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The Secondhand Vehicles’ Market Challenges and Opportunities at European Level Bucharest, 21 November 2013. Rob Henneveld Global Automotive Consultancy. Today. Present dynamic used car sector. 1. New cars: Traditional & alternative distribution, Zero-mileage registration. - PowerPoint PPT Presentation
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The Secondhand Vehicles’ MarketChallenges and Opportunities at
European Level
Bucharest, 21 November 2013
Rob HenneveldGlobal Automotive Consultancy
2ALB-Leasing conference 2013
Today
1. Present dynamics and developments in both Europe and Romania. Some trends and figures of the new and used car market, including mileage fraud.
2. Back to the drawing board for a SWOT!Determining Strength & Weakness & Opportuni-ties & Threats in present day used car sector
3. Adding Value to Used Car Supply Chain. While creating a permanent stream of revenue from Inspections
4ALB-Leasing conference 2013
Present dynamic used car sector
2. Mediteranea countries:• Strong drop in sales new cars• No (local) market for buy-backs & ex-demo’s• Volume- & price pressure on existing used car market
4. Consumer:….from possessing to use…….…Not to Buy is the New Buying…..
1. New cars: (1) Traditional & alternative distribution, (2) Zero-mileage registration
Online, Independents, Supermercado’s, etc.
3. Drivetrains: Auto ≠ Auto• Traditional drivetrain disappears (slowly)• Hybrid & micro-hybrid• Electrical (Full/Plugin/Range Extend.
4x major trends 2013
5ALB-Leasing conference 2013
373
524
491
Car density:Number of cars per 1.000 inhabitants
EU average: 478
213
Flow West => East• Young & high mileage cars• Older used cars
Flow South => North• Young & smaller cars• Low mileage cars
See printed version for car density per country in detail
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Trends Registered Car Park ‘07-’12
2007 20120%
10%20%30%40%50%60%70%80%90%
100%
22.7%3.3%
14.2%
12.1%
18.1%
31.2%
11.0% 21.7%
13.1% 14.5%
20.8% 17.1%
>0 - ≤2 >3 - ≤5 >6 - ≤10 >11 - ≤15 >16 - ≤20 >20
Consumers accept the “older car”:• Quality of cars in general increases….• He/she purchases and older one…..
• Functionalities are as good• Too high mileage is not an issue…..or is it?
2007 20120%
10%20%30%40%50%60%70%80%90%
100%
75.2% 67.0%
24.8% 33.0%
Benzin Diesel
Diesel share Europe: 35,9%
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Import on the increase (again)
Importing fairly easy Used cars plentiful available
* Estimation, **Extrapolated2008 2009 2010* 2011 2012 2013**
0
50000
100000
150000
200000
250000
300000Passenger cars
Import used car Sales new carsSource: APIA
Pollution tax cut of 30%
Highest ratio new sales vs import!
Need for mobility ≠ # used car supply
Influence of Government(s)
Non-transparency can result in:Disappointment / High Cost/Bad perception of sector…………
Eco-fiscal regimes: Too much, Unexpected, Disrupting markets
Threat used car sector: Mileage fraud
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Mileage fraud used cars
“Transaction Pusher #1”
Best target cars:• High mileage• Young cars
Crossing the border legitimize the new mileage
Barrier to do business across Europe:• 1.000 cars/Fte (mileage verification)• Financial risk & cost• Bad for image
Both the sector & consumer pay the price for it!
The Future for Quality Approved Used Cars looks good!
Low mileage cars are not trusted
11ALB-Leasing conference 2013
Next
1. Present dynamics and developments in both Europe and Romania. Some trends and figures of the new and used car market, including mileage fraud.
2. Back to the drawing board for a SWOT!Determining Strength & Weakness & Opportuni-ties & Threats in present day used car sector
3. Adding Value to Used Car Supply Chain. While creating a permanent stream of revenue from Inspections
12ALB-Leasing conference 2013
(SWOT) Used Car Sector
Positive NegativeInternal
Strength Weakness
ExternalOpportunity Threat
Opportunity Threat
SWOT
See printed version for extended SWOT
1. Stable product (volume sales fluctuations)
2. Product differentiation (price/age/quality)
3. Plentiful used car retail outlets
4. Accessibility is high through Internet
1. Lack of transparency
2. Low competence & retail skillset
3. Stock funding by banks
4. Old fashion-based daily practice
1. Stock - & Management Information
2. Development Pan-European market
3. Cross-selling opportunities
4. Internet differentiates on quality/price
1. Low entrée barrier & low sector imago
2. New car sales volumes & pricing
3. Eco-fiscal regime governments
4. Fraud (fiscal, mileage, etc.)
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Some conclusions SWOT
How can we make the real differencePrice is NOT enough anymore
We need to “lock-in-the-client” with services
Closing the gap of a-synchronic information between seller and buyer
Action #1: by “Adding Value”Start with transparent supply of information
Are we supplying a used car & maybe services,
orare we just moving dead metal?
NO supply shortage used cars* &
NO slack in demand!
We need to manage the perception of high
mileage cars
* In actual volumes
15ALB-Leasing conference 2013
Next
1. Present dynamics and developments in both Europe and Romania. Some trends and figures of the new and used car market, including mileage fraud.
2. Back to the drawing board for a SWOT!Determining Strength & Weakness & Opportuni-ties & Threats in present day used car sector
3. Adding Value to Used Car Supply Chain. While creating a permanent stream of revenue from Inspections
16ALB-Leasing conference 2013
Revenue from End-of-Contract Inspections
• Small cost => high return• Strategic reasons lead to: (win-win)
– Additional source of revenue– Commercial sales strategic leverage………– Awareness among Fleetowner & drivers– Increase better driver behavior
From “disposal” to permanent source of revenue
Leading to lower operational vehicle cost!
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Average split Passenger Car & LCV
0 - ≤12 >12k - ≤24 >24 - ≤36 >36 - ≤48 >48 - ≤60 >600
500
1000
1500
2000
201398
799
12421395
1675
264
731
18021987
1776
2210
Passenger cars LCV's
(Eur
o)
Based on +39.000 EU Inspections
In month’s =>Source: Macadam Europe
Best-practice method:• Audatex based• Brut repair cost (Q-new!)• -/- 30% = actual loss-of value
Part of determining:• Risk management• Insurance premiums• Correct franchise per incident
See printed version for more details
17,4% no cost
Above “Normal Wear & Tear” cost per vehicle
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Main requirements implementing
Some conditions for implementing:• Transparency on method & outcome• Consistency in: “Normal Wear & Tear”
– Norm inspection • Consistency in loss-of-value calculation• Processing insurance (claim) file• Educating fleetowner & driver (over time)• Monitor and apply benchmark key-figures
Sample of norm:
Latest development: “in-between-inspections”
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Conclusions
1. 2. 3. Europe is divided in 3-marketsMileage fraud is disaster for image of sectorManaging perception high mileage cars
No shortage supply, no lack in demandNeed to “lock-in-clients” with recurring servicesMore transparency is required
Steady and permanent stream of revenueSmall investment – high revenueLeads to lower Total Cost of Ownership TCO)
22ALB-Leasing conference 2013
Rob M. HenneveldGlobal Automotive Consultancy
+31 6 54 921 409www.globaucon.com
[email protected]/#!/RobHenneveldwww.linkedin.com/in/robmhenneveld1