Chief Financial Officer at Auto1 Group
Markus Boser joined AUTO1 Group as Chief Financial Officer in 2016 and is responsible for all financial activities of the Group. Prior to joining AUTO1, Markus was Managing Director, Head of JPMorgan’s Technology, Media and Telecoms Investment Banking practice in EMEA, where he executed strategic M&A, equity and debt financings for a variety of high profile European technology and internet clients. He previously worked at Deutsche Bank as a Director in Technology Investment Banking and Equity Capital Markets. Markus holds a J.D from Columbia University, an LL.M from Universität Tübingen and a B.A from the University of Virginia.Read moreView Profile Page
On the request of Auto1 Group, this interview is only published in text form.
Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.
Markus, a good place to start would be to explain the differences between the European and US automotive market from an offline and online perspective?
While the markets are similar in size, there are also some differences. The overall market in Europe is incredibly fragmented, even more than the US, both in terms of number of dealers, of which we estimate there are about 200,000, but also in terms of types of cars. On the dealer side, that fragmentation is not only on a European basis, but on a per country basis where in Germany, the top 10 dealers represent 8% of B2C and if you look at the total European used car market it is less than 2%.
This fragmentation exists across all different markets and while both the US and UK have several listed used car dealerships, Europe has virtually none. There is one in Finland and another in Sweden, but at the moment none in Germany, Spain, Denmark, Portugal or Switzerland. The UK probably has seven or eight and the US 12 to 15. Obviously, Carvana, Carmax and Vroom have taken much of the profile but there are also a host of others.
Furthermore, there are many OEMs in Europe; almost each country has its own. Germany has six, France has two – it all depends on how you measure it – Spain has SEAT, Italy Fiat, and there are also local sub-brands, like Skoda in the Czech Republic. The culture of buying cars has been much more individualistic, at least historically. A typical German or French middle-class family order their Skoda or Peugeot, with a very individual set of features such as panoramic roof or special gearshift. The OEM websites offer an unbelievable depth of engines, colors, styles within their configurators.
We estimate there are 140,000 different combinations of makes and models in Europe, which excludes model year and mileage. In the US, it is mainly the Japanese and US OEMs and they tend to have fewer makes and models and more standardized car types. European OEMs have a stronger control over distribution than in the US. That’s the first difference, the higher fragmentation in terms of both dealers and cars
Secondly, Europe is not one country, so you end up with many different tastes and styles. That leads to a bigger cross-border opportunity in Europe, particularly in the B2B market. In the UK BCA is a huge player with a massive market share above 60%, I think. In the US, you have Cox Automotive and then you have KAR and together they have about 20% to 25% of the B2B market in the US, I believe. There are a variety of other offline wholesale players, making it fragmented across many layers, countries and styles.