Europe Used Cars Market 2021-2026

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    EUROPE USED CARS MARKET

     

    INTRODUCTION

    As  a  general rule,  the definition  of  a  used  car  (motor  vehicle)  is  linked to  its registration.  Any motor vehicle that has previously been registered is a used motor vehicle. For instance, in Belgium the description of  what  a  used car is that “a  used  motor vehicle is to be  understood as being one which has previously been registered”

     

    Used Cars have been of major importance in recent years with the pandemic affecting the basic lifestyle and buyable range of various consumers in terms of reference towards automobile sales. Used cars are more preferred by new or first-time buyers of automobiles in various regions of the world as this helps in inculcating the required user driveable experience which would have a positive impact on a long-term usage time frame.

     

    The  development of the Internet has changed the power struggle between dealers  and consumers in terms of requirements towards the User cars segment of the European Nations.  Buyers can now potentially gain the upper hand. Customers are increasingly knowledgeable about cars, their quality, residual value, prices  applied,  finance  charges,  availability,  and,  more  and  more  frequently,  the  exact  profit margin that  the  dealer makes  in  closing a  deal.

     

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    The  importance  of  the  used  car market  is growing  significantly.  In  both  the  U.S.  and France, for example,  the used-to-new  vehicle  ratio (which  demonstrates the level of  used market activity) has increased since 1999 from 2.4 to 2.6 showing a steady growth of used  vehicle  sales by  volume.

     

    The key to  growth  has been transparency  and symmetry of information,  as consumers  continue  to apply the same approach to research and collection of information in their search for used vehicles as they do in the new car buying  process.

     

    As with new car sales, the  relationship between dealer and  customer  will  need  to be  based  on  respect  and  trust,  as well  as  ease  of purchase.  Such  a symmetrical  relationship  will  presume  that  buyers  and sellers  possess  the  same  information  by which to determine a product’s quality.

     

    The  most  important success  strategy in  the  used car  business  is  the development  of trust-inducing  initiatives  such  as  certified  used  vehicle  programs.  These  programs  provide  the  best protection against  channel competition and  allow dealers  to improve  margins significantly while offering an additional source of revenue for OEMs.

     

    Franchised  dealers are  in  a  strong  position to  benefit  from  growth  in the  used  vehicle  market, supported  by  OEM  involvement in  marketing  and  certification  programs,  access  to  high-quality off-lease  vehicles,  online  inventory  pooling and  a  more  professional  image  in  the  mind  of  the consumer.

     

    EUROPE USED CARS MARKET DYNAMICS

    The used car market covers all private and remarketed sales of second-hand cars. Private sales are those  in  which buyer  and seller  are  both  private  individuals. Remarketing  refers  to the  sale of vehicles  by  companies  that  had  used  them  in  the  course  of  business  or  to  generate  revenue. Remarketing  sales  include  the  disposal  of  used  cars  by  manufacturers,  rental  and  leasing companies, and others.

     

    The used car market is among the world`s biggest in the European Union Nations,  France, and the UK. In these markets, the used  car  business generates  considerable  economic income.  In  contrast,  the used  car market  is weaker in Canada, Japan, and Spain.

     

    In  addition to this, used vehicle  sales in  the  U.S. and Europe  are today more  than twice as profitable for  dealers as  new vehicle  sales (roughly  2.7% profit  margin, compared with 1.2%).  Moreover, the  used  vehicle  financing and insurance  segment is  often the  most profitable operational unit of a franchised dealership, posting 11.3% profitability in 2005 in the U.S.

     

    The European used car market generated total revenues of $268.3 billion in 2007 with a generation of  total  sales  volume  of  16.3 million units, equivalent to 56.8% of the market’s overall volume. But in the recent year, there has been a blockade placed upon the manufacturer dealer networks in both Europe and North America  have experienced consolidation in recent years, a process that has been historically characteristic of the automotive industry and is likely to continue.

     

    In  Europe  dealers  have  experienced  high  rates  of  consolidation,  largely  due  to  the  Block Exemption  legislation,  which  came into  effect  in  2002.  Sources  indicate that  the  number  of  franchised dealer  sales  outlets in  France declined by  about  17%, while  the number  of  German  outlets  declined  by  approximately  18%.

     

    With the increasing knowledgeable platforms and outreach , The market  share  of  independents  is likely  to  fall  in Europe because  leasers are  more  and  more looking after others channels to remarket their vehicles such as : auctions (ex: Germany, Holland), dealers, export, re-rental with the best example being Italy and other nations in Europe which run on rental requirements.

     

    The other main agenda of development for used cars within the market has been through the auction on platforms of varied levels. Used  car sales  via auctions  are  mainly  developed  in England  which used to be part of the European Union till January 2021 and  to  a  smaller degree  in  Germany  and  Holland and  are  emerging  in  other  countries.

     

    However, players such as Manheim or BCA setup aggressive strategies to expand in  Europe. Auctions are more and  more regarded by leasers as a remarketing channel at the expense of independents. Online auctions are rising

     

    EUROPE USED CARS MARKET SEGMENTATION

     

    The Europe market of Used Cars can be segmented into following categories for further analysis.

    By Product Re Usage

    • Remanufacturing Process
    • Scraping
    • Rental Services
    • Showcasing and Museum Purposes
    • Re Buying Purposes

     

    By Product Sales Conveyance

    • Online Sale
    • TV Marketing
    • Social media Marketing Platform
    • Online Auction
    • Platform based sales – OLX etc.
    • Direct Purchase

     

    By Class of Propulsion

    • Electric Vehicle
    • Hybrid Vehicle
    • Fossil Fuel Vehicle
    • Specialized Fuel Vehicle
    • Gas Based Vehicle

     

    By Age Classification of Usage

    • Children
    • Youth
    • Adolescents
    • Adults
    • Middle Aged
    • Elders and Senior Citizens

     

    By Regional Classification

    • Austria
    • Belgium
    • Bulgaria
    • Croatia
    • Republic of Cyprus
    • Czech Republic
    • Denmark
    • Estonia
    • Finland
    • France
    • Germany
    • Greece
    • Hungary
    • Ireland
    • Italy
    • Latvia
    • Lithuania
    • Luxembourg
    • Malta
    • Netherlands
    • Poland
    • Portugal
    • Romania
    • Slovakia
    • Slovenia
    • Spain
    • Sweden

     

    RECENT MARKET TECHNOLOGICAL TRENDS IN USED CARS

    The used vehicle market has grown in size and importance in the past decade and is positioned to continue to do so in the  future. A successful used vehicle  strategy on the part of automakers  and dealers is becoming essential to their operations and is increasingly recognized as such.

     

    Sales of new and used vehicles are strongly interrelated; used sales affect residual values and new vehicle  pricing, in  addition to  relationships  with  customers and  the  strength of  brands.  In  short, used  car  sales have  a  significant effect  on many aspects  of an  automaker’s  sales  and  cannot be ignored.

     

    OEM  involvement on  the  levels of inventory management  and  used vehicle  branding is crucial for enabling dealers to carry out successful remarketing programs.  While  national  used  vehicle  markets  differ  in  character  and  structure  due  to  a variety  of socio-economic  factors.

     

    There have been some core  strategies being implemented  that  are essential  for  growing dealers’ used  vehicle  sales in the European Market in the recent years which includes Continually  improve  the  customer  experience,  from  the  Internet  to  the showroom,  rationalize  customer  relationships  through  CRM,  perfect  online  promotion  and merchandising  efforts to  reach  prospects  and existing  customers,  manage inventory  and pricing with network-wide IT solutions, maximize high-margin sales opportunities, optimize certified used vehicle programs.

     

    In the European markets,  the dealers  and  manufacturers with  successful used  car operations  make  strategic investments in technology to improve customer experiences and build the trust that forms the basis of their ability to compete with lower-priced independent dealers and private sellers.

     

    The recent integration of technology has to be followed alongside the integration of a branded OEM Dealership to have better notion of the complete market operability in terms of increased sales in European markets. There has been focus placed upon having this value-added service being integrated into the used cars market of the Union.

     

    The urban customers would have better saviourism towards the OEM affiliated branded dealerships. The internet portals did not have a visible share. It looks like the customers looked to the information on the internet but concluded the transaction at a physical dealership.

     

    It must also be said that the identification of a customer who transacted in a conventional dealership as opposed to a web portal is relatively lower when integrated directly into a non-branded platform dealership. It is, therefore, likely that there is a certain amount of bias away from the buyers on the internet.

     

    COMPETITIVE LANDSCAPE

    The maturity of the used car market varies considerably according to country, and geographic proximity.France and Germany which work within the same European regulatory framework in terms of car distribution  have strong national traditions in the automotive industry and develop brands that have worldwide coverage.

     

    Germany has the most advanced online used vehicle market, used heavily by both sellers and buyers. Used vehicles in Germany already have the longest warranty among all markets. As a result, certified vehicles are not a strong differentiating factor in this market. Since recent years, dealers’ share of the used vehicle market has been recovering from six consecutive years of decline.

     

    Third-party listing websites, complete with multiple photos, detailed descriptions and vehicle history reports to reassure used vehicle shoppers, have made it easier for consumers to sell vehicles of all ages in the private market.

     

    In addition, franchised dealers within the EU Nations are also increasingly under pressure from the independent dealer segment, where new business models such as CarMax are retailing more of the late-model vehicles traditionally sold by franchised dealers.

     

    Independent e-tailer sites were much more likely to be used by German customers. As many as half of  German used car buyers plan to consult independent e-tailer sites for their next purchase, compared with only a quarter of French used vehicle buyers. Automotive publications have been more integrated to be used by Europeans as part of foundational requirements within  this information source.

     

    eBay Germany, although entering the market at a time frame later than expected, eBay Motors U.S., acquired one of the largest online classifiers in Germany – mobile.de – and has become a major competitor in Europe. It is also one of the reasons behind the growth of the private market in Germany. eBay Germany now has an inventory more than four times larger than that in the U.S.

     

    COMPANIES PROFILED

     

    Sl no Topic
    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive innovation in the Industry
    10 Technology trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on Point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2021-2026
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2021-2026
    19 Market Segmentation, Dynamics and Forecast by Application, 2021-2026
    20 Market Segmentation, Dynamics and Forecast by End use, 2021-2026
    21 Product installation rate by OEM, 2021
    22 Incline/Decline in Average B-2-B selling price in past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in past 12 months
    26 M&A in past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2021
    29 Company Profiles
    30 Unmet needs and opportunity for new suppliers
    31 Conclusion
    32 Appendix

     

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