CPO sales prove more resilient than new or used cars in the US during the COVID-19 pandemic, as Volkswagen Group Australia (VGA) launches a collaborative CPO program with carsales
In the face of tough trading conditions for automakers and dealers, Certified Pre-Owned (CPO) vehicles have been a shining light.
No more so than in the USA, where CPO sales have been at record levels in terms of volume and margin.
According to Automotive News, 2020 CPO vehicle sales proved more resilient than brand new vehicles and non-certified used vehicles, as price-sensitive American consumers gravitated to reliable and economical motoring backed by the peace-of-mind of an extended manufacturer warranty.
For US dealers, the shift to higher-margin CPO vehicles was a stabilising factor amid stalled new car sales, curtailed supply of inventory and lockdowns that limited car usage and, as a consequence, consumer demand.
Among the brands to benefit most from the trend to CPO in the USA last year were Porsche and Volkswagen – with both brands setting new records.
In fact, Porsche’s US dealer network sold more CPO vehicles in June 2020 than they had in any month during the program’s 17 years. The brand’s 3000 CPO sales was more than half the number of brand new cars sold for the month (5000).
Volkswagen USA dealers shifted over 11,000 CPO vehicles in May 2020.
Volkswagen Group Australia launches CPO program
Strong interest and sales of VW CPO vehicles in the USA has coincided with the launch of Volkswagen Group Australia’s (VGA) collaborative CPO program on carsales.com.au.
The program empowers the group’s network of Volkswagen and Skoda franchise dealers to flag their vehicles as CPO in front of Australia’s largest and most engaged audience of car buyers.
In addition, the partnership sees the launch of a carsales powered standalone VGA CPO destination.
Volkswagen and Skoda CPO vehicles must be less than five years old and have travelled less than 120,000kms. Already, more than 150 Australian Volkswagen and Skoda dealers have joined the program.
“As a leading brand, we’re delighted to offer Australian car shoppers the ability to purchase a CPO Volkswagen or Skoda, backed by the peace of mind of a minimum 1 year factory warranty, 12 months roadside assist and thorough 114 point technician inspection check,” says Adrian Robertson, Pre-approved Business Development Manager at Volkswagen Australia.
“We believe that our collaborative CPO program with carsales will help to engage more car buyers about the merits of VGA CPO vehicles and ultimately generate better sales and marketing outcomes for our dealer network,” Robertson stated.
Leanne Nguyen, Re-Marketing Co-ordinator at Volkswagen Group Australia, is also excited by the potential of the collaborative program.
“In a seemingly challenging environment in the new car space, it’s exciting to see a plethora of options opening up in the Certified Pre-Owned space here in Australia.
“The collaborative efforts between Volkswagen and Skoda’s Certified Pre-owned program and carsales showcases great opportunities for making ‘used’ the new ‘brand new’,” Nguyen adds.
Volkswagen and Skoda join BMW, Ferrari, Land Rover, McLaren, Mercedes-Benz, MINI Nissan and Porsche with highly-visible CPO programs. All of the programs have dedicated landing pages and functionality at carsales.com.au. Further details of the programs can be found at https://www.carsales.com.au/new-cars/certified-programs/.
“It’s satisfying to partner with Volkswagen to deliver this innovative CPO program,” says Gemma Pintaudi, Client Service Director at carsales.
“It’s a win-win-win for Volkswagen Group and its Australian dealers, as well as for Australian car shoppers on carsales.”
Scope to expand CPO awareness and understanding
CPO programs are not well known by consumers Down Under. This is in sharp contrast to the USA, where sales of CPO vehicles increased for nine successive years before 2020. In fact, carsales’ pioneering study ‘The Rise of CPO’ indicated more than half of Australian car buyers did not know what a CPO vehicle was.
“A key advantage of a collaborative CPO program with carsales is the opportunity to create and build awareness and understanding at scale,” Pintaudi explains.
“For example, as part of the VGA program, dedicated landing pages on carsales for both Volkswagen and Skoda clearly explain the benefits of purchasing a CPO-certified vehicle. CPO inventory is also clearly marked on carsales via both consumers’ personalised search results and details view pages,” Pintaudi stated.
“Consumers can even choose to filter their search results in order to shop CPO-certified inventory specifically.”
The ability to differentiate CPO inventory for sale from a non-franchise dealer and private seller stock on carsales is just one of the other potential benefits delivered to CPO eligible dealers.
Michael Holmes, Executive Director – Dealer at carsales, highlighted the significant opportunity to improve key metrics such as views to lead ratio and time to sell by participating in a CPO program such as that launched by VGA.
“Australian CPO dealers say the programs attract leads from highly-qualified buyers, helping to deliver quicker sales conversion and higher margins than non-CPO vehicles,” Holmes said.
“A CPO vehicles have a critical point of difference that can win a quick and profitable sale – long-term peace of mind to a consumer. This is particularly important with post-COVID consumer sentiment being fragile at times.
“All in all, it’s a more attractive vehicle for consumers to purchase and for dealers to sell — especially when considering the finance, trade-in and aftersales opportunities CPO vehicles can deliver.”
Effective merchandising the key to CPO dealer success
In order to maximise the benefits of CPO programs, Ren Blanning, Head of Business Consultancy at carsales urges participating Volkswagen and Skoda Australia dealers to merchandise their vehicles as effectively as possible.
“Maximise the power of a CPO program on carsales by doing the online advertising brilliant basics; well: presentation, promotion and price,” starts Blanning.
“That means not only flagging the car as CPO in AutoGate, but uploading professional photos that show off the quality of the vehicle, providing detailed comments that highlight that the vehicle has passed stringent criteria, and uploading a video to the listing, highlighting key vehicle features.”
“CPO vehicles make for a great choice to rank higher in consumers’ search results via the use of Promote. This supercharges the distinctive CPO branding visible in search results and helps the listing generate even more attention and consideration from buyers.”
“With the potential of CPO vehicles to realise stronger margins and quicker sales conversion, nailing the presentation and promotional aspects of a CPO listing is even more important for dealers.”
Summary:
1.Strong interest and sales of VW CPO vehicles in the USA has coincided with the launch of Volkswagen Group Australia’s (VGA) collaborative CPO program on carsales.com.au
2. A collaborative CPO program with carsales gives OEMs the opportunity to build awareness and understanding of their programs with Australia’s largest and most engaged audience of car buyers
3. CPO vehicles attract leads from highly-qualified buyers, helping to deliver quicker sales conversion and higher margins than non-CPO vehicles
