German car-rental company Sixt will offer off-rental vehicles on Mercedes-Benz USA's used- vehicle site, MBonDemand.com.
The company, which has been expanding in the U.S., is the first third-party seller to be integrated into MBonDemand, a Web-based platform through which franchised Mercedes-Benz dealers and independents buy Mercedes-Benz vehicles.
For luxury brands such as Mercedes-Benz, certified used vehicles are often entry-level offerings. And off-lease vehicles typically are prime candidates to be certified.
Mercedes-Benz USA sells most of its off-lease inventory digitally through MBonDemand. It has sold more than 200,000 vehicles through the site in the past four years. To expand the supply, Mercedes-Benz USA is opening its online marketplace to third-party sellers' Mercedes-Benz inventory.
'Destination'
"Our goal is to be the online destination to source Mercedes-Benz wholesale inventory," said Al Katz, general manager of pre-owned, remarketing and fleet operations at Mercedes-Benz USA.
Private online marketplaces give automakers more control over wholesale values, which helps drive higher residual values, said Nick Peluso, president of Manheim Digital Marketplace as well as RMS Automotive, a Cox Automotive company that operates the MBonDemand portal.
Sixt vehicles listed on MBonDemand go through Mercedes-Benz USA pricing. But Sixt can override the prices and it often does, Peluso told Automotive News. The overridden prices from Sixt could be higher or lower than those recommended by Mercedes-Benz USA.
For dealers, the private marketplace provides a larger supply of specific inventory from which to choose.
For third-party sellers such as Sixt, MBonDemand offers a channel to remarket fleet vehicles and get access to buyers interested in a specific vehicle brand.
"We are always looking at better ways to sell our vehicles and remarket vehicles," said Todd Sazera, executive vice president of Sixt U.S. "We felt that if we have a larger network of dealers interested in Mercedes-Benz products, we could get our cars to more viewers, rather than just running them to local auctions and dealer-direct."
Luxury vehicles account for at least half of Sixt's rental fleet, with Mercedes-Benz vehicles accounting for about 15 percent of the fleet. Most Sixt vehicles listed on MBonDemand are 2017 and 2018 models that have been driven 10,000 to 20,000 miles.
"We want our customers to be in the cleanest and most current model cars," Sazera said. "Our average fleet holding period is between seven and nine months."
'Hiccups'
The jury is still out on how effective a remarketing channel MBonDemand will be for Sixt.
"In the first month, we had some hiccups getting the condition reports uploaded," Sazera said. "I'm very optimistic that the MBonDemand product will be in our best interest and look forward to positive results."
RMS Automotive has developed similar digital marketplaces for a half-dozen automakers, including Porsche, BMW, Nissan and Volvo.
The software company uses predictive analytics and artificial intelligence to price vehicles based on mileage, age and customer demand. RMS can also suggest reconditioning work on a vehicle that would most effectively enhance the price, Peluso said.
RMS also uses data analytics to match vehicle inventory to dealers, based on their buying and search histories.
The appetite for used cars is driving demand for remarketing technologies, Peluso said. "Used cars are hot," he said. "There's more profitability in a used car than in a new car."