GM Financial expands national footprint to spread off-lease inventory
This year, GM Financial is expanding its volume footprint nationwide — recently opening distribution centers in the Detroit area, Maryland and New York — to help move more vehicles across Southeast and Midwest markets that wouldn’t normally get as many off-lease returns, says GM Financial vice president of remarketing, auction operations John Sullivan.
“So pretty much every one of our auction partners in 2018 will see an increase,” Sullivan explained during a late-January phone interview with Auto Remarketing.
In regards to the number of vehicles that are expected to show up at auction, he said “we will have a pretty good increase, probably in the 50-percent range for 2018 that is actually sold at physical auction, depending on how much the retail customer purchases and what we’re able to sell on the GMF DealerSource, which is our online platform.
“As far as volume goes, we haven’t finalized the numbers for 2017 yet, but they should come out shortly,” he added.
GM Financial will release its 2017 operating results on Feb. 6, according to GM Financial spokesperson Nikki Hall-Branch.
In early January, Cox Automotive’s Jonathan Smoke explained that off-lease units will provide growth in units at auction and that the composition is changing this year.
There will be nearly 300,000 more off-lease cars and trucks that will return to the market this year compared to 2017 for a grand total of 3.89 million off-lease units.
“Off-lease maturities are the source of off-lease vehicles at auction; we are past the peak growth in off lease but we have at least two more years left of growth in the volumes that will be coming to auction. In 2018, an additional 290,000 vehicles would theoretically reach the end of their lease,” Smoke said.
“That number will likely be influenced by lease pull-ahead programs, which were ramped in the fourth quarter; and remember, a substantial number never end up consigned as an off-lease as they are either purchased by the consumer or grounded by the dealer,” he explained.
On a localized level, Columbus Fair Auto Auction in Ohio said GM Financial began expanding their lane presence earlier this month due to increased off-lease volume.
Along with adding two simultaneous lanes that will run in lanes 7 and 8 every week, the auciton said GM Financial has started running bi-weekly closed factory sales on Tuesdays and will also continue to offer a bi-weekly repo sale this year.
“CFAA has proven to us in the past that they are capable of handling large volume sales,” GM Financial’s Chris Watkins said in a news release announcing the recent expansion. “Opening up an additional lane will help provide dealers in the central Ohio area with a wider variety of off-lease inventory.”
Source: Auto Remarketing