Volkswagen's heycar for used cars expands into the UK
Volkswagen has backed the launch of a new platform in the UK aimed at the used car segment. Designed and developed in collaboration with BCG Digital Ventures, the digital arm of Boston Consulting Group, heycar will compete with the large existing car websites who dominate the market by offering quality control for consumers and secure lead generation for dealers.
With the market for car sales seemingly stagnating in the last year, automotive manufacturers are presently scrambling to enter the used car space. Traditionally an untapped market for automotive firms, the market represents a lucrative prospect, particularly if consumers are likely to scale back spending on new products in the harsh economic times which seem to be looming. Competition between middle-man organisations and used car dealers is therefore intensifying, with dominant middle-man organisations and online platforms include companies like Auto Trader UK or Motors.co.uk presently enjoying a dominant presence.
In a bid to tap directly into the market, German automotive juggernaut Volkswagen has announced the expansion of its own second-hand dealing platform into the UK. The Society of Motor Manufacturers and Traders puts the value of the UK used car industry at £50 billion, while the UK used car finance point-of-sale market is valued at £17.6 billion by the Finance and Leasing Association. VW hopes that Hey.Car can break the already established status quo of online used car dealers with a mix of innovative, user-friendly interfaces and quality assurance techniques.
The UK becomes the second European market for heycar following a successful launch in Germany in 2017. VW and fellow backer Daimler believe that it can enjoy similar success in the UK, thanks to the platform’s guarantee of a more secure and trustworthy experience when buying a used car. Since clients are vetted before a request is sent to the car dealer, the dealer profits from this improved lead generation process as well.
Speaking at the heycar launch event in London, CEO Mat Moakes commented, “Buying a used car can be like a lottery, you don’t know what you’ll get. Existing websites are often cluttered with ads, eroding consumer trust. Dealers are burdened with rising fees for listing used cars online, squeezing their margins without a guarantee of leads or sales… After the launch phase we will charge on a lead-generation basis, guaranteeing a win-win for our dealer partners.”
Moakes joins the new business from a role as Managing Director of Centrica’s digital venture, Local Heroes. Managing the heycar dealer relationships, Karen Hilton meanwhile joins as Chief Commercial Officer with over 10 years of automotive experience and three years in leadership roles at the disruptive start-ups carwow and nested. In addition, the setup has been supported by BCG Digital Ventures, just as it was in Germany.
The platform was initially designed by BCG Digital Ventures. The firm’s partnership with Volkswagen Financial Services saw BCG’s digital innovation, incubation, and investment arm develop, build and launch heycar in just six months. The global team of BCG Digital Ventures has been going through a period of expansion recently, appointing Manuela Rabener as a Partner in its London office. The office has more than doubled in size since 2016, standing at around 130.
