volkswagen powerpoint - beijing german-inspired events
TRANSCRIPT
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Necessity of professional UC-business for an OEM
24 January, 2017
Oliver Lajara
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Agenda Chinese and German UC-Market
Main reasons for a growing UC-Market
Benefits and Volkswagen UC Performance
Suggestions for further improvement
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Mio Units
New car sales (Total Market) 22% growth 2015-2020
Mio Units
Used Car sales with 196% growth till 2020
• City restrictions
leads to more
replacement volume
and becomes used
car sources.
• Car holding period
reducing
and carparc grows
significantly.
• China car market
becomes more
mature and
expected to be 1:1
NC sales and UC
sales in 2020.
Source: PR64.1 Overlay Source: CADA; BIPE Analysis
China’s new car and used car sales development
will be on eye-level by 2020
2015
22,5
2020
18,5
+22%
2015
22,5
2020
7,6
+196%
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Used car development trend in China
China vs. Germany: UC development trend;
reflecting opposite NC/UC ratio
2016
28,0
5,5
7,1
2012
19,3
10,0
2014
23,5
Used car sales volume New car sales volume
Mio Units
Used car development trend in Germany
2016
3,4
6,8 7,1
2012
3,1
7,3
2014
3,0
Mio Units
Source：VGC pre-owned car
3:1
1:2
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4 main reasons for significant used car sales
growth over the next years
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Governmental policies & recommendations
Change of customers demand and mindset
Used car replacement volume
Existing environment of professional UC infrastructure
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Governmental change of policies and new
customer demand and thinking
Governmental
policies
“Guobatiao”
• No Emission barriers
• No regional blockage Stimulation of UC Transaction (nationwide)
• No age limitation
Change of
customers
demand and
mindset
Consumers increasingly see used cars as a good alternative to new cars
18
47
2016 2011
Consumers’ approach to used
cars during last car purchase, %
Considered a used car
Consumers’ reasons for
considering used cars, %
59
12
39
28
37
56
To get a better car
for the same price
To get a lower price
on a given car
As a temporary solution
Source: McKinsey 2016 China Auto Consumer Survey
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Existing, professional UC infrastructure and
increasing replacement volume
Professional UC
infrastructure
• Residual Values: Red Book, DAT, VW-database, etc.
• Vertical websites: 58, i-auto, autohome; Remarketing platforms: Youxin, Guazi
• Assessment/Evaluations/Training: Dekra, TUV, Cheyintong
• Transparent online-solution: Chejianding (historical damage checks)
• Wholesale/Retail/UC financing
Used Car
supply
increased due
to great
replacement
volume
‘000 Units
150100 120 100
55
341
199
36 75
43
98
Shanghai
23%
Hangzhou
299
156
43%
Tianjin Guangzhou
44%
175
491
Beijing
67%
69% Replacement Volume
New QuotaVolume
Replacement Ratio
Source：VGC pre-owned car
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Professional, certified UC business as a market
opportunity providing great benefits to an OEM
• New customer groups
• Wider range of sales
tools and options for
customer to offer
• Additional after sales
business & services
• Increase of customer
loyalty
Dealer Satisfaction
• Additional sales channel
generating additional
profits
• Avg. profit with new car
only 1%
• Avg. Profit with used car
between 5-12%
• Strenghten residual value
performance
Sales/Profitability
• Higher willingness to
fill stock with new cars
• Extending UC business
with new ressources
and infrastructure
• Enhancing their UC-
scope through JV‘s
Investments/Liquidity
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VW “Das WeltAuto” dealer development +
certified pre-owned car sales
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
0
100
200
300
400
500
600
700
2017 2016 2015 2014
DWA Dealers
CPO Sales
+59%
+32%
+38%
Source：VGC pre-owned car
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Suggestions for further improvement and
development in the UC business
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OEM
Buy-in from Top
Management
Voice of the dealers
Foster relationships
with 3rd parties
Industry, suppliers
and partners
Cooperation, sharing of
information
Focus on core competencies
Be Creative
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