Used Vehicle Sales Considerably Impact New Vehicle Lasting Values, Prices, And Brand Power
Sales of Used and new Vehicles Are Strongly Interrelated, According to a different Study on the Vehicle Research Program OTTAWA and PARIS (March 15, 2007) – The used vehicle clients are not going anywhere soon and can more and more change up the new vehicle market in a number of ways, including residual values, prices, brand strength and customer relationships. Consequently, manufacturer participation in inventory management and second hand vehicle branding is vital for enabling dealers to handle effective remarketing programs.
These are some of the findings from the new report concentrating on the used vehicle market printed through the Vehicle Research Program (CIRP). The research, entitled “Anatomy and Physiology from the
Used Vehicle Business,” offers an in-depth research into the second hand vehicle market having a particular concentrate on four key markets: U.S., Canada, France and Germany. The study examines:
(i)The development from the used vehicle business, both in size and importance,
(ii)Global trends affecting the used vehicle business,
(iii)The client shopping process, including Internet usage,
(iv)A comparative research into the four markets, and
(v)Success techniques for dealers/manufacturers.
The significance of the used vehicle marketplace is growing considerably. Both in the U.S. and France, for instance, the used-to-new vehicle ratio has elevated since 1999 from 2.4 to two.6, showing a stable development of second hand vehicle sales by volume. Additionally, second hand vehicle sales within the U.S. are today greater than two times as lucrative for dealers as new vehicle sales (a roughly 2.7% profit, when compared with 1.2%).
“Franchised dealers’ second hand vehicle operations now behave as a hedge against uncertainties within the new vehicle market as well as support new vehicle sales,” stated Dr. Christian Navarre, Director from the Vehicle Research Program. “With declining margins within the new vehicle business and also the aging of vehicles on the highway, the used vehicle business will probably be an increasing and more and more important element of franchised dealers’ sales, in The United States as well as in Europe.”
It’s obvious in the research the answer to ongoing growth is going to be transparency and symmetry of knowledge, as consumers use the same method of research and assortment of information within their look for used vehicles because they do in order to the brand new vehicle shopping process. For instance, although consumers still use local newspapers and word-of-mouth when searching for used vehicle purchases, they’re turning to the net in growing figures, highlighting the significance of getting a powerful Internet technique for second hand vehicle programs.
While national second hand vehicle markets differ in character and structure as a result of number of socio-economic, regulatory along with other factors, the report identified six core strategies which are required for growing second hand vehicle sales:
o Constantly enhance the customer experience, from the web towards the showroom.
o Rationalize customer relationships through Crm (CRM).
o Perfect online promotion and merchandising efforts to achieve prospective and existing customers.
o Manage inventory and prices with network-wide IT solutions.
o Maximize high-margin sales possibilities.
o Optimize certified second hand vehicle programs.
“Consumer attitudes to used vehicles have grown to be modern-day as vehicles themselves have improved in quality and reliability,” stated Nick Gill, Global Automotive Leader for Capgemini. “The various tools utilized by consumers also have evolved, inducing the requirement for dealers and manufacturers to essentially change their method of the purchase of used vehicles, because this report demonstrates. While these changes involve significant financial investments, they hold the opportunity of great returns and therefore are, actually, necessary these days.