Bad specs in used-car ads is “throwing money out the window”
“Every day, dealers advertise 6 million used cars online. Of those, 2 million are wrong – meaning that they lack at least 15% of the necessary specification”, Christof Engelskirchen, Managing Director CarToMarket & Consulting at Autovista Group, told the Fleet Europe Remarketing Forum just before lunch. That’s an expensive oversight, costing untold millions in lost revenue.
Mr. Engelskirchen discussed the crucial role of data quality and the dealer network in getting an optimal return on remarketing used vehicles. “In all, there are 216 million passenger cars on the road in Europe. Each year, 16 million new cars are sold, and 45 million used cars. Interesting to note is that 82% of customers request a test drive before buying – underscoring the importance of having a good dealership network”.
Even if better data usage increases the average residual value in such a network by just 1%, the cumulative benefits add up to “a lot of money indeed. Which means it’s worth investing in good specification of the vehicles sold”.
Increasing data quality equals digitisation, but that process entails risks as well as opportunities, says Mr. Engelskirchen. “The three most typical types of mistake are in used-car strategy, pricing strategy and stock management”. Remedying those would lead to less days in stock, and higher residual values.
Citing the example of the German market, Mr. Engelskirchen stated that “about two thirds of the vehicles are sold through the OEM network, which is relatively high. Despite this, fully one third of the adverts for the vehicles in question are blatantly wrong. And that’s just throwing money out the window”.
Fortunately, these specific problems have specific answers. Mr. Engelskirchen proposed a four-pronged best-practices approach. Point one, a well-considered remarketing strategy: “Manage your network with a clear and coherent set of KPIs/ Tools. And focus on keeping cars of own brand within network, for example via a used-car programme”.
Second point: “Ensure 100% quality ads on all portals, using VIN decoding”. Also important: Best practice pricing. “Establish a best-practice pricing policy and manage stock accordingly; and regularly train and educate on this”. And finally, create operational efficiency to leverage digitisation to your benefit. “Upgrade your CRM capabilities, get relevant market information and invest in online sales”.