Residual Value and Remarketing Forum - 13 February 2020 Hosted by - BVRLA
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Residual Value and
Remarketing Forum
13 February 2020
Hosted by
bvrla.co.uk
Welcome and Agenda
Residual Value and Remarketing Forum
Hosted by
bvrla.co.uk
BVRLA Meeting Rules – UK Competition Law
Compliance
All BVRLA meetings and events, including social events, are subject to the
application of competition law and therefore must be conducted in compliance
with competition law. Any business information which is sensitive or strategically
useful must not be discussed, including any reference to pricing, margins,
discounts, trading terms, use of third-party suppliers or market share. Members are
reminded that failure to comply with competition law may bring with it serious
consequences for them as individuals and their companies. Such consequences
include heavy fines and, in certain cases, the imposition of criminal penalties and
sentences.
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Agenda
09:30 Welcome and Agenda Lee Hamlett, Commercial Director, Inchcape Fleet
Solutions and RVR Committee Chairman
09:35 Session 1: Welcome from Copart Mark Godfrey, Strategy, Insight and Digital
Development Director, Copart UK
10:05 Session 2: Car Overviews Rupert Pontin, Director of Insight, Cazana
Latest update on the used vehicle marketplace
10:35 Coffee Break
11:05 Session 3: Brexit & Government Update– what does it mean for our industry? Paul Thompson, Government Affairs Manager,
BVRLA
11:30 Session 4: Cox Automotive Update James Davis, Customer Strategy And Insight
Director, Cox Automotive
11:50 WLTP Panel Discussion
Chair: Amanda Brandon, BVRLA
Panellists: Jonathan Clay, cap hpi; Simon Jinks, BMW UK and Lee Hamlett, Inchcape Fleet Solutions
12:50 Chairman’s Closing Comments Lee Hamlett, Commercial Director, Inchcape Fleet
Solutions and RVR Committee Chairman
13:00 Close of Forum and Lunch
bvrla.co.uk
Session 1 – Mark Godfrey, Copart
Residual Value and Remarketing Forum
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bvrla.co.uk
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020.
Copart Global leaders in online
vehicle remarketing
Global leader in online
vehicle remarketing
1982 - First yard opens in Vallejo, California.
244 Locations
11 Countries
750,000 buyers
Patented Auction VB3
13 years in UK
400,000 sales p.a.
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketing
Patented Auction Technology
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketing
Ever increasing Maximising desirability
global Member base of vehicles
Fuelling our selling engine
Specialist Operational
market place excellence
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingEver increasing Maximising desirability
global Member base of vehicles
Underpinned by data and insight
Specialist Operational
market place excellence
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketing190% Track record - ever increasing sales returns
Chart: Indexed YoY Sales Price Achieved on Copart Live Auctions
170%
150%
Indexed Sales Price
130%
110%
90%
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
Last 12 Years FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingUK
Insurance 21 of the top 25
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingUK UK
Insurance Non-Insurance
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingLease
Retail UK
Non-Insurance
Finance
Rental
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingSpeed of Disposal
Service Excellence
Maximising Sales Returns
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingPre-conceived
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingReality
‘
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingOur Market
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingOur Market
Opportunity?
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingThank You.
Strictly Confidential | Not for onward distribution | All rights reserved Copart UK Ltd 2020. Global leader in online
vehicle remarketingSession 2 – Rupert Pontin, Cazana
Residual Value and Remarketing Forum
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bvrla.co.ukUK Market Review Insight from Cazana Rupert Pontin – Director of Insight 13th February 2020
Agenda • The UK Market 2019 • The January 2020 UK Car Market • Fleet Focus • 2020 Considerations cazana.com
The 2019 Market Changing times
New Car Market
+0.8%
-3.2%
cazana.com Data courtesy of the SMMTNew Car Market cazana.com Data courtesy of the SMMT
New Car Market cazana.com Data courtesy of the SMMT
January 2020 Was it a surprise
The Big Announcement… cazana.com
New Car Market cazana.com Data courtesy of the SMMT
New Car Market cazana.com Data courtesy of the SMMT
New Car Market – Full Year
Noticeable Mainstream
Movers
Audi up 13%
Hyundai Down 31%
Kia down 25%
Lexus up 44%
MG up 145%
Mini down 31%
Nissan up 18%
Vauxhall down 25%
cazana.com Data courtesy of the SMMTUsed Car Market Performance cazana.com Data powered by Cazana
Used Car Market Performance cazana.com Data powered by Cazana
Used Car Market Performance cazana.com Data powered by Cazana
Used Car Market Performance cazana.com Data powered by Cazana
Anecdotal Market Commentary “Retail Market Faded a bit after the January Sales” Digital marketing campaigns and tenacity still driving used car sales Wholesale Market – “Prices still into book” ... Better pricing performance than manually edited data suggests, and highlights the importance of real-time insight “February will be interesting…” Saw a tail off in consumer demand but not disastrous just more difficult to deal cazana.com
Consumer Confidence cazana.com Data from Trading Economics
Business Confidence cazana.com Data from Trading Economics
Fleet Focus Things may be moving better again
Ex Fleet Market Performance – Petrol and Diesel cazana.com Data powered by Cazana
Ex Fleet Market Performance – Hybrid and Electric cazana.com Data powered by Cazana
Key Sector Performance at 3 yrs 60k cazana.com Data powered by Cazana
What is to come in 2020 Many variables
Cazana Outlook
2019 2020
New Sales New Sales
-2.4% -1.5%
Used Sales Used Sales
8m ? 8m to
8.15m
New Cars to Stabilise
cazana.comWorking with a Stabilising Market
CAFE
and
RDE2
Brexit Big data New Regulations
Pollution Economy
The CO2 problem Stagnation or Mild Building the
Growth Infrastructure and
Confidence
cazana.comSummary – use big data, technology and credible providers • Make the most of what is in the market to help • Use Real-time data for relevance and pricing accuracy • Total transparency on underlying data & certainty is essential • Machine leaning and data science take subjectivity out of the valuation process • Increase pricing insight and profit opportunities using data and technology • Additional metrics on regional, business-type, vehicle type performance 2020 is still the year of the used car…. cazana.com
Questions Rupert Pontin Director of Insight Rupert@cazana.com +44 (0) 7800 809021 If you would like to know more about how Cazana can help your business increase profit and forecasting accuracy with real-time retail driven insight, please contact me either directly or the sales team via sales@cazana.com
Coffee Break – back at 11:15 please
Residual Value and Remarketing Forum
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bvrla.co.ukBrexit:
What does it mean for our industry?
Paul Thompson, Government Affairs Manager
RVR Forum 2020
bvrla.co.ukWhat we know…
bvrla.co.ukWhat we know…
bvrla.co.ukWithdrawal Agreement
bvrla.co.ukUK wants a very different relationship with EU…
bvrla.co.ukEU – UK trade talks: what’s up for grabs? Goods Services Level playing field (state aid, environment, laws, competition) Transport and mobility Energy Data sharing Public Procurement Intellectual property bvrla.co.uk
No Deal –Dec 31st 2020?
What we know…
bvrla.co.ukBVRLA Guidance & Factsheets
For more information:
See our Brexit guidance page and webinar – regular updat.
Government’s Brexit page (Gov.uk/brexit)
Specific queries or further questions:
Paul Thompson, Government Affairs Manager Paul@bvrla.co.uk
bvrla.co.ukSession 4 – James Davis, Cox Automotive
Residual Value and Remarketing Forum
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bvrla.co.ukInsight Overview February 2020 J A M E S D AV I S Customer Insight & Strategy Director
The Cox Automotive Insight Team
Your Sector Experts
Passenger Car Commercial Vehicles
Philip.Nothard@coxauto.co.uk 07798 602736 James.Davis@coxauto.co.uk 07767 845848
@PhilipN_Auto @CoxAutoLovesCV
➢ 30+ years in the automotive industry ➢ 20+ years in wholesale: CMA, NCA and Manheim
➢ 7 years at CAP hpi ➢ 3 years in fleet asset management
➢ Director of the Vehicle Remarketing Association ➢ LCV and HGV specialismAgenda Van Overview • UK Parc and Key Stats • Forecast – New and Used • Hot Topic – RDE (+2), CAFÉ and Air Quality • Electrification • Market view from Manheim • Outlook Industry Trends
VAN OVERVIEW
Cox Automotive Insight - The 2019 UK Vehicle Parc
LCV Historic Growth, HGV Largely Static
• Van parc volumes grown c60%
since 2000 - driven by growth in
service industry followed by
downsizing from 7.5t truck, rise in
self employment, home delivery
and Gig economy
• Last decade +75% growth in
vans over 10 years old (2009
730k vs 2019 1.3m)
• 30% of the vans in the UK parc
are over 10 years of age
(c1,300,000)
• c6500 zero emission vans in a
total UK van parc of 4.3m vans
Source: SMMT Motor Industry Facts 2019
(2018)Vans’ Value UK Plc Source: SMMT LCV Sector Report 2019
Vans’ Value UK Plc Source: SMMT LCV Sector Report 2019
New Van Market, Forecasts and Cox Automotive Forecast A Stable Marketplace YEAR (‘000s) 2007-2016 (Avg) 288 2016 376 2017 362 2018 357 2019 366 2020 f 348 2021 f 332 Source: SMMT LCV Forecasts Jan 2020
Cox Automotive Insight Report – LCV: The UK’s First Ever Used Van Transaction Forecast
A robust sector
• Reflects recent growth
trajectory and record 2016
• Size of wholesale element
estimated at c142k
• 2020: first time we break 1
million used van transactions?
• Lack of primary data; change
of owner likely includes;
acquisition of fleets,
purchase/hireback, scrappage
and taxationHot Topic: Clean Air For Europe (CAFE)
Light Duty Vehicle (LDV)
• 2020 is a phase-in period; emission targets will apply for each OEM’s 95% least emitting new LDVs:
• Average CO2 emissions for every OEM fleet is targeted in any given year
• Pooled for model ranges, car and van
• Vehicle mass taken into account, lower volume exemptions, derogations etc
• Penalty of €95 for every g/km over target for every vehicle registered
• Car target 95 g/km
• Van target 147 g/km,
• EV registration counts as 2 credits
• 2021 all OEM ranges must fall under target for all LDVs:
• Cars: 15% reduction from 2025 and 37.5% reduction from 2030,
• Vans: 15% reduction from 2025 and 31% reduction from 2030
https://ec.europa.eu/clima/policies/transport/vehicles/regulation_enThe Current Demand for NEW EV Vans Demand vs Supply • CAFE EV credits believed to have impacted EU supply • Mild vs Full Hybrid vs REX vs BEV • Van usage differs first to second life - urban vs intra-urban • Rental sector take up – depot charging infrastructure, usage, • 1st life corporate fleet “transformation” would feed the used market Q1 2019 Amazon invested $440m in Rivian, start up EV OEM in US Q1 2019 Ford pipped GM and invested Q3 2019 Cox Automotive invested $350m • Rivian Pick up and SUV launching in 2020, 400 mile range • Skateboard platform, air suspension 200hp at each wheel • Lincoln taking platform for SUV • September Amazon has ordered 100,000 vans (2021-2025 delivery)
2020 – The Story So Far….January
Yes,,,,,,It’s STILL Robust!
• 8 out of 10 vans selling first time. 80.8%, up 2.3% versus December and up 2.8% versus January 2018
• CAP guide performance reached its strongest level in two years and rallied up 2.63% versus December 2019
• 25% more active buyers participate inlane and online versus January 2019. 3,088 buyers, up 22% versus January 2018
with 44% joining via online channels
• SMMT data shows best January new van market in over a decade
• Mileage having the biggest impact on buyer appetite and sale performance – 3 tier
• First ever Cox Automotive 2019 new van forecast just 1,778 vehicles (0.49%) short of actualThe Perfect Storm For New and Used Vans
• Clean Air Zone rollouts are seeing first life corporate users bring forward replacement cycles and change ownership approach
• By 2021 I believe upwards of 1.8m (42%) of vans on UK roads will be Euro 6
• List prices; more expensive to fund plus lengthening lead times for a number of factors (No deal tariff risk too?)
• Used Euro 6 vans enjoying strong demand; a limited primary rental supply volumes (Manheim sub 20% Euro 6 vans YTD)
• If new World Health Organisation (WHO) air quality targets are passed into UK law Q1 2020 then EU targets are superseded.
WHO targets are twice as aggressive; no doubt UK Clean Air Zone strategy and scope will have to be revisited
• UK Government published ‘Road To Zero’ in 2018:
– 2030 Target: 40% of the UK’s new vans sold to be ULEV/BEV (50%-70% ULEV and BEV for cars)
• 40% is c140,000 per annum
• currently c1,500 per annum
• +9233% in ULEV/EV registrations in the next decade (Manheim 60m average age: 2 change cycles hence!)
• EV registrations insignificant, c1500 for last 3 years, lack of product and supply. Diesel will be with CV for some years to come.
First vs second life usages, BEV reliance on charging infrastructure and range of vehicle and derivatives.
• Demand will match supply and there will no collapse in Euro 5 used values (rental vs corporate vs SME lifecycles),INDUSTRY TRENDS
Near Term UK Remarketing Trends 1 Supply & Demand challenges Car vs Van 2 Digitisation of value chain Moving beyond digital channels to frictionless wholesale 3 Demand for Vehicle Services New appetite for physical services to support the digital ecosystem 4 Dealer landscape changes Consolidation of the traditional dealer model 5 Emergence of Digital Retail Changing consumer behaviour on the way they find cars and vans 6 Role of Government Attitudes and policies a major influence on overall automotive health
Dealer Landscape Changes Reduction in Franchise outlets: • OEM consolidation and cost cutting • OEM footprint - realignment to new sales volume norms • Significant variance in profitability by OEM • Forced feed of used stock dependent on OEM • Higher throughput per site in the future, • Sales vs aftersales – different customer drivers Growth in supermarket outlets: • Competition intensifying – margin pressure • Expansion in footprint, super centres and throughput, • Huge appetite to source stock and in volume/batches Pressure for small independent dealers: • Primary buyers of the oldest and highest mileage vehicles • Regulatory compliance – consumer rights, operating costs • Market price transparency, need to specialise to differentiate, • Investment in digital retail experience
2020 Insight Timetable
Your Resource
Published:
✓ 2nd Annual Cox Automotive Insight Report produced with Grant Thornton
https://www.coxauto.co.uk/InsightReport
✓ BVRLA 2020 Industry Outlook Report:
https://www.bvrla.co.uk/uploads/assets/5af25256-c907-40aa-9382450a179518c6/BVRLA-2020-Industry-Outlook-CV-Final-revised.pdf
✓ SMMT LCV Sector Report 2019:
https://www.smmt.co.uk/reports/light-commercial-vehicles-delivering-for-the-uk-economy/
Pipeline:
✓ Mobility as a Service (MaaS) Special Cox Automotive Industry Report (H2)
✓ 3rd Annual Cox Automotive Insight Report produced with Grant Thornton (June)INDUSTRY LEADING INSIGHT
James Davis
Customer Insight & Strategy Director – CV
james.davis@coxauto.co.uk 07767 845848
@coxautolovescv /CoxAutomotiveUK /jamesdavis
@CoxAutomotiveUK /cox-automotive-uk
https://www.youtube.com/channel/UCzeRBc5_-R4S54TTlSl0HvA?view_as=subscriberWLTP Panel Discussion
Chair: Amanda Brandon, BVRLA
Panellists: Jonathan Clay, cap hpi
Simon Jinks, BMW UK
Lee Hamlett, Inchcape Fleet Solutions
Hosted by
bvrla.co.ukWLTP Data
Supply Update
Jon Clay
Feb 2020
CONFIDENTIAL INFORMATIONWLTP Fill Levels: Static Data
• 85% current fill level, but varies by brand
• 0% for some exotics (some of which have special dispensation)
• +76% for major brands (most +82%)
• Expect fill level to rise to match WLTP fuel consumption,
currently 92%
CONFIDENTIAL INFORMATION
81WLTP APIs: CO2 for Option Builds
• 11 OEM APIs covering c76% of new vehicle sales
• Only way to access WLTP CO2 for exact builds
• Options will cause some derivatives to jump multiple tax bands
• Integrated with all APIs, differing levels of maturity
• Seeing ramp up of OEM activity to complete ahead of April
CONFIDENTIAL INFORMATION
82The WLTP Emissions Service
The WLTP Emissions service is an API that collects emissions and fuel consumption data from
manufacturer factory systems. We have replaced our internal systems to enable this.
The customer submits a The Emissions Service identifies the
configured vehicle that is brand. Model year and details of
constructed using capIDs for the the request.
derivative and options. It then translates the capIDs to the
The configuration is based on the manufacturers specific language
option relationships in place. and submits a request for data
The manufacturer’s factory API
BMW
Emissions service
acknowledges the request,
Fleet Request: confirms a second time whether the
• MY 20 request is valid.
• BMW Toyota If the validity is confirmed then the
Car • 1 series factory supplies the emissions and
Buyer • 1.5 diesel fuel consumption for that specific
• 20” alloys Citroen configuration
• Panoramic The values returned will be sent
roof back to the customer
Etc.
CONFIDENTIAL INFORMATION
83OEM Dynamic Data: Where can it be accessed?
We have ensured our solution simplifies OEM strategies for our customers as much as
possible. Even if an OEM isn’t using an API, we will make their data available in ours.
API Access Only API & NVD
• Mercedes Benz
• SMART
• Volkswagen • Vauxhall
• Honda
• Audi • JLR
• Suzuki
• Skoda • Volvo
• Mazda
• Peugeot • BMW
• Mitsubishi
• Citroen • MINI
• KIA
• DS • FCA (all brands)
• Hyundai
• Ford • Toyota
• MG
• Renault • Lexus
• SEAT
• Nissan
• Plus many others…
CONFIDENTIAL INFORMATION
84For more information contact:
Jonathan.clay@cap-hpi.com
Head of Vehicle Identification
CONFIDENTIAL INFORMATION
85Brand Partnership Opportunities
Connect your brand to the key decision makers in the vehicle rental, leasing and fleet industry.
Wider, more
flexible range of
opportunities
Digital Advertising Sponsorship Thought Leadership
Exclusively for BVRLA members
Prices to suit all budgets
brandpartnerships@bvrla.co.uk
bvrla.co.ukFinal Thoughts
Thank you to Copart for hosting today’s forum
Thank you to our speakers and you for participating in today’s forum
RVR Feedback & Suggestions: Please spend a few minutes to complete the feedback survey
when you receive the email
Presentations: a link to where you can download these will be sent out
See you next time! 18 June 2020
bvrla.co.ukResidual Value and
Remarketing Forum
13 February 2020
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