I’m Matthew Freeman, Managing Consultant at Solera Consulting. Part of my role is to analyse the true cost of vehicle ownership, and the biggest cost, by far, is depreciation. That’s why Residual Value (RV) is so critical to Vehicle Manufacturers. A strong RV doesn’t just shape the used car market; it influences competitiveness in the new car market, brand credibility, and long-term profitability.
At Solera, through our cap hpi business, we provide automotive data analytics that are the benchmark for wholesale and retail performance. Partnering with RWA Automotive, whose automotive business intelligence platform empowers OEMs and dealer groups, we’re helping manufacturers turn RV from a lagging indicator into a proactive competitive advantage.
The UK’s new car market is split between fleet and private buyers. But both sides operate on finance models where monthly affordability depends directly on RV strength.
This is one reason why premium brands grew so strongly over the past two decades. Their cars held value, which meant they could often be leased for less per month than mainstream rivals. In short, strong RVs made their cars more competitive.
Today, as new brands - particularly Chinese entrants - expand in the UK, RV will again decide who grows and who loses share.
The UK is a right-hand drive market. That means most cars sold here stay here, with no easy option to shift oversupply abroad. For OEMs, that makes controlling used car channels critical.
Vehicles remarketed through franchise networks achieve stronger values. Buyers pay more for the reassurance of a branded dealership, and retailers pay more to secure the best cars. But if cars leak into independents or supermarkets, used car margin can suffer, and so does RV. This is exactly where Solera and RWA Automotive collaborate. It’s a joined-up approach that ensures residual values are managed actively, not left to chance.
Residual value is also a measure of brand strength. A car that holds value signals desirability and trust in the marketplace. For established OEMs, protecting RV protects reputation. For new entrants, a competitive RV is essential to be seen as credible.
That insight allows OEMs not just to measure RV, but to shape it, reinforcing brand strength over the entire vehicle lifecycle.
Electrification makes RV even more important. Under the UK’s Vehicle Emission Trading System (VETS), manufacturers must sell a rising percentage of EVs, with steep fines for failure. Yet EVs remain more expensive to build than ICE vehicles.
The way to close the affordability gap is through RV. If an EV holds strong value, its monthly finance cost can match that of a petrol or diesel equivalent, making the choice easier for buyers. We’ve seen this before: hybrids took off when PCP payments aligned with traditional models. Today, the same principle applies to EVs. OEMs that manage RV effectively will accelerate adoption and stay compliant without sacrificing competitiveness.
At Solera, we deliver the industry’s most trusted business analytics in the automotive industry. At RWA Automotive, the mission is to make that intelligence actionable for OEMs and dealer networks. Together, we give manufacturers:
OEMs face pressure to maintain share in a flat market. They can’t always control demand, but they can control RV performance. By working with Solera and RWA Automotive, OEMs gain the tools to protect competitiveness, accelerate EV adoption, and maximise auto dealer profitability.
Residual value is no longer just a by-product of sales. It’s a strategic battleground. OEMs that get it right will:
Through the collaboration of Solera and RWA Automotive, RV management becomes proactive, data-driven, and strategic. Together, we’re helping OEMs see the whole picture and compete with clarity in an increasingly complex market.
If you’re interested in our platforms and solutions, visit RWA Automotive OEM’s solutions page and Solera cap hpi’s website.
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