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16 Jun 22

GDPR and stagflation dominate latest session of Remarketing Expert Track

Fleet Europe’s Remarketing Expert Tracks – free, online, half-day events – are great occasions to deep-dive into complex issues that have a direct bearing on the remarketing industry. As was the case last Tuesday, when moderator Johan Verbois hosted presentations and discussions on not one, but two of those issues: GDPR and stagflation. 

Tune in to the next Remarketing Expert Track on 8 September, again a virtual session in the afternoon. Topic: The status of AI in the de-fleeting and sales process. Participation is free, but registration is required. More info here.

“Over the last months, there is more and more discussion about GDPR (the EU’s regulations regarding data privacy, Ed.) in Remarketing,” Mr Verbois introduced the first segment of the event. “Who is liable for passing on personal data in cars that are rented out or defleeted?”

Automation almost foolproof

Answering that question is not easy, but the Remarketing Expert Track boasted two of this topic’s leading experts to explain the ins and outs. First, Andrea Amico (Founder & CEO of Privacy4Cars) gave a thought leadership presentation to set out the parameters of the topic. Digitisation and connectivity have dramatically increased the amount of information produced by our cars. But when it comes to vehicle data, many drivers (and fleets) act as if we’re still in the analog age. 

And that’s often the case even if they are trying to fix the issue. “Clearing personal information from vehicles that are defleeted is often still done manually,” Mr Amico says. “But in that case, typically 30% to 70% still contain some amount of personal data. Using an automated tool is almost foolproof – that share drops to below 1%.”

Does it matter that your car still contains data from its previous owners? To an increasing number of customers, the answer is yes. Mr Amico quoted a used-car customer: “Seeing the last owner’s home address and routine navigational routes scared me and really made me realise there is a problem.”

"Get a good lawyer"

Increasingly, customers will gravitate towards remarketing professionals who are on top of this issue, and can guarantee proper respect for privacy, in accordance with existing rules and guidelines. 

But what are those? As an expert in the matter, Odia Kagan (Chair of GDPR Compliance and International Privacy at Fox Rothschild LLP) explained the complexities of compliance with privacy rules when it comes to vehicle data – and what the consequences of non-compliance can be.

First, the definition of ‘personal data’ can be a bit confusing. “Basically, it’s any information that can be tied to a person. So it’s not just name and address. It can also be the VIN number. And a lot more. All that is subject to GDPR, which means customers have the right to know which personal data is being recorded; can request this information; and can ask for it to be deleted. That all is very difficult, but it will be enforced more and more.” In short: “Trouble is coming.”

One pre-emptive solution is ‘data protection by design’, whereby cars collect as little information as possible, in the least invasive way, and delete it as soon as is feasible. Even so, Ms. Kagan’s recommendation to players who are forced to deal with this issue on a regular basis: “Get a good lawyer.”

A toxic mix

In the panel discussion closing this segment, Mr Amico reformulated the threat into an opportunity. “A survey in California showed that 9 out of 10 customers would change their purchasing behaviour to protect their privacy. So, if you are first to act in this field, this is an opportunity to stand out from your competitors.”

Following two simultaneous breakout sessions, in which Brian Madsen (Director of International Business for Cars2click) discussed defleeting as a cross-border opportunity, using AI DATA GEOpricing; and Benjamin Schilling (Head of Operative Account Management at TÜV Süd) talked about selecting the optimal vehicle return approach (central or decentral), Cind Du Bois (Professor at Belgium’s Royal Military Academy) took the stage.

Prof. Du Bois gave some background on stagflation, a topic often mentioned nowadays, but not always properly contextualized. Key phrase in her exposé: “Stagflation is a toxic mix of inflation and stagnation – and the word toxic is important, because a solution to inflation makes matters worse in terms of stagnation, and vice versa.”

After comparing our current bout of stagflation with the infamous one in the 1970s, prof. Du Bois provided her take on the danger inherent in stagflation – an inflationary spiral that will spin out of control. 

"No consistency"

A sobering lecture, and Philip Nothard (Insight & Strategy Director at Cox Automotive International) wasn’t able to provide much light relief. His picture of the used-vehicle market – where we are, where we’re going – wasn’t very cheerful; but all the more valuable for it. 

“The one consistency is that there is no consistency”, he said, referring to the recent abolition of plug-in grants by the UK government, just by way of example. But in fact, we do know some things about what’s coming, just from the volumes of vehicles produced (or rather, produced less) since the start of the pandemic. “There is no big influx of new used cars on the horizon”, Mr Nothard said. “Supply and demand will continue to be out of balance.”

Last speaker before the closing panel discussion was Luis Maria Perez-Serrano (Head of Remarketing and Mobility Consulting at TÜV Süd), who delved into the specifics of how stagflation is impacting the various actors in the remarketing industry. “It’s having different effects on different kinds of players”, he said, referring for example to the record profits achieved by OEMs – and this despite new-car registrations being in free-fall, this year as well.

For many OEMs, this is the start of a new paradigm, no longer based on volume but on value. Others, however, will revert to volume sales. 

Holy Grail of remarketing

Lease companies have well-filled order books, and experience windfall profits from their used-car sales. “But that is a short-term effect. In the midterm, those residual values will be rebalanced. For short-term rental companies, “in-fleeting is challenging at the moment.”

So, what does all this mean for the remarketing service suppliers. “Volume will stop being the Holy Grail of remarketing,” Mr Perez-Serrano predicted. “For profit-making, remarketing professionals will turn to other things, like flexibility.”

For the closing panel, the speakers were joined by Wolfgang Reinhold (Chairman, European Car Remarketing Association CARA). “I’ve been in the business for 40 years. I’ve never seen this much challenges come together all at once.”

The speakers agreed with a poll conducted among the audience of the Remarketing Expert Track during the session: “Uncertainty is our biggest challenge. But amid the doom and gloom, there are also opportunities, many of them still to be created.”

More than ever, being a remarketer means being clever about remarketing. Listening to what experts have to say about the industry’s hot topics is a good start. So… See you at the next Remarketing Expert Track. 

Tune in to the next Remarketing Expert Track on 8 September, again a virtual session in the afternoon. Topic: The status of AI in the de-fleeting and sales process. Participation is free, but registration is required. More info here.

Image: Shutterstock
 

Authored by: Frank Jacobs