Edouard Vaujour is a passionate entrepreneur. He is the CEO of Knave, a French company that enables the implementation of all-term rental services (short, medium, long) on mobility assets in distribution networks, companies and municipalities. The system couples stock financing, carried by Knave, with tools for using this stock – mobile rental applications, usage insurance, customer hotline, etc. – developed and operated by Knave.

Conception of KNAVE

Edouard says that many external factors are pushing the automotive market into a rapid transition to electric vehicles, which threatens its current dealerships’ model: margins are essentially made up of workshop revenues. Electric vehicles require very little maintenance, so the networks anticipate a reduction in this revenue share of 30% to 60%.

“The physical traffic of the networks is decreasing sharply due to the increase in new car prices, increasing the break-even point linked to the operation of empty showrooms. Optimization of surfaces and employees’ time is becoming a vital issue.” The new market entrants are taking the lion’s share of the new electrical market thanks to a production and distribution model perfectly designed for current demand (without transition or legacy costs to manage). These players have invested heavily in digital by simplifying the online customer journey to the extreme. “So, it has become very clear that integration of new profitable services and digital investment are the two essential elements for the sustainability of retail networks.”

Digital transformation – the way ahead

The difficulty with online sales is that it remains a niche market – with a maximum of 20% of product sold all products combined. Over 80% of sales are made in physical networks, so automakers must include very fragmented distribution networks into their digital strategy, which is very difficult to do.

The only way to address both consumers and dealerships’ needs is to bring a mass-market solution to the dealerships, opines Edouard. There is such a mass-market service that escapes the networks: short-term rental. For a few years now, manufacturers have been trying to reappropriate this service, but the projects have come up against the reluctance of distributors: the projects are approached as cost centers and not profit centers.

Innovative solutions

Renting centers in dealerships can only be cost centers at the moment for reasons like: (i) set up and maintenance costs of digital renting solutions, (ii) inventory financing and (iii) insurance for renting operations which are very hard to obtain and costly on local level.

KNAVE allows the network to transform this cost center into a profit center by taking ownership of all inventory and thus mutualizing insurance, technology and operation costs on a very large scale. The integration of the KNAVE system by manufacturers into their distribution networks at no cost allows them to devote the entire program budget to customer acquisition campaigns. The KNAVE brick is the hook to outbid the digital customer journey offer: the long-term trial and the multimodal mobility harmonized in all territories.

Leadership traits

I believe freedom should be the general rule and any constraint an exception.

Edouard urges start-ups should stop over-estimating SaaS business models capacity in automotive physical distribution networks. Dealerships have a well-earned reputation of being one of the hardest networks to penetrate, and they are very reluctant to any change. A SaaS model alone cannot succeed without physical presence. “In the automotive industry, the winners of the coming years are going to be the ones with ‘boots on the ground’. Even the current online pure players have declared their intention to open dealerships network throughout the world and have started deploying heavy capex on local workforce.”

The Success Mantra

“Owning the stock is owning the market. It is the hardest thing to do and to have in automotive, but everything derives from owning the asset: user data, supply management, control over the new and secondhand markets.”

KNAVE is the only solution positioned as the ‘gateway’ to the brand’s universe. Thanks to its KYC, its financing capacity and its digital solution, the company can seamlessly link the different stages of the customer’s life: product discovery through short-term use, leasing, sales and distribution of insurance to individuals. It is the first time in the automotive industry that an independent player has been able to set this up and deploy it with the major worldwide players.