CD Auction Group a 'well-kept' secret ready for growth

Andy Brown describes his business as a “well-kept secret” but, after a year at the helm of CD Auction Group, it’s not something he wants to suppress any more.

The remarketing company launched a new service for the fleet sector – CD Fleet Services – earlier
this year. Its aim is to better serve its fleet, leasing and contract hire customers, and it was the first in a series of strategic decisions to be made after Brown became managing director.

The new division has a fleet industry focus, with a range of products and services that are specifically aimed at fleet operators.

“The business needed to move forward,” says Brown. “A year later, we’ve signed 27 new customers.”

The contract wins come from a combination of rental companies and small-to-medium-sized end-user fleets – but Brown isn’t getting carried away. 

“We are never going to compete with a BCA or a Manheim,” he says. “Our market is the SME running between 250 and 1,000 vehicles, and we have had great success in targeting those people.”

Brown has been surprised at how some companies offload their vehicles, come de-fleet time. He explains: “There was a big tyre distributor 560 vehicles and he was selling to two or three traders. We did a trial of half a dozen vehicles for him and he realised, on average, £500 per vehicle more than he was getting from the traders. 

“It’s amazing how developed the fleet market is, yet there are people still using those sort of methods to dispose of vehicles.”

Brown’s career spans more than 30 years in the contract hire and leasing sector, with senior roles at Venson, Inchcape Fleet Solutions, Hertz and, most recently, at Fourways Vehicle Solutions, where he was MD.

His industry experience has also given him a customer’s perspective of CD Auction Group. “I used the business when I was at Hertz and at Inchcape ,” he says. 

“They were always very customer-focused, and you always got a lot more care and attention than perhaps you got from the bigger companies.”

It was one of the major reasons Brown joined the business last summer, replacing the retiring Roger Woodward. 

Spending the first few months in the role visiting key customers, he was delighted – and possibly relieved – to see the company’s customer focus was still evident. 

“It’s the culture of the business,” he says. “Some businesses have got it, others haven’t.”

Brown wants to combine that culture with the products and services now being offered under CD Fleet Services.

The offering is based on three key areas of fleet support: vehicle remarketing, vehicle logistics and pool fleet management.

Its online trade-to-trade auctions sell vehicles for leasing and rental companies, accident management businesses, SMEs and large corporations.

But it’s not just about remarketing. Pool Fleet Management is an online service that ensures in-life, unallocated company vehicles are stored securely between use and safety checked and valeted, before being reallocated.  

A white-label service, it can be branded for fleet management companies, individual contract hire and fleet operators or used by fleet managers.

The portal has been adopted by several major fleet management companies, including Inchcape Fleet Solutions and ARI Fleet UK.

CD Auction Group’s in-house vehicle logistics division can also collect and deliver pool fleet management cars, but the lion’s share of some 1,000 vehicle movements per month are primarily for remarketing.

It is a growing part of the business and is being developed to include an ‘inspect and collect’ service, using experienced assessors, which Brown says will improve the level of inspection given to fleets.

“It’s an issue for the leasing companies, because clients are complaining and they’re having to justify the charges,” he explains. 

“What they need is a proper inspect-and-collect system that works and we think that we’re developing something really good.”

The first contract win from a leasing company is in the pipeline and Brown is confident the new service will be a success. “It’s about giving the process credibility, because it’s such an area of contention.” 

There has also been a focus on developing the sales, with potential prospects identified, and a five-figure investment in IT, which has included a new website.   

“We’ve made a lot of strategic and structural changes during the past 12 months. The important thing now is to keep that momentum going, and keep growing.”

CD Auction Group recently completed negotiations with local landowners to increase its secure vehicle storage capacity to increase with the increase in business.

The extra land will add space for around 20% more vehicles to be stored and prepared, either for pool fleet management or waiting for online auction.

“We have grown dramatically,” says Brown. “If you compare half year this year with half year last year, we’re 54% up in terms of vehicles sold.”

He declined to reveal to Fleet News just how many vehicles that equated to, but even in percentage terms it suggests the company is reaping the rewards of Brown’s first year at the helm. 

Redefining the market

CD Auction Group started life 26 years ago as Cars Direct, with co-founders Graham Johnstone and Roger Woodward quickly making their mark on the sector.

They helped redefine vehicle auctions by allowing buyers to bid by fax, rather than having to attend a physical sale, and the advent of the internet allowed them to take the concept even further.

The company launched the first live online bidding service in 2003, opening up auctions to more potential bidders and revolutionising the way company cars and vans were sold.

More than 10 years later, it conducts all of its business online while all the major players in the remarketing arena have some sort of online offering.

The market will develop further, as demand grows, and recent research from the company already suggests a healthy appetite among its buyers. 

It asked more than 100 traders about their buying habits and 75% said they only purchase vehicles online. 

Andy Brown believes the market is quickly moving towards a point where online sales volumes will outstrip physical, especially with other, larger, auction companies reporting an increasing online share. 

However, he says: “To be good online, you’ve got to have the right vehicle descriptions and the right photography; they have to be on the money. 

“We have to ensure the buyers have everything they need to make the decision about whether the vehicle is for them or not.” 

A detailed inspection process is crucial, but that only comes after vehicles are valeted at CD Auction Group’s headquarters in Northamptonshire. “It ensures they can be thoroughly assessed,” explains Brown.

An on-site bodyshop also enables vehicles to be repaired before being offered for sale, while a photo booth ensures clear and detailed appraisal pictures of every vehicle it sells. 

It’s an approach that appears to be delivering success. “I’ve only had to take one vehicle back in the last 12 months,” says Brown. “The return rate is around 7-8% for some of the other auction houses.”