Interview with Jochen Schmitz
Jochen Schmitz is Head of International Fleet at Volkswagen Financial Services. In the interview, he talks about the current changes and challenges facing the fleet market – and how his team is supporting customers during these dynamic times.
Mr Schmitz, you have already been working for some time in the fleet business. Has the company car business changed much?
Up to around five years ago, the market was relatively static. But it has gained significant momentum since then.
Why is this?
The fleet market is facing major challenges. On the one hand, the market has to deal with changing regulations at EU and national level from time to time and, on the other hand, new mobility solutions and trends are increasingly gaining traction. In the past, customers could at best choose between a petrol or diesel model and between full-service packages or more process-oriented fleet management. Now the range of options available is significantly greater: electric mobility, progressive RAC solutions, ride sharing, car sharing, company bicycles, e-scooters, mobility budgets – fleet managers are faced with countless mobility alternatives. Flexible and integrated solutions are in demand more than ever. Therefore the task today is to find an appropriate answer for the individual customer.
How has this changed your work?
The level of consultation effort has increased. Ultimately, our goal is to provide individually-tailored and solution-based support for customers to enable the right decisions to be made in each case to meet the particular fleet objectives. We jointly analyse the requirements and integrate suitable offers into the fleet and mobility management package. A single-source solution is the best way to do this.
Does this also apply to electric mobility?
Definitely! Electric mobility is the biggest game changer in the fleet business and in the market in general. Correspondingly, we are seeing great interest in electric mobility – including the associated services such as charging and the necessary infrastructure for this at home or at work.
So this was not the situation a few years ago?
Yes, that’s right, although we have been advising customers comprehensively with regard to electric mobility since 2018. Electric vehicles are becoming increasingly interesting for companies at present, especially from an overall cost perspective. This means that fleet operators often cannot avoid considering adding electric vehicles to their fleet. In addition, more and more regions worldwide are announcing a phase-out date for registration of combustion-engine vehicles, while some manufacturers have also signalled that they will cease developing combustion engines from a certain effective date. Not forgetting: electric mobility can have a positive effect on corporate responsibility – for example, if it is used as a central instrument for achieving own CO₂ targets. But electrifying a fleet is not an easy challenge therefore we are permanently supporting our customers in this field.
In what way?
Because procuring electric vehicles alone is not enough. Companies have to address numerous other topics, such as the establishment or expansion of an in-house charging infrastructure or charging management. In addition, driver profiles should also be evaluated and agreed. Last but not least, the various state funding opportunities have specific differences at national level.
How do you support your customers in this respect?
Our Key Account Managers at Volkswagen Financial Services are trained in electric mobility; they support the customer together with their colleagues from the Volkswagen Group and can devise an integrated approach. Apart from the topics mentioned, we also support customers in relation to the car policy and cost analyses for potential use of electric vehicles compared with their hybrid or petrol or diesel counterparts.
You already addressed the trend towards holistic, integrated mobility solutions. Which specific changes are you finding with your customers?
Fleet customers are increasingly merging travel and fleet management – and calling for a combined solution of these two areas. In concrete terms this means: travel- and fleet management related topics should be handled centrally by one provider – from billing through to reporting. Of course there are still companies with the classic company car policy, but the demand for new solutions is definitely noticeable. Take a company in an urban environment, for example, which wants to retain young professionals. It may make sense in this case to extend the classic company car model with public transport or car sharing offers. The bottom line therefore is that professional mobility should be tailored to the living situation and environment of the employees. The solution thus lies in more flexible and multimodal mobility services.
The classic company car will therefore soon have outlived its purpose?
No – the desire for the individual company car remains strong. We also believe that the car will still account for the greater part of mobility in the future. Mixed by other mobility offers.
What is demand like for the ID at present?
Excellent, and we are anticipating that as soon as the first drivers are using the ID.3 as fleet vehicles and showing colleagues that they are everyday vehicles, then their long-distance counterparts will also be converted.
Has the COVID-19 pandemic changed procurement behaviour?
That’s difficult to judge. Initially we noticed a certain hesitancy with renewals and procurement – as in the market as a whole. In the first lockdown phase, in particular, some customers had expressed a desire for contract extensions. But then the order numbers quickly started going up again. What is noticeable in any case is that customers are asking much more frequently about flexible contract solutions. In the long term, diversification into multimodal mobility will also serve to enhance the classic car business. What’s more, digitalisation will also gain currency in the fleet business. For example, during the lockdown phases, many employees, company car drivers and mobility users discovered that they could accomplish many tasks online and remotely from home. This will also be very noticeable in post-Covid times when it comes to fleet-related issues and, for example, increase the demand for digital solutions for fleet business.
What would you wish for in 2021?
That’s obvious: That we can return again to post-Covid normality. And, of course, I would like us to continue working with our project teams with the same level of commitment. I am certain that Volkswagen Financial Services will become the most important partner internationally for fleet mobility by 2025.
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