British automotive data company cap hpi has announced plans to expand its services to the world, via Europe. Saad Ahmed speaks to international operations director Adrian Rushmore to understand the reasons for this, and gain an insight into the business’s future plans
The data companies that are now cap hpi have long had a strong presence in the UK automotive industry. However, when cap was acquired by Solera in 2014, its parent company decided it was time to go global. Adrian Rushmore, international operations director at cap hpi, tells Motor Finance that Solera planned for cap to provide vehicle valuations for its worldwide operations.
“[Solera] saw cap as a means to provide vehicle valuations to support its businesses around the world,” Rushmore says.
“We service all of the major automotive sectors in the UK, such as dealers, finance, and leasing. We want to broaden that proposition, and deliver our core datasets across the markets that they operate in.”
Certain aspects of cap hpi’s UK services appealed to Solera, and in particular its international operations.
“Particularly around the valuation of write-offs, determining the point at which a vehicle becomes uneconomic to repair, and in order to determine what is required in a vehicle valuation,” Rushmore explains.
A key part of this expansion seemed to be the development of what Rushmore termed a “global code”.
In its UK operations, cap codes allow the systems used by cap hpi customers to identify vehicles by unlocking specific data.
“That information could be detailed specification, technical data, trim, and also other information such as vehicle valuations,” Rushmore says.
The global code was an attempt to build on this, but on an international scale.
“The new global code will uniquely identify every model derivative in for every model year in every country, consistently,” Rushmore explains.
The code is designed to enable leasing companies and manufacturers to identify vehicles across national borders, and unlock further information about each vehicle, such as vehicle valuations for lessors and the performance of certain models across countries, to manufacturers.
A key part of cap hpi is vehicle provenance checks, and Rushmore tells Motor Finance that the global code will simplify the process of tracing the origin of a vehicle after it has crossed borders.
“In Spain, there are huge numbers of vehicles registered to serve the rental market during the summer period, and then those vehicles get exported,” Rushmore says.
“The global code can identify [a vehicle] when it appears in another market in nine months’ time.”
The global code is designed to be a means of identifying vehicles wherever they may be in the world, like a form of ‘digital passport’ for vehicles. In this way, Rushmore says, cross-border vehicle valuations will become increasingly possible.
Cap hpi’s expansion plans come at an uncertain time in the UK automotive market.
Following the referendum on EU membership in late June, it’s still unclear what form Brexit will take, and what it will mean for the industry.
With a lack of clarity on the UK’s future relationship with the European single market, questions could be asked why cap hpi has decided now, of all times, to expand its services into Europe.
The expansion, Rushmore says, has long been in the pipeline.
“Solera didn’t see Brexit coming. It acquired the business in November 2014, and it has a requirement that we need to serve,” Rushmore says.
Geopolitical uncertainty aside, it seems that cap hpi was determined to expand internationally, and Rushmore highlights that Solera’s operations gave them an existing set of customers.
“We need to support their businesses around the world, and that effectively gives us a customer base to start from. But in addition, we can serve the wider market because we’ve done so successfully in the UK.”
When asked what exactly cap hpi is planning to extend abroad, Rushmore reveals that vehicle data capture will ensure information is collected into a list, and used to calculate valuations.
The “suite” will be launched abroad, and will include forecast valuations, information regarding service maintenance and repair, and the total cost of ownership.
However, he explains that it will not be a case of simply lifting the UK operations and extrapolating them.
“We’re going to produce the same datasets across Europe and around the world, but we are going to do it differently. We have got the opportunity to create something new, rather than just replicate exactly what we’ve done in the UK.”
Rushmore tells Motor Finance that its presence in the UK market gives cap hpi an understanding of what would be required to introduce its datasets to the European automotive market, saying it will require a strategy shift, putting the focus on technology and moving away from people.
“We’re revisiting our methodology…what we produce has to be repeatable and scalable around the world.”
He argues that this would benefit cap hpi when comparing differences between the automotive markets of different countries.
“It’s then very easy to say, for example, what is different between the Spanish and Portuguese markets, or compared with the German market,” Rushmore says
“That’s one of the core requirements that we’re trying to build into our development plan.”
The international focus is something Rushmore seeks to emphasise. Cap hpi has recently made a number of international appointments which seem in line with this strategy.
The company has appointed John Watts as international senior editor LCVs, Derren Martin as international senior car editor, and Dylan Setterfield as international forecast manager. Martin Verrelli has been appointed as business development director with a brief to grow global operations.
Rushmore explains that cap hpi’s UK arm will remain central to its operations.
“The core of the international business will still be based in Leeds, and we will then have local experts in each of the countries that we move into,” Rushmore says.
Local expertise – having individuals on the ground in the various countries in which cap hpi operates – will be a key feature of the next stage.
Rushmore continues: “Local expertise is hugely important because sitting in the UK, it’s very difficult to be close enough to the market for any individual country. So local experts are very much part of the plan.”
As an example, Patrick Mayerhörmann has been appointed as car editor – Germany, and, working with a team of international editors, will be tasked with leading analysis of the German car market, Europe’s largest.
Challenges and changes
Cap hpi expects changes in the automotive market that will impact its operations.
In its report Navigating unprecedented change, cap hpi points to globalisation in the car industry, a shift away from fossil fuels, and technological advances, as factors that could change its operations.
Rushmore says changing trends in vehicle fuel systems are also adding complexity to the market, and thereby increasing the breadth of data that cap hpi will have to take into consideration.
“The manufacturers are in a situation where they want to invest in new technology, but there are inherent risks,” Rushmore says.
“The traditional petrol and diesel engine cars are still being developed and improved, but [manufacturers] can’t afford to ignore what the EV market might do…[or] if that will then be superseded by hydrogenfuel cells.”
Rushmore says that despite the early stage of vehicle autonomy, the “additional complexity” of technological developments means cap hpi will have to meet these challenges.
“The capture of all of this information, and the understanding and interpretation of all of this data is important,” Rushmore says.
“That data has to be reused in some way to measure the activity of the market.”
The rise of usership models, and the growth of PCP, is having an impact on the types of used cars present in the market, according to Rushmore.
“[PCP] changes up the dynamic of the future market, because even though [contracts are] taken out for 36 or 48 months, they rarely go to full term,” he says.
The impact, Rushmore says, is that the used market in the UK has seen an increase in vehicles aged between two and two-and-a-half years, resulting in “a better spread of used cars as a result of PCPs terminating early”.
According to Rushmore, this will “realign” and combat the price distortion in former rental cars aged six to nine months, and those of three to four years.