LAS VEGAS -- As the remarketing industry looks to a robust 2017, the biggest concern is being prepared for the opportunities that high volumes offer.
With leasing still on the rise, forecasters see the number of off-lease vehicles entering the used market climbing from an estimated 3.1 million in 2016 to 3.4 million in 2017 and 3.8 million in 2018.
"There are cycles in any economy, but it's not here yet," Jerry Hinton, incoming president of the National Auto Auction Association, told the group's convention here in November, held in conjunction with the National Remarketing Conference.
"You make hay while the sun shines," he said.
Or, as Tony DiPanni, executive director of SmartAuction, put it, "Remarketers will be very, very busy."
Industry executives insist they're ready to deal with the higher volumes, and they are taking steps to head off pinch points in the industry's smooth flow of those higher volumes to dealerships.
More vehicles in physical or online auction lanes means more profit opportunities for auctions and more used inventory for dealerships.
Still, to cope with the volumes, dealers have turned to sophisticated inventory-management software to help them stock the right vehicles at the right prices and avoid overpaying for a used car or truck that might lose value in a market with rising supplies. They also are much more conscious of the need to turn their inventory quickly than they were just a few years ago.
Four publicly traded dealership groups -- Sonic, Asbury, AutoNation and Penske -- have launched or purchased stand-alone used-only stores, entering a space dominated by CarMax Inc.
Auctions have added physical lanes and hired more reconditioning staff. Online auctions have improved their software. Automakers have bolstered their certified pre-owned programs. Finance companies are offering leases to used-vehicle shoppers.
Across all industry players, the biggest source of confidence in their ability to handle the higher volumes is technology, particularly technology the industry didn't have at the last peak for remarketing volumes a decade ago.
Consider Toyota Financial Services Inc. In October 2015, it launched Toyota's Dealer Direct mobile app. The app gives dealers 24/7 access to Toyota Financial vehicles. The app allows dealers to ground -- or accept on behalf of Toyota Financial -- off-lease vehicles that consumers return to the dealership and to buy vehicles online before they go to auctions. Another feature allows grounding dealers to electronically send odometer statements to Toyota Financial's customer service center, expediting the title process.
"We feel [the usage of] that app will do nothing but grow," said Mike Reid, remarketing manager at Toyota Financial Services. "With the additional inventory coming back in the marketplace, you'll need access to tools that make your job a little more efficient."
He said his top request for auction partners has been technology. And, generally, they have delivered.
"We know we're not going to grow from a people perspective, but we certainly need to expand our footprint all the time. We're going to need our auctions to help us do that.
"We've been pressuring them to make sure their technology matches today's needs. That's our challenge to all our auction partners. Make sure your technology is updated and it's not that traditional auction experience only. Give the dealers options to do different things."