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

2023 has started just as 2022 finished with all areas of our business very busy in supporting our customers around the globe face up to the constantly changing used car market.

Used EVs continue to be the major topic of conversation as they try and secure their place in the used market. INDICATA has been tracking used EV data for the past 2-3 years and we have shared with you our 2022 findings which shows how the market has changed for both the volume and premium brands.

Growing levels of used EV stock

The used EV market now has more cars in stock than ever before, but the recent price correction in many countries is already starting to breath life back into the sector. Our latest INDICATA Market Watch used car insights report shows how all the fuel types are performing in 13 European countries.

Prices have softened slightly in the majority of European countries but used car shortages are a common challenge as reduced new car production continues to impact the second hand market.

Cross border trends

Cross border sales via our MarketPlace online platform are helping balance the supply and demand for all used cars, including used EVs across Europe. MarketPlace global business unit director Morten Holmsten brings us the latest trends on all types of cars across Europe.

Meanwhile, our Autorola Solutions team is supporting dealers to manage their used car trade-ins more efficiently to help them sell more cars more often. Find out more in their short film which brings the Trade-In proposition to life.

Another busy year for Autorola Germany

We also talk to Autorola Germany’s new country manager Henrik Meissner. He discusses how the group’s products and services are supporting customers in a fast-moving used market and how our data is helping make a difference with both vendors and buyers. It looks like another busy year for our German colleagues in 2023.

And after attending the recent ENG remarketing conference it was so nice to meet so many customers, friends and colleagues on the two-day event in Spain. We look forward to seeing you all again soon.

Best regards
Peter Grøftehauge (LinkedIn)

Autorola Germany has reported business growth levels of 40% over the last 18 months as it continues to help and support dealer groups, fleets, OEMs and banks to manage its vehicle assets more efficiently. But the market is now changing and Germany’s customers are looking more to Henrik and his team to support them in a fast-changing used market.

“Over the past three months Germany has seen its used market move from demand exceeding supply to one that has slowed down caused by rising inflation. Supply now suddenly exceeds demand which has been a shock to many in the industry. Germany has not seen a surplus of used stock for 2-3 years since early 2020 before new car supply was compromised by the global shortage of semiconductors,” explained Henrik.

Export levels have begun to rise

Due to this dramatic market change and an increased acceptance by buyers and vendors to buying and selling online Autorola’s Marketplace remarketing portal is now playing its part in helping balance the country’s used car stock. Export levels have already begun to rise through the portal as leasing and dealer vendors dispose of unwanted or overage stock.

New EVs have become more popular helped by new car incentives and lower tax levels. Therefore, EVs are generally being purchased by larger companies as company cars on contract hire or lease as they aim to reduce their level of emissions.

The used EV market has softened

The rising cost of living however has made a big impact on the prices and demand for used EVs. The used market has softened with some EVs being exported to other countries where zero emission subsidies are much more generous for drivers. This trend has contributed to 27% of Autorola Germany’s used stock being exported via MarketPlace by the end of 2022.

Germany remains a predominantly diesel market due to the long distances between cities which means the market share of EVs remains small when compared with other fuel types.

“Like so many other countries there is a difference of opinion between manufacturers when new car production will return to its former level. Stellantis and VW both say its nearly back to normal while

many of the German brands and Ford believe it will be the end of 2023 and into 2024 before this happens,” said Henrik.

Using data to manage stock more efficiently

Whatever happens to production the current slowdown in consumer confidence means more dealers are looking to INDICATA’s used car and market supply insights data to help them manage their stock more efficiently.

INDICATA Germany has grown its sales team with many dealers looking to use its price and volume insights to help them make the decision of what stock to sell at auction and what to keep.

Helping make data powered business decisions

But while INDICATA continues to benefit from sales growth there is still work to do in educating the market about the power of making data-led remarketing decisions.

“Dealer groups need us to prove to them the power of making key business decisions by using our data. Right now being able to identify and buy fast-moving stock at auction and trade out of those models that are in low demand is critical to support continued profitable used car growth. That’s where our data can make a big difference,” explained Henrik.

Harmonising products and services

Henrik is already working hard with his team to harmonise the MarketPlace, INDICATA and Solutions teams so they work more closely together. No other German supplier can offer an established online used car platform, used car insights data and the Solutions platform which simplifies the digital processes of managing a vehicle through its life cycle all in one place.

“We have strengthened our Solutions sales team in recent months. Fleet Monitor is a very powerful system that can digitise a dealer’s processes from In-Fleet to De-Fleet. We are targeting larger dealer groups with this solution to provide a powerful interface bridge with their Dealer Management System. Dealers are beginning to understand that Fleet Monitor is a powerful addition to their DMS rather than a replacement or replica. This is another sales opportunity which will help us achieve our growth plans during 2023,” said Henrik.

At the heart of Autorola Solutions’ proposition is the Trade-In App which dealers use to take the customer through a step-by-step trade-in process for their car.

You simply input information with the customer in attendance about their car into the App and the App helps power a real time vehicle valuation which you share with the customer to seal the trade-in deal.

Watch the film to find out more:

Follow us on LinkedIn 

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

In 2022 Autorola saw the number of cross border used cars sales across Europe rise by 21.5% as used car stocks remained very transient to meet the changing needs of consumers.

The Autorola MarketPlace online wholesale platform continued to play its role in helping dealers source cars in countries with stock shortages while supporting other countries manage their stock surpluses.

Volumes are increasing

Not surprisingly volumes of cross border cars going through the MarketPlace platform increased during Q4 2022 as the demand for used EVs across Europe reduced dramatically. The Europe-wide rise in the cost of living left consumers unable to justify paying two or three times as much for a used EV as a used ICE car. 

The slowdown in demand for used EVs resulted in Market Days’ Supply rising to 103 days in early January which left many countries with surplus stock. This is three times as much EV stock that was in Europe earlier in 2022 which has raised the level of cross border activity managed by Autorola to up to 22% in 2023. This trend continued into February and the MarketPlace platform continues to help balance the supply and demand of used EVs across Europe.

All documentation is managed

Autorola’s cross border expertise doesn’t just include the provision of the online remarketing platform. The MarketPlace platform manages all the documentation, including the different Vat and tax elements of exporting and importing a used car from country to country.

Transportation is another key element of Autorola’s cross border proposition. It employs logistics managers in multiple countries in addition to an overall head of logistics in Denmark.

Cradle to grave cross border service

The ability to provide a cradle to grave cross border service is the reason this service continues to grow each year according to MarketPlace’s global business unit director Morten Holmsten.

He said: “Our cross-border proposition is the result of many years of work listening to customers in different countries and by developing our platform to manage all elements of their import and export transactions. It is a unique offering. 

“We have experienced people in multiple countries that work together to make the process of exporting and importing used cars as hassle-free as possible. We like to think we play a major part in helping European countries balance their used car shortages and surpluses,” said Holmsten.

Current cross border trends

• Sweden and Poland cross border activity depends on how the exchange rate develops. Currently the Swedish currency is very low against the Euro, which makes it very attractive to export cars. In 2022 85% of Sweden’s used cars sold via MarketPlace were exported
  
  

• For tax reasons, exporting cars from Portugal isn’t allowed, but Portuguese dealers imported more than half of their used cars during 2022
  
  

• The Netherlands has had very strong incentives to buy new PEHV and BEVs and lot of these cars are now being importer from Denmark, Germany and France to satisfy consumer demand
  
  
• Many of Italy’s used exports are luxury or sports cars, which incorporate a high share of the new car market
  
  
• Many Danish executive used car exports end up in Germany
  
  
• Generally neighbour countries tend to trade with one another to benefit from improved logistics and speed of delivery