Aramisauto thrives on shift from new to second-hand cars
PSA daughter, Aramisauto, France’s online ‘musketeer of second-hand cars’, according to Le Monde, is surfing on the wave of private car buyers going increasingly for second-hand rather than new. In 2019, Aramisauto saw its sales in its three markets – France, Belgium, and Spain – veer up with 8% to €748 million, being up to 62 000 cars from 55 000 the year before.
Aramisauto doesn’t communicate exact rentability figures, but with a gross margin between 2 and 5%, it is thriving. “Never as many cars were sold in France as last year,” co-founder and CEO of Aramisauto, Guillaume Paoli, told French newspaper Le Monde. “Eight million in total, all markets mixed.”
5,8 million second-hand cars
But most remarkable is the rise in sales of second-hand cars: 5,8 million in 2019 or 2,8% compared to the year before. The number of new cars sold in France was 2,2 million, an increase of 1,9%. More than half of the latter (55%), are company cars or leased ones. Sales to private people were down with 5,7%.
Last year, only 15% of French households bought a new car. And in the first month of 2020, the difference was even more striking. While the market for new cars plunged with 13%, the second-hand market jumped up with 12% compared to the same month one year before.
Car remains indispensable
“Buying a car remains a structural purchase for a household,” Paoli says. “Up to 73% of them consider a car indispensable, and for 69% the price remains the number one criterium. 38% of the French think a second-hand car is the best value for money.”
For the average car buyer in France, prices of new cars are becoming too high. The average spent is up to €26 000, compared to €19 000 ten years ago, according to figures from car magazine L’Argus.
New car buyer is 56
And it is not surprising that with age, the purchasing power of the French rises. The average new car buyer is now 56, compared to 54 before. The latter is confirmed by François Roudier, Communication Director at the French federation of car manufacturers.
“It reflects the decline in the purchasing power of the middle class. More and more French are switching from buying new cars to very young second-hand cars, less than two years old. Often these are so-called zero-km cars.”
Artificially boosting sales
More carmakers are registering new cars as ‘demonstration vehicle’, without a client order, to deregister it afterward, and offer it at discounts of 20 to 30% in the distribution channels. This way, they artificially boost new car sales. Aramisauto takes advantage of this and has a lot of those cars on its website.
Another factor is the complexity for car buyers of making the right choice of drivetrain, being it diesel, gasoline, or electric to guarantee a good resale price later. On top of that comes what Le Monde calls a ‘Kafkaesque‘ taxation system in France with the double malus for CO2 emissions as an example.