The Kia Approved Used Car Programme / Dealer Profitability European Networking Group, January 24th, 2017
Snapshot of the UK Car Market Annual new car sales 1.9 - 2.6m Used car sales 6.2 – 7.7m Annual new car sales 1.9 - 2.7m Used car sales 4.8 – 6.7m 36 different brands actively compete to sell new and used cars % of dealer’s profit is derived from Used Cars & F& I income in the UK Nationally, 50 % of dealer’s profit is derived from Used Cars & F& I income 1
The importance of the Internet….. Annual new car sales 1.9 - 2.6m Used car sales 6.2 – 7.7m More than 90% of most brands enquiries come from the net. 50% of Car Buyers don’t contact the Dealer before visiting. 60% of all car searches are conducted between 18.00 and 21.00 Less than 10% of consumers know the brand they want to buy before % of dealer’s profit is derived from Used Cars & F& I income they start their search. 85 % of consumers take less than 6 weeks to do their research More than 80% of Dealer’s used car sales are made within 1 hour’s drive of the Dealership. Data, courtesy of Autotrader 2
The origins of the Kia Approved Used Car Program..... 2008 / 2009.....The RECESSION ..... Think the unthinkable .....
Used car programme comparison. Used Car Warranty Scheme Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Ford Direct Toyota Approved Used Warranty Offer 12 months/20,000 2yrs unlimited Back to Original Keep remainder of the original 3 12 months See notes below Keep remainder of the mile or balance of mileage period / 100,000miles year 60,000 mile warranty or original 5 year warranty. If manufacturers extend the warranty to cover 12 the vehicle is older than five warranty, whichever is months/Unlimited mileage12 years then a 12 month longer. months unlimited warranty is supplied. Maximum Car Age 4 Years 1 year 18 months 7 years 5 years No mention on web page? No mention on web page? Maximum Car 60,000 miles 20,000 miles 18,000 miles 100,000 miles 60,000 miles 100,000 miles No mention on web page? Mileage Preparation Standard Multi point Inspection Multi point Multi point Inspection Multi point Inspection Multi point Inspection Multi point inspection Multi point inspection Inspection Exchange Benefit 30 day exchange 30 day/1000 Mile 60 day exchange 30 day/500 Mile exchange 30 day/1000 Mile 30 day/1000 Mile 30 day/1000 Mile exchange exchange exchange exchange All Makes No No No Non Toyota's receive similar Yes No No Programme level of cover. Recovery/Breakdown 12 months AA 2yr Ford Assistance 2 year RAC inc 12 months AA 12 months Citroen Volkswagen Assistance 12 Months RAC assistance Cover Assistance European Cover Roadside Assistance Additional Benefits: 7 day free insurance 7 day insurance 7 day insurance HPI & NMR check HPI & NMR check HPI & NMR check HPi & NMR check HPi Check HPi & NMR check HPi & NMR check Check on Vauxhall Tamper proof O% Finance for up to Automatically become a recall register hologram. Free 48 months on member of Club Toyota for 12 Transfer of any Specific models - with months. (entitles the customer remaining no dealer subsidy. to take advantage of exclusive breakdown cover Hologram bearing the offers and promotions.) and warranty if Kia motif vehicle sold. Comments Every Network Q 90 day Sale or Return Depending on the age of If Original new Car warranty Vauxhall registered to Programme on the vehicle there are two has expired, then a 12 2nd owner only under Campaign vehicles. warranty's supplied. For month Approved Warranty 12 months old with 90 Day Free stocking cars up to 3 years and will be supplied. less than 30,000 on Non campaign 100K it will have an all miles now supplied vehicles component Warranty. All with lifetime 100,000 vehicles over 3 years of mile warranty age and under 100,000 miles will have an Approved Warranty. Warranty Aon are the underwriters. Not CAR Care Plan Car Care Plan In House Mondial TWG/RAC sure if Toyota administer in house 4
A Brand on the move, despite the fluctuations of the market….. 2009 New Car Sales, 31,800 2016 New Car Sales, 89,000 5
Rental Company ‘Buy Backs’ Brand ‘Buys - Brand sell cars on ‘Buy - Back’ Back’ rental Deal to cars and ‘Refurbishes / Rental Company reconditions cars Brand sells cars to Dealers / 3 rd parties , via
Some thoughts and learnings….. We only sell cars to Kia Dealers Robust De-fleet process – no 3 rd parties Congruent with New Car Strategy Engage with Market Makers Cars are ‘Ready to Retail’
The Kia Approved Used Car Program 2016 - a year of recognition. Used Car of the Year – The Kia Sportage 2016, carbuyer, Used Car of the Year, the Kia cee’d 8
Transparency…..? How old do you How old want it to is this be? horse? 9
Residual Value, A segment 10
Residual Value, B segment 11
Residual Value, C MPV segment 12
Residual Value, C SUV segment Sportage 1.7 CRDi RV 1 Year 10K 2016 73 71 69 SPORTAGE 1.7 CRDi ISG 2 5dr Manufactuer A 67 Manufactuer B 65 Manufactuer C 63 Manufactuer D 61 59 57 55 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 13
Residual Value, D SUV segment 14
Residual Values, all segments 15
The ‘average’ Kia Approved Used Car Dealer….. Annual new car sales 1.9 - 2.6m Used car sales 6.2 – 7.7m The average Kia Dealer sold 54 Kia Approved used cars last year. The average Dealer made just under £1,000 GP The average Kia Dealer turned their used car stock, every 47 % of dealer’s profit is derived from Used Cars & F& I income days 16
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