Rewiring Automotive Retail

SPEAKER_1 (0:03)

Welcome to the Executive Insights Podcast, brought to you by AWS, where we address vital questions and share unique perspectives from leaders at the intersection of business and technology.

Tanuja Randery (0:17)

Hello, this is Tineja Randery, Managing Director of Europe, Middle Eastern Africa for Amazon Web Services. Welcome to another episode of Executive Insights, our CEO series.

In this series, I will be speaking with CEOs from across the EMEA region about what it takes to transform business and society, how they are leveraging data and technology to accelerate growth and innovate, and their insights on topics such as sustainability and addressing the digital skills gap. We will also be providing a glimpse into the personalities behind some of our great leaders of industry. Now, every time someone walks into a car dealership in Europe, books of service or signs of finance agreement, there's a good chance the software behind that experience has been built by the company led by today's guest. That company is Nextlane. Operating across 11 countries with more than 10,000 customers and over 70,000 end users, Nextlane plays a central role in the automotive retail ecosystem. It brings together systems, products and markets into a single platform designed to simplify how dealerships and manufacturers operate.

And it is doing so at a moment when the industry is navigating a period of real structural change. Leading that transformation is the executive of more than 25 years of experience building and scaling technology businesses across multiple geographies and markets. Hartmut Wagner, welcome to Executive Insights, and thank you so much for taking the time to join us today.

Hartmut Wagner (1:45)

Hi, Tanusha. Thank you very much for inviting and having me. Pleasure to be here.

Tanuja Randery (1:49)

Well, I'm really looking forward to diving into some of your experience in a very interesting industry. But before we do that, I understand that you are a marathon runner, triathlons, the whole thing.

So you know what kilometer 30 feels like. And I'm sure the finish line isn't quite where everyone thought it would be. And in some ways, the European automotive industry right now feels like it might be somewhere around that mark, right? Whether it's emissions, targets, or electrification, or of course the digital transformation we're living in. What do you, before we go there, tell yourself when you're almost there? What do you think the industry is also telling itself right now?

Hartmut Wagner (2:28)

Yeah, I love sports. And the 30 kilometer point is an interesting mark. But I have to say, 37 is for me actually the one where everything feels so painful. And when you really need to go for Plan B, C, and so on. But first talking about the industry, you're right. I mean, we all see in the last few years an interesting transformation. I would even say a disruption of that automotive industry. And I think it's driven by many external drivers. Obviously, political situations are driving, I would say, some un-clarity. So there's not the ultimate clarity where things go with regards to electrification or the next thing of how cars will drive in the future.

But even more important, you see that the strategy of many of the traditional OEMs or car manufacturers has not seen some of these new requirements. So they really are uncertain in terms of the direction they should go. And you have obviously Chinese OEMs that are quickly rising, quickly developing. They have a long-term plan. The others try to understand what the direction is and how they can react to it. But it seems they're not properly prepared for this.

Tanuja Randery (3:44)

Obviously, you sit right in the center of the European ecosystem, connecting these OEMs to dealers.

Is that position shaping in some ways the way you think about where the market is heading? Because you've got really this very special role. What are one or two things that you're actually seeing here in Europe?

Hartmut Wagner (4:04)

I mean, we're like in the, how we call it, in the ecosystem. And the interesting thing is that why the OEMs are in this transformation journey. So you're actually figuring out where things go to.

You see that also the relationship between dealers and OEMs has massively changed. So years ago, we were used to the fact that there was like a dealer for one brand, another dealer for the next, but another dealer for this. So there were long term relationships between dealer or dealer groups and brands.

And in the last years, most of these relationships have completely broken. They were made lots of acquisitions. Many of the OEMs even sold their complete go-to-market parts to dealer groups. So literally now you see one dealer is going for multi-brand plus the new brands. So there's no long-term standing relationship anymore. And every entity in all of this is literally thinking about itself. How can I survive? How can I further sell new car, used cars, and how to really drive the profit I need to survive in the long-term to give my employees a good job? And on top, and that's another angle of complexity, is that in the past, most of the new cars were literally sold via a shop. Yeah, you went to a dealer, you bought a car. There's now all around the direct sales from all end-to-end customers. So they dream about controlling the whole process towards the end customer. Obviously, they might like it, but dealers don't like it. So you see, there are a number of trends and things going on which drive a lot of tension, uncertainty, and the need for change within that industry, and especially in Europe, where these new, like Tesla or the Chinese and the traditional ones, especially the German and French manufacturers are literally colliding in the same markets now.