“Remarketeers are sitting on a goldmine of Big Data”
In the Hype Cycle, a well-known device for charting the maturity of new technologies, autonomous driving has currently attained the Peak of Inflated Expectations. Just about now, expect the hype to deflate to a Trough of Disillusionment, followed later by a slowly upward-bending Slope of Enlightenment.
Change is coming
Change is not per se linear, Dr. Christof Engelskirchen demonstrated, at the last session of the Fleet Europe Remarketing Forum, Tuesday in Barcelona. But it is coming, said the Managing Director Automotive Intelligence and Consulting at EurotaxGlass's. The online dimension has already utterly changed remarketing, and further transformation is unavoidable. But will it become a disruption – another word enjoying a ride on the hype cycle?
Dr. Engelskirchen saw two major trends: on the supply side, electric cars are getting their second wind – thanks to both advances in technology, most notably an extension of their range to 500 km and above; and the creeping effect of Dieselgate. On the operations side, online trading and intense margin pressure is likely to reduce the number of dealerships by 30%.
But perhaps even more important is the transformation on the demand side: used-car buyers are more price-sensitive, pragmatic and fickle than ever. They are tech-savvy, have a wide range of options and require a high degree of transparency. This is good news: all of this makes them highly receptive to good treatment.
“Four demand-driven trends will reshape remarketing in the future: the middleman will be cut out, high-quality specification will become both essential and a value-enabler, the digital environment requires the peace of mind granted by return policies and warranties, and remote software updates will keep used cars fresh longer than ever”, said Dr. Engelskirchen.
So, does all this add up to a coming disruption in remarketing, say three to five years down the line? “No. But competition and transparency will increase, and drive the need to scale the business”, Dr. Engelskirchen concluded.
That way forward will be via more and better digital intelligence, intimated Jörg Höhner, pictured, Global Managing Director of Indicata, the platform that provides live data on used-car prices in more than a dozen countries.
“The internet has empowered consumers. More than 90% do online research before buying a vehicle. They visit on average two dealerships prior to purchase – ten years ago, that figure stood at over four”, said Höhner. “And when they are in a dealership, almost 60% use their phone to compare showroom prices online”.
We live in data-driven times: 90% of all data ever created, dates from the last two years. The overall volume of data is expected to increase twentyfold by 2020. “Data-driven insights are vital to drive the used-vehicle business growth. But to do that, you need the tools to make sense of Big Data, and translate them into actionable insights”.
The presentation by BlaBlaCar, the leader in long-distance car-sharing, might have seemed a bit out of place at a remarketing event. But the reinvention of car usage by ride-hailers and car-sharers is also reshaping the re-use of those vehicles. Cars are under-used and under-occupied; BlaBlaCar connects single drivers and travellers to share the cost of long-distance trips and fill some of the 10 billion empty car passenger seats travelling between cities every year. The platform is C2C-oriented, but the company is keen to insert a B somewhere in the equation. Corporate application of the BlaBlaCar principle would have a significant and positive impact on TCO.
Clearly, the last presentation of the day had inspired Wolfgang Reinhold, Senior VP Car Remarketing, Operations and Procurement at LeasePlan and president of CARA: “The hotel where we are staying has a 100% occupancy, but only 50% of the beds are used – I sense a business opportunity”.
Next stop, Iraq?
Wrapping up the third Fleet Europe Remarketing Forum, Reinhold concluded that “our way of working will change. Clients will become tire clickers instead of tire kickers. We are all sitting on a goldmine of Big Data, but we are not using it. That will change too. Our competitors will be Amazon, eBay and others like them. We should be ready for them. And new markets will open up: not just in Russia and the Maghreb countries, but also in Iran and even Iraq”.
The location of next year’s Fleet Europe Remarketing Forum remains to be confirmed – it will in any case be co-located with the Fleet Europe Forum and Awards, as always. Perhaps next year in Baghdad may be a bit too soon, but who knows a few years down the line?
Image: Fleet Europe