Used car price stability masks petrol diesel divergence

Oct 11, 2018   written by Autorola
Used retail car prices have remained relatively stable across Germany, the UK and Italy with average prices increasing by just 1.3%, 1.1% and -0.1% respectively, although the underlying Indicata data shows some interesting market dynamics as you drill down.

Average used car prices in France increased from €19,136 in October 2017 to €20,391 whilst used car prices in Spain have jumped by 17.4% over the same period to €21,147. Part of the reason for the increase, particularly in Spain, is the mix of vehicles as buyers are changing their cars at younger ages and now feel able to upgrade to more premium and larger vehicles without fear of looking ostentatious to their peers.

Petrol is outperforming diesel according to Indicata
A review of Indicata’s used car index, which normalises for mix and inflation, shows a common theme of petrol outperforming diesel over the last 12 months.

In Spain and France, the markets are both showing prices for used petrol cars strengthening whilst used diesel prices are relatively flat.

Spain experiences used car price increases
Spain has seen particularly strong growth in used car prices for F segment petrol cars with luxury car buyers typically paying up to 10% more than they were a year ago. Whilst buyers of B-segment (small cars), C-segment (medium cars) and D-segment (large cars) are paying anything from 3% to 6% more than they were last year.

The growth in French used car values is also being powered by demand for petrol vehicles. Petrol car values for B-segment rose 5% whilst D-segment, E-segment (Executive cars), M-segment (MPVs) and S-segment (sports cars) rose 8%, 3%, 3% and 4% respectively compared to diesel values which remained generally flat.

Across the other markets we are still seeing petrol performing better than diesel but it is a case of used petrol cars remaining stable as diesel prices are falling by 3% to 5% on average.

Click here to get back to all News

Sales of used cars strengthen across most major markets

Oct 11, 2018   written by Autorola
The latest data from Indicata shows that despite the drop in new car sales in September the used car market remains strong, with sales rising in the UK, France and Italy after the traditional lull in sales during the holiday period.

In the chart adjacent shows the traditional fall in sales in July and August in Germany, France and Italy as consumers look to spend their money on holidays rather than considering buying a replacement car.

German used car sales reverse in Germany
Whilst used car sales in Germany went into reverse in September, falling by around 4% this is partly due to the rush to change cars in the run up to WLTP and sales are not expected to fall any sharper than one would expect in the run up to the festive period and the year end. However, it should be noted that the Indicata Germany specific market report does show used car sales volumes marginally down in August and September 2018 over the same months in 2017.

Spain is showing minimal movement in volumes throughout the period, but this is in line with how the market has recovered from being one of the worst hit during the economic crisis. It is also a market where a lot of used vehicles are exported, and this helps balance the supply and demand equation.

UK has its own used car micro climate
Even though WLTP has been introduced across Europe from the 1st September the UK, being the only major right-hand-drive (RHD) market, means it has its own micro-climate for cars. This is because exports into the other four RHD markets of Ireland, Malta and Cyprus are limited by their market sizes. The result of this saw the usual seasonality in used car sales being distorted by the rush to register new cars in the run up to September, and with it the need to sell used cars to free up dealer stocking plans.

Whilst not visible from the chart the underlying data from Indicata also demonstrates the impact the “war on diesel” has had on used car sales in some of the markets. For example, in Germany in October 2017 petrol used cars were already 54% of the 425,00 used car sales identified in the month, but by September 2018 petrol now accounts for 60% of all used car sales according to Indicata.

Diesel demonisation impacts UK market
The UK has also been impacted by diesel demonisation, with used petrol car sales moving away from a parity in volume terms with diesel from October 2017 through to March 2018 where it is now 6% higher than diesel cars in volume terms.

Used diesel cars continue to outsell petrol in France, Spain and Italy but this is a legacy issue due to the previously higher volume of new diesel cars being bought and the longer average retention periods by consumers. Looking ahead the situation is expected to follow what we are already seeing in Germany, and the UK as buyers move away from diesel due to the change in the supply mix coming from the new car market.

Click here to get back to all News

Used stock levels starting to fall as demand eats into supply

Oct 11, 2018   written by Autorola
With used car sales volumes increasing and used car values generally remaining relatively flat one might expect used car stock levels to be falling sharply. However, the influx of used vehicles into the market from WLTP has created some market distortion.

The micro-climate of the UK right-hand-drive (RHD) car market demonstrates the true extent of the impact of WLTP with used car stock levels in September of just under half a million cars which is over 7% higher than the same time last year.

UK and German dealers increase used petrol stocks
The increase in sales volumes of petrol cars noted previously in Germany and the UK is also being met by a change in used car stocks. Dealers are increasing the volume of used petrol cars on their forecourts whilst reducing their volume of used diesel cars in both markets according to Indicata.

Used car stock levels in Spain having been dropping for most of 2018 and a significant part of 2017. Total Spanish used car stock levels of 79,468 in September 2018 is 26.3% lower than the same time in 2017. To understand what is causing this you need to remember that whilst new car sales in Spain for 2018 are forecast to be 1.3 million cars, just four years earlier it was just 0.86 million. Despite this many fleet operators are continuing to export their vehicles out of the country as they come off fleet resulting in a shortage of supply and this is also helping to push up used car prices.

Indicata reveals market days’ supply by country
According to Indicata data Market Days’ Supply (MDS) has remained relatively steady as dealers try to match their stock levels with sales. Germany, Spain and Italy are all showing around 80 days’ worth of used car supply, although the previously mentioned situation in Spain has meant quite a bit of volatility over the last twelve months.

French dealers are currently running at a leaner 60 days MDS whilst the UK is currently at just over 40 days.

WLTP has put quite a lot of nearly new used vehicles into the market. Once they are available for sale, the fact that so many new cars are not available to order or have long lead times as manufacturers wait for certification means we could start seeing a shortage of used cars coming back into the market as part exchanges. Reduced fleet cars coming back off contract could also drive down MDS further as supply may fail to match demand.

Click here to get back to all News

Poland set for potential WLTP impact

Oct 11, 2018   written by Autorola

Autorola Poland has reported a positive, yet ever-evolving, trading environment within its domestic market.

‘For us, the market is very positive,’ said Michal Wojciechowski, Autorola Poland, ‘the economy is buoyant, vehicle sales on the whole continue to grow, the fleet distribution side of our business continues to expand, we have made a new appointment to the team and we have been delighted with the introduction of Indicata which has enabled us to further enhance our portfolio of partners.’

Potential of used vehicle market
Vehicle manufacturers also see the potential of the used vehicle market and are the latest users to adopt Autorola Group’s Indicata to get a tighter handle on their remarketing activity both within Poland and across the EU. First to adopt the technology were Kia and Volvo. Importer organisations and the larger dealer groups that are testing Indicata now (the businesses’ target for 2018 and 2019) deem that market intelligence, network performance and sector analysis will ensure greater used vehicle penetration within the domestic market.

Along with partnerships with Kia and Volvo, the growth of Autorola Poland has also come in the form of new partnerships agreed with long standing client – a major German OEM leasing company and bank for whom the business has been selling vehicles for since 2012. Now Autorola’s Fleet Monitor and MarketPlace systems are being used to help monitor, manage and process their vehicle fleets too.

Other recent wins include a new partnership with another German brand, with Autorola providing logistics and transportation support. ‘We offer a bespoke service for all our partners,’ said Michal. ‘This is really the first time we have seen our compound become such big business and is certainly an opportunity for us moving ahead to cater for thousands of vehicles in a similar fashion.

Developing relationships
With manufacturer relationships developing, the biggest part of the Autorola Poland business continues to be closed auction sales or mass export of 9-12-month old ex-rental vehicles. France, Spain and Italy respectively make up the top three regional export destinations. Austria is one of the ‘newer’ countries to join the distribution channels.

Despite the successes, and Michal’s continued optimism, he is realistic of the challenges pending – namely the influence of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and, a little closer to home, the broader domestic situation.

Measuring real life fuel consumption and CO2 emissions from passenger cars and vans, WLTP will affect the global automotive sector and put all OEMs on the same band width.
“WLTP is still a bit of an unknown, especially within the local market,’ said Michal. ‘Without doubt there will be challenges around imports, an already sensitive area of business since it’s last scare back in 2016 when there were rumours of excise tax introductions – something which ultimately failed to materialise, but it was enough to destabilise the market temporarily.”

Click here to get back to all News

Autorola supports the Swedish remarketing sector by using smart data

Oct 11, 2018   written by Autorola

June signalled a major change in the Swedish new car market recording the best-ever sales month in the country’s history. 66,244 new cars were sold in June, a 73% increase, after the government introduced new incentives for low emission cars in July which would in turn penalise more polluting vehicles.

Inspired by the French system the price of new cars is set to rise as well as the cost of ownership if you have a diesel car or larger petrol engine model. Despite this, 2018 is projected to be another strong new car year for Sweden with 380,000 sales forecasts, as the buoyant economy enables consumers and corporates to continue to replace cars on a regular basis.

The right remarketing strategy
Autorola is helping dealer groups and leasing companies to analyse and plan the right remarketing strategy by using smart data. By translating the vendor’s market data on stocking days, prices and vehicle volumes, country manager of Autorola Sweden, Brian Madsen, and his team can plan which country to sell the cars in to optimise prices.

“Our job is all about working with the dealers to solve market conditions where supply exceeds demand. We are not trying to solve the problem once the used car has come back at the end of its contract, but identifying which cars are coming back and when and then starting to pre-sell the cars,” said Sweden country manager Brian Madsen.

“That means turning to a wider European market and export. Currently 95% of used car sales on our online portal are being exported to other European countries.
“Export is solving a countrywide problem and dealers are receiving a good market price for their cars. We are proactively selling cars which is keeping stocking days very low and prices high in what is a very difficult market,” he added.

Strong dealer used car insights
Autorola’s Indicata real time used vehicle management portal is providing strong dealer insights into key metrics such as local market prices and demand. These insights are proving powerful for OEMs on a national basis as it can help them keep the national supply of used cars under close control, including management cars or rental buy backs, as well as national dealer stock.

“We like to call it retail driven, wholesale where high supply and low consumer demand immediately pushes the used cars into the wholesale market,” said Madsen.

The Swedish market experienced a 43% growth in EV and plug in hybrid sales in June and cars like the Golf GTE are becoming very popular. Like so many countries the charging infrastructure is still in its infancy with charging points springing up in retail shopping malls and fast food outlets with the offer of free electricity being offered by retailers.

Indicata used to help adopt consistent pricing
Swedish consumers are very well informed. They do a great deal of their homework online to evaluate used car prices. Drivers can be very fickle and will travel 150km to view a used car if it means saving a few thousand Krona. Indicata is being used by dealer groups to help adopt consistent pricing for stock to ensure dealers in different towns don’t compete with each other.

“Indicata enables dealer groups to adopt specific pricing on high demand models safe in the knowledge that they are not undercutting each other. A group used car manager can analyse the situation on a daily basis and will quickly liaise with a dealer if they are falling out of line with group strategy and reducing prices,” said Madsen.

Click here to get back to all News

Reacting to industry change and understanding Big Data

Jun 27, 2018   written by Autorola
In June we hosted our bi-annual country managers’ conference in Denmark. It’s where all our country managers come together for a few days to discuss our group strategy, and for us to all understand the changing dynamics across the global automotive and asset management industries.

It’s clear that further change is taking place. Not just the fall in demand in diesels from some countries or the shortage of the right used cars in some markets, but the increased appetite for more insight and data to help vendors sell cars faster, help them improve efficiency within their used car operations and ultimately increase profitability.

Big Data leads to greater market insights
The term ‘Big Data’ has been used for some time but we believe that the automotive industry is starting to really get to grips with what it means and how access to more data leads to creating greater insights which help drive greater efficiency, revenues and profits.

Our INDICATA real time used vehicle management system started out by making insights available to dealers to help them manage their stock inventory more efficiently and to reduce stocking days.

INDICATA helps drive used cars down the right channels
The system is now being used by OEMs to understand the dynamics of its entire country used vehicle stock and to help them manage and support their retailers in selling more used cars. Leasing companies and banks are using INDICATA to understand the true value of a car at the end of a contract and which channel to put it through to speed up its sale – that includes export markets.

We have even seen a major OEM in Turkey use INDICATA as a lead management tool to enable consumers to generate their own used car evaluation online and to enable their dealers to start a conversation about buying their used car in exchange for a new car.

20 years of online experience
What this shows is that the Autorola family is constantly reacting with the times, and using its 20 years of working online to reinvent itself to provide customers with dynamic products and services that help and support the success of their businesses. Have a great summer.

Peter Groftehauge
Autorola Group CEO

Click here to get back to all News

Big Data will power the future of the automotive industry according to Autorola’s group CEO Peter Groftehauge

Jun 27, 2018   written by Autorola
Insights into local, regional and national used car sales generated by INDICATA’s real time online used vehicle management system is helping car dealers run the perfect used car inventory.

Having access to data that can be used to sell more used cars more quickly, and importantly help them only stock cars that in high demand gives dealers an advantage over their competition.

INDICATA has micro and macro benefits
This works from both a micro perspective when a dealer is selling an individual car against its local rivals in its local market, and from a macro perspective when an OEM needs a proactive overview of its entire national used car stock.

“Companies are beginning to understand how big data can help make people become more efficient in the way they manage their used car inventories. Used car dealers and OEMs can manage their used car stock more efficiently and ultimately reduce stocking days and improve profitability.

Where new car sales are falling there is an increased focus on used car sales
“In countries where new car sales have started to fall then used cars are a major profit contributor, so INDICATA has arrived at a good time,” said Groftehauge.

INDICATA is live in 13 countries with Europe-wide contracts held with a number of OEMs. Over six million used cars are scanned every day with over 2,500 dealers worldwide using its powerful insights.

Autorola reported growth across the group in 2017
Its success has helped the Autorola group to report its second-best year by turnover in 2017 at the same time generating healthy profits that it can re-invest in the business.

The group has invested around 17m Euros in its 70-strong IT and software department over the last five to eight years, and investments of 3-4m Euros per year will continue as Autorola aims to keep its 19 subsidiaries at the top of their game.

Autorola continues investment in its products and services
This investment has also benefited the development of Autorola Solutions where its Fleet Monitor asset management portal manages vehicle fleets from pre-delivery inspection to auction for a number of OEMs, European banks, leasing companies and dealer groups. Big fleets generate big data and it’s important for an asset owner to be able to quickly check, analyse and respond to the information to make their operation more efficient.

Autorola’s online MarketPlace auction and INDICATA are working together in many countries. OEMs and their dealers can upload any over age stock or unwanted part exchanges onto the online platform for a quick sale to the trade. Dealers then use INDICATA to decide which stock is selling fast in their area and then access more of those used cars quickly and efficiently online.

Click here to get back to all News

Autorola Netherlands is helping companies export used diesels to markets where demand is strong

Jun 27, 2018   written by Autorola
Autorola Netherlands is providing a vital export service to smaller leasing companies to help maximise prices for their ex-fleet diesel cars, many of which have fallen in value over the past six months.

Autorola is using its Europe-wide online remarketing portal to connect diesel cars with buyers in countries where demand is still strong.

Pan European marketing strategy
“The dramatic fall in demand for used diesels has opened asset owners’ eyes that unless they adopt a pan-European remarketing strategy they risk losing tens of thousands of Euros,” explained Zijad Halilovic, Autorola Netherlands, business development manager.

“Opening stock up to a Europe-wide buyer-base avoids the problem of dealing with potential residual losses or even having to stock pile cars. Our online remarketing platform is finding homes for thousands of used cars in strong diesel markets such as Portugal, Croatia and Romania,” he added.

40-55% of Autorola stock is exported
Between 40-55% of ex-lease stock sold on the Autorola portal is now being exported compared to an industry average of 20-25%. Average transaction prices are between 10-14,000 Euros and it takes around 7-10 days for cars to be delivered cross border. Vendors receive their money quickly and efficiently.

The INDICATA real time used vehicle management portal is also helping support the move to an international remarketing strategy, as live market insights enable vendors to quickly identify cars in stock that are struggling to meet reserves or where demand is non-existent.

Market insights support the export and import process
“Vendors can quickly identify which cars are struggling to sell and make a strategic decision to market their car online and get it sold quickly. Whether that is to a local or European buyer it shouldn’t matter if the car is sold for a market price,” said Zijad.

The Netherlands is a strong petrol market and increased used demand has meant dealers are now importing cars from Germany, Belgium, Denmark and France via the Autorola online portal to satisfy consumer demand.

Autorola’s online platform brings buyers and sellers together
This has pushed import volumes ahead of export, with petrol cars such as the VW Polo and Golf, Toyota Aygo and Opel Corsa very popular. Once again Autorola’s online portal is at the heart of putting buyers and sellers together on a Europe-wide basis.

Click here to get back to all News

Autorola Portugal is at the heart of the digital transformation of the Portugese motor industry

Jun 27, 2018   written by Autorola
Around 68,000 used cars were imported in 2017 to help satisfy consumer demand. It has been the only way the industry has been able to balance the supply with demand.

Used car imports help satisfy consumer demand
Many of these used cars are imported via Autorola’s online remarketing portal with cars being purchased predominantly from France, Germany, Belgium and Holland. Within a few days of buying online the used cars can be on a dealer’s forecourt ready for sale.

New WLTP regulations could impact new car sales
One key spoiler in the new car market could be the new WLTP regulations set go live on 1 September. WLTP affects the global automotive sector and will put all OEMs on the same band width and the Portugese government is yet to announce the fiscal impact of the new legislation.

With new car taxes already very high in Portugal it could be very harmful for some brands, however they could choose to introduce a new transitional legal framework to control the taxes impact based on CO2 which would help support new car sales.

Autorola is at the heart of the digital transformation of the industry 
Autorola has been at the heart of the used car industry for many years and been a key contributor to the digital transformation of the motor industry. Portugal continues to grow its reputation as having a high technology infrastructure and used car vendors from dealers and leasing companies, to banks and rental companies have embraced online selling.
Over the past five to six years around 50% of business cars have been sold online. Companies such as leasing, rentals and dealer groups have had great results online across the Autorola group and in Portugal hold regular weekly online sales to dispose of their cars.

Traders market their used cars via social media
Trade buyers have been switched onto buying used cars online for many years. Many use their smart phone to bid online, while the smaller independents market many of their used cars via social media. The technology revolution is alive and well across all industries in Portugal which explains the country’s acceptance to adopt the INDICATA real time used vehicle management portal.

Agreements are already in place for our INDICATA real time used vehicle management with Renault, Toyota, Kia and the VW Group. Dealer groups value the real-time insights the system provides to enable them to run their used vehicle businesses as efficiently as possible.

Used market insights have been welcomed by dealers
Having access to detailed insights about their local used market and that of their close rivals has been welcomed by dealers. OEMs are also using it to create a country-wide picture of their entire used car stock, in particular average stocking times, both locally and nationally.

Click here to get back to all News

Autorola Australia country manager Philip Browne on how online remarketing is helping change the used car landscape

Jun 27, 2018   written by Autorola
Personal leases have grown in popularity over the past 12-24 months with consumers looking to switch from owning to the flexibility of leasing a car. Currently these account for up to 90,000 new car sales each year with Toyota Finance one of the biggest players.

National leasing companies are offering competitive lease rates on new cars and when the consumer has equity in the car calling them with an offer to swap them into another new car.

Upstream selling
Lease companies are using Autorola to sell ex-lease cars upstream, whereby 3-6 months before the end of the contract the car is inspected and pre-sold to a buyer. Pre-selling the ex-lease car is proving an efficient disposal method for the leasing industry while the used market is buoyant. Used cars are sold within days of being de-fleeted and the customer gets to drive away in a new car keeping the market stimulated.

Another strong source of used cars into the market is via the fleet sector. Offering a company car as part of the recruitment package especially as competition to employ talent across the country is very high. Typically, fleets are keeping cars for between 3-4 years up to 140,000km and these are offering a different type of used stock proposition to dealer part exchanges and ex personal lease trade-ins.

Tourism is contributing to a growing hire car fleet
Tourism continues to grow in Australia and with it the rental market, particularly around Sydney and Melbourne. Nine million visitors were welcomed in the year ending March 2018, an increase of 7.7% and sufficient growth to see all the major rental companies extend their hire fleets. Hertz remains the number one rental company, with the majority of cars now being purchased on risk as opposed to manufacturer buy-backs.

The larger hire companies tend to keep cars for 18 months while the smaller independents usually replace their cars every 24 months. Ex-rental cars provide valuable used stock into the market as they fall between dealer part exchanges and ex-fleet cars.

Autorola runs two salvage auctions per day in Australia
A continued growth area for Autorola’s online remarketing proposition is the salvage market where cars are inspected, photographed and offered for sale in situ. On average Autorola runs two salvage auctions per day online and sells between 400-500 salvage cars online each month, a figure which continues to grow.

Selling the vehicle online is an efficient route to market due to the physical size of the country. The vehicle is marketed online but does not move until it has been purchased by the buyer thus reducing the need for insurance companies incurring expensive transport costs. Offering salvage vehicles for sale online to a wider range of buyers ensures the insurance company gets the best price.

Autorola has moved the used salvage market online
The Autorola proposition has transformed the market as previously salvage stock would just be offered to local trade buyers, or it would be taken to a regional storage yard incurring huge transport costs to be auctioned. Online remarketing not only speeds up the sale but also ensures it remains a highly cost-effective process.

Overall the Australian economy is looking forward to more years of stability, but with the advent of the growth in personal leases and the end of domestic car production the automotive sector continues to reinvent itself.

Click here to get back to all News