Carmakers nestle in booming used car market
Car manufacturers and importers that previously concentrated on new car sales are now creating a comfortable nest in the used car market. It’s easy to see why. In France alone, that market grew by 7,8% between 2016 and 2017 while new car sales only increased by 2,3%. PSA has integrated second-hand car sales in its Push-to-Pass plan, aiming to double the number of cars sold by 2021.
For a long time, carmakers have neglected the used car market, often judging it as a by-product of new car sales. With 5,6 million cars sold every year in France alone, it’s more than two times bigger than the sales of brand new vehicles. In addition to that, the used car market seems to hold its ground better. Between 2016 and 2017, it grew by 7,8% while new car sales only increased by 2,3%.
‘Back to the dealership’
In spite of that substantial share, the major part of the second-hand car market is left to private sellers. The development of online platforms certainly helped. The Internet also reduced the number of clients in dealerships. Today, buyers only visit the dealership an average 1,1 time compared to 4 before.
“We want to bring clients back to our dealerships. And second-hand cars are a good opportunity for that,” explains Nicolas Lemaignen, used car manager at Renault. Consequently, carmakers have developed a bunch of services designed to seduce the client.
Certified used cars
“The second-hand car market has all the characteristics of a non-perfect market. Uncertainties on the products exist, such as the mileage, the previous use, and finance,” declares Guillaume Crunelle, Deloitte associate.
Carmakers have thus created labels that certify the quality of the car. For instance, BMW ensures every used car sold through their dealerships goes through a 154-checkpoint control.
Thanks to this, carmakers have managed to nibble back some market share. In 2021, they represented 29% of all second-hand sales. Last year, that share was up to 38%. French automotive Group, PSA, has even decided to go a step further. It unified its brands’ entire used car label under one name: Spoticar.
CEO Carlos Tavares has even included second-hand cars in the group’s new strategic plan Push-to-Pass. The aim is to increase the used car sales from 537.000 units in 2017 to 1 million in 2021.
AramisAuto’s success story
In 2016, PSA even managed to get hold of a major actor in the used car market: AramisAuto. Created back in 2001, the French company played the role of intermediate for new car sales. It’s in 2009 that it launched itself into the used-car market.
Contrary to other actors, AramisAuto has decided to industrialize its chain. The company purchases every car it is offered. If it’s over eight-years-old, the vehicle is directly sold to export merchants. If the vehicle is salvable, however, AramisAuto sends it to its repair shop where the car is repaired, serviced, and cleaned. Last year, the repair shop managed to deal with 12.000 vehicles.
Today, AramisAuto’s activity is booming. “Our average growth is 10 to 15% a year,” happily declares Nicolas Chartier, cofounder of AramisAuto.