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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

Rob Henneveld

Global Automotive Consultancy

Present dynamic used car sector
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
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
    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
    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
    (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
    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
    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
    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
    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