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‘Upstream marketing’ off-setting used car market glut, says Glass’s

Growing use of advanced remarketing strategies is helping to offset negative effects on the used car market, according to Glass’s.

Car remarketing

Glass’s says the growing use of ‘upstream marketing’ could explain why the long-heralded explosion in used car numbers has so far failed to materialise

Pointing to a move amongst leasing companies and motor manufacturers to ‘upstream marketing’ – designed to defleet cars quickly through online channels – Glass’s said the new strategy could explain the smaller-than-expected increase in used car numbers hitting the wholesale market in Q3 2016.

Rupert Pontin, director of valuations, explained that according to forecasts, the large increase in new vehicle sales seen in the last two to three years, mostly sold on PCP, should now be visibly returning to market and pushing down values over and above the normal levels. He added that such vehicles are present in the market but are not being sold through the traditional routes such as motor auctions.

Pontin explained: “Our view is that, so far, this strategy appears to be working. The danger of the arrival of a glut of similar used cars on the market is that they drive down values. This has happened but to nothing like the degree that we would have expected. Our data indicates that volume is running at 1.9% up year to date in comparison with 8% for the full year in 2015.

“There are several models that were sold on PCP in large numbers in 2013 and 2014 that could easily have fallen by 5-6% in value in the second half of this year but, instead, are running at around half of that level.”

The key issue moving forward, he added, was whether upstream remarketing could continue to curb the worst effects of larger used vehicle volumes?

“Our forecasts continue to indicate that the numbers of used cars arriving on the market will increase well into next year and whether this more advanced form of remarketing will continue to be as successful is open to question.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.