17 Nov 20

Fleet Europe Summit: “2020 has taught us that the future is unpredictable”

Moderator Steven Schoefs promised the viewers “a visionary discussion of the future of our industry,” and the CEOs for the Executive Leasing Panel did not disappoint. Traditionally they meet face to face, this time – and after a few glitches – they spoke from various locations; and of course the changes wrought by Covid-19 were top of mind. 

“Due to the pandemic, we’ve been working remotely for months now, and with success,” observed Tim Albertsen, the CEO of ALD. “That success means that even as the pandemic goes away, remote working won’t completely disappear. But more structurally, change will come because the millennial generation that is now joining the workforce has different demands and expectations when it comes to mobility.”

Accelerator for change

“If anything, the pandemic has acted as an accelerator for change and innovation in terms of mobility,” added Marco Lessacher, Alphabet’s CEO. Lease companies have had to adapt, and adapt fast.

“The current environment means more homeworking and less mileage, but also a specific need for individual mobility. It’s interesting to note that the drop in new vehicle sales – from 62 million to 50 million – was driven mainly due to physical lockdowns. So there will still be a need for cars, and an increased need for flexible solutions.”

But flexibility is just one of the innovations banging at the door. Perhaps other changes should get priority, argues Marchel Koops, CEO of Athlon. “Given the choice between flexibility, electrification and connectivity, our priority will be electrification. In this, we’re responding to the direction of travel of our customers. In fact, one third already have KPIs for zero emission by 2025.”

“Those three priorities are difficult to disentangle,” counters Leasys CEO Giacomo Carelli. “To give but one example: we will be launching a carsharing solutions that uses EVs, which are connected.”

Consulting services

Jochen Schmitz, Head of International Fleet at Volkswagen Financial Services, concurs that electrification is the top priority: “Fleets won’t be able to avoid the topic of full EVs. Corporations are part of society. It is part of their corporate responsibility to develop sustainable mobility. But full EVs also help them reach their own CO2 targets. And by now, EVs can offer a better TCO and traditional fossil-fuel vehicles.”

“It will be the short-distance drivers who will be the first movers, as they will demonstrate that EVs can be used without trouble to achieve cost and sustainability goals. The job for lease companies is to offer consulting services to our clients, to make sure that this transition can be achieved at comparable cost, or better.”

“Electrifying fleets is a journey, and we’re at the start, not the finish,” says Mr Lessacher. “Vehicles need to be exchanged in suitable use cases. This is where our consulting role comes into play.”

“The residual values of EVs will grow stronger as the target group for EVs increases, not just in the corporate sphere but also among private customers. This growth will have a positive impact on residual values.”

Amazing job

That doesn’t mean connectivity is any less of a priority for the lease companies. And in future, even more so, says Mr Carelli: “Recently, OEMs have been investing in the connected capabilities of their new vehicles, and we in the fleet and mobility industry will be able to leverage this investment to our advantage. We must strive to merge all mobility apps into one, as the customer ultimately wants simplicity. This is a major task that awaits us.”

This has been a challenging year, but those challenges have taught all involved some positive lessons, Mr Lessacher claims: “Lease companies have done an amazing job in managing a major crisis for which nobody of us had a handbook. In 2021, as the economy recovers, we expect to have a good year. Not just because of the economic recovery per se, but also because of the ongoing demand for innovation, and the fact that 2020 has shown our customers that we are reliable partners.”

Equally upbeat, Mr Schmitz predicts that “the transition from fleet to mobility will not be slowed down by the pandemic. It’s a logical evolution, and our customers will continue down this path, as they have before the pandemic. In fact, the crisis accelerated the change towards mobility.”

“I’m optimistic for 2021,” says Mr Koops. “We expect a good year. But if 2020 taught us something, it’s that the future can be unpredictable. So the only thing I’d like to predict, is that we will help our customers identify and solve their issues in 2021. We won’t be expanding geographically, just in terms of the services we offer.”

“Leasys is fairly young, so we will be expanding into our 12th and 13th market in 2021, and also diversify our product offering,” Mr Carelli offers. 

Authored by: Frank Jacobs