BUILDING ON THE SUBSCRIPTION ECONOMY
Logistics and asset management
Managing planned and unplanned downtime when ownership is flexible
In-life management for the subscription economy.
Although the vehicle sourcing and selling journey is becoming increasingly digitised, there will always remain a need to process the physical asset. Indeed, organisations like Manheim Vehicle Services continue to invest in increasingly sophisticated and environmentally responsible ‘one stop solutions’ – geographic locations where all elements for whole life vehicle management can be completed. This includes body repair, mechanical and diagnostic recalls, MOT, retail quality imagery and integrated logistics.
The growth of flexi-rent or subscription models provides further opportunity for in-life vehicle management. With wrap-around IT systems which support the physical infrastructure, there is already a seamless data transfer process to enable agility, cost control and intelligent decision-making. Retail-ready solutions, both indirect and direct, are enabling both ‘click and collect’ and transported handovers to take place with fully trained brand ambassadors across new, in-life and used vehicles.
The cost base and best practice for processes are now firmly established within Manheim Vehicle Services to support the ‘switch’ from one driver to another in the subscription or flexi-rent model. With the infrastructure and physical vehicle management systems in place, this is allowing manufacturers, lease companies, and new tech entrants to evolve their business models to support the growing demand for access to a vehicle without the long-term financial commitment.
Indeed, when organisations such as Manheim Vehicle Services can in-fleet, prepare, deliver, handover, collect and dispose of vehicles, this takes the strain away from manufacturers and facilitates the exploration of new growth areas. They can focus on the marketing and customer relationship, knowing the back-end processes are in place, at scale, to manage the vehicle.
"At Manheim Vehicle Services, we recognise there will always remain a need to process the physical asset, whatever happens in terms of ownership models and digitisation. Our aim is to provide geographically placed whole life vehicle management solutions through large scale sites that use the most technologically advanced equipment and integrated systems. The investment we are making is enabling everyone with an interest in the future of mobility, from vehicle manufacturers to leasing companies, tech brands and beyond, to take the next steps in supporting a subscription-based automotive economy."
Pete Bell, Chief Operating Officer, Cox Automotive Europe
Specialist vehicle support.
While finance models and asset usage patterns are changing, the technical support for the physical asset remains significant irrespective of the ownership profile. Indeed, as vehicles themselves become more complex – electric technology, roll-out of ADAS, high-tech LCVs, micro mobility, and so on – the need to provide centres of excellence is growing.
For example, with the current expansion of the home delivery market, dedicated workshops are required to cater for LCVs covering everything from technical maintenance through to vehicle imaging. As LCV fleets become increasingly electrified, and flexi-rent agreements become more commonplace, this will further increase complexity, with a need for rapid and agile response, mechanical expertise, and customer service innovation.
Investment is required in both the people and the infrastructure, with continual skills training and technology to support new vehicle platforms and ownership models. Manheim Vehicle Services has introduced gas catalytic drying systems which use 75% less energy than traditional methods, while also partnering with Pod Point to introduce array charging technology to its Bruntingthorpe site.
"The continued evolution of finance and ownership models, including innovation around subscription and flexi-rent, provides challenges and opportunities for values forecasting. Mileage rates and usage patterns for such vehicles are likely to be different to those which are owned outright. We will also see a wider range of ages coming to auction, when cycles are more flexible. This should provide greater variety of wholesale stock, once the market gets used to a new way of working."
Philip Nothard, Insight and Strategy Director, Cox Automotive
From centre of excellence to driveway.
Alongside investing in centres of excellence to support new handover, in-life management, and vehicle disposal, organisations also need to consider the growing demand for automotive services to be delivered at home or at work.
The existing relationship with the manufacturer or retailer is evolving, with many customers expecting greater flexibility in their interactions. Add the subscription model into the mix and it is likely that drivers will expect the services to come to them, on the driveway, in the car park or wherever is most convenient.