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Dan Kennedy is national sales manager for GM Remarketing. Steven Kapusta is director of remarketing for GMAC Financial Services.
UCN: What is the current state of your relationship?
Kennedy: There’s no change in our relationship. We realize the value of going to market together. We’ve done it for more than ten years. It works very well for us.
Kapusta: Just like anybody, do we disagree on some things? Yes, we do. Do we agree on a lot of things? Yes, we do. We work out the things we disagree on and move forward. For the big picture, the strategy, the direction, we come together and it seems to be working pretty well in the marketplace, even today.
I would add that despite all the different changes at both companies, there haven’t been a lot of changes on the remarketing side. We still have a majority of the same people in the field representing GM/GMAC at auction.
UCN: What is the current state of GMAC remarketing now that it includes Chrysler financing?
Kapusta: The way we go to market depends on how we work best with our partners at hand. On the GM side, you’ll see us going to market together. On the Chrysler side, we’ll team up and go to market accordingly. That has to be a hand-in-hand relationship.
We’re not remarketing any Chrysler Financial cars. At present, we’re not doing anything with the Chrysler Motors cars. We’re talking about potential
efficiencies and opportunities.
GMAC has been financing Chrysler’s cars for several months now, so as repossessions come through, we’ll be remarketing both GM cars and Chrysler cars. We had some non-GM product in our portfolio before, but it was very small.
UCN: How many vehicles will you remarket this year?
Kapusta: We’ll run about 650,000 through the remarketing channel. Next year appears to be flat. That’s a combination of lease cars, repossessions and balloon-payment cars.
Kennedy: We don’t give absolute numbers, but we will be down a little bit this year from where we were last year. That trend will continue through next year. There will be fewer company cars and fewer rental cars.
UCN: What’s the age and mileage for those cars?
Kennedy: The overall rental fleet is getting a little older and the mileage is going up on them. Their business is changing. We’ll see some vehicles with less than 20,000 miles Some will come back in the mid-30s. It really depends on the programs we’re running. Our repurchase vehicles are between six months and 15 months old.
Kapusta: A majority of our leases are 36 months. They’re coming back closer to schedule than ever before because of the economic climate and lease pricing. The average mileage has moved up to 40,000 miles from 36,000 miles.
UCN: Is there any one vehicle your heavy with in that lease portfolio?
Kapusta: The mix is actually pretty good. We’re pretty comfortable and excited. Some years we’ve had heavy volumes of one or two specific models. This year it’s distributed pretty well.
UCN: And on the rental side?
Kennedy: We actually have a fairly decent mix of vehicles coming back, although you’ll see a fair number of Impalas, as you normally would.
UCN: How are the stationary closed sales working?
Kennedy: We haven’t seen any waver in dealer participation. We’ve received positive and negative feedback. We’re looking at ways to improve the experience for the dealers.
On the open side, we’re using Manheim Simulcast, Online Ringman and LiveBlock. We’re seeing growth in the number of vehicles being sold online.
If dealers are willing to buy online based on a condition report, why not do a physical auction that way. We bring those vehicles up to a standard. The vehicles are sitting right outside a lane if the dealers want to walk the inventory.
UCN: Have your results met your expectations this year?
Kapusta: Overall, the year has been really strong. We’ve had great dealer participation in all our venues. The prices have been strong all year. It is starting to soften and it’s softening fast. It’s that time of year. When you look back, you say, ‘Wow, things went on such a nice run for so long.’
Now we’re seeing the change of model years and we’re seeing a return to seasonal prices. We saw prices start dropping in mid-September. I’m guessing we’ll see them soften relatively fast through October. After that it should level off.
Kennedy: That’s very consistent with what we’ve seen in past years, excluding last year.
Kapusta: Dealers are in an interesting predicament. They want to make sure they don’t have too much on the lot. We’re in the best shape we’ve ever been in terms of supply, meaning it’s low. But the dealers are being careful.
UCN: How have all the changes at GM affected your remarketing efforts?
Kennedy: There have been changes in the corporate environment. But we didn’t stop selling vehicles. We’re still shipping vehicles, reconditioning vehicles, and offering them in the best channel available to our dealers.
UCN: What affect will the discontinuations of Saturn and Pontiac have on your program?
Kennedy: In the past we handled the sale of many of the Oldsmobile products. The dealers accepted those vehicles and I would expect that they will accept the Pontiac and Saturn products as well. With General Motors standing behind the vehicles for parts and warranty there should be no issues about the vehicles being serviced. Our GM dealers will be able to provide the service to the customers on these vehicles. In fact, the GM Certified dealers can certify the
Pontiac vehicles under our
current program, making them even more desireable for the retail customers. We don’t anticipate that we are going to have any problems selling those vehicles.
UCN: Any plans to change the number of auctions you work with?
Kennedy: There will be a few changes as the volume of vehiclescomes down. We have ongoing relationships with Manheim, ADESA and a
number of the independents.
That won’t change. We will go through an auction rationalization process. We’re going through a very systematic analysis to make sure we pick the right locations to sell our cars. The business is pretty dynamic and requires daily monitoring and adjustments.
Kapusta: This business is a relationship business and it takes a lot of communication. If you keep the lines of communication open, you can get through it all. |
