German Automotive Company

Developing and deploying a predictive model for residual value forecasting of vehicle portfolio, resulting in more accurate forecasts and higher margins

Challenge

• Large portfolio of vehicles across the globe
• Need to accurately determine accurate monthly payments and residual value on leasing contracts
• Central computation of residual value difficult as criteria vary from one country to another

Solution

• Worked together with internal team to integrate multiple data sources from the past 12 years together
• Deployed linear regression model refined by incorporating our forecasting expertise
• Applied state of the art model improvements to gain in transparency and control over the learning and predictions

Business impact

• More accurate prediction in residual value compared to existing model
• Increased transparency and explainability of results
• Enables future improvements as model was designed with scalability in mind, ensuring that results stay accurate as new data becomes available