Car manufacturer backed used car programmes across Europe are falling short of delivering expected returns, despite outperforming independent dealers in many key metrics, according to new research from Indicata.
The study, which analysed 73 manufacturer franchised networks across 12 countries, including the UK, found a consistent gap between investment and performance.
On average, manufacturers invest around €1,100 (£950) per unit into remarketing and certified pre-owned programmes, yet typically only generate €450 (£388) per unit in returns.
In the UK, where approved used schemes are often viewed as a key tool for supporting new car sales and residual values, the findings raise questions about network execution and pricing strategies.
Andy Shields, global business unit director at Indicata, said: “Our analysis shows that while OEM programmes outperform independents, most networks are leaving significant value on the table through poor execution and a lack of proper performance measurement.”
OEM-owned sites undercut residual values
One of the most striking findings of the report is the pricing strategy of OEM-owned locations. These sites were found to list vehicles consistently below market value, undercutting both franchised dealers and independent retailers.
“If an OEM’s goal is to support residual values, then managing their own used car sites is not working,” Shields added. “The data suggests these operations prioritise rapid stock clearance at the expense of overall network profitability and brand value retention.”
Stronger used car performance drives new car gains
Despite the wider network challenges, Indicata found a clear link between strong used car capability and new car success.
Dealers with high-performing used car operations saw 23% higher new car penetration. Those focused specifically on their own-brand used stock achieved up to 55% more new car sales.
“This data fundamentally changes how OEMs should view their used car channels,” Shields said. “It is not just a support function for retail, it directly influences new car sales and overall profitability.”
Indicata’s call to action for OEMs
The study concludes with a call for manufacturers to address underperformance through a focused three-step plan:
- Acknowledge that despite outperforming independents, most used car programmes are not delivering adequate returns on investment.
- Improve performance measurement with clear KPIs such as brand share growth and residual value uplift.
- Enhance execution at network level by helping dealers improve pricing, stock management,and operational processes