E-MOBILITY-RANKING

Munich, July 2023

Featured Insights

E-MOBILITY-RANKING

Munich, July 2023

Our new e-mobility ranking analyses the progress of e-mobility in over 30 countries worldwide. The experts led by Berylls partner Dr Alexander Timmer looked at where the share of BEVs on the road can contribute to achieving climate targets and what development the fast-charging infrastructure has taken over the last few years from 2019 to 2022. The data collected has been used to create a global ranking that makes individual nations comparable.

Countries in Northern & Western Europe and China are well on their way, while Eastern & Southern Europe and large parts of the US are lagging behind. For Germany, the analysis shows a contrasted picture. Dr Alexander Timmer: “With a BEV quota, i.e. the share of BEVs in the vehicle fleet on the road, of just over two percent, Germany has moved into the TOP10this year, thanks to strong progression of BEVs in new vehicle sales last year. Scandinavian countries, the Netherlands, and China are in some cases well ahead of us here. The good news, however, is that Germany, with a growth in DC fast chargers of 90% last year, has one of the strongest progressions in comparison with other countries in our ranking. This will make long-distance trips across Germany far easier, and boost sales growth for BEV.”

Our experts
Dr. Alexander Timmer

Partner

Valentin Froh

Project Manager

Sema Poyraz

Project Manager

Henri Parisy

Senior Consultant

TOP XEV COUNTRIES

Our Berylls TOP XEV country table shows key electromobility metrics for more than 30 countries worldwide since 2019. You can select the desired year using the drag-down "Years" menu and order the columns individually in ascending or descending order.

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Y-O-Y Change
Country
Region
New vehicle sales
Vehicle Fleet
Charging infrastructure
Ratio
BEV
PHEV
Total xEV
BEV
PHEV
Total xEV
ALL CHARGERS
ULTRA-FAST CHARGERS
INFRASTRUCTURE COVERAGE
xEV/CHARGER
BEV/FAST CHARGER
SHARE OF NEW SALES
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF NEW SALES
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF NEW SALES
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF FLEET
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF FLEET
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF FLEET
(in %)
Y-O-Y
CHANGE
(in % points)
NUMBER OF CHARGERS
Y-O-Y CHANGE
(in %)
SHARE OF FAST CHARGERS
(in %)
NUMBER OF CHARGERS
Y-O-Y CHANGE
(in %)
NUMBER OF CHARGERS FOR 10.000 INHABITANTS
AREA COVERED BY ONE FAST CHARGER
NUMBER OF xEV PER CHARGER
Y-O-Y CHANGE
(in %)
NUMBER OF BEV PER FAST CHARGER
Y-O-Y CHANGE
(in %)
1
0
NORWAY
EUROPE
89%
7%
3%
-5%
92%
1%
27.3%
4%
6.7%
1%
34.0%
5%
30
23%
32%
8
33%
55
33
32
-11%
80
-11%
2
2
DENMARK
EUROPE
52%
15%
4%
-6%
56%
9%
12.0%
5%
4.5%
0%
16.5%
5%
31
118%
36%
3
208%
53
4
15
-33%
31
-51%
3
12
MALTA
EUROPE
38%
20%
7%
-6%
44%
14%
1.9%
1%
1.4%
0%
3.3%
1%
124
23%
3%
4
-/-
3
79
87
4%
1
-/-
4
-1
SWEDEN
EUROPE
35%
-4%
23%
2%
58%
-1%
7.7%
2%
7.6%
2%
15.3%
4%
53
45%
16%
7
95%
51
48
14
-7%
46
-27%
5
1
NETHERLANDS
EUROPE
35%
4%
14%
1%
48%
5%
6.0%
1%
4.0%
1%
10.1%
2%
183
26%
3%
4
53%
102
7
5
6%
111
10%
6
-1
FINLAND
EUROPE
30%
-4%
20%
-1%
50%
-5%
4.2%
1%
6.0%
1%
10.2%
3%
15
31%
27%
3
76%
29
71
18
2%
28
-7%
7
4
BELGIUM
EUROPE
28%
9%
15%
-6%
43%
3%
4.6%
2%
5.4%
1%
10.0%
3%
76
73%
6%
3
95%
65
7
8
-13%
64
7%
8
0
LUXEMBOURG
EUROPE
27%
5%
8%
-2%
36%
3%
7.5%
2%
4.2%
0%
11.7%
2%
2
14%
13%
307
97%
40
8
20
9%
101
-29%
9
-2
CHINA
ASIA
27%
4%
15%
3%
42%
7%
6.0%
1%
2.5%
1%
8.6%
3%
3
31%
54%
0
-/-
25
5
9
17%
11
-12%
10
-8
ICELAND
EUROPE
26%
-24%
16%
6%
42%
-18%
12.1%
4%
9.8%
3%
21.9%
7%
2
58%
21%
413
153%
65
187
21
-21%
56
-45%
11
3
PORTUGAL
EUROPE
20%
2%
14%
0%
33%
2%
2.8%
1%
2.2%
1%
5.0%
2%
12
66%
26%
698
149%
12
29
25
-9%
53
-17%
12
5
UNITED KINGDOM
EUROPE
20%
3%
9%
1%
28%
4%
3.8%
1%
2.1%
0%
5.9%
1%
97
33%
25%
17
275%
14
10
20
1%
52
-39%
13
-4
SWITZERLAND
EUROPE
19%
-2%
9%
-1%
28%
-2%
4.2%
1%
2.1%
0%
6.3%
1%
17
23%
17%
1
38%
20
13
17
4%
67
-19%
14
-4
AUSTRIA
EUROPE
18%
-2%
7%
0%
24%
-3%
3.8%
1%
1.4%
0%
5.2%
1%
30
63%
19%
3
91%
33
15
9
-21%
35
-29%
15
1
FRANCE
EUROPE
17%
0%
9%
-1%
25%
-1%
3.1%
1%
1.8%
0%
5.0%
1%
155
31%
19%
16
82%
23
18
12
0%
41
-28%
16
-4
IRELAND
EUROPE
14%
-4%
10%
2%
25%
-2%
3.0%
1%
1.8%
0%
4.8%
1%
3
27%
21%
350
64%
7
91
32
-3%
96
-22%
17
-4
GERMANY
EUROPE
14%
-5%
7%
1%
20%
-4%
3.9%
1%
2.6%
1%
6.6%
2%
159
33%
21%
26
66%
19
10
20
5%
58
-14%
18
3
KOREA
ASIA
9%
1%
1%
0%
9%
1%
2.5%
1%
0.0%
0%
2.5%
0%
0
-100%
-/-
0
-/-
0
-/-
-/-
-/-
-/-
-/-
19
3
USA
AMERICA
8%
0%
2%
0%
10%
1%
1.7%
0%
0.6%
0%
2.3%
1%
197
12%
25%
32
28%
6
161
-/-
-/-
-/-
-/-
20
8
CYPRUS
EUROPE
8%
3%
4%
1%
12%
4%
0.3%
0%
0.2%
0%
0.6%
0%
512
56%
7%
10
43%
6
264
-/-
-/-
-/-
-/-
21
-1
LATVIA
EUROPE
7%
-2%
5%
3%
12%
1%
0.8%
0%
0.2%
0%
1.0%
0%
1
116%
37%
205
266%
6
147
-/-
-/-
-/-
-/-
22
4
HUNGARY
EUROPE
7%
2%
5%
0%
12%
1%
1.5%
0%
0.7%
0%
2.3%
1%
4
26%
18%
451
158%
4
116
-/-
-/-
-/-
-/-
23
-5
ROMANIA
EUROPE
6%
-4%
0%
-2%
6%
-6%
0.5%
0%
0.2%
0%
0.7%
0%
4
66%
35%
551
152%
2
144
-/-
-/-
-/-
-/-
24
5
GREECE
EUROPE
6%
2%
6%
-1%
12%
1%
0.3%
0%
0.5%
0%
0.8%
0%
7
123%
11%
231
344%
7
170
-/-
-/-
-/-
-/-
25
-6
SLOVENIA
EUROPE
6%
-3%
2%
0%
8%
-3%
1.3%
0%
0.3%
0%
1.5%
0%
2
34%
15%
152
79%
10
61
-/-
-/-
-/-
-/-
26
-5
LITHUANIA
EUROPE
6%
-2%
6%
3%
11%
1%
0.9%
0%
0.7%
0%
1.6%
0%
2
124%
32%
522
544%
10
66
-/-
-/-
-/-
-/-
27
-2
SPAIN
EUROPE
6%
0%
6%
-1%
11%
-1%
0.6%
0%
0.8%
0%
1.5%
0%
49
70%
20%
3
113%
10
51
-/-
-/-
-/-
-/-
28
-4
ESTONIA
EUROPE
5%
-1%
5%
3%
10%
1%
0.6%
0%
0.2%
0%
0.9%
0%
1
54%
35%
211
94%
8
117
-/-
-/-
-/-
-/-
29
3
CZECHIA
EUROPE
5%
2%
2%
0%
7%
1%
0.5%
0%
0.3%
0%
0.8%
0%
6
36%
28%
581
123%
6
43
-/-
-/-
-/-
-/-
30
0
ITALY
EUROPE
4%
0%
3%
-1%
8%
-1%
0.7%
0%
0.7%
0%
1.4%
0%
58
42%
17%
3
51%
10
29
-/-
-/-
-/-
-/-
31
-3
BULGARIA
EUROPE
4%
-1%
1%
0%
5%
-1%
0.6%
0%
0.2%
0%
0.9%
0%
3
86%
32%
405
155%
5
111
-/-
-/-
-/-
-/-
32
-1
POLAND
EUROPE
3%
-1%
3%
0%
6%
-1%
0.3%
0%
0.2%
0%
0.5%
0%
9
57%
29%
695
134%
3
113
-/-
-/-
-/-
-/-
33
0
CROATIA
EUROPE
3%
0%
2%
0%
5%
0%
0.5%
0%
0.4%
0%
0.9%
1%
1
71%
30%
141
29%
5
103
-/-
-/-
-/-
-/-
34
0
SLOVAKIA
EUROPE
2%
0%
2%
-1%
5%
-1%
0.5%
0%
0.4%
0%
1.0%
0%
2
34%
38%
401
122%
4
52
-/-
-/-
-/-
-/-
35
0
JAPAN
ASIA
1%
-1%
1%
0%
2%
-1%
0.3%
0%
0.4%
0%
0.7%
0%
54
13%
18%
0
-/-
4
37
-/-
-/-
-/-
-/-
-/-
-/-
CALIFORNIA
AMERICA
22%
0%
4%
0%
25%
0%
5.2%
1%
1.6%
0%
6.8%
1%
50
2%
26%
0
-/-
13
32
39
26%
115
6%
-/-
-/-
EUROPE
EUROPE
15%
0%
7%
0%
23%
-1%
3.1%
1%
2.0%
1%
4.5%
2%
1
39%
17%
109
92%
19
27
13
-5%
48
-25%

BEV – Battery Electric Vehicle, PHEV – Plug-in Hybrid Electric Vehicle

A backseat for drivers: Autonomous driving will be the backbone of shared urban mobility in Europe

Munich, October 2022

Featured Insights

A backseat for drivers: Autonomous driving will be the backbone of shared urban mobility in Europe

Munich, October 2022

Introduction

Autonomous driving (AD) has long been seen as the savior of shared mobility, finally making ride hailing and ride pooling services profitable by eliminating the cost of paying the driver. Pilot projects are underway across the globe, however the key question remains: when will AD technology, regulation and public acceptance align and reach the point where driverless vehicles start to transform the personal mobility landscape?

To answer this question and quantify the scale of the opportunity for AD to push forward the use of shared mobility services in Europe, we built the Berylls Mobility Model to assess the impact of key drivers including technology, political will and regulatory readiness on driverless urban mobility in 544 European cities across 35 countries.

The results of our extensive modeling show a decisive shift toward self-driving ride hailing and ride pooling services over the next decade. Our key findings include:

  • AD vehicles will account for 50% of the distance travelled with ride sharing services in European cities by 2035
  • The European urban mobility market will grow by 56% to €802bn by 2035, but the market share of private cars will shrink to 60%, from 67% now
  • By the end of 2035, we expect there will be between 500,000 and 1.2 million AD cars used for ride hailing and pooling
Berylls Insight
A backseat for drivers: Autonomous driving will be the backbone of shared urban mobility in Europe
DOWNLOAD
Authors
DR. MATTHIAS KEMPF

Partner

Yue Zhou

Senior Consultant

Yakop Tolunay

Consultant

Niklas Rehmert

Venture Builder

Dr. Matthias Kempf

Dr. Matthias Kempf (1974) was one of the founding partners of Berylls Strategy Advisors in August 2011. He began his career with Mercer Management Consulting in Munich, Germany, in 2000. After earning his doctorate degree and further consulting work at Oliver Wyman (formerly Mercer Management Consulting), he joined the management of Hilti Germany in 2008. At Berylls, his area of expertise is new mobility services and traffic concepts. In addition, he is an expert in developing and implementing new digital business models, and in the digitalization of sales and after sales.

Industrial engineering and management studies at the University of Karlsruhe, Germany, doctorate degree at Ludwig Maximilian University, Munich, Germany.

Quo Vadis, Chinese OEMs in Europe? Part 2

Munich, August 2022

Featured Insights

Quo Vadis, Chinese OEMs in Europe? Part 2

Munich, August 2022
I

s there a shortcut for Chinese OEMs in Europe?The second in Berylls’ short series on established and new Chinese OEMs in Europe focuses on their performance and the best market entry strategies.

Executive summary

  • With increasing electric vehicle (EV) adoption in Europe, Chinese OEMs see a fresh opportunity to re-enter Europe and even target the premium segment
  • The timing seems right because their products are more mature, while Chinese EV players have a more customer-centric mindset than previously and are open to new sales models
  • However, to succeed in Europe, Chinese OEMs will have to adapt their way of working, plan and implement rigorously, and penetrate markets rapidly
  • Lastly, Chinese OEMs must prioritize investments in building a sustainable, long-lasting brand reputation based on a highly professionalized ecosystem with great products at the core
Authors
Dr. Jan Burgard

Berylls Group CEO

Willy Wang

Managing Director China

Hongtao Wei

Associate Partner

Soleiman Mansouri

Associate Partner

Lois Yang

Lead Analyst

A window of opportunity

Boosted by government subsidies and emissions regulations, the EV market in Europe is now highly attractive, especially in western Europe. However, major multinational carmakers have not yet fully captured the rapidly expanding EV market, which means Chinese OEMs sense a great business opportunity. Since 2020, Chinese OEMs have successively launched EVs in Europe, re-entering a market where they first tried their luck more than a decade ago.

To a certain degree, there was a blank space in the electric vehicle market when Tesla first came to Europe in 2008. Faced with few competitive pressures, Tesla had the advantage of gradually being able to establish a firm foothold there. Today, although a gap in the market still exists, it is getting smaller. Traditional European players such as BMW, Mercedes-Benz and Volkswagen are introducing more and more EVs, while other specialist EV manufacturers such as the U.S. companies Lucid and Rivian are also targeting the European market.  

Chinese OEMs therefore have only a narrow time window to exploit Europe’s remaining, rapidly closing EV market space. The challenges of re-entering Europe are not so different from those they experienced in the past and whether they succeed this time principally depends on whether they can leverage their core strength, which is customer-centricity. In plain terms, it depends on whether they can really understand Europe’s kaleidoscope of national markets and customers in all their diversity. As a starting point, Chinese OEMs need to consider why their first foray into Europe ended in failure.

Why have Chinese carmakers failed in Europe in the past?

History and ideology

Compared with emerging markets in Asia, Africa and southeast Asia, most European markets are highly mature, with their own automotive cultures and tastes. Traditional OEMs such as Volkswagen, Mercedes-Benz and BMW have dominated these markets for a long time and still do so today in conventional internal combustion engine (ICE) vehicles. With certain exceptions, even well-known Asian brands such as Toyota and Honda have only limited influence in some western European markets.

The current success of Chinese-European brands like MG and Polestar suggests that “being born” in Europe brings higher acceptance by European customers. This is partly because purely Chinese brands are still young and naturally lack a heritage, both at home and abroad. In addition, recent political developments have increased the resistance of some European customers to Chinese products.

Different customer groups, different preferences

The preferences and demands of European customers are very different from their Chinese counterparts, but this is not a problem that can be solved by conducting a few simple market surveys. For instance, Chinese OEMs pay great attention to product features such as connectivity and infotainment functions to attract young Chinese customers. In Europe, the same strategy needs to be sensitive to different consumer priorities. While connectivity and infotainment influence European customers’ purchasing behavior, they are more attracted by “traditional virtues” such as build quality, material selection and driving performance. In this context, new hi-tech features are generally regarded as bonus items. In fact, Chinese OEMs actually often neglect European customers understanding. As they are quite successful in their home market, they often think that the same ingredients for success in China can be directly applied in Europe, especially when it comes to EVs. A fatal error!

Even when buying EVs, European customers favor brands with a strong reputation for high reliability and a wide network coverage for sales, aftersales and electric charging. Unfortunately, no Chinese brand has so far managed to provide the same level of product and service quality as “local” brands such as BMW and Mercedes-Benz.

Poor brand reputation
In the past, multiple poor performances in crash tests have made Chinese brands seem embarrassingly bad. Between 2005 and 2009, attempts by the Chinese Landwind and Zhonghua brands to launch in Europe were both stalled by dismal crash-test results. In 2005, the Chinese SUV Jiangling Landwind failed the German ADAC automobile club’s crash test shortly after being premiered at the Frankfurt IAA Motor Show. In similar fashion, the Zhonghua BS6 failed the Euro NCAP crash test. These PR disasters left European consumers with the stereotype that the quality of Chinese cars was highly questionable.

Can Chinese carmakers succeed where they previously failed?

The difference this time is that Chinese OEMs’ products have matured to the point where they are at least seen by European customers as generally competitive in the “traditional” sales virtues of build quality, use of high-grade materials and driving performance. Meanwhile, Chinese vehicles now also boast highly advanced new “bonus” features for European purchasers such as world-class connectivity and autonomous driving. Lastly, Chinese OEMs are used to building their products in a customer-centric way, with features such as seamless integration of mobile phone apps.

However, even with these core competencies, Chinese OEMs are not guaranteed an easy ride with rapid returns now that they are re-entering the European market. In their favor, most Chinese OEMs are action oriented and advocate “learning by doing” and “agile” progression. But they must also adjust their mindset to complex European automotive markets that require rigorous and meticulous planning.  

Chinese OEMs should follow the example of the best European competitors and lay out a structured, holistic plan with detailed implementation processes that are based on European customer journeys. Furthermore, they should be prepared for long-term investments to gain and retain the trust of European customers in their products. This will require Chinese OEMs to establish a strong ecosystem in Europe that is adapted for short-term, medium-term and long-term strategies in all areas of their business, including pillar brands, product portfolios, pricing, distribution networks and the digital domain.

Short-term strategy: Brand building and competitive pricing

These are the critical next steps toward success in Europe. Chinese OEMs must ensure that their models are more attractively priced than mainstream European competitors to make up for their lack of brand reputation. Competitive pricing can yield some instant wins when combined with large-scale PR and communications campaigns for models that are extremely good value for money compared with similar vehicles made by competitors. Communications should focus specifically on performance marketing in line with the brand’s positioning during the individual journeys of potential customers, rather than adopting a broader “fishnet” approach through TV spots, billboard advertisements and other media channels.

Medium-term strategy: Product portfolio and network

It is very important for Chinese OEMs to choose a suitable product portfolio and an appropriate sales and aftersales network to gain entry to European markets, following thorough homework on individual market trends and tastes. In this context, it is worth noting that Chinese customers are not necessarily the same as their counterparts in Europe. To give one obvious example, while the SUV is the most popular model of vehicle in China, this is not universally true across European markets.

With regard to sales and aftersales networks, we generally see three distribution channels for China’s EV manufacturers to enter Europe. Firstly, they can cooperate with large local dealers who are interested in selling their vehicles. We believe that a large majority of dealers will be willing to work with Chinese OEMs, given the current trend toward the agent model, which is increasing the margin pressure on most dealers.  

Alternatively, Chinese OEMs can follow Tesla’s example and try to set up their own networks in Europe. This might seem the most desirable route in terms of retail steering and customer experience control. However, doubts remain about whether Chinese OEMs have the financial strength to set up a suitably extensive European network, especially if they are start-ups. Given their lack of capital, we believe it is more likely that Chinese players will adopt a combination of direct sales and franchise dealerships.

Lastly, Chinese OEMs should consider working with local mobility providers, whether they are rental, carsharing or subscription players, to get their vehicles visibly onto European streets, where they can generate word of mouth endorsements most effectively. Chinese players should focus in particular on the subscription model, where shorter contract periods and lower monthly fees can help overcome the resistance of European customers to Chinese cars.  

Long-term strategy: Creating a sustainable, positive brand reputation

A functioning ecosystem with clear structures and the right priorities are key challenges, but are still merely prerequisites for a successful market entry in Europe. Creating long-lasting brand recognition and growth for Chinese EVs will take both time and a willingness to experiment.

The leading Chinese EV manufacturer NIO is a good example. To its credit, NIO has invested a lot of effort in its ecosystem set-up in Europe, especially around user communities, user experience and other fields that are “beyond the vehicle.” Using Norway as its main testing ground, NIO aims to build an ecosystem with cars at its core that also includes digital services and lifestyle offerings, such as community building events. Yet NIO still only sold around 200 cars in Europe in 2021, despite all these innovations. Further refinement and analysis of its fledgling ecosystem will be required to establish how or even whether these services can meet the demands of European customers.  

Some observers, especially on the Chinese side, argue that such a detailed and rigorous approach is not necessary because there is one hi-tech product – the mobile phone – where Chinese manufacturers have already proved that they can make a rapid, successful market entry in Europe. A few years ago, Chinese mobile phones were almost unknown in Europe, but today the market is full of Chinese brands such as Huawei, Xiaomi and Oppo.

 

However, there are three significant differences between mobile phones and cars. Firstly, unlike cars, mobile phones can be changed frequently at a relatively low price. Secondly, the success of Chinese phones in Europe is based on the budget segment and is concentrated in a few countries. Consider the example of Xiaomi. In the second quarter of 2021, Xiaomi shipped 12.7 million units to Europe, making it the region’s single largest mobile phone supplier, ahead of Samsung (12 million) and Apple (9.6 million). Yet Xiaomi’s success is driven mainly by sales in Russia and the rest of the Commonwealth of Independent States (CIS), whose huge mobile phone market is dominated by budget buyers. This fact largely explains why the average price of a Xiaomi phone in Europe was around $164, compared with $250 for a Samsung phone and $808 for an Apple one. 

Thirdly, 50 percent of mobile phones in Europe are sold through network operators such as Vodafone and Telefónica, which also like to tweak the pricing of hardware devices with special offers and promotions. In summary, one should not assume from the success of Chinese mobile phone players in Europe that it is easily replicable in the auto sector.

There are no short cuts to a successful market entry

The bottom line is that it will be a painstaking and long journey for Chinese OEMs to make their European market entry a success at the second attempt, focusing on EVs. There are no shortcuts.

Yet we believe that they have everything at their disposal this time to avoid a repeat of their earlier failure. Today’s leading Chinese carmakers have a competitive product portfolio, a state-of-the-art technology stack, a customer-centric mindset and deep investor pockets. But as a Chinese proverb rightfully states, “you can’t clap with one hand” (一个巴掌拍不响). It will require a joint effort to make the re-entry of Chinese OEMs into Europe sustainable and profitable, because their success will depend on teaming up with the right local partners. 

Stay tuned for the next article in this series, where we explain:

  • Why Chinese OEMs still need strong partners to achieve lasting success in European markets
  • How these partnerships are faring so far for both sides
  • What needs to be done to make these collaborations more fruitful
Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Willy Wang

Willy Lu Wang (1981) joined Berylls Strategy Advisors in 2017. He started his career participating in the graduate program of Audi focusing on production planning. After stations at another strategy consultancy as well as being the strategy director for a German Tier-1 supplier, he is now responsible for the China business at Berylls.

He has a broad consulting focus working for all clients in China, whether they are JVs, WOFEs or pure local players. He is also responsible for the development of AI and Big Data products dedicated towards the Chinese market further strengthening the Berylls End-to-End strategy and product development capabilities.

Wang studied Electronics & Information Technology with focus on Systems and Software Engineering and Control Theory at Karlsruhe Institute of Technology.

Hongtao Wei

Hongtao Wei (1988), Associate Partner, joined Berylls Strategy Advisors in 2015, an international strategy consultancy specializing in the automotive industry, where he focuses on all issues related to the Chinese automotive market. In addition to Western manufacturers in China, his clients also include Chinese OEMs, investors, provincial governments, and state-owned enterprises.

He has profound expert knowledge in the areas of sales and aftersales. His other areas of expertise include digitalization, connectivity, and turnaround management.

He studied Sinology, Economics and Statistics at the Ludwig-Maximilians-Universität in Munich.

Soleiman Mansouri

Soleiman joined the Berylls Group in March 2022. He has set his focus on customer-centrist solutions, gaining experience in Product- and Corporate Strategy, Consulting with the focus on the OEM business. His Automotive career started with digitalization of the Aftersales of an US OEM in Europe and took him to China to the leading German OEM group, heading the Product and Portfolio department. He gained intensive consulting experience with one of the top management consulting firms and as a freelance consultant. Before joining Berylls, he was the Director Go-to-Market of one of the top Chinese OEMs supporting their entrance into the EU market. Soleiman is a graduated M.A./MBA in International Business from the University of Hamburg and ECUST/Shanghai.

Soleiman joined the Berylls Group in March 2022 and is part of the Asia-team, responsible for supporting all players in a successful market entrance. Also, provides profound expertise of customer-centric Product Marketing and Portfolio Strategy approaches to our clients.

Soleiman is expert in customer-centric Product-/Portfolio Strategy, Go-To-Market, Corporate Strategy and Entrepreneurship.

Doppelinterview mit Andreas Rauh und Thomas Vinnen

Munich, August 2022

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Doppelinterview mit Andreas Rauh und Thomas Vinnen

Munich, August 2022
W

ir erwarten eine Belebung im Markt für Distressed M&A

Als Beteiligungsgesellschaft der Berylls Gruppe investiert Berylls Equity Partners in Unternehmen der Mobilitätsindustrie, die sich in Sondersituationen befinden. Nord Leasing bietet mit Sale & Lease Back und Sale & Rent Back attraktive Finanzierungslösungen und ist auf den produzierenden Mittelstand spezialisiert. Beide Unternehmen stehen im Tagesgeschäft in regelmäßigem Austausch zu potenziellen Zielunternehmen und zur Branchenentwicklung. Wir sprachen mit den beiden Geschäftsführern.

Interview Eva Rathgeber

Unternehmeredition: Welche Entwicklungen am M&A-Markt nehmen Sie aktuell wahr und wie beurteilen Sie die Perspektiven?

Andreas Rauh: Aus unserer Sicht war das Jahr 2022 im Mobilitätssektor, in den wir ausschließlich investieren, bislang eher ruhig. Wir als Berylls Equity Partners legen aber relativ strikte Investitionskriterien an, was die Anzahl möglicher Zielunternehmen für uns schon per se einschränkt. Perspektivisch erwarten wir in der nahen Zukunft eine deutliche Belebung im Markt für Transaktionen aus Sondersituationen.

Thomas Vinnen: In den vergangenen Monaten hat die Nord Leasing GmbH eine hohe M&A-Intensität erlebt, die jedoch mit einer weiterhin spürbaren Zurückhaltung einherging. Gründe hierfür sind nicht nur der Ukrainekrieg und die Coronapandemie, sondern vor allem die volatilen Märkte und die Zinswende. Wie stark und vor allem wie lange diese Krisenherde den M&A-Markt beeinflussen werden, lässt sich angesichts der aktuellen globalen und politischen Entwicklungen schwer vorhersagen.

Herr Rauh, welche Rolle spielt Distressed M&A für Ihre Beteiligungsgesellschaft?

Rauh: Als Beteiligungsarm der Berylls Gruppe investieren wir ausschließlich in Unternehmen der Mobilitätsindustrie, die sich in einer Sondersituation befinden und von deren nachhaltiger Perspektive wir überzeugt sind.

Als Berylls Gruppe bringen wir sämtliche unserer Kompetenzen sowie unser einzigartiges Branchennetzwerk ein und können so eine bestmögliche Entwicklung unserer Portfoliogesellschaften sicherstellen.

Unser partnerschaftlicher Ansatz als Beteiligungsgesellschaft ist leicht erklärt: In allen unseren Aktivitäten als Berylls Gruppe verstehen wir uns als integrales Element der Mobilitätsindustrie. In Summe unterscheidet uns das sicherlich von den übrigen Beteiligungsgesellschaften im Bereich Special Situations Investments.

Herr Vinnen, an welchen Stellen kommen Distressed-M&A-Fälle bei Nord Leasing vor?

Vinnen: In diversen Branchen, jedoch mit einem Schwerpunkt im Automobilsektor ebenso wie im Maschinen- und Anlagenbau. Nord Leasing finanziert Bestandsanlagevermögen von produzierenden Unternehmen aufgrund sehr unterschiedlicher Wünsche und Herausforderungen unserer Kunden. Es können Sondersituationen sein, welche die Unternehmensentwicklung hemmen, aber auch solche, welche mit großen Chancen verbunden sind.

Welche Anforderungen muss ein Unternehmen erfüllen, damit Sie sich mit einem Sale & Lease Back engagieren?

Vinnen: Es muss ein substanzielles, mobiles und vor allem frei zur Verfügung stehendes Anlagevermögen vorweisen mit einem Zeitwert in Höhe von mindestens 500.000 EUR. Klassischerweise handelt es sich dabei um Unternehmen mit einer Umsatzgröße von 5 Mio. bis 10 Mio. EUR.

Herr Rauh, Ihre Gesellschaft beschreibt sich selbst als „unternehmerisch agierende Beteiligungsgesellschaft, die Unternehmen der Mobilitätsindustrie mit Perspektive in Sondersituationen erwirbt, operativ verbessert und strategisch langfristig ausrichtet“. Welche Bedeutung hat das Finanzierungsthema für Sie?

Rauh: Bei jeder unserer Transaktionen ist das Finanzierungsthema ein wesentlicher Bestandteil des nachhaltigen Übernahmekonzepts. Ganzheitlich betrachtet bilden die Themen Strategie, operative Exzellenz und tragfähige Finanzierungsstruktur immer die Grundlage für eine erfolgreiche Entwicklung unserer Portfoliogesellschaften.

Wann kommt ein Asset-Based Lending für Sie infrage?

Den Einsatz von Asset-Based Lending bewerten wir bei jeder Transaktion neu. Ziel muss immer ein tragfähiges Finanzierungskonstrukt bei Übernahme sein, damit wir unsere Portfoliogesellschaften marktseitig bestmöglich entwickeln können. Im Fall der insolventen Heinrich Huhn GmbH zum Beispiel stellte die große Asset Base eine Herausforderung im Verkaufsprozess dar. Asset-Based Lending war unserer Einschätzung nach ein geeigneter Baustein innerhalb eines konservativen Gesamtfinanzierungskonstrukts, unter Einbindung von drei regionalen Bankenpartnern.

Wie verlief denn der Prozess?

Der Akquisitionsprozess bei Heinrich Huhn war für unser Team sehr herausfordernd. Wir befanden uns bis wenige Tage vor Signing in einem Kopf-­an-Kopf-Bieterrennen. Den finalen Ausschlag hat dann unser Übernahmekonzept gegeben, das die wesentlichen Interessengruppen überzeugen konnte. Und ich freue mich, heute sagen zu können, dass unser Konzept aufgegangen ist – trotz der extrem widrigen Rahmenbedingungen in der Automobilindustrie seit unserer Übernahme im August 2021.

Zu welchem Zeitpunkt erfolgte die Einbindung der Nord Leasing? Wie lief das ab?

Wir haben die Nord Leasing früh in diesen Prozess eingebunden. Wir pflegen mit den Kollegen dort eine hervorragende Geschäftsbeziehung und stehen im Tagesgeschäft in regelmäßigem Austausch zu potenziellen Zielunternehmen und zur Branchenentwicklung. Wir schätzen die Kompetenz und die Verlässlichkeit des Nord-Leasing-­Teams. Wir als Berylls Gruppe unterstützen unsere externen Partner im Gegenzug gerne regelmäßig mit unserer Branchenexpertise.

Und wie viel des ermittelten Werts wird dann finanziert?

Vinnen: Das hängt von diversen Faktoren wie Qualität, Verwertbarkeit und Verwertungsdauer der Maschinen ab und beträgt in der Regel 75% bis 90% des Gutachtenzeitwerts. 20% eines jeden Volumens stellen wir dann mit eigenen Mitteln dar; 80% werden über die klassischen – im Leasingmarkt tätigen – Kreditinstitute zur Verfügung gestellt.klassischen – im Leasingmarkt tätigen – Kreditinstitute zur Verfügung gestellt.

Herr Rauh, wie lange hat es gedauert, bis die Beträge ausgezahlt wurden?

Rauh: Das ging wirklich sehr schnell. Der Entscheidungsprozess wurde durch die Nord Leasing in nur vier Wochen abgeschlossen, wenn wir vom Erhalt der entsprechenden Informationsanforderungsliste rechnen. Am Closing-Stichtag wurden alle Beträge fristgerecht durch die Nord Leasing ausbezahlt. Für uns als Berylls Equity Partners ist ein Thema in der Zusammenarbeit entscheidend: Wir bekommen vom Team der Nord Leasing stets von Anfang an eine offene und belastbare Einschätzung der Finanzierungsfähigkeit und des möglichen Finanzierungsvolumens. Darauf können wir uns dann im weiteren Prozessverlauf verlassen. Da herrscht Handschlagqualität und das wissen wir sehr zu schätzen.

Herr Vinnen, neben Sale & Lease Back bieten Sie auch Sale & Rent Back an. Wo liegen die Unterschiede?

Vinnen: Im Sale & Lease Back-Fall verkaufen Unternehmen ihr gebrauchtes, mobiles Anlagevermögen an die Nord Leasing GmbH und leasen dieses sofort wieder zurück. Beim Sale & Rent Back werden die Maschinen nicht zurückgeleast, sondern zurückgemietet. Im Unterschied zum Sale & Lease Back bleiben die Betriebe als Mieter der Maschinen wirtschaftlicher Eigentümer und schreiben diese weiterhin in ihrer Bilanz ab. Sowohl die Konditionen als auch der Liquiditätseffekt sind bei beiden Varianten identisch.

Herr Rauh, warum haben Sie sich für die Leasingvariante entschieden?

Rauh: Wir haben diese Variante mit Blick auf die gewählte Transaktionsstruktur sowie aufgrund bilanzieller und steuerrechtlicher Überlegungen gewählt.

Wenn Sie abschließend die Finanzierungsart mit drei Schlagworten versehen sollen – welche sind das?

Schnell. Unkompliziert. Verlässlich.

Interviewpartner
Andreas Rauh

Executive Partner

Thomas Vinnen

Geschäftsführender Gesellschafter bei Nord Leasing GmbH

Hier gehts zur vollständigen Ausgabe in der Unternehmeredition.

Andreas Rauh

Andreas ist seit Januar 2020 als Mitgründer und Geschäftsführer bei Berylls Equity Partners tätig. Berylls Equity Partners investiert, als Beteiligungsgesellschaft der Berylls Gruppe, in Unternehmen der Mobilitätsindustrie, die sich in Sondersituationen befinden.

Andreas ist Experte in den Bereichen Private Equity, Mergers & Acquisitions und Unternehmensführung.

Nach zehn Jahren im Bereich Transaktionsberatung mit Schwerpunkt im Mittelstand wechselte Andreas im Jahr 2014 in den Beteiligungsbereich. Dort hat er seitdem in leitender Funktion eine zweistellige Anzahl an Firmenübernahmen und -verkäufen begleitet.

Andreas ist ausgebildeter Diplomkaufmann mit einem Abschluss von der Universität Trier und hält einen Master of Science in Business Abschluss der Handelshøyskolen BI.

Global Truck Players: Q2 2022 Review

Munich, August 2022

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Global Truck Players: Q2 2022 Review

Munich, August 2022
T

he global truck players Daimler, Traton, Paccar and Volvo are regularly monitored by Berylls commercial vehicle expert Steffen Stumpp.

Here are his major findings for Q2 2022:

  • Highest quarterly profit ever
    The big 4 truck manufacturers have earned cumulated 2.9 bn Euro in Q2 2022 – more than ever before. Main drivers were significant price increases, a positive product mix development as well as favorable exchange rate effects.
  • Supply side remains key to success
    Bottlenecks on the supply side, caused by the Ukraine war and the COVID lockdown in China, limit production volumes and unit sales. There are significant differences in how truck OEMs cope with the current situation.
  • Book-to-bill ratio below 1.0
    For the first time since Q2 2020 the incoming orders were below deliveries, meaning that the truck industry will probably lose pace next year – there are first signs for an economic slowdown.

Can’t wait to read more? Download the Insight now!

Berylls Insight
Global Truck Players: Q2 2022 Review
DOWNLOAD
Authors
Steffen Stumpp

Associate Partner

Andreas Oesinghaus

Associate

Steffen Stumpp

Steffen Stumpp (1970) joined the Berylls Group in October 2020 as Head of Business Unit Commercial Vehicles. At this point, he already looked back on extensive professional and leadership experience in the commercial vehicle industry. Stumpp started his career in an OEM and went through different roles in research, marketing, product planning and after-sales service. When he switched to the automotive supplier industry, he took over the responsibility for worldwide sales and marketing of a medium-sized tier 1 supplier. After another step as head of sales he decided to join Berylls, where he is now responsible for the commercial vehicle business.

Stumpp is a graduate engineer and has studied industrial engineering at the KIT in Karlsruhe and the Technical University of Berlin with focus on logistics.

Shared Mobility in a post pandemic world – the beginnings of a mobility revival?

Munich, August 2021

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SHARED MOBILITY IN A POST PANDEMIC WORLD – THE BEGINNINGS OF A MOBILITY REVIVAL?

Munich, August 2021

Are we seeing a mobility revival?

Covid-19 has had a massive impact on mobility everywhere. A recent Berylls survey found that many London residents have reduced the number of times they commute each week even post Covid-19 and that many, in addition to supporting the introduction of low traffic zones and vehicle bans, would welcome the introduction of new modes into the city’s mobility mix. No wonder then that curbing private vehicle ownership has become a key pillar in many European cities’ efforts to reduce their carbon footprint. Yet so far few have put forward concrete ideas on how they plan to close the resulting mobility gap, and many look to the private sector for solutions.

In this context it is worth noting, that when Volkswagen CEO Herbert Diess was asked to comment on his company’s €2.5 bn acquisition of Europcar, he said that it was Volkswagen’s intention to use Europcar’s assets to build a mobility platform. Diess’ remarks not only contrast sharply with the renewed focus on core automotive activities touted by many of his colleagues; they also come at a time when mobility platforms seem to be regaining lost momentum: barely a week after VW’s Europcar deal was announced, Uber rival Bolt raised € 600 m in a funding round that valued the company at €4 bn or double its €2 bn March valuation. Are we at last witnessing the beginnings of a mobility revival?

Authors
DR. JAN BURGARD

Berylls Group CEO

Jens Garrelfs

Associate Partner

Volkswagen is only the latest OEM that plans to build a vehicle-as-a-service platform, but many OEMs are reluctant to follow the company’s example

A look around shows that Volkswagen is only the latest OEM that plans to unite its leasing, rental, car sharing and vehicle connectivity services under the umbrella of a mobility platform. In fact, the outlines of what Volkswagen dubs its “One Digital Platform” have already been visible for some time at Stellantis, Toyota Kinto as well as Sixt. All these platforms have in common that they are built around a vehicle-as-a-service (VaaS) stack that gives access to a car for a flexible period of time.

On the surface, such one-stop mobility shops may seem to do little more than bow to changing customer preferences. As subscriptions models have closed the gap between rental and leasing, they have torn down the boundaries between what used to be – at least from an OEM’s vantage point – disparate service offerings. The result: the difference between leasing, subscription, rental, or car sharing models is no longer one of kind, but one of duration.

The automotive industry isn’t by far the only area of transportation where added convenience drives customer preferences for one-stop solutions. Yet many OEMs are reluctant to follow the example set by VW and others. The reason is that a VaaS platform’s underlying operating model doesn’t square with how they traditionally approach leasing or leasing-related services. Many OEMs consider leasing – even car sharing –sales-enablers first and foremost, and many captives measure their success by their ability to help their OEM parent grow unit sales.

This is not another mobility hype; VaaS platforms are means of leveraging core OEM strengths

Are VW and others pursuing a mobility vision that is fundamentally at odds with an automotive present in which private car ownership – not in spite but because of Covid-19 – continues to dominate? Does on-demand mobility no more than distract from the reality that for most automotive OEMs selling cars remains the single most important source of revenue?

We believe that such thinking is rooted in a failure to understand the larger implications of operating vehicles on-demand as part of an integrated VaaS platform. We see such platforms as a means for leveraging the full weight and breadth of what OEMs can offer – including sales – in the face of, for example, smaller competitors with more narrowly positioned subscription or flex leasing models.

By incorporating mobility services that cater to a broad range of mobility needs, budgets, and occasions, a VaaS platform creates a unified entry point with relatively low barriers to entry. Furthermore, where many OEMs conceived digital sales channels primarily as vehicles to ferry customers to dealer showrooms, a VaaS platform allows customers to move seamlessly from car sharing, rental, and ride hailing to other services – including in some cases the option to purchase a used car – as per their own needs, not an OEM’s desire to sell cars.

How much more customer-centric VaaS platform-based business models are compared with existing omnichannel retail offerings also shows in the kind of physical formats that complement them. Besides concessions at airports and railway stations, these include downtown pick-up and service locations. By cutting across digital and physical formats, VaaS platforms go where customers are and where their mobility needs arise.

A VaaS platform spreads customer platform and fleet operating cost across multiple verticals and has the potential to increase per-vehicle earnings or vehicle lifetime value (VLV®)

Uniting multiple verticals behind a single frontend allows the fixed cost associated with operating a digital customer platform and attendant physical network – cost, that is, which each vertical would otherwise have to carry on its own – to be spread across multiple verticals. The same applies to one-time customer acquisition costs and marketing expenses as well as costs incurred “behind-the-scenes” for managing, servicing, and cleaning a large fleet of vehicles. The model also permits moving vehicles between verticals to pro-actively manage weekly and seasonal demand peaks.

Best-in-class OEMs use VaaS platforms to optimize vehicle utilization over not one but multiple use cycles and a period of up to seven years, throughout which vehicles remain on balance and are serviced by OEM-owned or -affiliated outlets. The key to achieving this is an intelligent asset allocation engine that calculates the optimal next use for each vehicle that has reached the end of its current use cycle – say, a three-year lease contract – by using the vehicle’s age, model, equipment level and service history to match it to the service vertical or sales channel that promises the highest monetization potential. In our experience, this kind of data-driven approach to maximizing vehicle lifetime value (VLV®) can increase OEMs’ per-vehicle earnings by some 15-25%.

The end of the mobility hype in 2019 masked many OEMs’ failure to transform the way they sell cars – and Covid-19 has only added to this situation

Of course, even the added convenience of a VaaS platform won’t make private ownership go away anytime soon – or ever. Yet when the mobility hype ended in 2019, the failure of many OEM-funded new mobility ventures masked the simultaneous – and potentially more severe – failure on the part of those same OEMs to deliver on initiatives designed to fundamentally alter the way they sell cars.

Many OEMs toyed with idea of adopting direct sales models in hopes of reducing intra-brand competition and wooing customers with greater price transparency. In this model, dealers would act as agents while NSCs and importers would manage vehicle stocks centrally. In the event, few such initiatives advanced beyond the pilot stage. Many did little more than alienate dealers while barely moving the needle in terms of actual sales.

Covid-19 has only added to this situation, as the automotive sector’s surprisingly speedy recovery has made many OEMs dangerously complacent about such long-overdue overhauls of their operating model. To further complicate matters, OEMs no longer have the financial resources to invest in risky, cash-burning adventures; they need strategic initiatives that can show bottom-line returns fast.

A mobility platform follows the same operating principles as a direct sales model and can furnish relevant data and operational expertise

Among the key reasons why many direct-sales initiatives failed were lack of relevant customer insights and inexperience in managing large vehicle inventories. Both are areas where the operating models of a VaaS platform and an agent-based direct sales model overlap and even complement each other: With access to customer and vehicle usage data across a highly relevant set of day-to-day use cases, a VaaS platform can furnish intelligence on model and configuration preferences and deliver pricing insights on both new and used cars. Moreover, by giving operators the option of rerouting non-sellers to alternative uses, a VaaS platform can relieve price pressure on overstocked lots and thereby contribute to maintaining and managing residual values.

This also opens new opportunities for dealers beyond the role of acting as agents, such as operating new physical formats or mobility services through franchise agreements. Giving dealers and their investors a clear, long-term perspective is critical at a time when OEMs must look to external partners to share the cost of future-proofing their operating model with. VaaS platforms are therefore an opportunity to set existing partnerships on a new footing.

Conclusion: a sustainable operating model

In recent years, several automotive companies have launched vehicle-as-a-service-based mobility platforms. VaaS platforms follow an operating model that is at once customer-centric and cost-conscious. It is also compatible with – even complementary to – an agent-based sales model, which many OEMs have made the mistake of abandoning too soon. What we’re seeing then is not a mobility revival so much as on-demand mobility moving to the center of the automotive agenda, as some OEMs move toward a VaaS operating model that is sustainable not because it is built on customer-centric innovation but because it enables profitable growth through higher vehicle lifetime value.

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

How Vehicle-as-a-Service can be 50% more profitable than traditional car sales

Munich, August 2022

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How Vehicle-as-a-Service can be 50% more profitable than traditional car sales

Munich, August 2022
M

any OEMs are struggling to create a business case for VaaS that captures all the benefits. Here, we set out the key considerations that are not covered by traditional assessments.

The 30-Second Read:

  • The direct benefits of Vehicle-as-a-Service generate up to 50% more profit for OEMs compared with the traditional sales model, through keeping ownership of vehicles for longer and over more use cycles, and retaining customers by offering them new contracts when their old ones run out
  • There are also indirect customer-related benefits that further strengthen the business case, including lower customer acquisition costs and more options to upsell newer models.
  • However, many OEMs are not capturing these benefits in their VaaS business cases. As a result, they are delaying adding the service and risk missing out entirely on a fast-growing, profitable new line of business.

Introduction

Customer needs and the resulting demand patterns are changing in the automotive industry. Owning a prestigious car used to be a symbol of status, but vehicle ownership is no longer the aspiration of many drivers. This is the result of rapidly changing customer expectations, and influences inside and outside the automotive world. Three main trends dominate:

  • Flexibility: Long-term commitments and rigid asset ownership are not in sync with the lives and demands of today’s customers, who want to keep open the option to try something new in all aspects of their daily lives.
  • Technology risk: Constant improvements in technology lead to shorter product lifecycles and increased risk for buyers as new vehicle value declines even faster.
  • Fear of missing out: The number of vehicle brands and therefore options is increasing, making customers reluctant to be tied to the same car for an extended period of time. Today’s customers also show less brand loyalty than in the past. (For a more in-depth assessment of these trends please see Berylls’ Vehicle-as-a-Service (VaaS) study).

These forces present a fundamental challenge for the traditional automotive business, built on one-off sales and after-sales revenue from parts and servicing. Vehicle-as-a-Service (VaaS) models, in which the customer does not own the vehicle anymore and returns it at the end of the contract, are on the rise – based on current customer feedback, we estimate there will be a 38% increase in the market share of use-based models by 2025.

VaaS very much caters to what customers already expect and value from services in other parts of their lives, such as music or video streaming. The good news is, it creates two central opportunities for OEMs and other providers:

  • Firstly, it is far easier to stay in touch with customers, contacting them to renew or update their contract, each time their current agreement ends. As a result, customers can be retained for several usage cycles. Providers can also optimize returns by selling complementary products and services (such as insurance packages or electric vehicle charging services), tailored to the customer and the vehicle.
  • Secondly, the OEM or service provider retains ownership of the vehicle, and can find new customers for it over multiple use cycles due to flexible usage periods (see Figure 1)

Figure 1

In contrast to the traditional ownership model, in which the seller loses access to the customer and the vehicle after the initial sale or financing contract ends, VaaS providers can at least in theory benefit from an ever-increasing customer and vehicle base.

Based on past project experience, we have calculated that long-term profitability can increase by 40 to 50% as a result. In Figure 2 below we show an indicative comparison of product profitability for both sales models. The calculation is based on anonymized data from a volume OEM, taking the average across several of its battery electric SUVs.

As the chart shows, individual VaaS offerings themselves are less profitable than traditional new car sales. However,  profits across multiple use cycles add up to create a far higher total vehicle lifetime value (VLV) for the VaaS provider:

Figure 2

Building the VaaS business case: Don’t overlook the indirect benefits

In addition to the direct benefits outlined above, the VaaS model also offers important indirect  – and frequently overlooked – benefits. Combined, these will strengthen the business case even further.

Indirect benefits include creating loyalty by offering a convenient, appealing service that meets changing customer demands. At a time when the brand or particular vehicle hardware is no longer a reason to buy or to stay with one OEM, loyalty must be built up through outstanding service and a superb customer experience.

Another indirect benefit of multiple, shorter use cycles is the ability to cross- and up-sell more often. A customer might decide after just a couple of months to switch to a contract for a more expensive model, a decision that would have taken a couple of years in the traditional sales model with longer holding periods.

By making targeted offers to customers they already have a contract with, OEMs will also be able to spend less on marketing because they will have a larger pool of “locked in” customers.

The table below looks at the top- and bottom-line benefits of further little-noticed advantages offered by VaaS, focusing on customer relationship management (there are further indirect benefits to VaaS which relate to the operating model, which we will explore in an upcoming article):

How will this help OEMs and VaaS providers to take their share of a growing market?

To date, many OEMs are struggling to create a positive business case for VaaS. From the outset, their analysis fails to recognize the 40 to 50% direct profit increase that VaaS can deliver across multiple use cycles (as this profit is usually booked separately across different departments). Further, they do not consider the indirect benefits of the VaaS business model. In this blog we have focused on the customer-related benefits, but there are even greater positive effects if one also considers operating model improvements. These include synergies from increased asset utilization if one common fleet was used for various VaaS offerings in parallel.

For many providers, in particular incumbent OEMs that are looking to expand their traditional, ownership-centered sales offerings to include VaaS, it’s difficult to fully assess even the direct impact factors in their business case. This is because in many companies, the product development process is still siloed, with every department seeking to optimize its own profitability rather than take a cross-functional approach to designing a new service model. 

As a result, there is a risk that many potentially successful VaaS offerings will not be launched, because the underlying business case failed to show their true potential. This represents a missed opportunity for providers, as Vehicle-as-a-Service offers are here to stay. Without a VaaS product, OEMs and other potential providers are missing out on securing their customer base in this emerging market.

Today, this may mean losing only a little market share, but in the near future, it means missing out on addressing entire customer groups because they don’t have the right offers: our Vehicle-as-a-Service study showed that by 2025, 50% of Gen Z drivers would use VaaS to buy their next electric car.

If you would like to discuss your own VaaS business case calculations or your strategy and product design, please get in touch:

Berylls Insight
HOW VEHICLE-AS-A-SERVICE CAN BE 50% MORE PROFITABLE THAN TRADITIONAL CAR SALES
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Authors
Christopher Ley

Associate Partner

Florian Tauschek

Associate Partner

Tobias Detzler

Senior Consultant

Nikolas Horn

Senior Associate

Florian Tauschek

Florian Tauschek has 8 years of experience in strategy consulting. He focuses on business & sales model strategies for flexible Vehicle-as-a-Service (VaaS) offers.

He is an expert in topics such as customer & vehicle lifetime value optimization, the transformation of the underlying automotive sales model from one-time asset sales towards multicycle models generating recurring revenues as well as market entry strategies for various VaaS products such as operating lease or subscriptions. Furthermore he is the author of several market leading studies around VaaS.

He holds a Master of Science degree in management from HHL – Leipzig Graduate School of Management.

Christopher Ley

Christopher Ley joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in October 2021 as Partner. He has over 14 years of top management consulting experience with focus on new business models and market expansions within the automotive & mobility industry. He is an expert around Vehicle-as-a-Service, comprising vehicle finance & leasing, fleet management and mobility services. Christopher Ley is advising OEMs, Captives, Financial Services Companies, PE & VC Investors, Leasing & Rental Companies, Fleet Managers and Mobility Startups around the transformation from one-time sales towards use-based multi-cycle business models on a global level.

Prior to joining Berylls, Christopher Ley has been working for other international management consulting firms, amongst others Monitor Deloitte and Alvarez & Marsal. He holds a diploma degree in business administration from Johannes Gutenberg-Universität in Mainz and an MBA from Colorado State University.

Snapshot of the European Auto Subscription Market

Munich, October 2021

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SNAPSHOT OF THE EUROPEAN AUTO SUBSCRIPTION MARKET

Munich, October 2021

The automotive market is in the midth of maybe the largest transformation in its history. Customers are demanding flexible usage-based offerings and turn away from classical vehicle ownership. This trend is further increased by the advent of electric vehicles. Digitally-enabled direct sales models fundamentally change the way how mobility is purchased and allow new competitors to enter the market. Subscription offerings are now closing the gap between classical leasing and rental models.

We have analyzed the current dynamics in the European market and assessed the strategic rationale for different archetypes of players to enter the subscription market.

Find out more about the future of automotive sales, subscription offerings and there role in Vehicle-as-a-Service models in our newest Berylls Insight “Snapshot of the European auto subscription market”.

Berylls Insight
SNAPSHOT OF THE EUROPEAN AUTO SUBSCRIPTION MARKET
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Authors
CHRISTOPHER LEY

Associate Partner

PHILIPP ENDERLE

Associate Partner

TOBIAS DETZLER

Senior Consultant

Christopher Ley

Christopher Ley joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in October 2021 as Partner. He has over 14 years of top management consulting experience with focus on new business models and market expansions within the automotive & mobility industry. He is an expert around Vehicle-as-a-Service, comprising vehicle finance & leasing, fleet management and mobility services. Christopher Ley is advising OEMs, Captives, Financial Services Companies, PE & VC Investors, Leasing & Rental Companies, Fleet Managers and Mobility Startups around the transformation from one-time sales towards use-based multi-cycle business models on a global level.

Prior to joining Berylls, Christopher Ley has been working for other international management consulting firms, amongst others Monitor Deloitte and Alvarez & Marsal. He holds a diploma degree in business administration from Johannes Gutenberg-Universität in Mainz and an MBA from Colorado State University.

Tobias Detzler

Tobias Detzler joined the Berylls Group in October 2021 as part of the Vehicle-as-a-Service (VaaS) team. At this point, he already looked back on several successful consulting projects in the automotive and the automotive finance industry with another consultancy.

Within the area of Vehicle-as-a-Service, Tobias developed particular expertise in topics such as vehicle subscriptions, used car (remarketing) and business model/strategy development. Beyond that, he completed projects in each dimension of the CASE trends and therefore gained knowledge around connected, autonomous, shared and electric mobility.

He holds a Master of Science degree in management from the University of Mannheim and focused his studies on finance and general management.

Quarterly Index Rebalancing Q3 2022

Munich, August 2022

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QUARTERLY INDEX REBALANCING Q3 2022

Munich, August 2022
F

ew things shape modern life as much as individual mobility. Be it as an expression of freedom and individuality, or as an economic driver. 

To reflect this, we have developed the Solactive Berylls LeanVal Automobility Leaders 100 Index – the AUTO100. It tracks the performance of the 100 most
relevant publicly listed automobility players worldwide.

By design, the AUTO100 covers the industry’s entire value chain – from vehicle manufacturers and suppliers, to dealer groups, and providers of mobility services or infrastructure.

Rebalancing updates

There are several major effects impacting the global capital markets. Global economy is suffering due to ongoing COVID lockdowns, especially in China, leading to disruptions in the supply chains, shortage of semiconductor and other shortcomings in resources. Nevertheless, the sector is benefiting from recent increases in domestic demand and expansion in the US and Europe.

Can’t wait to read more? Download the Insight now!

Berylls Insight
QUARTERLY INDEX REBALANCING, AUGUST 2022 [1MB]
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Authors
Dr. Jan Burgard

Berylls Group CEO

Malte Broxtermann

Associate Partner

Andreas Oesinghaus

Associate

Björn Simon

Consultant

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Malte Broxtermann

Malte is an expert in the development and implementation of automotive digitization strategies.

He focuses on helping clients scale (generative) artificial intelligence to improve their bottom line across the entire automotive value chain. His primary customers are automotive manufacturers and their suppliers, especially those active in the Software-Defined-Vehicle space.

Before his time at Berylls by AlixPartners (formerly Berylls Strategy Advisors), he advised leading North American utility companies. Prior to that, he saved lives as emergency medical technician. Malte holds master’s degrees in economics from Maastricht University and Queen’s University in Canada.