Aiming for 2 million vehicles in 2020

ALD's Mike Masterson (pictured) looks forward to growth in a variety of geographies and segments in this excerpt from a longer interview in the Fleet Europe 98. Read the full interview in our online magazine (p. 44).

It's been a year since ALD International went public. And it's been a very good year, says Mike Masterson, reviewing the annual figures for 2017 and looking forward to even brighter days with new customer-centric mobility services. 

At the presentation of your annual report, you said ALD aims to add another 8 to 10% to its fleet size this year. Is that really achievable?

“Less than four years ago, we marked our one-millionth car. This March, we passed the 1.5-million mark. That's because our fleet growth is accelerating, from about 7% per annum up to 2011, to 9.8% last year. So it's not just achievable, it's something we have already delivered. That's why ALD has risen from being a mid-range player to leader in Europe.  

As for individual segments, our corporate business continues to grow strongly: by 7% last year. The penetration of service leasing in the corporate sector is increasing, so there is plenty of growth potential.

Nearly 20 years ago, we were a first mover in partnerships, and we’ve developed a lot of expertise in this area, creating win-wins with our partners – banks, manufacturers, mobility providers, insurers, electricity providers – both financially, and in service delivery. That’s why our partnership business – a maturing segment, with huge coverage – still managed to grow by 14% last year. In private lease, we experienced 40% growth last year. So that’s also clearly an opportunity. 

We feel pretty optimistic about the business in the upcoming years and we’re comfortable with our 8 to 10% annual growth prediction. Meaning that we’re aiming 2 million vehicles in 2020 and 3 million in 2025 of which then 1 million will be in B2C.”

Diesel sales are under pressure in Europe. Will the share of diesels in your fleet drop?

“The strength of this industry is the heavy rotation of our fleets. By the end of 2019, we'll only have Euro 6 diesels. But ultimately, it's about finding the best solution for the customer, based on TCO and what the driver needs. So we're not betting for or against diesel.”

As the mix of diesel and petrol cars and their alternatives varies per country, does that give you flexibility in terms of remarketing?

“I would think that this helps to balance the portfolio. As does the fact that we're increasingly reselling to individuals, exporting more – 20% and rising – and also developing private lease, some of it as second lease of used vehicles."

Another thing on everyone's minds are the possible effects of WLTP. What do you think the impact of the new European vehicle test procedures will be?

“Difficult to say, since the rules in each country in terms of the impact of WLTP on registration tax are not yet very clear, even at this late stage. But overall we're hopeful WLTP will produce credible CO₂ figures, which will benefit the entire industry. It's just that the transition will be difficult, particularly between coming September and September next year, when there will in effect be two CO₂ ratings for each model.”

Will WLTP speed up the transition to alternative powertrains in fleets?

“Yes, if linked to a CO₂-based scrappage plan. On its own: I'm not so sure”.

Final question on mobility: BMW and Daimler recently announced that they would join forces on mobility services. Do you foresee that over time they could become a competitor for fleet management solutions?

“Yes. But we're looking at a huge market. We currently have about 16% of the corporate market. If we had a million private leases by 2025, we'd still only have 2% of that market. So there’s plenty of room. And there will still be a need for someone to manage all those vehicles. That's a huge opportunity for us, and it outweighs the competitive pressure.”

This interview is an excerpt of a longer interview published in Fleet Europe magazine N° 98. Read the full interview in the online magazine (p. 44)