The Secondhand Vehicles’ Market
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The Secondhand Vehicles’ Market Challenges and Opportunities at European Level Bucharest, 21 November 2013 PowerPoint PPT Presentation

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The Secondhand Vehicles’ Market Challenges and Opportunities at European Level Bucharest, 21 November 2013. Rob Henneveld Global Automotive Consultancy. Today. Present dynamic used car sector. 1. New cars: Traditional & alternative distribution, Zero-mileage registration.

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The Secondhand Vehicles’ Market Challenges and Opportunities at European Level Bucharest, 21 November 2013

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The Secondhand Vehicles’ Market

Challenges and Opportunities at

European Level

Bucharest, 21 November 2013

Rob Henneveld

Global Automotive Consultancy


Present dynamic used car sector

1. New cars:

Traditional & alternative distribution,

Zero-mileage registration

4x major trends 2013

  • 2. Mediteranea countries:

  • Strong drop in sales new cars

  • No (local) market for buy-backs & ex-demo’s

  • Volume- & price pressure on existing used car market

  • 3. Drivetrains: Auto ≠ Auto

  • Traditional drivetrain disappears (slowly)

  • Hybrid & micro-hybrid

  • Electrical (Full/Plugin/Range Extend.

4. Consumer:

….from possessing to use…….

…Not to Buy is the New Buying…..

Online, Independents, Supermercado’s, etc.

Car density:

Number of cars per 1.000 inhabitants

EU average: 478


  • Flow West => East

  • Young & high mileage cars

  • Older used cars




  • Flow South => North

  • Young & smaller cars

  • Low mileage cars

See printed version for car density per country in detail

Trends Registered Car Park ‘07-’12

Consumers accept the “older car”:

  • Quality of cars in general increases….

  • He/she purchases and older one…..

    • Functionalities are as good

  • Too high mileage is not an issue…..or is it?

  • Diesel share Europe: 35,9%

    Import on the increase (again)

    Highest ratio new sales vs import!

    Importing fairly easy

    Used cars plentiful available

    Need for mobility ≠ #used car supply

    Pollution tax cut of 30%

    * Estimation, **Extrapolated

    Source: APIA

    Non-transparency can result in:

    Disappointment / High Cost/Bad perception of sector…………

    Eco-fiscal regimes: Too much, Unexpected, Disrupting markets

    Influence of Government(s)

    Threat used car sector: Mileage fraud

    Mileage fraud used cars

    “Transaction Pusher #1”

    • Best target cars:

    • High mileage

    • Young cars

    Crossing the border legitimize the new mileage

    • Barrier to do business across Europe:

    • 1.000 cars/Fte (mileage verification)

    • Financial risk & cost

    • Bad for image

    Low mileage cars are not trusted

    Both the sector & consumer pay the price for it!

    The Future for Quality Approved Used Cars looks good!


    (SWOT) Used Car Sector

    • Stable product (volume sales fluctuations)

    • Product differentiation (price/age/quality)

    • Plentiful used car retail outlets

    • Accessibility is high through Internet

    • Lack of transparency

    • Low competence & retail skillset

    • Stock funding by banks

    • Old fashion-based daily practice


    • Stock - & Management Information

    • Development Pan-European market

    • Cross-selling opportunities

    • Internet differentiates on quality/price

    • Low entrée barrier & low sector imago

    • New car sales volumes & pricing

    • Eco-fiscal regime governments

    • Fraud (fiscal, mileage, etc.)

    See printed version for extended SWOT

    Some conclusions SWOT

    How can we make the real difference

    Price is NOT enough anymore

    We need to “lock-in-the-client” with services

    Are we supplying a used car & maybe services,


    are we just moving dead metal?

    NO supply shortage used cars*


    NO slack in demand!

    We need to manage the perception of high mileage cars

    Closing the gap of

    a-synchronic information between seller and buyer

    Action #1: by “Adding Value”

    Start with transparent supply of information

    * In actual volumes


    Revenue from End-of-Contract Inspections

    From “disposal” to permanent source of revenue

    • Small cost => high return

    • Strategic reasons lead to: (win-win)

      • Additional source of revenue

      • Commercial sales strategic leverage………

      • Awareness among Fleetowner & drivers

      • Increase better driver behavior

    Leading to lower operational vehicle cost!

    Average split Passenger Car & LCV

    Based on +39.000 EU Inspections

    Above “Normal Wear & Tear” cost per vehicle

    In month’s =>

    Source: Macadam Europe

    17,4% no cost

    • Part of determining:

    • Risk management

    • Insurance premiums

    • Correct franchise per incident

    • Best-practice method:

    • Audatex based

    • Brut repair cost (Q-new!)

    • -/- 30% = actual loss-of value

    See printed version for more details

    Main requirements implementing

    Some conditions for implementing:

    • Transparency on method & outcome

    • Consistency in: “Normal Wear & Tear”

      • Norm inspection

    • Consistency in loss-of-value calculation

    • Processing insurance (claim) file

    • Educating fleetowner & driver (over time)

    • Monitor and apply benchmark key-figures

    Sample of norm:

    Latest development: “in-between-inspections”


    Europe is divided in 3-markets

    Mileage fraud is disaster for image of sector

    Managing perception high mileage cars

    No shortage supply, no lack in demand

    Need to “lock-in-clients” with recurring services

    More transparency is required

    Steady and permanent stream of revenue

    Small investment – high revenue

    Leads to lower Total Cost of Ownership TCO)

    Rob M. Henneveld

    Global Automotive Consultancy

    +31 6 54 921 409

    [email protected]!/RobHenneveld

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