Car Remarketing Expert Track: ‘connected ecosystems’ are future for used-car market
If you’re a Remarketeer hungry for data and insights, then you need to check the Vehicle Remarketing Expert Track. Organised by Fleet Europe and CARA, the series concluded today. But you can still see all three webinars – more information below. First, a resumé of today’s session, on ‘The Future of Used Cars’.
The session, presented by Johan Verbois (Fleet Europe Remarketing Expert, Founder of 5S Consulting and CARA Board Member), consisted of three presentations, all satisfyingly data- and insight-rich, by:
- Radu NICODIM, Strategic Planning Manager at D’Ieteren Auto. His topic: ‘Future Vision on the Used-car Industry’.
- Sebastian FUCHS, Managing Director of Manheim and RMS Automotive at Cox Automotive. He discussed ‘Five Key Trends in the Used-car Industry’.
- Andy SHIELDS, Global Business Unit Director at INDICATA. He spoke about ‘Data-driven decision making’.
Mr Nicodim is also Managing Director of MyWay Pro, a B2B digital used-car sales platform launched last July by D’Ieteren Auto. Why? Because Belgium’s leading distributor of (new) cars, after careful analysis, has realised the value potential and the resilience of the used-car industry, and sees this not only as a path to de-risk its new-car business, but also for significant future growth.
“Belgium historically has a low used-car to new-car ratio, due in large part to the great number of company cars. We expect this to change at a ratio of 1.6% per annum, driven by regulatory changes and accelerated by the COVID-19 crisis,” says Mr Nicodim.
As the used-car trade moves online, bricks-and-mortar dealers still have an important advantage: “For used-car buyers, the journey starts online – and this is where you can capture customers – but few want to complete the purchase without seeing, touching and test-driving the vehicle.”
It is based on this belief that the future of used-car trading is “phygital” – a blend of digital and physical experiences – that D’Ieteren has developed its dealer-centric vision on remarketing, with MyWay Pro as a B2B digital sourcing platform for dealers, MyWay as a B2C online lead-generation tool for dealers, and Lizy as a platform for online used-car leasing.
“Dealers are quite pragmatic. Via pilot projects, we’ll demonstrate the advantages of this system, which they can enjoy without making major investments,” says Mr Nicodim. “Even if change won’t happen overnight, we will be able to convince them.”
Mr Fuchs deep-dove into the five trends that are reshaping the used-car industry today – an important overview because, if anything, the COVID-19 crisis is speeding up these trends, and the change they’re generating. Here are three:
Digitalisation of sales, both by OEMs and dealers. “This process has accelerated significantly over the past six months. And we need both a retail and a wholesale approach, as exemplified by our companies Modix and Manheim Express.”
Connected ecosystems. As exemplified by D’Ieteren’s approach, Mr Fuchs says, and by progressive changes within Cox’s ecosystem. “For examples, dealers using Modix can now also make the same car available via Manheim Express. This is for outflow, but inflow of vehicles is also getting connected.”
Self-service culture. “Everything has moved to our phones. So the online shopping experience for used cars has to become more adapted, more immersive and more enticing for customers using phones. An example: in Q4, we’ll be launching an artificial-intelligence application that will automatically mark scratches and dents on used cars, removing the need to do this manually.”
For all the talk about data-driven decision making, precious little remarketing decisions are driven by hard data, Mr Shields remarked. And that’s a pity, because that data is a means, and the end is optimalisation of the remarketing process – in other words, higher revenue.
If anybody understands what data-driven means, it’s INDICATA, which on a daily basis extracts information on 9 million used vehicles, and uses AI and data analysis to transform that data into actionable intelligence, presented to its clients in a range of practical tools.
A key concept is Market Day Supply (MDS) – the number of days it would take to sell a certain volume of a particular model. “MDS determines which models to stock. Models with an MDS below 60 days are fast-moving. With an MDS from 120 days, they’re slow-moving.”
With a few case studies, Mr Shields demonstrated how a data-driven approach – in buying certain models and using dynamic pricing – can increase stock turn, eliminate the risk of over-ageing vehicles, and ultimately – at least in one case – double profitability.
Watch the recording of this Expert Track on top of this article.