The shortage of used quality vehicles will not
ease by as much in the final quarter of 2012 as hoped, according to
Roger Woodward, managing director of CD Auction Group.
When making the prediction, Woodward also
stated his opposition to a common auction grading system proposed
for members of the National Association of Motor Auctions (NAMA)
and spoke of difficulties inherent in Glass’s “brave attempt” to
begin a new valuation system for auction vehicles.
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Although Woodward said the wholesale market
for used cars was likely to ease before the end of the year, “the
market is still tight so condition and specification remain
critical,” he added.
Reports in
August by British Car Auctions and
September by Manheim have pointed to an ongoing rise in used
vehicle prices as the supply of vehicles in a retail-ready state
has diminished.
Fleet operators in particular have been
restricting supply by extending contracts and, although some are
starting to remarket cars from the last quarter of 2009, when fleet
sales rose 4%, others are hanging on to quality stock or selling
direct to franchise retailers.
Automobile trade purchasers
travelled further than ever to acquire profitable stock last
year, according to vehicle valuer CAP, but Woodward was
positive buyers were “back in the market” for stock, although the
high selectivity in the market put a premium on vehicle
preparation.
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By GlobalData‘One man’s condition’
Woodward has also stood against NAMA proposals
for unified vehicle grading at auctions, saying his company’s
experience of specific grading had led to disputes and CD instead
using clear photos and detailed condition reports of each
vehicle.
Although it may be assumed grading would aid
buyers and vendors, “one man’s ‘condition 3’ can be another man’s
‘condition 5’,” and also pushed down prices owing to “a natural
tendency to downgrade if the true extent of any damage is not
obvious,” he said.
Alternatively, Woodward called Glass’s G2
system a “brave attempt to come up with more accurate and specific
valuations,” with the separation of trade and retail values giving
a potentially clearer view of margin.
The system has met with initial problems in the industry and
Woodward agreed accuracy had come at the cost of complication,
again citing the use of specified condition categories for used
vehicles and the lack of spread between the highest and lowest
trade values in the new guide.
richard.brown@vrlfinancialnews.com
