he German used car market has become increasingly volatile. Ownership transfers have declined from an all-time high of 7.4 million in 2016 to just 5.6 million in 2022, while vehicle prices increased due to supply shortages during the pandemic and following Russia’s attack on Ukraine.
Furthermore, the first generation of battery electric vehicles (BEVs) have entered the used car market, with large declines in their residual value compared with traditional ICE vehicles due to the constantly evolving technology.
Despite this volatility, the used car market is more important than ever. Rising take rates of leasing and subscription shares have expanded the balance sheets of captives and fleet owners, exposing them to increasing residual value risk in the used car market. For dealers, the importance of the used car business continues to grow: due to fixed margins and BEV quotas, sales and profits need more than ever to be generated in the used car business.
To exploit the full potential of what is now a € 121 billion market in Germany alone, automotive providers need a new playbook. They must rethink the used car business right along the value chain, from OEMs to mobility and service providers, used car platforms and dealers.
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