Used Car Remarketing in Europe What drives the sector & how this affects your business Bucharest, 15...

Used Car Remarketing in Europe

What drives the sector & how this affects your business

Bucharest, 15 November 2012

Rob HenneveldGlobal Automotive Consultancy

2ALB-Leasing conference 2012

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


• 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


Technology as a (sales) driver©

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Manufacture in a continuous race………


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%


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


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


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


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!


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

mes

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


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…


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


Post- & pre-crisis©

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Or we shift……

Lessons from ‘08/'09 crisis:• Buyers stop• Single channel & - outlet• Limited competence / skillset


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?


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


Rob M. HenneveldGlobal Automotive Consultancy

+31 6 54 921 409www.globaucon.com

[email protected]/#!/RobHenneveldwww.linkedin.com/in/robmhenneveld1©

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Used Car Remarketing in Europe What drives the sector & how this affects your business Bucharest, 15...

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