It is estimated in the BCA Europe Used Car Market 2003, produced in association with Sewells Information and Research, owned by Fleet News' parent company Emap Automotive, that leasing companies will next year defleet and sell one million vehicles.
In the Netherlands and France, operational leasing, known as contract hire in the UK, represents a major part of new vehicle sales. In these markets, the major leasing companies are very high volume sellers of used vehicles – a trend that is spreading across Europe, the report adds.
Germany is the biggest car market but its operational leasing share has traditionally been relatively low. This is changing and, in turn, is generating the need for new remarketing channels to absorb the growing volumes of ex-lease cars, the report suggests.
The report studies the used car market in many European markets in detail. Here is a summary:
The wholesale used car market in Germany has been traditionally dominated by big wholesalers, often franchised groups wielding plenty of buying power. Vehicle manufacturers, rental and leasing companies deal with these wholesalers, (plus a small number of direct buyers), with bulk deals usually managed through an internal department set up by the seller.
Increasingly, leasing companies have sought to set up a more competitive selling environment alongside the bulk deals, typically through bid/tender arrangements by fax, sealed bid, e-mail and internet. Leasing companies are also major exporters, with substantial volumes of cars going to eastern Europe, the Middle East and Turkey.
Dedicated vehicle auctions are a relatively fresh concept in Germany, and sales are strictly business-to-business and initially consisted of manufacturers closed sales back to their dealer networks, only latterly expanding to multi-vendor auctions featuring vehicles from fleet, dealer, lease and rental sources.
Many vehicle manufacturers still rely on a small number of franchised dealers to take the majority of their used volume, effectively treating their dealers as wholesalers.
Annual used volumes have hovered about the 2.5 million mark for a number of years, with little sign of dynamic growth, according to the report. In fact used and new car sales are similar and last year recorded figures of 2.68m and 2.287m respectively, giving a used to new ratio of 1.2:1.
The report says a confusing element of Italian used car volumes are the 'minivolture' sales (dealer part-exchange numbers) which are actually counted in the official Italian figure. For the purposes of this report the minivolture volumes of 982,622 in 2002 have been excluded.
Last year, 1.76 million used cars were sold in Spain (2% down year on year) – against a new car market of 1.3 million (a decrease of the 6.57% against 2001).
The report found that there is currently an oversupply of rental product and also growing leasing volumes to be absorbed and as a result, used car sales in France have been running at record levels, rising again last year to nearly 5.5 million units. The major leasing players are home-manufacturer captives and big French-based international players.