are being sold today. We’re leveraging machine learning and AI automation to help ensure we get the right asset to the right sales channel to improve the speed of sale and ultimately deliver the best net return for our clients,” Clarke said.

However, the grounded, conventional channels – the brick and mortar auctions – remain the number one channel through which remarketed vehicles are sold, he said.

Element’s Seger noted how data helps his company determine the best time in a vehicle’s lease life to optimize its remarketing value.

“We can leverage a customer’s telematics data to determine the best time to cycle a vehicle, based on multiple factors, including make, model and mileage, as well as maintenance cycle,” Seger commented. “The result is additional value and improved cost of ownership for our customers.”

Former LeasePlan CEO Pitcher said the final consideration is the economics of the transaction.

“This is where Big Data and sophisticated analytics will determine successful strategies for fleet management companies and their fleet customers, as well as the best way to market certain vehicles in certain parts of the country. With data, we’ll continue to get smarter, and we will see trends changing faster,” he said.

“I tell people, the biggest issues that will face the remarketing industry are speed and technology, how quickly can you sell a vehicle, while maximizing the price,” Pitcher said.