“2021 was amazing for Arval, 2022 will be full of innovation”
In 2021, Arval’s leased fleet grew by 6.4% to just under 1.47 million, and its new-vehicle orders were up 15% versus pre-Covid year 2019. On top of that, it expanded into three more countries. A remarkable performance, says Arval Chairman and CEO Alain van Groenendael (pictured): “I’m confident we have outpaced the market and our competitors – and our growth is 100% organic.” In an exclusive conversation with Fleet Europe and Global Fleet, he explains how.
First, the facts – as presented in Arval’s activity results for 2021, released today. Last year threw up some very specific challenges for leasing and mobility providers like Arval. Not only was there the continuing effect of the pandemic, but the automotive industry also had to deal with the ongoing microprocessor shortage, which is choking off the supply of new vehicles.
Nevertheless, Arval managed to grow its leased fleet to 1,469,753 vehicles, up 6.4% versus 2020. In addition, new-vehicle orders increased by 15% compared to 2019, the last year before Covid-19 hit. A few key figures:
- The Corporate fleet amounted to 1,032,065 vehicles in 2021.
- The Retail segment grew by 11%, thanks in large part to Private Leasing (+24%).
- The Mid-Term Rental segment grew significantly, also by 24%.
- Arval Beyond, the strategic plan focused on mobility and sustainability, is bearing fruit, with bike leasing up 54%, MaaS users increasing tenfold, and 30% of Arval’s new orders being EVs.
- Together with its partner Element, Arval extended its geographic coverage to include the three Baltics: Latvia, Lithuania and Estonia.
- Arval Re-Lease, a used-vehicle leasing service, is now live in seven countries.
Mr van Groenendael, what catches your eye in Arval’s 2021 results?
“After strong growth in 2020, we again recorded strong growth in 2021, with our fleet progressing 6.4%. As we have seen in these past quarters, Arval’s growth is 100% organic. None of it is due to mergers or acquisitions. And I’m confident that with this strong growth, we have outpaced the market and our competitors.”
It’s not just the 2021 fleet that shows remarkable growth, also your fleet orders.
“Yes. We see a strong level of activity from our clients – 15% higher than 2019, which is the year before Covid. Because of that high volume in orders, and due to the vehicle delays with OEMs, we now have a stock of orders in excess of 200,000 vehicles. So that in itself is a figure with huge potential for 2022.”
Why do you reckon Arval will have stronger growth than the market and its competitors?
“The number one reason is that Banque BNP Paribas, our unique shareholder, has a very strong, solid and loyal customer base. This gives us access to retail and business customers in all possible domains and in the various entities within the group.”
“On top of that, we have reached our highest ever Net Promoter Score (NPS; a measure of customer loyalty and satisfaction, Ed.) The result was higher than the target we set for 2025. And finally, there’s the strength and the return of our partnerships, the number of which is continuously growing.”
Can you tell us a bit more about your recent partnerships?
“Over the last month, we’ve signed partnerships with Emil Frey, with MG in Germany, Austria and Italy, and more to come. We have a partnership with Astara, and a global partnership for mobility with Ridecell. And last Friday, we concluded an exclusive digital partnership with Jaguar Land Rover and BNP Paribas for nine countries in Europe by 2023.”
“This last deal is truly a BNP Paribas partnership, as it also includes Cetelem for personal finance, Cardif for insurance – and Arval. It’s a full global offering, including car loans, renting and leasing, in an entirely digital way. It will allow clients and dealerships to select the product that best fits their customers. This offering will afterwards also be presented to other OEMs, to our bank customers, and it will become the new digital standard for our industry.”
Turning from partners to customers: for various reasons, contracts have to be adapted and extended now more than ever. How has Arval been dealing with that?
“Our teams have been extremely pro-active in searching for solutions with customers who need to extend and/or adapt their contracts. We have changed no less than 400,000 contracts, adapting either the duration, the mileage, or both. We have provided payment facilities to customers with treasury issues. We have provided mid-term rental solutions to customers coping with the long delivery times of vehicles ordered. All of which is appreciated immensely by our customers. That is one reason why we had such a high NPS score – which in turn leads to both new and renewed business.”
In last year’s excellent results, what do we see when we zoom in on Arval’s corporate leased fleet?
“Private individuals continue to be a strong source of growth, up 24% compared to the previous year. And the retail segment as a whole – Private plus SMEs – grew by 11%. As for our corporate business: it continues to be extremely strong, with local corporate fleets and also thanks to our international activity and global customer base, via our alliance with Element in the U.S.”
“With that alliance and our various partnerships, we add up to more than 3 million vehicles. Fleet growth with our partner Element is spectacular. At present, we have about the equivalent of 50 major global clients, representing a total of more than 300,000 cars. About five years ago, that figure was no more than 50,000 cars.”
How fast is it going with Arval’s electrification?
“We had set a target to hit 500,000 EVs by 2025, but it’s going much faster than that. What we’ve seen in the last months of 2021 is that more than 30% of orders are EVs. That trend is continuing today. And that is 30% of our total business, irrespective of business type or geography. That’s why we’ve re-set our target to 700,000 EVs by 2025. Out of a total target of 2 million, that makes 35%. Adding to that is the success of a programme we’re calling ‘One EV, one tree’. Up until today, we’ve planted more than 70,000 trees.”
What will 2022 bring for Arval?
“It’s tricky to predict anything, because the OEMs still have delivery issues. What we do see, however, is that the strategic direction we took in 2021 has delivered very good results in terms of electrification, mobility, partnerships and customer satisfaction. That’s a strong foundation, and we’ll continue to build on it. Plus, we’ll continue to innovate.”
Which innovations can you reveal?
“Already in March, we’ll launch several innovative products. The first one is called Arval Adaptive. It’s a new subscription-based business model. Then there’s Arval Pro, which was designed with professionals in mind: it offers segmented and tailor-made services for the self-employed, for independent professions, and also for last-mile delivery companies. And the third one is Arval Connect.”
“At Arval, we now have more than 400,000 cars equipped with telematics. Arval Connect is a special service for customers with connected cars to manage their TCO, their CO2 emissions and their driver safety. Based on the tests we have done with some clients, we see we can reduce up to 25% of accidents; we can consult and provide up to 30% of EVs for a fleet; we can reduce fuel consumption by up to 16%, and we can reduce TCO by up to €70 per vehicle per month.”
“Arval Connect comes with a strong commitment to customer satisfaction. In other words: our customers pay a fee for the service, in return for which Arval commits to hitting some targets. If those targets are not met, Arval will reimburse the customers for the fees they have paid.”
Such a commitment will be most welcome considering that, due to market pressures, lease rates are going up…
“Indeed, prices are going up for tyres, for car servicing, for all kinds of car-related services. The increase will be between 4% and 8%, depending on the type of service and the country.”
What can we expect in 2022 in terms of the Arval Beyond strategy, in particular the launch of new mobility solutions?
“This will be another year of growth and acceleration for Arval Beyond, with the launch of innovative new products. We will have a strong focus on consulting, as this is the first step towards implementing new mobility solutions and services.”
“Last week, for example, we launched the new edition of ‘The Journey Goes On’, our campaign to assist customers with planning ahead and finding the most appropriate sustainable solutions, considering the current state of the automotive industry.”
“In 2022, we’ll also have a strong axis on bold and strategic partnerships, as they are allow us to offer integrated solutions to our customers. Such as the partnership with Jaguar Land Rover on mobility financing solutions, which I mentioned earlier.”
“And we’ll continue to strengthen our offer on connectivity, launching those new connected services in March that I talked about.”
“Also, we’ve identified a need from corporates, professionals and the self-employed for an LCV offer, combined with services. And we’re also about to launch an innovative flexible offer for individuals on a subscription mode – stay tuned for that!”
“And of course, we keep building on our historical partnership within the Element-Arval Global Alliance, and a unique value proposition for Arval’s international customers.”
Final question. If 2021 was a year of 100% organic growth, will that still be the case in 2022?
“We’re really proud of our organic fleet growth of 6.4%. But that won’t prevent us from carrying out external and highly targeted growth operations, if such opportunities should arise. We’re always open to new partnerships and to expansion – as long as it benefits Arval, our customers and our employees.”
Arval is one of the Founding Partners of the Connected Fleets Conference. The 2022 edition will take place on 28-29 March in Amsterdam, where Arval will share its insights and expertise on this year’s theme, ‘Sustainable & Connected’. Click here for more information and to register.