23 Nov 23

Fascinating deep-dives on anniversary edition of Remarketing Forum

There was no birthday cake, but there were plenty of other things to make the 10th anniversary edition of the Remarketing Forum on Wednesday, the first of the two Fleet Europe Days in Lisbon, a memorable event. More than ever, the Forum provided fascinating, information-rich deep-dives into key remarketing topics, including battery health and EV sales.

Presenter Johan Verbois spilled curry on his shirt and there were one or two technical glitches, but apart from that, the Remarketing Forum wasn’t just flawless, but impressive. The event radiates maturity and confidence and was bigger than ever, with hundreds of remarketing professionals attending and no less than 21 speakers on stage. 

Audience engagement

There was plenty of audience engagement too, with panel discussions followed by Q&As sprinkled throughout the day. Enhancing the interaction: live audience polling via Slido, giving several presenters the chance to test their theses on the attendees. 

The event kicked off with an exclusive interview with Guillaume de Léobardy, Chief Remarketing Officer of Ayvens, the newly-minted leasing giant who is also a remarketing giant, defleeting close to 600,000 vehicles per year. 

He set the tone for the day by indicating the kind of mind expansion that is necessary to take remarketing to the next level: “It used to be just about selling cars, but since the pandemic, is about much more: creating value, recycling cars into specific offers”, such as second-hand lease, for instance.

And about recycling: “Remarketing is recycling. It is an essential contribution to sustainability. What’s missing, is the attention of the authorities. So we as an industry must be more bullish in demanding support from governments for the used-car market.”

Lots of attendees, so lots of networking opportunities...

Apple stores

Next up was Rodrigo Da Silva, a man of many hats, the most pertinent here being that of VP and chairman of the Car Dealers department at CECRA, the European umbrella for the motor trade and repair industry. 

Explaining his organisation’s nuanced view of the agency model currently transforming the automotive distribution model – in the process radically resetting the relationship between OEMs and dealers – he said: “The agency model could be a good deal, if it’s a genuine one, that is: if all investment is entirely paid by the OEM, and if you have fixed prices. This works well in other industries – Apple stores are a good example. But if you as a dealer have a margin that you can take off, we call that a non-genuine model. The risk is, that many OEMs, especially the European ones, will be offering non-genuine contracts to their network.”

Each OEM is approaching the agency question differently. Mercedes, for example, aims to transact 80% of its European car sales via the agency model by 2025. Volkswagen will use a hybrid form: agency for EVs, but ICE vehicles will still be distributed via the franchise model. And Stellantis has delayed its ‘New Retail Model’ due to IT unreadiness.

“Remarketing has an enormous role to play in this evolution. Some OEMs will use agency to pull used cars back into their network. That will create an opportunity to resell used cars that are factory-refitted cars.”

Better at empathy

Next, Maarten Bekkers, founder and CEO of Autochat, came to offer a glimpse into the future of conversational AI, and what it can do for the automotive industry. “Lisbon is where the idea for Autochat started, so I’m happy to be back here”, he said. 

Specialised chatbots like Autochat can help automotive retailers and remarketers help find a balance between efficient operations and exceptional customer service, according to Bekkers. “Automated doesn’t mean impersonal. If a customer gets a quick and exact reply to their question, that’s personal.” Bekkers cited research showing AI is actually better at showing empathy than humans, because for one, it has more time. 

Autochat’s compelling proposition received one of the three Remarketing Awards handed out that evening. 

Following Bekkers were Ian Hucker, Lynk&Co’s VP Sales for Europe, and Nicolas Fenetre, BCA’s European Business Development Director. “Together with BCA, we’ve built a real remarketing machine”, said Hucker. Lynk&Co is well known for its subscription model, but is now also branching out into other models, including leasing via Ayvens. Remarketing is key to its subscription offer. “We start at the end of the vehicle lifecycle, and we build our offer around it”, explained Hucker. Enter that remarketing machine: “BCA is empowering a multi-lifecycle approach, supporting Lynk&Co’s strategy”, added Fenetre. Lynk&Co would also go on to win one of the prizes at the Remarketing Awards.

Triaging vehicles

A few years ago, many had high hopes that AI would help totally automate vehicle inspection. After a networking break, Eliron Ekstein, CEO of inspection specialist Ravin, put the dashed expectations in context: 

“The real value of AI for vehicle inspections is not to automate everything, but to triage vehicles. The point is not to get to perfection, but for AI to be able to identify major flaws, which is the case in about 30% of AI-based inspections. Those vehicles then still need human evaluation; but by eliminating the other 70%, you can remove an average cost of €800 per vehicle.”

Michal Matys, CEO of Euro COC, waved two things on stage: a Certificate of Conformity, and a bunch of cash. The message: one equals the other. Especially of the former is missing from a car that is remarketed cross-border. The COC is like the birth certificate of the car, and replacing a missing one takes time, which translates to money lost. “Don’t by cars without a COC. And if you do, ask for a discount for all the hassle you’ll have to go through.” Euro COC aims to reduce that hassle from a process that can take weeks or even months to just 24 hours. A very specialized, but very useful service: “About 40% of remarketed cars have no COC, and about 30% of those are traded across borders”, Matys says. 

Tasty morsels

When Brian Madsen speaks, the industry listens. Because nothing is as eloquent as success. On stage, the founder of Cars2click charted his company’s meteoric rise, from its founding in 2019 past two Fleet Europe Remarketing Awards to its position today – most recently helping Polestar design an asset management ecosystem. Madsen’s theme was ‘Agility and Sustainability in Remarketing’. Critical for both: AI. “Artificial Intelligence can be your partner, helping you automate processes. Markets change fast. The only way to keep up is to use AI. I don’t think AI will replace people, but people who use AI will replace those who don’t.”

After lunch, Jon Bulloch, International Business Development Director at Autorola/Indicata, kicked off a number of sessions that were dense with tasty morsels of industry data, and had many delegates grabbing their phones to take pictures of the slides. “We get more questions on used EV values than anything else”, Bulloch said. And that was the meat and potatoes of his talk. Out came the phones. 

A Slido survey of the audience confirmed the signals Bulloch gets from the wider remarketing industry: people are quite pessimistic about used EV values over the next year. Used EV stock at OEMs has tripled over the last year, and prices have gone down significantly: -28% in Germany, -22% in the Netherlands, and even -40% in the UK. 

Demand tripled

“However, demand has also tripled; and if we look at individual models, we see that the big dive in value has now stabilized.” When comparing EV models with an ICE equivalent, various examples show used EV prices trending down towards the ICE ones and starting to plateau.

“As EVs become more of a mainstream used-car proposition, electric will increasingly be considered as just another fuel type. Will consumers pay 60% more for a used EV than for its ICE equivalent? No. But will they pay 5 to 10% more? Probably.”

The phones stayed up for Viktor Irle’s presentation. The co-founder of EV-Volumes, now an Autovista company, reviewed EV sales figures broken down by the various battery chemistries. Some interesting data points:

  • In the first half of this year, 6 million EVs were delivered, 40% more than the same period last year. Almost 4.3 million were BEVs. 
  • Global EV share in H1 was 14.1%. In China it was 30.5%, Europe 19.7% and the US 8.7%. “China is half the world’s EV market”, said Irle.
  • In BEVs, Tesla leads the market with almost 890,000 units. But including PHEVs, BYD is the world’s biggest OEM, selling 1.25 million units. 

Three important milestones: by the end of this year, there will be 40 million EVs on the road globally. Today already, Chinese brands sell more EVs in Europe than Japanese ones. “And by 2030, 50% of all new cars sold globally will have a plug.”

Battery degradation

Turning to batteries, there is good news: “Average battery capacity is increasing by 8% every year. All chemistries are improving.” But also more troubling news: “LFP batteries perform better than other types, and they’re getting more popular as a result. However, they are not recyclable.”

Taking the conference even deeper into battery territory was Timothy Engstrom, the Technical Lead for Elysia, the battery intelligence software division of Williams Advanced Engineering. 

“Battery degradation is complex”, he started off. Head-spinningly, three-dimensionally complex, as it turns out. Yet establishing battery health is increasingly critical for the remarketing industry, as the volume of used EVs grows. So, how can we understand this better?

For one, battery degradation is path-dependent. Meaning that the remaining capacity is not enough to predict the future usefulness of the battery. You need a detailed usage history to tell you how exactly the battery was used. This requires lots of historical telematics data. 

“Absent that, third-party health checks are more likely to confuse than inform you on battery health”, Engstrom said. OEM-provided data isn’t always reliable, but: “OEMs are not in a conspiracy to misrepresent battery health. It’s just really hard.”

Closing the anniversary edition of the Remarketing Forum was a grande finale, featuring some of the industry’s heavy hitters. 

Future “not easier”

“This has been an interesting event, and much more aligned with the OEM perspective as one could think,” said Simon Dransfield, Director Mobility and Pre-Owned at JLR. “We all have an inherent interest in strong RVs, but I don’t necessarily see cross-border trade as the best answer. We at JLR focus our remarketing efforts inside our markets.”

Bertrand Donck, CEO of inspection company Macadam, painted a picture of the changed market: “20 years ago, there were 16 automotive brands that controlled 80% of the market. Now there are 7 brands controlling 90%. That means the demands have changed. And we need to keep up.” Which is why Macadam earlier this year acquired key parts of SGS. 

“The future is about data and market trends. The key question is: How do you build a data-driven organization”, asked Peter Grøftehauge – rhetorically, because the CEO of Autorola has a good idea of the answer. Autorola is expanding, with a joint venture in the UAE. “There are a lot of opportunities in that region. We are now looking at Saudi Arabia”, said Grøftehauge, who was inducted into the Fleet Europe Remarketing Hall of Fame at the Remarketing Awards later that evening. 

Wolfgang Reinhold, chairman of CARA, had three pieces of advice. “Startups, take it from an old man: after a few years, you have to make a profit.” And for the industry as a whole: “We’ve gone through a lot of hardships in the past few years, but the future will not be easier.” And: “I’m not Greta Thunberg, but we really have to think about sustainability. We have a planet to leave to our grandchildren.”

“Nobody owns the remarketing space, but we all have a custodial duty”, chimed in Ed Spitzer, Senior VP Fleet at Enterprise Mobility. “We all need to be flexible and prepared for change – because we’re headed into uncharted territory.”

Images: Benjamin Brolet/Fleet Europe

Authored by: Frank Jacobs