August was another strong month for the European used car industry according to our latest August INDICATA used car insights report with sales up on average 10.3% year-on-year.
Used car pricing continued to increase in most markets with Turkey, Portugal and Italy experiencing the largest year-on-year rises.
Despite these rises we sense that the used car industry is cooling down very slightly and it will be interesting to see how September pans out for vendors and buyers alike according to INDICATA business unit director Andy Shields (LinkedIn).
This will involve tight control of stock and pricing, both of which INDICATA can help companies with across 13 European countries.
Autorola Mexico continues to grow
Mexico is a country where the remarketing sector is still growing in maturity and our Autorola team led by Alfredo Hernandez (LinkedIn) is doing some great work with OEMs, banks and rental companies developing these strategies.
The used market is very strong currently and Autorola’s online used car inspection and sales portal is at the heart of many successful online auctions.
We interviewed Alfredo about the changing face of the Mexican market focusing on how the used and new car markets are doing and how Autorola is using its technology and processes to help increase the transparency and professionalism of all used vehicle sales.
Digitisation of remarketing plans a central role in fleet management
Our Solutions business unit is advising its customers to keep its used cars moving to support business finances and cashflows as the remarketing industry settles down following the global pandemic.
With digitisation and automation now playing a central role in running fleets, Autorola Solutions believes profitability and efficiency are two immediate areas which can be influenced significantly as a result.
Read what business unit director Ib Kimose (LinkedIn) has to say about how our Fleet Monitor asset management system can help streamline processes, improve efficiency and performance, as well as ensure all activities are compliant.
End of an era – a tribute to Niels Grøftehauge
Finally, it is with great sadness that I announce the passing of my father Niels Grøftehauge. Niels has been involved with Autorola from the very beginning and has been a great source of inspiration for us all in Autorola, Bilsalg, Autocom and Bilpriser.dk and a significant contributor to the market position we have achieved at Autorola Group today.
I know many customers, colleagues and suppliers have met Niels over the years and will remember his cheerful nature and depth of knowledge of the automotive industry. He will be missed, and we honour his memory!
Best regards
Peter (LinkedIn)
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NEWS
Introduction from CEO Peter Grøftehauge
New INDICATA insights
The European used car market grew by 10.3% year-on-year in August on the back of rising prices and supply shortages according to INDICATA’s insights report, but signs of a slowdown are showing.
Twelve of the 13 countries where INDICATA has a presence experienced growth during August.
Turkey, Portugal and Italy saw the biggest year-on-year growth at 41.7%, 39% and 33.1% respectively, while only the UK market contracted in August, by 3.3%.
August used car pricing was strong
Used car pricing was strong and continued to increase in most markets, which combined with reports of rising wholesale prices and high conversion rates, showed that overall demand is outstripping supply.
INDICATA’s insights show that sub-12-month old cars are particularly in short supply as OEM self-registration and demonstrator schemes continue to be compromised by manufacturing plants playing catch up following the impact of the Covid-19 pandemic.
Dealers are short of cars
Dealers across Europe remained short of used cars, particularly those in Poland and Portugal where stock levels reduced by 11% during August.
The UK and Turkey experienced the joint highest rise in stock of 3%.
While August pricing continued to rise, INDICATA warned that dealers are becoming more cautious in their buying habits as wholesale prices have remained high. In addition, rising Covid-19 infection rates could too result in a slowdown across many European countries in September and Q4.
Signs of slowing down
“There are signs that the European used car market started slowing down during August although prices remained strong,” explained Andy Shields, INDICATA’s global business unit director.
He continued, “Dealers are becoming more cautious with stocking following rises in infection rates.
“There are still healthy profits to be found from fast-moving stock but dealers need to keep a close eye on pricing and stocking days to ensure they aren’t left with slow moving stock should prices and demand swiftly fall.”
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Used car market playing catch up in Mexico
With a population of almost 130 million, a rich cultural history and diversity, and abundant natural resources, Mexico has the 11th largest economy in the world. Primary activities include farming and fishing; secondary activities comprise manufacturing, mining and construction; and tertiary activities cover retail and the services sector.
Yet it is a country that now faces many health and economic challenges. The Covid-19 pandemic has caused vast challenge with over 70,000 deaths recorded to date. A knock-on implication, but by no means the only contributing factor, has also seen the country’s GDP fall by -17.1% during Q2.
Positive economic signs since May
Mexico’s president, Andrés Manuel López Obrador declared the economy had ‘hit bottom’ in April and May. There have been positive signs since with Mexico’s economic activity advancing 8.9% in June.
Amongst this backdrop, Alfredo and his team have clearly faced their own trials, but indications are that road ahead looks increasingly positive.
“Quite simply, April and May were horrible,” explained Alfredo. “We sold 10% of what we are used to selling during that period.
Used market playing catch up
“Since then, the used car market has been playing catch up and we are now ahead of all expectations.”
Alfredo reports a significant rise in demand for used vehicles since June, from all Autorola partner OEM brands – BMW, FCA and Mercedes Benz – with conversion rates up in the high 90% per sale. This is in contrast to the typical 75% sales conversion rates pre-Covid-19. Such has been the performance that other OEM brands are also looking on with interest to provide their dealers with a steady flow of stock.
And whilst the used car market shows a significant uplift, the new car market continues to be hard pressed. A combination of economic factors and personal security issues highlighting just a few of the challenges.
Daily rental is growing
One area showing some real potential for growth is rental – not least of which because of the geographical challenges Mexico represents with a central urbanisation, surrounded by dessert and mountain ranges.
Some of the highly populated tourist areas which are home to large fleets of tourist transport – Cancun as an example in the south east or Los Cabos on the Baja California peninsula – require defleet vehicles to be shipped long distances to get them back into densely populated areas (central Mexico). Some rental businesses are now exploring the opportunity to use the Autorola platform to facilitate this ‘remote selling’ function.
Our online platforms are suited to OEM activity
Alfredo explained, “Without doubt, the OEM side of the business continues to be key and our platforms are made for their activity, but the rental market opportunity is an interesting one that presents its own challenges and opportunities for fleets and buyers. There is exploratory work to be done but the capabilities and flexibility of our system is opening up potential new opportunities for different market sectors – something we will continue to explore.”
For Alfredo and Autorola Mexico the road ahead is becoming increasingly clear and already there are some exciting plans afoot which will see the business continue to go from strength-to-strength.
As Alfredo himself puts it, “This is an exciting time for us as a business and we are genuinely excited about what is to come over the next few weeks and months.
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Autorola Solutions saves your business time and earns you money while showing you how you go digital with a purpose
Autorola Solutions is advising its customers to ‘keep moving’ in a bid to support business finances, and more specifically cashflows, as the remarketing industry continues to settle post-pandemic.
With digitisation and automation now playing a central role in running fleets, Autorola Solutions believes profitability and efficiency are two key and immediate areas which can be influenced significantly as a result.
Delays in selling assets impacts cashflow
Ib Kimose, director, Autorola Solutions, said, “Cost saving is a central issue in vehicle fleet management and every fleet manager wants to achieve large returns with low costs.
“Each day an asset is standing still on the compound without moving onwards in the flow, it depreciates, while at the same time accruing cost to storage.
“Delays impact largely on fleet management businesses and is directly linked to the final sales price and margin obtained. This has a direct impact on cashflow.”
Work intelligently with data
He continued, “Working intelligently with data allows you to monitor on any gateway your flow and allows you to freely configure your focus areas; from timely call back of your cars on the road, to actual returns, return inspections, sales preparations to online listing of cars and the aftersales processes.”
Autorola Solutions’ insight highlights that fleet managers agree that they spend too much time reporting work times and the most frustrating aspect of fleet management is the high cost throughout the lifecycle of the asset and long lead-times.
Asset life cycle stages
“It is important to stay connected to your stakeholder landscape; customers and drivers, as well as suppliers and business partners, all play an important role in the different stages of the asset life cycle,” explained Ib.
“Thus, boosting productivity collectively is important. Fleet Monitor is both a process management tool and a collaborative platform with communication options – designed to simplify every part of your fleet and resource management.”
Lean fleet management
Autorola Solutions offers lean fleet management based on state-of-the-art online systems that work together to support efficient fleet management processes from acquisition to disposal for fleet, OEM, bank, leasing companies and dealer groups.
Fleet Monitor has been proven to help businesses streamline processes, improve efficiency and performance, as well as ensure all activities are compliant. The collaborative platform provides users with a powerful tool to reduce operational costs and mitigate both operational and financial risks, and its communication module is an integral part of creating a service-minded platform.
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