Remarketing in Central and Eastern European countries
I would like to dedicate this article on used car sales in Central and Eastern European (CEE) countries. These markets are very interesting for many pre-owned car sellers and for fleet owners. Why? That I will try to explain in this article.
An important factor for fleet managers who want to sell their vehicles on the used car market is the residual value. I expect that most of you know that residual values are mainly driven by supply and demand. Determining the residual values, on the other hand is a little more complicated. The difficulty partly lies in the fact that the demand for second hand cars is hard to predict while it depends on various macro- and microeconomic factors.
What are those factors? Here are some examples:
– Are consumers able and willing to buy used cars?
– How big is the supply of used cars? Do the cars meet consumer standards on models, price and quality?
– Are there appropriate routes to the market? Are there a cost efficient means of transport and can these means carry large volumes?
Predicting residual values and sales in CEE countries
And predicting residual values is even more tricky in emerging markets. In Western European markets new car parks are quite stable and sell large volumes of cars every year. This means that there is a regular flow of cars to the used market.
The emerging markets, on the other hand, have much smaller sales volumes of cars and even a slight fluctuation in volume can have a large impact on residual values and conversely on remarketing opportunities.
In the current situation, the size of the new car market in CEE countries is not large enough to create a strong used car market. Therefore, many used car traders are looking to import used vehicles. And that’s where we come in. However, developing these opportunities can hold some problems.
Developing opportunities in emerging CEE markets
To accelerate the growth of the used car markets in CEE countries, and ultimately enhance the acceptability of our second hand vehicles and their realistic prices. But we collectively, as car traders, need to abate some of their concerns. There are a few ways we can help improve communication. Here are some examples:
– Supporting used car price guides within the markets and building confidence in these figures
– Creating press and PR programmes that describe used cars as having excellent value for money.
– Emphasizing how the used car industry is becoming more professional.
Starting export to emerging markets
Used car traders and fleet owners who are looking to grab the opportunities that lie in CEE countries, definitely consider using the help of an intermediate. And I am not just saying that as an employee of a European used car auction company.
Venturing into new markets takes time, effort and therefore money. When you use an international platform to sell your used vehicles, you don’t have to bother with extensive market research. All the groundwork has been done for you: building partnerships, studying the market, legislation, prices,… This saves you a lot of time.
If you prefer flying solo, than please remember that knowledge is key! Educate yourself with all factors mentioned above. And develop a brilliant strategy to acquire clients.