The automotive ecosystem has been in considerable turmoil for some time, but in September the pressure and urgency of action have reached a new peak. Players like VW Group, Renault, Stellantis, Mercedes, BMW... are finding that their current transformation speed and amplitude are not sufficient. China is currently the most burning platform, but OEMs are also feeling the heat in Europe (and in the US), even before CO2 regulation massively increases pressure in 2025. As an example of disruptive moves, VW Credit US is handing over the vehicle loan business to Wells Fargo, keeping their growing leasing business. This shows a willingness to outsource key functions like Captive Finance in a core market to increase efficiency and reallocate capital. The fact that VW Credit maintains leasing / mobility capabilities also shows the strategic importance that VW Group attributes to asset management in the upcoming EV world. On the vehicle topline side in Europe, the tightening CO2 regulations in 2025 are already prompting some repositioning... Besides numerous announcements of new, "more affordable" models, manufacturers count on fully monetizing the ICE vehicles they are allowed to sell, without incurring fleet emission penalties, by increasing ICE prices. If such a collective "value approach" holds, this would generate excess demand and higher margins not unlike the Covid / Chip period. Despite pressure on New- and hence also Used-Car sales - the first positive net-income quarter from Auto1 rather confirms its integrated model. The future is likely to test its robustness vs lower Used Car volumes in the market.
While digital vehicle traders with short vehicle holding periods are somewhat independent from price movements, the continued fall in used EV prices poses a high risk to asset owners. We are taking up "Residual Values" in our next Qorus webinar. Sign up for free at the end of this newsletter!
Want to keep reading?
Create a web account to get access to more insights