16 Nov 16
News

“Line between new and used cars will blur”

How do car manufacturers factor in remarketing in their overall strategy? Attendees at the Fleet Europe Remarketing Forum, Tuesday in Barcelona, got an answer after lunch, in the form of presentations by Marc Lechantre, Director of PSA's Used Car Business Unit; and Ralf Kostrewa, Head of Fleet Sales at VW Group. 

The PSA Group is recovering from some very difficult years, and its Push To Pass plan aims at making it “not the biggest car manufacturer, but the best mobility provider”. This includes multi-brand after-sales services as well as multi-channel used-car services. The aim: to enlarge the OEM's customer base, and to build long-lasting relationships with them. 

“And that is why we know a new-car focus is not enough for the world of tomorrow; and why used cars are an essential part of our new strategic plan”, says Lechantre. One big element of that plan is Free2Move, the recently-launched brand for all of PSA's new mobility initiatives, and more specifically Free2Move Lease, the drive to optimise PSA's leasing business – among others by replacing a scattered value chain by a comprehensive approach, and weak buy-back management by a profitable used-car remarketing strategy. And not just for PSA brands, but from a decidedly multi-brand philosophy.  

Last but not least, by the end of this year, PSA will launch an online trading platform, which by next year should be up and running as a multi-brand operator, not just for the B2B and B2C channels, but also for C2C. “We are aiming at sales of 800,000 used cars via this platform by 2021, increasing the profit from our used-car sales by four”.

Ralf Kostrewa faced the elephant in the room head-on, and started with Dieselgate. Among the lessons learned from the issue was the fact that it had not significantly impacted residual values for Volkswagen Group. Remarketing is a very strategic business for the manufacturer, “to the extent even that we limit the number of cars that we provide to short-term rental companies, in order to protect the residual value of our models”. 

In another sign of the importance to VW of the continued success of its vehicles in their second life, the group has created a brand specifically for its used cars: DasWeltAuto. “This applies to all the brands in our group, except for Audi, which has a separate brand for its used vehicles, Audi Approved: plus”. 

The unified brand allows VW to set global standards for quality, and with added transparency come higher residual values. “But our best sales argument is and remains the quality of our global dealer network”, says Kostrewa.

In a short Q&A, both speakers were asked about their view on electric-car RVs. They agreed that subsidies still obscured the real-life, long-term viability of the sector, also casting a shadow over residual values. 

Both were more positive about the future of car dealerships – an endangered species in these increasingly digital times, according to some. “You can't do everything over the internet, you will always need physical locations”, said Kostrewa. “A bright future”, chimed in Lechantre, “even if the business model of the future will be very different. In the Netherlands, our dealers came to us, aware that their way of doing things will disappear over the next 10 to 15 years. We now move around 400 vehicles per month in private lease in the Netherlands, and these vehicles too will all at some point need to go back to dealerships to be serviced and remarketed. So that is one way forward for the dealerships”.

Both manufacturers are keen to widen the range of services they offer: “We must evolve, otherwise we will face the Nokia scenario. That is why we launched such a wide range of services at the latest Paris Motor Show”, reports Kostrewa.
Lechantre notes an interesting element to the widening range of services offered by manufacturers: “We will be offering – and replacing – elements of the car with a different lifecycle, for example batteries and software. So the line between new and used cars will start to blur”.

Marc Lechantre (l., PSA) and Ralf Kostrewa (VW)

Image: Fleet Europe

Authored by: Frank Jacobs