Sharing is changing remarketing - here’s how
Sharing vehicles is efficient, both in terms of resources and cost. Digital platforms make sharing easy. So expect to see more of it. Also: expect it to radically reshape remarketing. Because sharing increases both the supply and the demand of used vehicles.
Ride hailing, car sharing, vehicle subscriptions: all examples of the sharing principle in action in the automotive industry. For consumers – corporate and private – sharing has the potential to be a more flexible, more convenient and more affordable alternative to classic models of ownership or usership (including ‘traditional’ leasing).
“In the used vehicle industry, the sharing principle will likely lead to such still relatively new concepts as leasing or subscription of second-hand vehicles to become mainstream”, says Benedict Beeker, Head of Market Intelligence at LKQ Europe. “Indeed, some major players are already offering this service.” As the digital landscape continues to evolve and consumers become more accustomed to sharing models, these alternative options will gradually erode the market share of traditional models, giving rise to a new wave of supply and demand for used cars. In fact, the emergence of shared vehicles as a business model will ultimately lead to the defleeting of these vehicles, thereby increasing the availability of used cars on the market. Furthermore, the diverse range of sharing models available will create an equally diverse range of outlets for consumers to choose from.+
On the other hand, it also creates a new source of demand for used cars. Perhaps consumers will want to buy the shared vehicle they’ve been driving themselves. “One novel outcome of the post-pandemic supply challenge has been rental firms turning to used vehicles to bolster their fleets,” remarks Philip Nothard, Insight and Strategy Director at Cox Automotive. “Also, many fleets have found buying used cars a relatively painless process, and are now factoring in the used car segment to their future plans.” As sharing is almost exclusively powered by digital platforms, the used vehicle journey will have an important digital component, and perhaps be entirely digital. Because of this, customers demand high degrees of transparency and convenience, personalisation and trustworthiness from the purveyors of their used cars.
However, consumers are not new to e-commerce. Online shopping was on the increase well before the pandemic. Corona did push it to the next level, with many now ready to consider buying something as expensive as a car online.
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This article is an extract of the Car Remarketing E-Book "Optimising the used vehicle customer journey in a changing world" which you can download for free by clicking on this link.
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