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Beneath the static industry average, the vehicle ownership experience in Mexico is shifting

Economic-impact events affecting Europe’s fleet and finance automotive industry have become more frequent Engaging in forecast scenario analysis rather than relying on a singular base case has become the new normal Absolute values of battery-electric vehicles sit above petrol powertrains in three major European used-car markets The fleet and finance industry faces a period of high uncertainty in Europe. Geopolitics and trade are increasingly strained, Chinese OEMs are rapidly expanding into the region, and major fleet suppliers are consolidating. Electrification in Europe remains uneven too. Proposed clean corporate vehicles regulation could introduce national zero- and low-emission registration targets for large companies. In this era of rapid change, the future is hard to predict. For fleets, this means adaptation and flexibility must be built into strategies. A major part of planning is maximizing money recovery when vehicles are de-fleeted. To do this effectively, residual value (RV) managers weave necessary levels of uncertainty into their forecast and optimize vehicle values at the remarketing point. Additionally, comparing forecasts to remarketing results and adapting accordingly is key. How can this be done effectively when the future looks so blurry? Furthermore, is the crystal ball brighter for some powertrains than others? These topics were discussed in detail during two sessions at the Fleet Europe Days 2026 in Lisbon, Portugal. Increasingly Frequent Crises “As an industry, we have become significantly more resilient over the past 10 years. For some, this came as a bit of a surprise, but a positive one,” commented Christof Engelskirchen, chief economist and director professional services at JD Power Europe & Australia. Christof Engelskirchen, chief economist and director professional services, JD Power Europe & Australia, presenting at the Fleet Europe Days 2026 in Lisbon, Portugal. “Working through the more frequent crisis-moments that companies have endured, it gave them some strength and resilience. They are taking a more proactive stance, anticipating more and acting more decisively,” he outlined. Engelskirchen highlighted that economic-impact events affecting the automotive industry have become more frequent. Geopolitical and trade tensions, plus EV policy uncertainty, are causing fleets to adopt a more responsive and flexible mindset. This climate is not expected to change over the next couple of years. “We are getting used to accepting ups and downs as the new normal,” noted Engelskirchen. Differing Fleet Impact These crises have varying impacts on RVs. For example, in Spain, trade values expressed as a percentage of the original list price (%RVs) for 36-month-old cars at 60,000 km dropped dramatically during the financial crisis in 2008 and 2009. Engelskirchen pointed out that during the COVID-19 pandemic, RVs rose across major European markets before entering a period of normalization. The impact of these events can differ substantially between powertrains too. Engelskirchen showed that in Spain, petrol’s bump in value retention rates during Dieselgate were bigger than diesel’s %RV decline. Analysing these outcomes can help when forecasting the impact of arising economic-impact events. “The past and current performance of used car markets remains a very important bellwether of future RV development. There are many different influencing factors for RVs, and some of these will have an impact that is very much informed by the past. For example, lifecycle depreciation and the role of the brand are factors that have been quantified and analysed for many years,” explained Engelskirchen. Christof Engelskirchen, chief economist and director professional services, JD Power Europe & Australia, presenting at the Fleet Europe Days 2026 in Lisbon, Portugal. Additional definitive examples include GDP and inflation. If either rise, this generally causes RVs to increase. Conversely, if used-car supply, new-car price pressure, OEM push dynamics, or interest rates rise, RVs generally drop. Fleet Scenario Analysis So, with economic-impact event frequency higher than usual, tying forecasts to one set of assumptions could leave fleets vulnerable. Instead, having multiple forecast scenarios can help companies prepare for sudden market changes. These scenarios differ from base cases, which are the forecasts carrying the most confidence or probability behind them. “Scenario analysis needs breadth without losing relevance. Look too narrowly and you reinforce your existing worldview. Look too broadly and the scenarios become generic. The art is finding the right balance,” explained Engelskirchen. Christof Engelskirchen, chief economist and director professional services, JD Power Europe & Australia, presenting at the Fleet Europe Days 2026 in Lisbon, Portugal. For example, a fleet could use an EV transition disruption scenario, which they associate with a moderate probability. In this situation, government and industrial policy becomes less supportive of EVs, while buyers and owners adopt a wait-and-see attitude. Compared to the base case, this scenario would have a positive impact on internal-combustion engines (ICE) and full and mild hybrids. However, it would have a negative impact on battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs). “There is no limit to the number of scenarios a bank can have. However, scenarios that closely mirror the base case are less critical. More importantly, the exercise exposes vulnerabilities in the base-case forecast itself,” said Engelskirchen. “Scenario analysis is also very much influenced by the bank’s fleet portfolio risk profile. If a portfolio’s exposure is high, both number and type of scenarios they look at may differ,” added Christian Schneider, director analytics at JD Power Europe & Australia. Therefore, a fleet’s bespoke composition and affects which forecast scenarios will be relevant. For example, a fleet with a low share of electric models would be less concerned about a scenario that disrupts EV RVs. Fleet Powertrain Forecasts As companies make the electric transition at varying speeds, understanding how different powertrains are expected to retain value is important. This can help determine future fleet composition, replacement cycles, and risk allocation. During a panel at Fleet Europe Days 2026, Schneider analysed the projected absolute RVs of BEV and petrol C-segment SUVs. He explained that by December 2028, BEVs are expected to see higher values on average in this segment than petrol models in the big five European used-car markets. This widely aligns with current RV performance. In Germany, Spain and the UK, absolute BEV RVs sat above petrol models in October 2026, according to JD Power Residual Value Intelligence. In Italy, BEVs were marginally ahead by €135, while they trailed petrol cars in France by €1,497. Meanwhile, absolute PHEV RVs currently sit between BEVs and petrol models in most countries. “In terms of the outlook, we see PHEVs performing worse than BEVs. This is because they are currently pushed more in the bigger markets via incentives for fleets,” noted Schneider. Christian Schneider, director analytics at JD Power Europe & Australia, presenting at the Fleet Europe Days 2026 in Lisbon, Portugal. Schneider also highlighted that Chinese OEMs have competitive technology and pricing in the PHEV sector. These models are not currently affected by the European Commission’s countervailing duties, which only apply to BEVs. However, the EU will limit the number of hybrids, including PHEVs, imported from China, The Guardian reported. The annual quota of 350,000 vehicles is expected to come into force in December. “Competition and vehicle capability are increasing substantially in the PHEV market. The powertrain type may receive a second wind on the back of better range and more affordable prices,” highlighted Engelskirchen. Powertrain Forecast Reliability Schneider analysed the forecast reliability of BEV RVs compared to petrol models. He outlined that for BEVs, knowing specifications such as battery chemistry, capacity, and charging times is essential for accurate BEV forecasts at a model and powertrain average level. Schneider also noted the importance of understanding how models and technology will change over the next few years. This can help show which launches add RV pressure on current vehicles and which do not. Christian Schneider, director analytics at JD Power Europe & Australia, presenting at the Fleet Europe Days 2026 in Lisbon, Portugal. For mass market powertrains today, including BEVs and increasingly PHEVs, there is plenty of data to build solid forecasts. Challenges to current forecasts include the risk of changes in industrial policy around EVs plus the emerging competition in that space, particularly from China. In turn, EV forecasts are somewhat more exposed to these challenges. However, ICE and hybrid models are also interconnected and therefore affected by these challenges. AI and Fleet Forecasting During the panel, Schneider was asked about the overall reliability of RV forecasting compared to five years ago. He explained that forecasting models are now fed richer datasets and that the industry has learned a lot from recent crises. Looking five years into the future, the role of forecasting may also notably change. Christian Schneider, director analytics at JD Power Europe & Australia, presenting at the Fleet Europe Days 2026 in Lisbon, Portugal. “Most companies dealing with forecasting are aware that data is key and are collecting more of it. I think this points towards more reliable forecasts. On the other hand, economic-impact events are becoming more common. So, you need to be more prepared,” said Schneider. As companies become better equipped from a data perspective to prepare scenarios, the increasing capability of AI presents further opportunities. However, this also comes with inherent risks. “AI will play a bigger role in building statistical models. It could also help define forecast scenarios a little bit better. However, I think we must be careful, especially when we speak about completely AI-based forecasting models, that they do not get a black box. When a forecast turns out to be wrong, it is important to understand what exactly went into that forecast and which assumptions were used,” warned Schneider. Engelskirchen also emphasised the value of providing context for both current and forecast RVs even on an individual model trim level. This can be done by providing transparency around ongoing assumptions. Navigating the Never Normal Overall, fleets are now learning to navigate the “Never Normal”. This was a term coined by keynote speaker Peter Hinssen, who gave the event’s first presentation. Throughout the summit, the key theme of uncertainty remained. However, the takeaway was not that creating plans or forecasts are now redundant. Instead, strategy should be able to adapt quickly yet purposefully to disruptions. Understanding the assumptions underpinning base case forecasts and their reliability alongside multiple probable scenarios can help fleets thrive when the next change hits.

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