Features
17 Mar 23

Cautious optimism about RVs in first Remarketing Expert Track of 2023

More than 300 people had registered for the year’s first Remarketing Expert Track, yesterday afternoon. Proof, if any was needed, that this virtual gathering of expertise – now further condensed to an action-packed two hours – is increasingly popular with industry professionals. The first topic of 2023? The Supply and Demand outlook, and its impact on RVs. 

Times are volatile, and now more than ever, “nobody knows what’s going to happen. The Remarketing Expert Track brings together the best experts on each topic. They say their piece, but you make up your own mind”, said Johan Verbois, the event moderator.

Situation: promising

Kicking off the proceedings, Mark Howlett (Head of Corporate Sales & Remarketing at Kia Motors Europe) gave his view on the new-vehicle supply situation in Europe. “The situation is more promising than last year. But it’s still a struggle to maintain business continuity.” His solution: “Don’t overpromise on the lead times. And keep in mind that these vary for each make and model.” As for used-vehicle supply, “we still see a shortage, especially in the younger used-car segment, but also in three- to four-year-olds.”

Next, Matthew Freeman (Managing Consultant, Cap HPI) delved in to changing trim strategies, and their impact on RVs. The OEM trend towards range simplification is partly driven by supply issues, but also “by just how complicated things had become.” One example (out of many possible): the total number of model variants offered (in the UK) for the BMW 3 Series Saloon was 40 for the third-generation E36 model, 103 for the fourth-generation E46, 199 for the fifth-generation E90, a whopping 513 for the sixth-generation F30. 

Accelerated simplification

That number was already reduced to 202 for the seventh-generation G20, launched in 2018. “And more recently, specific factors (like the supply  chain crisis, Covid and the Ukraine war, Ed.) have accelerated the simplification of trim choice.”

Traditional options still drive a lot of RV, “especially things  you can touch”, like LED lights, alloy wheels, a panoramic roof and SatNav. The golden rule, however broad or narrow the your trim range is: “You’ll only get create value if you explain the features to the customer – not just the new-car customer, also the used-car customer.”

And despite the value of features ‘you can touch’, Mr Freeman predicts that great changes will come with the mainstreaming of FOD – short for Features on Demand. 

Following Mr Freeman, Dr Christof Engelskirchen (Chief Economist at Autovista Group) presented his outlook on Europe’s car markets. He started with a quote from the IMF mid-2022: “Risks for the economy are overwhelmingly tilted to the downside.” Turns out 2022 wasn’t that bad after all, and 2023 started off quite hopeful. “But with SVB, Credit Suisse and other banks in hot water, it makes sense to dig up that quote again.”

10% expansion

The message was more of caution than negativity, because, as Dr Engelskirchen pointed out, various forecasts predict robust growth. The headline for that particular slide was: “New-car markets likely to expand by 10% in 2023”. He did expect some headwinds for the used-car market in terms of RV development, but “2023 is not a dark year for RVs – they are holding up relatively well.”

Dr Engelskirchen also discussed Tesla’s price cuts as part of a clever but risky strategy to reposition itself as a mass-market brand. 

“The Remarketing Expert Track has never had a bigger panel (pictured, Ed.) than this one”, said Mr Verbois, introducing no less than six experts, weiging in on the topic of the day. 

No working recipe

Carlo Siviero (Head of Car Data at Quattroruote) explained the peculiar situation of the Italian used-car maket: “We have an oversupply of EVs and a shortage of ICEs, because electricity is more expensive than fuel. As a result, diesel and LPG used cars have very high RVs, because their running cost is lower than for EVs.”

Nicolas Carron (Car Market Analyst for L’Argus) took stock of the massive change the automotive industry underwent the past few years: “It’s more than 100 years old, and for most of that time things were the same. In the past five years, the rules have completely changed. Add to that the arrival of a whole new batch of brands, and I can say we don’t have a working recipe (for RVs) anymore in France.”

“Charging infrastructure makes a big difference”, said Rick Zielman (Partnership Director at Autotelex). “We have really good infrastructure in the Netherlands, so we’re really positive about EVs going forward.”

Skeptical about 2024

Dr Engelskirchen reiterated his cautious optimism about RVs in 2023, “but I’m more skeptical about 2024. A lot of money can be earned in the next two to three years by good RV management.”

“In 2022, only 1% of drivers in Germany sold their car and didn’t replace it. That shows Germans are not ready to abandon the personal car”, opined Denis Knuth (Consultant RVs at DAT Group). “Maybe this year, because of the economic circumstances, more people will be reluctant to invest in a new vehicle. That creates opportunities for new players and new strategies.”

Despite all changes, “there are still things that will stay the same”, said Mr Freeman. “We still sell transport, and people buy it with both their head and their heart. What’s important is that we have the right information to base our decisions on.”

AI replacing people?

The closing segment was for Briand Madsen (Director International for Cars2click), who spoke about adding the ideal fleet to maximise RV. Cars2click is a young company making great strides by integrating Artificial Intelligence into its remarketing processes. Key insight: “AI can make a lot better forecasts than we can”, but: “AI will not replace people. People who use AI will replace those who don’t.”

Missed this Remarketing Expert Track? No worries – tune in for the second session on 25 May (topic: Optimising the Used-Vehicle Customer Journey) and/or the third, on 24 October (Enhancing Speed and Profit via Data-Driven Remarketing). Participation is free, but registration is required. For more information, watch this space!

Image: Fleet Europe

Authored by: Frank Jacobs