Off-lease marketplace goes online

Yet another segment of the auto market is being steered into e-commerce. This time the driver is the fleet management arm of Macquarie Bank.

It has launched the site D-Auction as the first electronic marketplace for ex-fleet vehicles. The site is also exposing vehicle dealers to the complexities of the dynamic auction model - a step some industry players believe is premature.

The private exchange sells ex-government cars coming off-lease to motor vehicle dealers around Australia. As an electronic channel supplementing traditional automobile auctions, D-Auction promises reduced costs for buyers and sellers.

"While it is early days yet, we have been very encouraged with the results since the site was launched," said Macquarie associate director John Wilson.

The site, run in conjunction with the Motor Trades Association of Australia, gives Macquarie potential access to all 1400 Australian vehicle dealers. That translates into selling "more cars faster and at higher net sales proceeds", Wilson said.

There are concerns that Australian dealers still coming to grips with online auctions will find the extra wrinkles introduced by dynamic pricing too confusing. "We don't believe the market is ready for the dynamic model at this time," said carsales.com.au managing director Sak Ryopponen. "Our approach is to educate the used-car side with the static model so they can get comfortable with the online environment before they tackle more complicated variations."

He argues the static model allows newcomers to transact bidding at their leisure compared with the additional pressure introduced by auction closing times in the dynamic system. "There are also issues about choosing auto bid versus manual bidding and the extra difficulty of keeping track of your results under the dynamic versus static model."

That said, carsales.com.au is itself gearing up for a dynamic auction offering although it won't appear until later this calendar year, Ryopponen said.

D-Auction is the first Australian business-to-business site to use Fairmarket's dynamic pricing software platform. The US company's major domestic clients to date have been the consumer-oriented auction sites, News Interactive's gofish.com.au and Yahoo's sold.com.au.

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