Five Years of Driving Growth: How heycar Is Conquering Europe’s Used Car Market

After resounding success over the past five years, heycar Group reflects on how it became the leading pan-European platform for quality used cars.

First, it was Germany in 2017. Then, market launches in the UK and Spain followed in rapid succession. And more recently — boasting shareholders Allianz and the Renault Group and its subsidiary Mobilize Financial Service, in addition to Volkswagen, Volkswagen Financial Services, and Mercedes Benz Mobility — digital used-car marketplace heycar has expanded into France and added an e-commerce pilot in the Netherlands.

Now, as it marks its five-year anniversary, heycar is the fastest-growing platform for quality used cars in the European automotive industry.

“I feel proud to say that heycar has surpassed its infancy phase and has now grown to become an independent and self-sufficient business that has taken off in all important European markets in only five years of existence,” said heycar Group CEO Florian Schlieper.

To recognize where the company is today, we asked Florian and BCG Digital Ventures (BCGDV) MDP Mathias Entenmann to look back on how the successful partnership of heycar Group and BCGDV led to an expansion into multiple geographies — as it continues its mission to change how people buy cars.

Mathias Entenmann explained that the initial motivation for heycar was the observation that auto manufacturers traditionally were not in the consumer business.

Mathias: Car companies understood themselves as developing fantastic new cars, brand-marketing those cars, and then managing a B2B sales network to auto dealers, fleet customers, and so on. So that was what they were really good at. Increasingly, however, they realized that in the new modern world, they could increase their online presence and sales capabilities.

In addition to new cars, there was a sizable used-car market that was being neglected by auto companies, who made most of their money from financing vehicles. These companies realized there was no reason that a two-year-old car couldn’t also be financed. Additionally, online sales would make the process much more attractive for the consumer.

With auto classifieds markets already existing in many territories — in fact, Mathias recalled how BCGDV studied the market and initially felt it was well-served, if not saturated — researchers went further and found the way to differentiate the venture was to solve frictions like lack of trust on the part of consumers.

Mathias: It soon became obvious that the existing classifieds system was a digital dinosaur. Classifieds were already a 20- or 25-year-old business model whose time had come and gone. Dealers and merchants — the advertisers — were fed up with paying for a listing. They wanted to pay for a lead or, ideally, pay a commission for a sale. We learned that they would pay for that certainty.

Ultimately, it was the automotive sector’s slowness to embrace digital that handed the joint project team a golden opportunity to transform car sales on digital channels with heycar.

Florian Schlieper added how data drives the point home.

Florian: 70% of people start their search on multi-brand platforms like heycar, and 75% of them are even swapping brands when buying their next used car. By working with global manufacturers, we quickly gained customers’ trust with attractive brand offers and additional services. At the same time, we provide our partners with a strong tool to engage online customers at the very start of the car-buying process and get them invested in brands and services when they’re most open to it.

BCGDV and heycar formed a classic startup-style team with multifunctional, multidisciplinary product managers, designers, engineers, growth hackers, and the like. The team made several realizations during its early efforts that eventually informed heycar’s successful geo-expansion and business scaling.

Mathias: The key success factor for setting up heycar was our combined startup-like approach in quickly forming a hypothesis and having the market and the consumers validate it. I would always say our mantra is “Test, not taste.” If I think cars should be presented like this or flow should run like that — fine, that’s my personal opinion; it’s my taste. But does it really work? Is it the best solution when we test it in the market?

Within six weeks of market testing, a heycar website was advertising and even selling cars. But just as quickly, the joint project team discovered that consumers weren’t prioritizing price — they were searching for trustworthy service and quality products. This revelation brought about a major strategy pivot.

Originally, manufacturers were pushing dealers to photograph used cars in beautiful environments and make them look perfect. Unexpectedly, however, consumer behavior showed that customers wanted transparency and realism. If the car had a scratch, the dealers needed to trust that customers would still buy the car — and they did.

Testing non-intuitive ideas like that and applying market numbers to decision-making is what BCGDV brought to the game.

Another insight that the joint team gained as time went on was that Volkswagen’s brands didn’t need to stand alone on the heycar website. Allowing competing auto manufacturers to appear actually enriched the experience for everyone.

Mathias: We started with mostly Volkswagen dealers who had a handful of other cars. But we measured almost immediately that when there was more diversity on the site, bounce rate decreased and conversion increased. When people saw a Volkswagen next to an Audi or next to a BMW or a Mercedes or Renault or whatever, we noticed more traffic converting, which means heycar’s online marketing spend was being better utilized.

With Mercedes-Benz, Renault and its subsidiary Mobilize Financial Service, and Allianz signing on to the venture, heycar has been able to rapidly scale its growth and establish close, trustworthy relationships with dealers, manufacturers, finance institutions, and insurance companies.

Florian: With the joint interest of OEMs, captives, and dealers, we offer full integrated financing and related services. Heycar is open to dealers of all brands. Having this multi-brand approach is crucial. On our platform, dealers place their listings for free, and they only pay us when we generate a lead or an online sales transaction for them. Our lead-based and commission-free model is attractive to dealers and makes us stand out.

New offerings like money-back guarantees and concierge services have also increased heycar’s scale while evolving it into a hybrid lead and e-commerce company. Customers can choose to buy used cars either online or offline, directly from more than 7,500 dealers. Creating a customer journey for both scenarios sets heycar apart.

Florian: Customer orientation is at the heart of everything we do. We are constantly evolving and creating new propositions that increasingly set us apart from our competitors. Buyers know that heycar is backed by the big brands they trust when buying a car. And close links with the automotive companies and banks open important market access and local experience for heycar and provide an important link to local dealers.

France, heycar’s most recent expansion, specifically has a rich car manufacturing history and is the second biggest automotive market in Europe. Those facts prompt some interesting thinking around consumer trends in the country.

Florian: According to a survey conducted by Harris Interactive on behalf of heycar France, 75% of French people had concerns about buying a used car, citing problems appearing shortly after purchase as the main reason. At the same time, 87% of potential buyers said they give priority to brand dealers and want to be covered by a guarantee. That’s why we offer an ecosystem that meets these expectations and presents offers based on more rigorous criteria than just price.

Since its launch in December 2021, heycar France has been consistently expanding its catalog of high-quality used cars and improving the customer experience with financing options, insurance products, and other value-added services for an end-to-end online purchasing journey.

The company’s successful international expansions have made it one of the most growth-oriented marketplaces in Europe. Today, heycar is active in Germany, the UK, France, the Netherlands, and Spain — and is far from finished.

Florian: Our European coverage is increasing. In addition to France, we launched an e-commerce pilot in the Netherlands at the end of last year to assess scalability in other markets. Meanwhile, heycar is the only platform in Europe that offers a fully integrated journey for cash, financing, and leasing in a 100% e-commerce transaction.

European growth is ongoing. Centralization is bringing together our local teams within the heycar Group to commence an exchange between experts. Centralizing the teams makes us stronger, and the enormous amount of knowledge we can now share between experts means we are equipped for any challenges that come our way. The resulting one-platform approach allows us to move forward more quickly with our developments and planned expansions. Not only do we want to operate across Europe, but we are now operating as a transnational team.

We have achieved a lot over the past five years — but I’m very excited about what is still to come!

For more information on heycar, go here.

Learn about the future of consumer attitudes and buying behavior in this report.

Interested in joining BCGDV? See our current vacancies.

Find us on Twitter @BCGDV, LinkedIn, and Instagram.

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BCG Digital Ventures - Part of BCG X

BCG Digital Ventures - Part of BCG X

BCG Digital Ventures, part of BCG X, builds and scales innovative businesses with the world’s most influential companies.