From Auction to Shop: How data helps auto recyclers
Individual auto recyclers have lots of information to process, and they utilize data like any modern and highly digital business. The data fed through our computers from daily part sales and requests provides us with invaluable insight into our business.
Each week in North America there are over 20 total loss vehicle auctions, each with thousands of vehicles available. It’s not possible for every recycler to use pen and paper to look at each car and determine whether it’s worth purchasing, so we use computerized data.
This data is tied to a car’s VIN and determines which parts a recycler currently has demand for and what they already have in stock. This data is used to create an automatic bid on the vehicle based on what the recycler can afford to pay for it.
Our members are buying on average 1200 vehicles a year, and this data is something they rely upon to monitor how their business is doing at any point in time.
Auction to shop
The Hollander Interchange is the universal language behind our North American inventories, and has been created from VIN information usually supplied by the OEMs. Over time, these VINs have been decoded into about 200 part assemblies that form the inventory we manage.
These systems allow recyclers to track vehicles, parts and hopefully profitability. When recyclers sell a part it’s recorded on the car’s income statement so they can figure out later whether they’ve broken even on a vehicle, turned a profit or see how much revenue may be left on a car.
This falls in line with a strategy that our industry pursues, which is finding a way to extract extra revenue from every single vehicle so we can bid more on vehicles in the first place.
As the number of recalls in North America exponentially increases, data becomes even more important because OEMs want to be able to buy back or track those recalled parts. And we don’t want to sell parts that are under recall. They’re capable of pinging our database for recalled parts and offering to purchase them, but the cooperation apparently ends there.
More data needed
While we can provide access to our database for them to easily search, they don’t seem to want to cooperate by providing the data we need. They offer to fax us a list of VINs that are affected—which benefits no one, and certainly no one with 100,000 parts in their inventory.
But that’s not the only obstacle. Insurers trying to limit severity and repairers trying to fix more vehicles want to use more of our products. But they’re finding that we don’t have the same data they do and they’re prohibited from sharing what they have. This is an ongoing issue that the industry is working hard to turn around.
Modern auto recyclers are really huge data warehouses, and this data is proving to be a valuable resource for the auto recycling industry and beyond.