AutoGrab launches used car intelligence tool

AUTOGRAB, the online tool for analysing used car market trends and advertising effectiveness, is launching a new tool that it claims will revolutionise the way used car managers buy, hold and sell their used car stocks.

Called Pipeline, the tool gives used car managers or pricing managers a view of the market for the same cars that are on sale at competing dealerships or being offered by competing private sellers.It gives dealerships and used car retailers a real-time view of the market in which used car managers are buying and selling their used car stock from the time a particular make and model comes on the dealership’s radar screen through trade-in or wholesale purchase to the final pricing and selling decisions that are made in the lead-up to final sale.The chief commercial officer of AutoGrab, Saxon Odgers, told GoAutoNews Premium: “We are able to track the value of a used car that is being acquired by the dealership, and then understand how the market is moving from the time of when you acquired it, as it moves through reconditioning, transit, photography, cleaning, all the way through to being listed online.“Pipeline will give the dealership visibility on what the market is doing with that stock item. How many are for sale? How quickly are they selling? What is the average price?  How competitive is the market?  Are prices for that stock item in other dealerships trending up (a shortage) or down (too many).

“Managers will be able to track their profit and margin throughout that time. This will enable them to make a price decision at the point of listing the vehicle so they can control their profit and their margin,” Mr Odgers said.

“We can then track that vehicle’s performance online across all other marketplaces, across its whole competitive landscape. We provide profitability scoring, give them the marketability scoring, enabling them to control their profitability strategy in used cars.

“This is especially important now as the market is going through a challenging time especially as there is more dealership stock around. “Pipeline shows managers the total value of stock that is tied up in places like reconditioning, the value of stock waiting on photography and the value of stock online.

“So this is enabling them to have full visibility of their assets as they’re getting prepared for sale, how that asset’s price will vary, change and depreciate during that time, and then what their strategy is throughout their retailing process, through to the transaction. 

“And then after the sale, we’ll be able to give them metrics on their sold vehicles like performance against other dealers, and enable them to have a clear plan through acquisition, pricing, merchandising and selling from the point of acquiring the car all the way through to the transaction,” Mr Odgers said. 

So the business case is, firstly, you go through your acquisition methods, whether that be AutoGrab sourcing tool, whether it be trade-in at the dealership, whether it be auction, whether it be wholesale, whatever it is you acquire a vehicle.

“You send that data feed of your acquisition, or the vehicles you’ve acquired that are getting prepared to be listed, that will sit in what we call pre-listed stock within AutoGrab. 

“In there, they’ll be able to set the price and ascertain the market at that point of when the car is going into reconditioning, if it’s in transit from another location, if it’s being prepared for sale or photography, whatever the status of the vehicle is, the used car manager and the pricing managers will be able to understand where that car sits in the market right now. 

 

“We give them a score and predict how that car is going to depreciate in the next week, two weeks, three weeks, based on what the market is doing, using performance metrics like days supply, days to sell, and all those market-relatable performance metrics. 

“So when it comes to the point of listing the car for sale on a marketplace or on their dealership websites, they’re able to have a sense of comfort of where their car sits from a competitor landscape, from a price perspective, how many other vehicles are available in the market, across all marketplaces, where they compare against other dealers, where they compare against private sellers, and they’re able to make a price point that they’re comfortable with to move that car and to obtain as much profit in the vehicle as possible based on knowing what the market is doing. “And then from there, we will start to score each stock item. We give each car a marketability score, a profitability score, and the managers can control their destiny and have complete visibility on how retailable that vehicle is, and maximise the profit from the point of acquisition through to the point of transaction.

“Right now, managers are relying on gut feel. They book a car into stock and they might have a view about what the market is doing. They’ll price the car and they’ll hope for  the best, but Pipeline enables them to have full control and visibility of each of the cars as they move through each status all the way through to the transaction.”

Mr Saxon said that used car managers doing it by the seat of their pants might think they can pick up a car for a great price, but when they go into Pipeline they discover that it’s actually a low price because a shed load of the same cars have just come in from a fleet somewhere.

“Or, when they suddenly see that a fleet has dropped a lot of those same cars, the managers are in a position to immediately respond by repricing any of those cars they have in stock,” Mr Odgers said.He said as an example of the power of the data: I am in New South Wales and there’s 48 of them for sale by dealers, and they’re taking an average of 122 days to sell. And the average price is $37,990 and I bought this car for $32,000 plus. There’s $2000 in reconditioning so I might think about wholesaling this car now for $1,000 profit, because AutoGrab suggests that this car is in a crowded market and I have higher kms than the average in the dealerships around me. 

He said that dealerships can tend to hold a car in stock for too long because they are hoping for a sale but they are not aware of what is happening around them.

“They think it is a good strategy but the market suggests otherwise and it just comes down to using data now to make good transactional retailing decisions to maintain and maximise profitability. This is so important right now in this challenging market.”

Mr Odgers said that Pipeline can also help managers identify cars that come their way that are in short supply in the market and are selling quickly.

“You might actually spot a trade coming in that’s a little unusual. You go into Pipeline and you find that no one else has anything like it and the historical data suggests it is a faster seller and therefore you should buy it.

“Or you might have traded a car that’s in pre listed stock that you’re looking at wholesaling but you run it against the market and there’s only two for sale. And in the last 60 days 10 have sold, and they sold in 15 days, and they sold to this price. “Maybe we should have a go at retailing this car and you might have a five grand gross-profit opportunity, and that car is going to be out of your dealership in a week. That’s a good proposition. That’s a good business case to retail it. 

“So it’s about using the data and the information to make the decisions in your dealership.”

Mr Odgers said the market data is updated hourly.

He said that the data showing the value of the stock the dealership is holding focuses the minds of managers on the total value of stock that is being held up at various stages as the cars move through the system and the need to get them listed as soon as possible.

“Dealerships will tell you the average reconditioning time is two and a half to three weeks. In that time another 30 cars could have entered the market and the price has changed. So your opportunity to maximise profit is hurt with cars being held up in service, or held up in reconditioning; they are losing their ability to maximise profit early.

“A lot of dealerships will have a defined wholesale strategy, but we think this will help them develop a better one, based on the data and visibility they can now get that they could not get before,” he said.

“A lot of the large dealer groups around the country are ready to launch it as a process in their dealership, and it will be the most robust inventory market management tool in Australia. 

Mr Odgers said: “As every major group across the country is focusing on used cars as a way to obtain profit and to build a profitable dealership. And if you aren’t starting to actually use the data and the market insights as part of that strategy, you’re going to end up having some pretty horrible months and being potentially in the red in some cars,” he said.