Autorola is at the heart of Mexico’s digital used vehicle revolution says country manager Alfredo Hernandez Hamelberg
Written by Autorola in category Autorola Group News
June 28, 2021
Like so many countries Mexico has been impacted by the Covid-19 pandemic, and as of late June only 35% of the population of 130m had been vaccinated.
The first wave of pandemic in 2020 was the worst from the perspective of restricting people movement, but it sped up the country’s switch to buying more goods online. From groceries to used cars, transactions have more than tripled in the last 12 months.
At the heart of the online revolution
The Mexican market has always preferred face-to-face contact when buying and selling, particularly used cars, but it has taken a global pandemic to change this mindset and Autorola Mexico has been at the heart of this online used car revolution with its MarketPlace online platform.
“More car makers have been talking to us about online auctions. They have seen how online auctions can work when they are accompanied by good images and a detailed description of each car.
“Online is more of a trusted platform now in Mexico and during Covid-19 our operation remained open from the beginning of the pandemic as our business was set up to run online. Since the start of the pandemic, we are running more closed auctions on behalf of car makers than ever before to sell cars directly to their franchised dealers,” explained Alfredo, Autorola Mexico’s country manager.
A growing number of OEM contracts
Autorola has contracts with Mercedes-Benz, BMW and Stellantis to run closed auctions throughout the year. Its team of vehicle inspectors inspect the cars thoroughly prior to sale and grade them with five different levels of damage so buyers are clear whether they need repairing prior to sale or whether they are ready to retail.
Once the cars have been purchased online by dealers manages all the logistics to get the cars onsite as quickly as possible. The manufacturer helps fund the logistics to ensure dealers are not compromised by being further away from the used car storage centers. That has helped add further confidence within the dealer networks when buying used cars online.
Launching CV and bus auctions online
Hernandez has plans to start running online sales for commercial vehicles and buses for one major manufacturer. Autorola is set up ready to inspect and sell these vehicles online, albeit with a different damage framework to help dealers clearly understand the condition of each truck or bus prior to it being sold online.
“There is an all-year round demand for used commercial vehicles whatever the economic conditions as they are a working tool. Without commercial vehicles our supermarkets would have struggled to fill their shelves during the various lockdowns. The used market is 12 months a year and the used demand for ex-corporate fleet trucks are very high,” he said.
Demand exceeds supply in the used market
Mexico has been impacted by the shortage of semiconductors, like the rest of the global automotive industry. Fewer new cars are being sold which has meant a rise in demand for used cars. Prices have risen dramatically which has frustrated dealers and pleased vendors, a trend which Hernandez believes will go on for some months.
“No car maker knows how long the semiconductor shortage will continue and so used cars will continue to be in high demand and relatively low supply. It may be into 2022 before we see the market get back to normal,” he explained.
Leasing and rental companies
The rest of the Mexican market is made up of leasing companies and rental companies who continue to do their own thing from a vehicle remarketing perspective. Lease cars are offered to the employee to buy at the end of the contract which 95% of drivers take up.
Meanwhile, rental companies are setting up retail used car centers to sell their ex-hire cars directly to the consumer, although many suppliers have been hit hard by the new vehicle shortage and have resorted to buying used cars to satisfy the short-term rental demand from companies and consumers.
Opening used cars to a national buyer network
“We are in regular contact with the rental sector which has used cars that regularly fail to sell after 90+ days in stock. Rather than sell them to the local trader Autorola can upload them and sell them on its platform. That way it opens the used vehicle up to a country-wide market which will generate a higher price than selling to a local trader, or coyote as we like to call them.
“Autorola’s education and support of Mexico’s maturing used market continues and we are enjoying being an integral part of the digital revolution as it happens. Our proven online technology means we are well placed to work with many more car and commercial vehicle manufacturers,” said Alfredo.
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