Post on 27-Dec-2015
Used Car Remarketing in Europe
What drives the sector & how this affects your business
Bucharest, 15 November 2012
Rob HenneveldGlobal Automotive Consultancy
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Content
1. Upstream: developments at the car manufacture2. Market position of used cars3. Affect on leasing- and bank sector
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DisclaimerThis presentation is prepared with the greatest care when it comes to completion, accuracy and the interpretation from the multiple sources. However no rights can be claimed from any errors. This presentation is only for the visitors of ALB’s 8 th annual conference and its members. It is strictly prohibited to copy and distribute by any carrier and/or other means, the content, partly or whole, of this presentation without prior permission. Rob Henneveld 10 November 2012
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• Upstream: developments at the car manufacture
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Platform strategy car manufacture©
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• Overproduction, 10-20%• Overcapacity, 20-30%
Global platform standardization main 12x OEM’s:• 223 platforms in 2010 to 154 in 2020 (-/- 30%)• In 2020: 74% of total production with • 95% production from only 36 platforms• Production from 80 million (2012) to 125 million in 2020
+ =
Marketing makes the difference!
Result:• The “Universal Car”• Re-badging
Platform definition: (lego blocks….)• R&D among competitive OEM groups• Sharing components among brands• Same production line, different brands
OEM: Original Equipment Manufacture
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Technology as a (sales) driver©
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Manufacture in a continuous race………
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Future Residuals =>Technology driven! ©
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Europe 2010 Europe 20170%
20%
40%
60%
80%
100%
41%
13%
45%
10%
14%
72%
5%
Production planning 2010-2017
Conventional Diesel Conventional Benzine EV HEV
HEV’s:• Regenerating brake energy• Start-Stop systems
Making conventional used cars obsolete!
Micro hy-
brids; 89%
Mild hy-
brids; 5%
Full hy-
brids; 6%
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Product life cycle development©
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arch
& D
esig
n
Gro
wth
Prod
uctio
n
Mat
urity
Dec
line
Time
Reve
nue/
Volu
mes
’50’s => 10-12 years’90’s => 6-7 years
2012: 2-4 years max.
Automotive industry follows the smartphone business model
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2. Market position of used cars
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Used car market©
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4th
3rd
2nd
1st
Almost new
New
Scrappage
Owners
Distribution New
Retail general
It is a split market
• New from factory• Company cars• Buy Backs• Pre-registrations
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Dynamics new-used car volumes
In general the used car market volume is stable!
• Car manufacture is investing in Quality used car labels
• Buy back flow from weak new car markets but strong tourist markets is flooding other EU-countries
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In economic weaker times, the used car buyer orientate on cheaper cars.
2004 2005 2006 2007 2008 2009 2010 2011
-15%
-10%
-5%
0%
5%
10%
15%
-3.1%
5.5%
-5.1%
-1.4%
4.2%
-0.8%
9.3%
-1.0%
8.7%
-0.2%2.1%
-12.6%
13.0%
4.5%
Year-to-Year Volume Fluctuations
Secondhand New cars
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Needed: professional occasion management
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Dec '10
Jan '11
Feb '11
Ma '11
Apr '11
May '11
June '11
July '11
Aug '11
Sep '11
Oct '11
Nov '11
Dec '11
Jan '12
Feb '12
Ma '12
Apr '12
May '12
June '12
80%
85%
90%
95%
100%
105%
Occasion price development related to age till June 2012
0-4 year 4-8 year 8-12 year
Prijsfluctuations:• Allways down over period of time• Somtimes a brief increase, never long
Threat: margin erosion!
More & More required: short purchase & sales cycle!
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Ø S
tock
tim
e (D
ays)
115
Ø Sales time (Days)*68
Relation shift stock time & sales time (B2C)
Reasons:• Attention staff recently trade-ins• Forgotten “dead stock”• “lot cars” more expensive = longer
stock time• “Fresh used car” often cheaper
*For how long has the car just sold be in our company?
Ø stock time: 115 daysBrand dealers
68 days
Ø: stock time ≠ sales time
From First-in-First-out to Last-in-First-out:• Stock ages• Demand ≠ Supply
*Passenger carsSource: CRM Used Carmanagement and adopted by Global Automotive Consultancy
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• Affect on leasing- & bank sector
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Lease contract ≠ model life cycle©
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Time
Rese
arch
& D
esig
n
Gro
wth
Prod
uctio
n
Mat
urity
Dec
line
Reve
nue/
Volu
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2012: 2-4 years max.
Optimum RV-window becomes shorter…..
• 2 – 3 years max.!• Average leasing period get’s longer
Leasing period 4-5 years
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Leasing companies©
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Finance & Admini-stration
(Remarketing)
Sales & Purchase
Service &
Operations
In ’80’s
Finan-ce &
Con-trol
Sales
Ope-ra-tion
s
Procu-
rement
Con-tractMan.
Remar-
keting
Admini-stration
Now…
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Who knows/decides on Residuals & Risk?©
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Collective risk assessment
The “thirst for new leasing contracts” easily leads to gambling!
Decision stakeholders
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Post- & pre-crisis©
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Or we shift……
Lessons from ‘08/'09 crisis:• Buyers stop• Single channel & - outlet• Limited competence / skillset
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Post- & pre-crisis©
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Or ……
Lessons from ‘08/'09 crisis:• Buyers stop• Single channel & - outlet• Limited competence / skillset
Present:• Is multi-channel the answer?• Positioning remarketing?• ROI?
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Shifting Lease into Uses Car proposition? ©
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Finance & Administratie (Remarketing)
Sales & Purchase
Service &
OperationsIn ’80’s
Admi-nistration
Finance & Contr
ol
Ope-ra-
tions
Procu-remen
t
Con-tractMan.
Remar-
ketingSales
Now…
Sales
Highest Risk!!
Service, Procurement &
Operations
Core business?! Future: ?
Remarketing
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Rob M. HenneveldGlobal Automotive Consultancy
+31 6 54 921 409www.globaucon.com
Rob.Henneveld@globaucon.comTwitter.com/#!/RobHenneveldwww.linkedin.com/in/robmhenneveld1©
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