NEWS

Welcome to the second newsletter of 2023. There is no shortage of activity within the global used market as it continues to throw up challenges for both buyers and vendors.

Used EVs continue to generate the most discussion. They are still selling slower than petrol and diesel used cars even though the fall in prices during recent months has helped increase demand and sales in some countries.

Average used prices are also now gently falling in Europe according to our latest INDICATA Market Watch report, except for Turkey where the country continues to write its own rules and in the UK.

The Netherlands features in our country profile where we talk to Frank Tanke about the country’s used landscape which is seeing many vehicles exported in search of maximising profits.

Treating Europe as one single used market is becoming more commonplace for leasing companies and OEMs as they use big data supplied by INDICATA to leverage price and demand.

Our interview with Jon Bulloch INDICATA’s European Business Development Director confirms the increased thirst for used vehicle data. The new agency model, cross border sales and the growing number of Chinese brands launching into Europe are all creating a demand for big data to help vendors make strategic remarketing decisions.

His team are already set up to provide the best live data and valuations. When combined with Autorola Solutions’ industry-leading back-end systems the proposition for vendors becomes even more powerful.

Its Fleet Monitor end-to-end asset and supply chain management system is popular with companies looking to improve their process mapping and overall asset management efficiencies.

Companies continue to search for these increased efficiencies as external factors continue to change the industry and their businesses. You can rest assured our Autorola, INDICATA and Solutions teams are working hard to help you face those industry challenges.

And while we have been interviewing colleagues from around the group Fleet Europe’s Frank Jacobs interviewed me about our group’s future plans. I shared news of our exciting plans for the group in 2023 and beyond as well as my thoughts on how residuals of Battery Electric Vehicles continue to change. I hope you enjoy the interview.

Best regards
Peter Grøftehauge (LinkedIn)

Europe’s leading magazine Fleet Europe has interviewed our group CEO Peter Grøftehauge where he discusses our fantastic business performance in 2022 and looks forward to an exciting 2023.

This includes the growth of the Al Futtaim partnership in the Middle East, the launch of INDICATA’s new Residual Value forecasting tool and what the future looks like for Battery Electric Vehicle residual values.

Read the full interview here:

https://www.fleeteurope.com

The European motor industry continues to change at breakneck speed with each new development set to have a massive impact on the used car market.

The new agency model for instance will see franchised dealer groups focus more time on used vehicles as they create their own used vehicle brands and move away from the reliance on OEMs and new car sales.

The agency model could extend to used cars in the future when the OEM sells cars directly to the customer, which will further change the remarketing landscape.

Online purchase journeys

We’re working with traditional dealer network OEMs and newer agency model brands to offer Trade-In solutions to enable online purchase journeys and provide a solution to absorb trade-in volumes not covered by the traditional dealer model.

“We work in partnership with the OEMs to offer the best solution to match their circumstances. For OEMs with a traditional dealer network, we can supply fully underwritten valuations to enable the dealers to keep the trade-in vehicles they want and give us the ones they don’t want; for agency model OEMs we can provide a fully managed service to take all trade-in vehicles.”

New brands are joining the market

In the last 12 months there have been a multitude of new Chinese car brands launching in Europe. The success of these brands will depend very heavily on their cars being accepted in the used market.

“The extent of the changes in the industry over the next five years is massive and the thirst for used vehicle data will grow as the different stakeholders utilise it to make strategic decisions to optimise sales and profitability by country or across Europe.

“With no historical used vehicle data to refer to in Europe, brands will be looking for new insights into how their vehicles are performing in the used market. INDICATA is set up to help and support new and established brands as they change the way they interact with customers and their dealers.

Cross border sales are increasing profitability

“Our data is already helping pan European customers and their dealers identify where their used cars are making the most money. This cross-border strategy powered by big data is helping generate an additional 2,700 Euros per vehicle. It has given them the ability to leverage price and demand in a market where used cars are in short supply, whilst maximising the proportion of their brand cars sold through their franchised dealer network,” said Jon.

The USP of the Autorola Group is that we can supply complete remarketing solutions including the best live data and valuations from INDICATA, together with industry-leading back-end systems through Autorola Solutions. It provides full remarketing capabilities in terms of buying, selling and logistics of used vehicle sales across all of Europe and beyond, including all cross-border administration. The opportunities we can bring to OEMs, leasing and rental companies are huge.

Whilst used ICE cars comprise the majority of all of Europe’s used cars, the topic of conversation among most dealers and OEMs currently is used EVs which currently comprise just 5% of the market.

Dealers are split currently in that some are confident in stocking EVs and then selling them to targeted buyers while other dealers are sitting on the sideline and waiting for the right time to dip their toe in the water.

Helping support dealers

“Dealers are going to need more help as they transition towards their new future. We are all set to help and support them with our data and insights. We are working to partner with more systems providers to integrate our data into dealer software. We do not want them to have to move away from their systems of choice, instead we can integrate our data into the software they are already using via APIs,” explained Jon.

“INDICATA can provide powerful used car reporting and analytics via a dashboard that is quick and easy to use. Proactively informing dealers when cars are over age or are priced too low or too high with the competitors comes as standard with INDICATA. It is intuitive and constantly keeps a close eye on market prices and supply to become an extra member of the remarketing team. ”We can support OEMs, leasing and rental companies with a regular portfolio of valuations to help them manage risk in their fleets and maximise remarketing valuations. We’re launching forecast values this year across Europe to enable full revaluation and forecasted contract end-date valuation.”

Tracking the used market

INDICATA’s Market Watch report has been supporting dealers for over three years in tracking used sales, prices, and stock levels across 13 European countries.

EVs have created the most headlines in the report in recent months by reporting record prices and then as stock increased and the European economies started to experience inflation record falls. The reduction in prices has certainly helped generate demand and clear ageing stock but the power train is still yet to find its level within the European market.

INDICATA’s reports are also helping OEMs track the performance of their dealer networks on used cars. It enables them to identify opportunities to improve processes and maximise use car profitability.

Buying and selling at the right price

For dealers it is all about buying and selling at the right price and gradually mixing in stock with traditional ICE cars. Petrol is the favoured power train type in the majority of Europe while diesel continues to fall from grace, except for the eastern European countries where it remains in high demand.

“Countries providing incentives to buy and run new EVs are helping increase sales but often the challenge comes when these cars reach the used market. Each country must work out how to transition EVs into the used market over the next couple of years otherwise new sales will stall. As we get closer to 2030 the market will have to change and new and used prices will have to come down. INDICATA is keeping a close eye on all elements of the market to help buyers and sellers,” said Jon.

The quest for data from remarketing decision makers in The Netherlands continues to grow as they use it make strategic decisions as to what they sell, where and for what price.

The Netherlands has multiple customers now buying bulk data over the past two years including banks, leasing companies and dealer groups.

Leasing companies are constantly looking for the most profitable country to sell used cars that are coming off lease. There are a large number of leasing companies based in the country and they have switched onto the fact that selling their used cars coming off lease in other countries may be more profitable for them.

Exporting used cars

Between 70-80% of the country’s used cars are now exported by Autorola Netherlands. More Dutch used cars from leasing companies are exported to other European countries than to home-based dealers which makes The Netherlands one of the most transient remarketing nations within the group. Germany is its biggest customer taking around 70% of the total followed by Hungary, Belgium, and Portugal.

“With INDICATA we have the used car insights data in real time to help vendors decide where best to sell their used car and amazingly there is a big difference depending on the make and model in question.”

Export can increase disposal profits

“We have seen vendors generate an extra 3,000 Euros per car by using our data to locate the perfect country to sell their car in. Once the country has been identified our cross-border expertise goes to work in engaging with buyers in that country to team up cars with buyers,” said Frank.

“Buyers have confidence to bid on cross border used cars via the Autorola platform as they trust our process. We have an excellent reputation in looking after both the vendor and buyer,” he added.

Frank’s team employs three experts who fill in the 20 pages of paperwork needed to export each car. It aims to make it easy for vendors and buyers and why Autorola has become a leader in the field of cross border sales. They can also manage all the logistics involved in getting each car delivered completing the cradle to grave export approach. This helps fuel a profitable and proactive export service.

EV new car incentives

Since 2012 the Dutch Government has been one of the most eager in Europe to introduce incentives for companies and drivers to reduce their CO2 by getting them out of ICE cars and into EVs.

Drivers now base their new car decision on the reduced tax they must pay rather than the brand they aspire to. This has reduced brand loyalty in the new car sales market, but that doesn’t always carry over to the used market.

Tesla is a very popular in The Netherlands and tax incentives, which last five years, helped the brand sell 20,000 Model 3s in December 2019. It means vendors will be seeing these cars coming back into the market in December 2024 which will provide significant challenges for vendors.

Used EV stock levels continue to rise

Much of the time the best option is to export the car into another market but when the used EV sector is still in its infancy that does not provide an immediate and quick answer. Stock levels have continued to rise over the last six months in the country and there could be greater incentives needed to speed up the sale of cars.

“It is great to see incentives being offered to buy new and used electric cars, but it does not take account of the substantial number of ICE cars that are already in the market as used cars. Diesel has fallen from grace which means that cross border sales are often the only answer to shift stock out of the country as they have been devalued in the home market by these Government incentives.

Diesel popularity continues to fall

“In our latest INDICATA Market Watch report diesel has become the third most popular powertrain as hybrids start to take over its position. Petrol used cars continue to be the most popular accounting for nearly two thirds of all used cars sold. The market continues to change, and we are helping vendors and buyers to come to terms with these changes with our online MarketPlace platform and INDICATA used car insights working together,” said Frank.

“Our business continues to be at the heart of the modernisation of the used car industry and we look forward to growing our volumes as new car supply starts to help feed more used cars into our market,” he added.

Autorola Solutions celebrated its first ever global sales training conference earlier this year with 30 colleagues from around the world converging on Denmark.

Here they experienced three action-packed days where they shared ideas and insights with a combined vision to create even stronger propositions for our customers around the world.

The sales team agreed that Fleet Monitor is the current star of the show with the customers. The end-to-end asset and supply chain management system allows customers to monitor and improve their workflows to maximise asset management efficiencies.

Fully customisable

Fleet Monitor is a fully customisable platform that allows customers to build workflows across their organization and with external parties based on real-time shared data. The platform puts people, processes, and technology together in one digital landscape, which streamlines operations and services for fleet owners in all segments of automotive who want to optimize their business.

We are being approached by large fleet owners who want to be constantly on top of their customer service and Fleet Monitor is the answer as it ties all processes and data together to help them stay competitive in the market. When integrating INDICATA’s used car data insights into their system and the Autorola MarketPlace online remarketing platform it provides them with a true cradle-to-grave proposition.

Full solutions partner

Our strong proposition is a result of years of experience in the automotive market, a strong organization of subsidiaries across 19 countries throughout the world and three strong business units that feed into the overarching strategy of Autorola Group to be the preferred full solution partner for customers in automotive.

Autorola Solutions continues to go from strength-to-strength powering dealer, fleet and OEM inventories and is in 19 subsidiary countries.

Follow us on LinkedIn 

https://www.linkedin.com/company/autorolasolutions/

While there is much talk about used BEVs the demand for used petrol and diesel cars remains strong, but it does depend on which country you are in.

There is a north-south divide by powertrain, with all countries north of Austria seeing used petrol cars dominating, whilst Austria and all nations to the south, plus Sweden continuing to see used diesel taking the lion’s share of online B2C used car sales.

Used petrol and diesel cars still account for 86.1% of Europe’s used car market and despite average used BEV prices falling by 9.7 percentage points in 4 months, Market Days’ Supply remains high at 110 days going into April 2023. BEV stock market share increasing by 9.3% month on month.

Prices are now falling

For most of 2022, prices continued to rise until September, but used prices are now falling, with nine countries showing a month on month used car price fall going into April. Average prices for Turkey rose 9.3 percentage points MoM, meaning they are now 88.6pp higher than at the start of 2022.

Poland also saw prices rise by a marginal 0.2pp MoM, but for all the LHD European markets, average prices fell 0.3pp MoM, and they are now 3.6pp lower than at the start of 2022. U.K. prices which fell for most of 2022 saw a 1.1pp uplift MoM, leaving average prices still 5.2pp lower than in January 2022.

Europe’s used car market is healthy

“The general health of Europe’s used car market is very good, but we are continuing to see prices settle down after long periods of monthly rises. Ironically, the UK is now seeing some small price rises while the rest of Europe are seeing price falls. It was the opposite way round in 2022, while Turkey continues to do its own thing with prices nearly doubling in the past 16 months,” explained Andy Shields, INDICATA global business unit director.

“Used EVs are still a challenge in some countries while in others the fall in prices over the past few months has done an excellent job in revitalising the market with both demand and sales increasing. It will be interesting if prices have to fall again before the summer to help speed up movement in the used EV sector again,” he added.

For a free copy of the latest INDICATA Market Watch report go to www.indicata.com