Ford's Remarketing Arm Focuses on Raising Return on Risk Vehicles

Auto Rental News recently interviewed Linda Silverstein, sales and service manager for Ford Automotive Remarketing Services in Dearborn, Mich., to learn what the group can offer auto rental dealers intent on maximizing the return on risk vehicles they’re ready to sell.

Why was Automotive Remarketing Services formed?

Ford has developed an industry-leading remarketing process over the years, led by Tom Cunningham. As a result, Ford successfully remarkets hundreds of thousands of rental repurchase, Ford Credit Lease termination and company service vehicles each year.

In 1999, some of our fleet customers asked us for help in remarketing their vehicles. Following that, a cross-functional team, including customers and business partners, investigated the opportunity of offering remarketing services to external customers as a business extension.

The team quickly determined that there are large numbers of external customers who would greatly benefit from disposing of their vehicles through the Ford vehicle remarketing infrastructure. A business plan was developed and approved. Automotive Remarketing Services was officially formed in January 2000.

How does ARS fit in with Ford’s existing vehicle remarketing department?

ARS utilizes the same vehicle remarketing infrastructure to deliver best-in-class remarketing processes to our external customers. ARS vehicles are sold through Ford-sponsored auctions.

Ford's vehicle remarketing group has 68 on-site auction area managers nationwide who understand local market conditions and are trained professionals in vehicle repair and reconditioning. They represent ARS vehicles in the same manner as other vehicles in the Ford sales.

This consistent quality process gives dealers and buyers the same high level of confidence in bidding on ARS cars and trucks as they have in buying other vehicles in the Ford lanes.

What customers are you targeting?

The majority of our customers are rental accounts that want to maximize the return on the disposal of their risk vehicles. In its first year of operation, ARS has remarketed risk vehicles for Budget, Hertz licensees, Enterprise, Dollar, Thrifty, Payless, Triangle, Interamerican, Advantage, Armada, Ryder TRS and other daily rental customers, including Ford and Lincoln Mercury dealer daily rental units.

Additionally, ARS remarkets off-lease vehicles for financial institutions and out-of-service fleet vehicles for commercial accounts responsible for remarketing their own cars and trucks.

What do you see as the predominant trends influencing the remarketing industry and what actions are you taking?

Clearly, there's a trend in the daily rental business toward a higher mix of risk vehicles. More rental companies will be looking for assistance in maximizing the return on these assets and will seek the services of ARS to add to their bottom line.

We believe that, while Web-based remarketing will have a growing role, physical auctions will continue to be the primary means to successfully remarket vehicles. We have valuable business relationships with Manheim, ADESA and independent auctions, and we will continue to utilize their robust remarketing infrastructure.

What future role will e-commerce and Internet-based activity play in remarketing? And for ARS in particular?

The Internet and e-commerce provide tremendous opportunities for automotive remarketing — for all parties concerned. There are remarketing opportunities for dealer buyers, commercial buyers, retail buyers, and the current owners of the vehicles.

We don't want to give away all our plans, but I can tell you about one area. Dealers are increasingly using the Internet as a channel to supplement their visits to auctions to find the used vehicles they need. It provides them a way to shop for used vehicles 24 hours a day, instead of waiting for the next live auction.

Dealers in the Ford lanes at the auctions have become confident with the consistency of our high reconditioning standards, and this translates to their confidence in the vehicles we sell online.

We at Ford Motor Company have been holding online auctions for our dealers for years. In the future, we will be upgrading the technology and expanding these auctions to more dealer buyers and more auction locations.

What future role will consumer leasing play in vehicle remarketing?

Residual values established by both captive and non-captive finance companies have been adjusted in recent years to better reflect used vehicle market conditions. If more retail lessees buy their vehicles at the end of their lease term as a result, this will reduce the volume moving through traditional remarketing channels.

Additionally, there are signs that some of the non-captive finance companies will reduce or eliminate their activity in the consumer leasing area and focus on retail purchase programs.

How did ARS do in its first year of operation?

We were very pleased with our first-year performance. We exceeded our first-year volume and financial objectives, and signed agreements with over 100 customers.

Most importantly, we satisfied our customers -— all indicated they would continue utilizing ARS in 2001 to assist them with their remarketing needs. We plan to continue growing our business and satisfying our customers -— a simple formula, but one we never lose sight of. I'm fortunate to lead a team of great, consumer-focused professionals here at ARS.


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