The digital transformation:Used car retail performancemanagement 2.0

E.N.G. Automotive Retail & DistributionBerlin - April 5, 2016

Jörg Höhner, Global Managing Director INDICATA

Papal InaugurationPope Benedict XVI

Papal InaugurationPope Francis

NO TRIVIAL CHANGEMajor trends changing consumer car buying patterns

The internet empowersconsumers

Smartphones and tabletsare game changers

Consumers take theirhomework seriously

Targeted researchresults influence buying

decisions

WWW

NO TRIVIAL CHANGEAnd also the used car business sees already disruptions…

In a time wheresupply and demandchanges faster thanever, data-driveninsights are vital todrive your usedvehicle business togrowth.

ActionableMetrics &Insights

DATA-DRIVEN INSIGHTSMonitor real-time data to improve used car performance

MARKET DAYSSUPPLY

PRICE TOMARKET

INVENTORYAGE

PRICINGSTRATEGY

STOCKTURN

SHARE OVERFIRST PRICETO MARKET

NUMBER OFPHOTOS

DATA-DRIVEN INSIGHTSKPIs to guide used vehicle suceess

STOCK TURNCareful stock management to improve operational performance

5,67,4

0,0

2,0

4,0

6,0

8,0

10,0

Nov. 2014 Nov. 2015

Profit Impact:€ 38.400

Small Dealer

6,68,3

0,0

2,0

4,0

6,0

8,0

10,0

Nov. 2014 Nov. 2015

Profit Impact:€ 180.300

Mid-size Dealer

7,3

9,2

0,0

2,0

4,0

6,0

8,0

10,0

Nov. 2014 Nov. 2015

Profit Impact:€ 1.140.700

Large Dealer Group

MARKET DAYS SUPPLYMeasures the relationship between supply and demand today

120

SupplyTotal number of vehicles currently available

DemandAverage number of vehicles sold per day

60

MARKET DAYS SUPPLYHow can Market Days Supply help protect residual values?

VolumeDistribution

PricingStrategy

GERMAN PREMIUMMANUFACTURER

JAPANESE VOLUMEMANUFACTURER

EUROPEAN VOLUMEMANUFACTURER

1 - 3 0 d a y s

3 1 - 6 0 d a y s

6 1 - 9 0 d a y s

9 1 + d a y s

INVENTORY AGEMinimize the profit harming effects of increased market volatility

24%

13%

13%

50%

28%

15%

12%

45%

29%

18%

13%

40%

105 % 5% above Price to Market100 % Average Price to Market95 % 5 % below Price to Market

Nøgletal

PRICE TO MARKETAssess the price position of your inventory

Price/Market

MDS

97 50100 74101 15099 217

Price/Market

MDS

101 6098 6095 60- -

Days instock1-30

31-6061-9091+

Typical Ideal

PRICING STRATEGYKnow when Market Days Supply is in your favour

Attractive carspriced too low

Identify network dealers whoconsistently price below the

market

Identify network dealerswithout “rational” pricing

strategy

Know when Market DaysSupply is in your favour

„Discount“ dealers Fresh inventorypriced lower than old

Attractive cars pricedtoo low

PRICING STRATEGYTop 3 dealer pricing strategies undermining profitabilty

SHARE OVER FIRST PRICE TO MARKETIdentify and manage deprecation risk of your inventory

Avrg.Price/Market

102%

Total InventoryValue

€ 8.426.359

Share Over FirstPrice/Market

37%

Value @ Retail Asking Price € 3.754.629Depreciation Risk Next Month € 56.319

TOO FEW PICTURESManage the ideal photo count

CASE STUDYPremium Brand Dealer in the Netherlands

Average stockdays reducedby

15%

95%Gross Marginper unit up by

Used car salesgrew

113%YOY

2,1 to3,7

Stock turnincreased from

CASE STUDYAsian 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 (>60days)

2.869 2.135 -29%

Too few pictures (<3 pictures) 846 474 -44%

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