This blog is based on the recent analysis, OEMs’ Used Car Retail Strategies, Europe and North America, 2025, authored by Frost & Sullivan’s Growth Expert, Anuj Monga, from the Mobility team.
Across global markets, automakers are no longer treating used vehicles as mere trade-in byproducts. Instead, they’re positioning pre-owned sales as a core profit driver and customer retention tool.
But why now? And how are OEMs pulling it off?
Used Vehicles Are the New Profit Engines for OEMs: What Changed
Gone are the days when automakers ignored the used car market. Today, several forces are pushing OEMs to take control:
- Soaring New Car Prices – With affordable cars no longer flocking the market like during the pre-Covid era, more buyers are turning to certified pre-owned (CPO) vehicles.
- EV Market Complexities – As EV adoption grows, OEMs are increasing their focus on the used market by developing battery health checks and certification programs to build buyer trust and retain value across the vehicle lifecycle.
- Digital-first Buyers Reshaping Used Sales – With rising demand for online buying and virtual services, OEMs are building direct platforms for used vehicles, boosting control and unlocking new revenue streams.
This transformation is compelling leadership teams to focus on used vehicles in strategic planning, accelerating the broader automotive retail transformation.
How OEMs Are Taking Control of the Used Car Lifecycle
- Next-gen CPO Programs: Beyond Basic Inspections
OEMs are developing next-generation CPO programs that go far beyond basic inspections. These programs now offer:
- AI-powered diagnostics for deep vehicle health reports
- Extended manufacturer warranties to rival new car coverage
- Transparent pricing with no hidden fees
- EV battery health certifications to ease buyer concerns
- Disrupting Traditional Dealerships with Digital Retail
OEMs are cutting out middlemen by:
- Selling directly online (Tesla-style)
- Offering 360° virtual showrooms for remote browsing
- Streamlining financing with instant digital approvals
- Introducing subscription models (e.g., Volvo’s “Care by Volvo” for used cars)
- Leveraging Data for Smarter Sales
Automakers hold a goldmine of vehicle data, allowing them to:
- Predict maintenance needs before buyers even ask
- Personalize trade-in offers based on driving history
- Adjust pricing dynamically using real-time market trends
Are you transforming fast enough to win in direct used car sales?
Tech That’s Reshaping Used Car Buying
The future of used car retail is digital, seamless, and automated:
- Augmented Reality (AR) Showrooms– Customers inspect cars remotely via smartphone.
- AI-powered Valuation Tools– Instant pricing based on condition, demand, and location.
- Blockchain for Vehicle Histories– Tamper-proof records to build trust.
- Automated Financing– Get approved and drive off in under an hour.
Result? Dealers are substantially cutting costs while selling faster.
Why Used EVs Are the Next Battleground
The EV revolution is adding new layers of complexity and opportunity:
- Battery health certification is becoming a critical differentiator
- Software update compatibility is emerging as a key valuation factor
- Charging infrastructure partnerships are influencing purchase decisions
- Specialized financing products are being developed for used EVs
OEMs are recognizing that without their involvement, the used EV market could face significant trust and transparency issues that might hinder broader adoption.
READ MORE: Global Electric Car Growth Outlook
Strategic Advantages for OEMs
By taking control of used vehicle retail, manufacturers are positioning themselves to:
- Capture Additional Revenue Streams
- Higher margins on certified vehicles
- Extended service and maintenance opportunities
- Financing and insurance products
- Future trade-in value retention
- Strengthen Brand Equity
- Consistent customer experience across vehicle lifecycles
- Quality assurance through manufacturer certification
- Enhanced residual values
- Build Customer Intelligence
- Comprehensive ownership data
- Behavioral insights across multiple transactions
- Predictive modeling for future needs
How well are you using your brand and data to drive the next wave of used vehicle growth?
Operational Transformations
To support this shift, OEMs are making significant internal changes:
- Dedicated used vehicle divisions are being established
- Traditional dealer networks are being repurposed as delivery and service centers
- Reconditioning processes are being standardized across regions
- Inventory management systems are being integrated with new vehicle operations
The Leadership Challenge
For C-suite executives, this transformation requires careful navigation of several critical areas:
- Balancing Channel Conflict
Managing relationships with dealer networks while developing direct sales capabilities - Technology Investments
Prioritizing digital tools that enhance rather than complicate the customer journey - Organizational Alignment
Breaking down silos between new and used vehicle operations - Cultural Shift
Moving from a production-focused mindset to a customer lifecycle orientation
Conclusion: A Fundamental Reorientation
The automotive industry is undergoing more than just tactical adjustments to market conditions. What is unfolding represents a fundamental reorientation of business models and strategic priorities. OEMs that successfully execute this transformation are positioning themselves for sustainable success in an increasingly complex market landscape.
As the industry continues to transform, one reality is becoming increasingly clear: in the future of automotive retail, used vehicles won’t just support new car sales, they will be essential to the entire business model.
The question for automotive leaders is no longer whether to prioritize used vehicle strategies, but how quickly and completely can they adapt their organizations to this new reality.
Is your organization ready to capitalize on these opportunities and accelerate growth in the OEM used car market?
Want to dive deeper? Click here to connect with Anuj Monga and other growth experts and discover how these insights can help accelerate your growth strategy, or connect with us at [email protected]
