ROYDEN VOLANSA significant number of automotive manufacturers use Lightstone’s dealer and performance studies
With increasing competitiveness, pricing pressure, tight operating margins and rising consumer debt levels, the local automotive industry is a challenging environment in which to operate, says analytical solutions provider Lightstone commercial director Royden Volans.
“Therefore, the right information, delivered to the right person, at the right time, is required to assist automotive industry role-players in being more efficient,” he says.
As a result, Lightstone conducted five automotive manufacturer studies in 2012 to assess these companies’ operational efficiencies.
Volans explains that these studies integrate client, automotive, spatial and geo- demographic data.
“A significant number of automotive manufacturers use our dealer and per- formance studies, which we publish every year,” he boasts.
Moreover, he explains that the company uses the data it collects to develop models that are relevant to the automotive industry, as they provide companies with valuable insight into the state of the industry.
Volans says the company has developed several automotive-specific models, namely the retail value model, the residual value curves, the security index and the repair cost index.
The retail value model has a point estimate, a range of high and low estimates and a confidence score to distinguish low-volume or unreliable predictions.
“The ten-year residual retail value curves are based on historical pricing behaviours and are updated monthly,” he says, adding that this model was updated last year to include more granular-level (model/variant) data than what was previously available.
The security index is a measure of what is likely to be recovered by a secured lender at a future point of loss, under forced sale conditions, he explains.
“This integrates auction performance models and residual value curves,” he adds.
Volans further explains that the repair cost index calculates the relative cost of repair when comparing one vehicle with another, as it integrates value models, the relative- value investment curve (where applicable), actual crash data, simulated crash data, parts pricing and repair labour.
“These analytics enable Lightstone clients to accurately assess the value point of underwriting or of acquiring a vehicle, based on likely future scenarios,” he says, noting that the repair cost index is used by insurance actuaries to improve the pricing system for the automotive insurance industry.