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10/10/18
Wolfsburg (D)
Company

Huh or hey?

Last year, Volkswagen Group launched its very own multi-brand online used car portal, heycar, where around 310,000 cars are currently waiting for a new owner.

Huh or hey?
Markus Kröger, CEO of heycar

heycar is aiming to do things differently. This is the message behind the new ad for Volkswagen’s used car portal currently appearing on TV and, of course, on YouTube too. A voice asks: “Hey, do you prefer browsing for used cars like this?” A picture of a man with a magnifying glass appears. “Or like this?” We see a young man on a sofa with a laptop, looking relieved and excited as he tests out the simple heycar website. Then cars from a few different brands appear. “Good-as-new cars – and hey, they’re all still under warranty.” Quick and clear. It’s hey, hey, heycar.

And anyway: heycar has to do things differently. With a volume of EUR 80 billion per year, the used vehicle market is very tough. At the moment, the world of online portals in Germany is dominated by two big names that are unavoidable for both sellers and buyers. Anyone looking to get rid of their old car currently has to list it on one of these sites or, ideally, on both of them. And any customer looking for a wide range of used cars to choose from will find it on one of these portals. Around 90 percent of all sales that take place via online portals go through these pages. Competitors have to think outside of the box if they want to attract sellers and buyers on this market.

Different than most competitors

heycar is different – so says Markus Kröger, CEO of the portal. Different for buyers, different for sellers, different for car manufacturers. That’s three things at once – is that even possible? “Of course it’s possible!” says Markus Kröger. “Our approach is completely different to most of our competitors.” It starts with the business model: heycar isn’t a listing site, it’s a brokering site. “We don’t make any money when a seller lists their cars on our platform,” says Kröger. “We make money when a seller signs a sales agreement with a buyer who has found the car on our platform.” This is how heycar earns commission.

heycar boss Markus Kröger at a meeting in a Berlin car dealership.

 “We therefore have a real interest in making sure that cars are sold.” heycar sees itself as a broker who brings together sellers and buyers – and then politely finds out whether they hit it off and whether they agreed on a sale.

A genuine alternative

Some 1,000 retail groups with around 3,000 locations have now signed up to the portal. “heycar offers a genuine alternative to the listing portals,” says Markus Kröger. After all, sellers don’t have to worry about the costs unless they manage to sell a car. At the moment, heycar sees itself more as an extra than as an alternative. However, the aim of the site is to offer sellers so many benefits that they no longer have to list on the other portals, or at least not on all of them, explains the CEO.

A hand on the dipstick: the engine compartment undergoes a thorough check.

Reliability and transparency

heycar only lists vehicles with a warranty. “All of our cars have been thoroughly checked, have passed their MOT and still have a warranty,” says Kröger. “That’s why we get all sellers who want to list cars on our site to sign a declaration.” One of the ‘rules’ on heycar is that every car must have less than 150,000 kilometers on the clock and must be less than eight years old. The thinking behind this is to protect buyers from any nasty surprises. heycar hopes to attract customers with reliability and transparency, not because of the sheer size of its range. Kröger predicts that the number of vehicles on the portal will grow to a maximum of 700,000. The site currently lists 310,000 – and that’s just one year after its launch. Potential buyers can search for their dream car according to various categories, and then only receive offers for “family cars” or “city cars”. “Our goal is to find out exactly what a potential buyer is looking for and then find them the perfect match,” says Kröger. “The customer is at the heart of everything we do.”

Customers want diversity

The used vehicle platform is a subsidiary of Volkswagen Financial Services. This means that heycar is also able to offer financial services. “Our financing calculator allows us to draw up highly accurate sample financing packages for cars from the Volkswagen Group,” says Kröger. Customers can use heycar to request a credit check and then sort out the financing directly with the seller if everything is in order. Over the long term, heycar is planning to offer this as an online service – buying and financing all in the same place.

Even though it is part of the Volkswagen family, heycar takes a clear multi-brand approach. “Buyers want to be able to compare cars,“ says CEO Kröger. “Even if a customer has already decided on a specific brand, they still want to see what alternatives are out there – even if it’s just to assure them that they’ve made the right choice.” Nevertheless, only 40 percent of all buyers set out to buy a certain brand when they start looking. “Most customers are completely open-minded,” explains Kröger.

“We’re onto something great,” believes heycar CEO Kröger.

Multiple brands and multiple shareholders

heycar is leaving the door open for other car manufacturers to purchase a stake in the portal. “After all, we’re all facing the same problem. Our dealerships all want a good and quick solution for selling our used vehicles,” says Kröger. In September, Daimler announced its plans to purchase a 20 percent share in heycar “to support the further development of this multi-brand platform”. Daimler hopes that the portal will soon be able to offer sales, financing and insurance all from a single source. “We are delighted with the investment,” says heycar boss Kröger. “It confirms that we’re onto a good thing.”

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Products as well as Volkswagen AG distributors can be found at: www.volkswagen.de.

The specified fuel consumption and emission data have been determined according to the measurement procedures prescribed by law. Since 1st September 2017, certain new vehicles are already being type-approved according to the Worldwide Harmonized Light Vehicles Test Procedure (WLTP), a more realistic test procedure for measuring fuel consumption and CO2 emissions. Starting on September 1st 2018, the New European Driving Cycle (NEDC) will be replaced by the WLTP in stages. Owing to the more realistic test conditions, the fuel consumption and CO2 emissions measured according to the WLTP will, in many cases, be higher than those measured according to the NEDC. For further information on the differences between the WLTP and NEDC, please visit www.volkswagen.de/wltp.

We are currently still required by law to state the NEDC figures. In the case of new vehicles which have been type-approved according to the WLTP, the NEDC figures are derived from the WLTP data. It is possible to specify the WLTP figures voluntarily in addition until such time as this is required by law. In cases where the NEDC figures are specified as value ranges, these do not refer to a particular individual vehicle and do not constitute part of the sales offering. They are intended exclusively as a means of comparison between different vehicle types. Additional equipment and accessories (e.g. add-on parts, different tyre formats, etc.) may change the relevant vehicle parameters, such as weight, rolling resistance and aerodynamics, and, in conjunction with weather and traffic conditions and individual driving style, may affect fuel consumption, electrical power consumption, CO2 emissions and the performance figures for the vehicle.

Further information on official fuel consumption figures and the official specific CO2 emissions of new passenger cars can be found in the “Guide on the fuel economy, CO2 emissions and power consumption of new passenger car models”, which is available free of charge at all sales dealerships and from DAT Deutsche Automobil Treuhand GmbH, Hellmuth-Hirth-Str. 1, D-73760 Ostfildern, Germany and at www.dat.de.