Reaping Optimum Returns in Automotive Remarketing – Enabling maximum revenue at minimum cost
Read time: 10 mins
The COVID-19 pandemic, changing consumer behavior, and new players such as fintechs have all challenged the auto-financing industry. However, as the automotive industry has started to show signs of recovery, auto financing is also believed to see growth. The auto-financing sector must build resilience, strengthen the core business, and reinvent future offerings to thrive, states McKinsey’s executive survey in Europe (which also applies to global players).
Most of the players are still on legacy IT infrastructure that offers limited capabilities to explore the true value of technology. The limitations in forecast methodologies due to distributed systems and data sources are a major concern. Similarly, the lack of a robust reporting mechanism affects decision-making in the leadership. Many parties are involved, and companies struggle to create a collaborative working environment, thereby introducing a lot of waste in the value chain. The lack of integrated systems that can provide a 360-degree perspective of all the blocks in the value chain is a significant area requiring improvement. Limited tracking of vehicles available for remarketing and managing a high volume of vehicles poses a considerable challenge. A robust price discovery mechanism is crucial for making the business profitable, but many organizations lack the same.
The remarketing sector can reap the benefits of a highly intelligent platform with automation and artificial intelligence (AI) technologies. Technological enhancements like virtual vehicle representations can provide digital buyers with a life-like experience to make informed decisions.
Leveraging industry-leading capabilities, we offer unique and intuitive solutions such as the remarketing app, original equipment manufacturer (OEM) online store, and an end-customer self-inspection feature to cater to the specific needs of the auto-financing industry. The remarketing app acts as a catalyst to enable sales through real-time availability status, improve productivity, reduce the per-vehicle turnaround time, and ensure faster revenue recognition. Zensar’s unique proposition for the remarketing segment includes AI integration and AI-enabled features such as an intelligent bid manager or precision marketing capabilities. In addition to revenue increments and cost reduction, customers can also use cases such as bid predictions and smart alerts for sale locations.
Following are some of the salient features of our solution.
Self-inspection: A self-guided vehicle inspection tool brings in a paradigm shift in the remarketing process, helping the financing company determine the asset’s residual value. This also enables a customer to efficiently perform the inspection without an expert’s presence, which improves asset turnaround time and helps save costs. Also, reports generated using such intelligent inspection platforms can help boost accuracy.
Advanced bidding platform: Solutions based on AI and machine learning (ML) are a key differentiator and a unique value proposition of our offering. The AI-ML-enabled prediction engine recommends the best price, discounts, and location for sale to optimize revenue, costs, and margins. The introduction of AI-based intelligent bid managers brings in a tectonic shift from the existing cost-intensive traditional auction processes or dealership sales that have the innate shortcoming of reach.
Precision marketing strategies: Advanced AI-enabled marketing help companies maximize the asset value, drive higher sales, and lower costs. For example, location-based smart alerts can help reduce inventory and transportation costs, improve turnaround time, and drive customer satisfaction.
Remarketing opportunity creation: This helps identify lease vehicles with high demand in the market before the maturity of the lease. With the help of AI recommendations, financing companies can provide special offers to current lease customers and extend their lease or shift the sale earlier by terminating the lease.
Data monetization: Dealers can subscribe to the sales intelligence data available with the financing companies to monetize the information. Analytics based on historical data can help stakeholders involved in the remarketing process optimize their operations.
The road ahead
As the first step to recovery, the auto financing sector must defend itself from market changes and challenges. But many auto-financing players may not have the required risk-management strategies, mentions the McKinsey report on auto financing. A powerful survival strategy for the organizations will include preserving the residual value of leased vehicles and having effective remarketing practices. Moreover, these organizations must strive to maximize the value of their assets, optimize inventory management, shorten the turnaround time, and improve multi-stakeholder management and customer service. This complex business is inventory-heavy and thus requires advanced solutions to accommodate customer expectations and derive profits.
Financing organizations must focus on improving the bid management process, reducing inventory costs, and enhancing the efficiency of client operations, including returns and inventory management, to survive and grow in the market. It is equally significant to customize the sales cycle to drive revenue, introduce advanced decision-making platforms, dashboards and consoles, streamline the inspection and reporting process, and improve stakeholders’ collaboration. Zensar’s expertise and innovative remarketing solutions can help the auto-financing industry reap these benefits and more.
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