For VWFS, mobility and multi-brand are the future

“2020 will be an important year – for the automotive industry in general but also for us in particular,” says Jochen Schmitz, Head of International Fleet at Volkswagen Financial Services (VWFS). VW Group’s finance and fleet management pillar will focus more on integrated mobility and multi-brand services to grow its international corporate customer base.

How is VWFS doing in Europe today? 

“We have more than 21 million contracts around the world over all customer groups, but Europe remains our core fleet market – starting with Germany, our home market. Moreover Eastern Europe is growing fast. We do business with small and medium fleets and of course multinationals. Our Europe-wide dealer network gives us good coverage within the SMEs. In addition, our large and multinational customers are supervised by our local and international Key Account Management.” 

And what about growth? 

“One of our important growth segments are large multinationals. Alone among this very special customer group, we increased our new business volume, adding 55,000 new contracts in 2019. We now have more than 140,000 contracts of multinational companies in Europe in our portfolio. In 2020 we’re concentrating on improving knowledge in our network to better serve and grow in this segment.”

Don’t prospects perceive you as too much of a captive provider? 

“Our business involves both sales and consulting – and especially listening to customer needs. That’s why we’re moving from being a traditional captive provider to a more multi-brand player. For example, we experienced that a French company may prefer French brands. With our multibrand capability we are able to fulfil these needs. Although such brand loyalty may change due to developments in electrification and mobility.” 

What are your ambitions for 2020? 

“In 2020, we’ll be focusing even more on EVs, because that’s where the market is going. We’ve been advising our customers about EVs for a year and a half already. Within this scope we have created an EV consulting team, which is visiting our customers to look into driver profiles and to advise them on the new generation of EVs.”
“Another important topic are new mobility solutions. The company car is and will still remain the dominant part for corporate mobility, but we also have to consider new trends. But in this context it is very important to understand that not every trend or every solution is appropriate for all customers and all situations. Therefore, part of our consulting strategy is to think from a customer’s point of view and to focus only on the relevant innovations.” 

How?

“We’re constantly revising our mobility solutions. Besides our classic full service leasing these include smart-parking, fueling, fleet management and in the future travel management and mobility budgets. If all goes well, we’ll launch a platform soon, where customers will be able to choose their relevant mobility modules. It will be an open platform, so if a new and requested trend emerges, we can implement it easily. 

Does VWFS already offer car-sharing?

“Yes. Our subsidiary Greenwheels is the biggest carsharing company in the Netherlands and is also present in Germany. The main focus is on private customers. We also provide the financing and leasing for these solutions. But overall, Corporate car-sharing is a niche market, not as relevant as public car-sharing currently. If this might change in the future is hard to predict. 

Which other mobility solutions are emerging?

“The mobility budget for company and private use. The fact that fleet management companies will have to start with mobility management: micro-travel, inner-city mobility and last-mile solutions must also be managed.” 

What makes VWFS a mobility provider rather than an automotive finance company? 

“We’re constantly moving forward with our mobility strategy, both via our mobility unit and our stake in Fleet Logistics. We’re working hard on the merger of fleet and travel management, including mobility budgets. In the market, we see customers don’t just want solutions for company car drivers, but for other employees as well – both for commuting and business trips.”
“In metro areas, a growing amount of customers have both a fleet and a mobility policy. They look to their supplier to provide solutions for both. So we also have to satisfy employees who have a mobility budget, without a car. Presumably in 2020, we’ll have a solution for this trend with our mobility platform.”

Let’s turn to the Americas. North America is expensive to penetrate, South America is still immature. Does that sound right?

“In North America, we work together with our colleagues from VW Credit, Inc. – VCI for short – very closely. In addition to that VCI has started a substantial partnership with Merchants, a fleet management company in the US. They provide VCI by offering additional fleet services. Therefore we are able to fulfil all fleet customers requirements. This is helping us to increase our fleet volumes in the US. Especially our European customers appreciate the same high level of services, which we can offer in the US now. Further south, Mexico and Brazil consider VW a ‘home brand’, because we have such a long manufacturing history there. But yes, the fleet market is still in its infancy. Nevertheless, this offers great potential for growth."

How about VWFS elsewhere?

“We’re also growing well in Australia, which is very similar to the European fleet market and largely multi-brand. Consequently the services we offer in Europe are also highly requested by our customers in Australia – also from a TCO perspective.” 

Final question: will fleet management and leasing continue to globalise?

“Yes. Although customers usually like to work together with several local heroes they focus their international business on a single- or double-source strategy. And that is not only the case for large multinationals, but also for smaller companies. I don’t see that changing. On the contrary, in the future this trend will even grow. But as always: There is no “one size fits all”, so special requirements in the local markets have to be considered.