In part 1 of this 2-part series, columnist Alan Bird interviews a remarketing industry insider to find out how digital technology is changing the auction and used car business.
There is no argument that over the past five years, the used vehicle business has been booming. In fact, since 2013, Canadians have purchased more than 14 million used vehicles.
In 2017, I brought in Eric Janca to head up our Lease Maturity and Remarketing business for SCI Lease Corp. Eric’s knowledge and experience made him the perfect candidate to build this side of our business from the ground up.
I recently sat down with him to chat about the changes he has seen over his career, as well as what he believes is around the corner for the used car business. Even more so, why he feels a solid remarketing strategy is so vital in today’s competitive market.
Alan Bird: Even for a guy as young as you (not yet even 40) what are some of the biggest changes you have seen in the remarketing space over the last decade?
Eric Janga: Probably the biggest change I’ve seen is the transition towards an online process of remarketing. When I started I was going to physical auctions, and buying a car was all about the gut feelings — touching and feeling the cars, kicking the tires.
You got a sense for the vehicle by seeing it first-hand. As a seller, I would see a crowd of dealers, packed in, checking out the vehicles, looking for a great deal. There was a buzz in the air. There was also a good balance between camaraderie and friendly competition. Dealers would outbid each other, or hold back on bidding to help a friend get a good deal. Auction protocol I would call it. It was a bustling hive of callers, buyers, sellers, vehicles, noise. I loved it and I still do.
For me, my role has always been selling, standing on the block next to the auctioneer, representing the cars, and looking at the bids from the buyers in front of me. My pride would kick in as I sold vehicle after vehicle. And it was the best when the spring market would come around and I’d see dealers pumped to buy my cars in the lane.
It’s not like that as much anymore. While it may have once had 40 dealers physically bidding in your lane — now you are happy to see ten and you are watching the screen to light up green from online bidders. The outbid tactics and the camaraderie are still there, but it’s faded quite a bit. Time is a huge issue and I’ve seen a major shift in the structure of a dealership.
No one has the time to be there in person when they can do the same thing online. Plus many of the original Dealer Principals now have their kids coming in and know they don’t really need to be onsite. They can do their bidding and buying online instead. Online buying seems to have become the more efficient option that continues to grow.
Now I know that the switch to online has happened slowly but like in pretty much every industry out there, it’s happened. As technology continues to evolve the way it has, you can just as easily buy a car online and while the hustle and bustle is missing, you can still get a pretty good feel about the car.
AB: Do you miss going to auction houses?
EJ: I do and if we can’t make it to the auction we make sure that someone is available to represent the vehicles online. Truthfully I’d rather see the perfect plan unfold across all channels. As a seller we are always looking at alternative ways to maximize the value of our portfolio of vehicles. There are quite a few vendors that have supported in our industry to create online channels to sell units upstream, midstream and even will the car is physically at an auction.
The challenge is finding the optimal mix in each channel. I also love the marketing side and getting the adrenaline pumping when you are able to influence your buyers and can see the results of my efforts. It’s enjoyable but when you run a national remarketing program, you can’t physically get to every sale. It’s just impossible.
AB: How has digital specifically impacted the world of remarketing?
EJ: Remarketing vehicles is like all other businesses today effected by the advances of technology. It allows more eyes to see and participate in determining the value for items than ever before. Think of the stock markets. There was a time when not only did you actually have be on the floor of the stock exchange to exercise a trade but only dedicated traders could initiate and finalize the transaction. Today, you and I can do the same thing with an e-Trade account from pretty much anywhere in the world just about 24 hours a day. Our business is exactly the same — yes some trades are still processed in the aisle at the auction, but more and more will be done online and yes that affects price. Just as a thoughtful note, while the floor of the New York Stock Exchange is still active with its opening and closing bell, the Toronto Stock Exchange closed theirs in 1997. Makes you wonder.
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