Cars hit the superhighway

CARS have changed a great deal in recent years. But the way in which we buy them has hardly altered at all. If you want a new one, you go to the dealer authorised to stock the make you have decided upon; if you take the second-hand route, you essentially have three options: a dealer, an auction, or checking advertisements.

CMA, the former USM-listed company that has just won a section 4.2 listing on the Stock Exchange, is out to challenge that status quo. As the second biggest car auction group, it is particularly keen to advance on the sector leader, ADT. But as George Inch, the energetic Scotsman who took over the helm 18 months ago after a decade at the BRS division of NFC, acknowledges, it is a mature market - and the only way to move forward is to introduce new products.

Mr Inch's special new product is the electronic auction.While insisting that the "physical auction", no doubt with kicking of tyres and sucking of breath through the teeth, will always have a role, he sees the hi-tech version as a logical complement.

First, he says, advances in technology along with falls in prices make it feasible. Secondly, it saves time - and thus money - for those on both sides of the transaction, But perhaps more important are the changes to the second-hand car market.

In the past two or three years manufacturers have become more involvcd in the used market through buy-back deals, at the same time as many of their dealers have done, because of narrowing margins on new models. In addition, many fleet and leasing operators are considering entering the market.

Moreover, customers have become much more willing to buy second-hand, because of the twin effects of recession and the improving reliability of just about every make of car.

This last factor seems particularly important to Mr Inch's vision, since if the average member of the public has the confidence to buy a car without seeing it, on the strength of a brief description, taking in such details as age, mileage and general condition, electronic auctions would appear to have huge potential.

For the moment, though, the main users seem to be dealers who can move a vehicle from one end of the country to the other almost literally with the touch of a button or two. Because a car will frequently go through two or three pairs of hands on its way from seller to final customer, the physical system is cumbersone.

In contrast, the electronic version requires no travelling, provided bidders have appropriately equipped computer screens with access to the auction centre. A description of the car is displayed, and buyers indicate an interest by pushing a button. It is particularly suitable for disposing of fleets, since most of the cars involved will be standard models of similar age and condition. After about four months of operation,CMA claims to have details of about 10,000 vehicles on its databases.

Although its particular arrangements with such companies as Honda, Peugeot and Avis vary, CMA does have the capacity to manage the whole process of getting the vehicle from its current base to the ultimate customer. Furthermore,its Autofind database is a powerful stock indicator, showing how many examples there are of a particular type of car, where and at what price.

"It's a case of meeting the needs of a particular client at that time," said Mr Inch. But it is also a way of meeting the company's needs. In his view, sticking to one activity is like standing on one leg; his role at CMA is to "get them a couple of other legs, because it makes you less affected by the vagaries of the market".

He is not about to forget CMA's roots." Our credibility is still our expertise in physical auctions and the fact that we've been doing it for the last 40 years.We intend to be doing it for the next 40 years."