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Shortages in the refurbishment sector affect vehicle remarketing

Posted on by darion

Source: Shutterstock.com

The Vehicle Remarketing Association (VRA) reports that shrinking capacity in the remanufacturing sector is causing significant delays in getting cars and vans ready for sale. This problem is causing significant bottlenecks in the remarketing process.

The VRA Industry Trends Committee is examining the issue, which is being driven by several factors, including consolidation of refinish service providers, skills shortages, parts availability and limited electric vehicle (EV) resources.

Marcus Blakemore, the committee’s chairman, noted the growing complaints from VRA members about renewal delays. “These delays have a direct impact on the speed at which vehicles can be turned in, tying up money in assets waiting to be prepared for sale,” Blakemore said. “Vehicles with damage or defects lose value because dealers know they will take longer to process, sometimes months longer than expected, to reach retail channels.”

Blakemore noted that the solution to the problem is complex due to a number of factors. “The primary cause is the reduced number of refurbishment facilities available to the general remarketing sector, exacerbated by recent consolidations and business sales. In addition, there is a perceived shortage of skilled workers, which requires a renewed commitment to training across the sector and will take time to resolve.”

He also noted that parts shortages remain a major problem. “While things have improved since the pandemic, vehicles are still waiting months for the necessary parts to be saleable.”

The challenge is particularly acute with the growing number of electric vehicles entering the used market. “The industry is not yet fully prepared to handle the expected number of electric vehicles that will come to market. For example, only about one in three body shops can repair electric cars and vans,” Blakemore added.

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While there are no easy solutions, Blakemore said the committee will continue to work to raise awareness and promote dialogue among stakeholders. “This is not a quick fix, but the VRA can help by raising awareness and creating momentum for potential solutions,” he concluded.