The Czech Republic automotive sector has matured significantly over the past 12 months according to Rene Buzek, managing director of Autorola Czech Republic.
With a stable economic and political base, demand for new vehicles within the Czech Republic is high and has seen vehicle manufacturers turn their attentions on improving business infrastructures via the implementation of workflow management tools to enhance automation. This has been led by Fleet Monitor from Autorola Solutions.
‘We have witnessed an increasingly structured way of working within the market,’ explained Rene, ‘which has been positive for business and seen demand for our Solutions product increase. We are on the cusp of starting up some new projects with OEMs within the market with a view to enhancing their processes and workflows.’
Leasing segment overloaded
The leasing sector is what Rene describes as ‘overloaded’ with vehicles at present with unrealistic residual values resulting in higher levels of stock and stocking days. The private buying market is simply not absorbing the volume of vehicles coming to market and, as a result, banks are showing signs of nervousness and applying pressure on lease companies to ensure they speed up used sales, so they can see return on investment.
Rene said, ‘From our perspective this challenge is a great opportunity. We are working together with the leasing sector to relieve the pressures to find the right pricing models and to keep stock days under control. We are using Solutions to educate and coach the leasing sector about which vehicles to dispose of via which channel to optimise both stocking days and pricing.’
Rise in export
Despite the overall used car sector being buoyant, the challenge of choosing the correct channel for disposal of certain vehicles has also seen a steady rise in the volume of vehicles being exported. With certain ‘lower specification’ vehicles becoming less desirable as the market matures, some of the major vehicle handlers are turning to export as a means of disposing of the surplus domestic stock.
However, as the lower specification vehicles leave the market via export, the import market is steadily developing with the demand for higher specification, lower mileage vehicles rising. René said ‘In line with the new sector, over the past 12 months the demand for high specification, lower mileage used vehicles is too, very positive.’
These imported vehicles are entering the market from Austria, Belgium and, predominantly, Germany.
Global issues rumble in background
Although the market has and continues to evolve at pace, some of the current major global challenges appear to have had little impact on the market to date, but the rumblings are clear.
As the ‘demonisation of diesel’ continues to spread post- ‘Diesel Gate’, the market for diesel powertrains remains buoyant domestically. However, there are some rumblings within the market that plans are afoot to implement regulatory measures, in line with EU recommendations.
Rene said, ‘This is causing a bit of concern within the market at present, but I am confident that we will not see big change within the next five years.
‘The impact of WLTP is another issue that has been under great scrutiny in recent months, throughout Europe, and looking at the domestic data – registration figures have reduced, yet the market remains positive.’
Supporting the change
With the evolution of the market well underway, technology is beginning to play a key role in progressing business across the board but Rene points to one of the key challenges within the market as being centred on mindset and the willingness to adapt to the new order.
‘It’s a challenge in some areas for people to accept the need to change their remarketing strategies,’ said Rene, ‘but on the whole, the market is recognising that it needs to bring in new processes, business models and management flows to satisfy demand.’
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