Digital Transformation Used Car Retail Performance
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This document discusses how data-driven insights can help used car dealers improve performance in today's changing market. It provides examples of key performance indicators (KPIs) that used car dealers and OEMs can measure, such as market days supply, price-to-market, inventory age, and stock turn, to optimize pricing strategy, inventory management, and reduce risks. Case studies show how measuring these KPIs helped a premium dealership increase sales and profit margins by reducing aged inventory and stock days. The document promotes a company called INDICATA that provides data insights and analytics to help used car businesses drive growth.
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Digital Transformation Used Car Retail Performance
- 1. E.N.G. Vehicle Remarketing 2016 The digital transformation: Used car retail performance management 2.0 Jörg Höhner Global Managing Director INDICATA, Autorola Group Amsterdam – January 26, 2016
- 2. NO TRIVIAL CHANGE Major trends changing consumer buying patterns The internet empowers consumers Smartphones and tablets are game changers Consumers take their homework seriously Targeted research results influence buying decisions WWW
- 4. In a time where supply and demand changes faster than ever, data-driven insights are vital to drive your used vehicle business to growth.
- 5. Actionable Metrics & Insights DATA-DRIVEN INSIGHTS Monitor real-time data to improve used car performance
- 6. OEM • Improve market transparancy • Monitor and optimise dealer network performance • Protect and increase residual values • Analyse, manage and reduce risks DEALER • Improve market transparancy • Optimize used car operations • Increase stock turn • Analyse, manage and reduce risks FLEET • Improve market transparancy • Live Portfolio Value Analysis • Predict future residual values • Analyse, manage and reduce risks DATA-DRIVEN INSIGHTS Real-time data to improve performance
- 7. MARKET DAYS SUPPLY PRICE TO MARKET INVENTORY AGE PRICING STRATEGY STOCK TURN DATA-DRIVEN INSIGHTS KPIs to guide used vehicle operations success SHARE OVER FIRST PRICE/ MARKET
- 8. MARKET DAYS SUPPLY Measures the relationship between supply and demand today 120 Supply Total number of vehicles currently available Demand Average number of vehicles sold per day 60
- 9. MARKET DAYS SUPPLY How can Market Days Supply help protect residual values? Volume Distribution Pricing Strategy
- 10. 105 % 5% above Price to Market 100 % Average Price to Market 95 % 5 % below Price to Market Nøgletal PRICE TO MARKET Assess the price position of your inventory
- 11. Price/ Market MDS 97 50 100 74 101 150 99 217 Price/ Market MDS 101 60 98 60 95 60 - - Days in stock 1-30 31-60 61-90 91+ Typical Ideal Inventory overview PRICING STRATEGY Know when Market Days Supply is in your favour
- 12. Attractive cars priced too low Identify network dealers who consistently price below the market Identify network dealers without “rational” pricing strategy Know when Market Days Supply is in your favour „Discount“ dealers Fresh inventory priced lower than old Attractive cars priced too low PRICING STRATEGY Top 3 dealer pricing strategies undermining profitabilty
- 13. GERMAN PREMIUM MANUFACTURER JAPANESE VOLUME MANUFACTURER EUROPEAN VOLUME MANUFACTURER 1- 30 days 31- 60 days 61- 90 days 91+ days INVENTORY AGE Minimize the profit harming effects of increased market volatility 24% 13% 13% 50% 28% 15% 12% 45% 29% 18% 13% 40%
- 14. STOCK TURN Careful stock control to improve operational performance 4,6 5,9 0,0 2,0 4,0 6,0 8,0 10,0 Nov. 2014 Nov. 2015 Profit Impact: € 25.164 Small Dealer 5,8 6,7 0,0 2,0 4,0 6,0 8,0 10,0 Nov. 2014 Nov. 2015 Profit Impact: € 150.685 Mid-size Dealer 6,3 7,1 0,0 2,0 4,0 6,0 8,0 10,0 Nov. 2014 Nov. 2015 Profit Impact: € 983.933 Large Dealer Group
- 15. SHARE OVER FIRST PRICE TO MARKET Identify and manage deprecation risk of your inventory Avrg. Price/Market 102% Total Inventory Value € 8.426.359 Share Over First Price/Market 37% Value @ Retail Asking Price € 3.754.629 Depreciation Risk Next Month € 56.319
- 16. CASE STUDY Premium Brand Dealership “Average stock days reduced by 15% 95% Gross Margin per unit up by Used car sales grew 113% YOY 2,1 to 3,7 Stock turn increased from
- 17. CASE STUDY Asian OEM Apr. 2015 Nov. 2015 Change % Over aged (>90 days in inventory) 2.348 1.747 -26% Slow market (MDS >120 days) 1.982 1.564 -21% Over first price to market 2.218 1.723 -22% Price not changed recently (>60 days) 2.869 2.135 -29% Too few pictures (<3 pictures) 846 474 -44%
- 18. In a time where supply and demand changes faster than ever, INDICATA drives your used vehicle business to growth.
- 19. IMPROVE YOUR USED VEHICLE OPERATIONS NOW Request a demo or get started with a free trial. info@indicata.com +49 (0)40 180 370-0 www.indicata.com