Morten Holmsten, global director for Autorola Marketplace recently presented his views on disruption within the automotive sector suggesting that although it was difficult to create – upstream used car selling; data driven inventory management; and online consumer sales were clear trends.
In his session – ‘European disruption within the automotive sector’ – organised by the Turkey Authorised Automotive Dealers Association, Morten discussed the trends in the European automotive market and explored the reasons why the market changes so slowly.
Nobody questions whether an online auction works
Morten, who oversees Autorola’s Marketplace business unit across Europe Australia, Brazil and Mexico spoke of how in 2001 Autorola started to disrupt the physical auction market by being the first auction provider to go 100% online with its process. However, it was five years previous that Autorola made the first attempt – ‘an attempt that failed due to technology not being ready’ explained Morten.
He continued, ‘If we were able to say that we succeeded with disruption, there shouldn’t be any physical auctions left in Europe. But there is. We managed though to get a fair market share and we started the movement towards online auctions. Today nobody questions if an online auction works.”
Disruption in the automotive sector is challenging
Morten discussed why disruption in the automotive sector is such a challenge in comparison to other industries which have been greatly impacted by disrupters such as Apple (mobile phones); Airbnb (accommodation); Uber (taxi); and Netflix (movies).
“All three challenged the established players in their respective markets causing some to go out of business whilst others adapted to the rules of the new players,” he said.
Buyers and sellers have a different view on the quality of a used car
Focusing on the automotive sector, Morten said there are many reasons why it was difficult to create real disruption, namely the fact that some very big players own the products along with most of the distribution channels; the products need regular servicing at a designated location; and the actual physical product is expensive to distribute.
He said: “It’s also worth noting that used vehicles are a product where two people – buyer and seller – can have very different opinions on the quality of the same product.”
Data drives Autorola’s decisions about prices and buying markets
Turning his attentions to the European market trends of upstream selling, data driven management and selling vehicles online to consumers, Morten provided more insight into how each was contributing in providing all stakeholders, specifically dealers, with enhanced decision making, cost savings, process efficiencies and overall transparency.
“With more and more digital processes and data, comes new possibilities in how you can benefit. At Autorola all decisions about prices and buying markets is today based on data from the market,’ explained Morten.
“There is no doubt in my mind, the winners in the automotive market, are and will be the dealers who learn to act on data and not intuition or feeling.”
Dealers now generate leads through the online world
Highlighting the specific challenges associated with selling vehicles online, Morten pointed at how the major players all offer services associated with the vehicle sale in the form of delivery, finance, insurance and services.
“But one thing which is very difficult for all of them to solve is how to handle the trade-in car when trying to make a 100% online journey,’ said Morten. “Dealers need to see the online world as a lead generator to create traffic to their physical location.”
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