In addition to retaining its place as number one premium brand these are the priorities for Mercedes’ fleet boss.
Accolades don’t come much higher than Fleet News New Company Car of the Year, especially for a business which aims to put fleet at the heart of what it does.
Mercedes-Benz launched the all-new E-Class in spring 2016.
It marked a huge step forward for the brand in the executive car sector, bringing new levels of comfort, technology and efficiency to market.
Company car drivers can choose between diesel, petrol and plug-in petrol hybrid variants, as well as saloon or estate body styles.
Rob East, Mercedes-Benz head of fleet, said fleet sales of the E-Class are up by 26% this year, with 4,296 saloons and 1,112 estates shifted since January.
A new 2.0-litre diesel engine, available in 150PS and 195PS power outputs, has been designed for future real-world emissions regulations.
It contains features to ensure NOx treatments work efficiently even after cold starts or when ambient temperatures are low.
The driving environment in the new E-Class differs to the conventional set-up in the executive car sector.
Two 12.3-inch screens create a ‘wide-screen cockpit’ containing virtual instruments in the direct field of vision of the driver as well as an infotainment display above the centre console.
Driver assistance systems set the E-Class on the path to autonomous driving.
Assistance from the steering is available with the optional Drive Pilot, as well as camera-detected speed limits feeding into the adaptive cruise control.
Safety systems can also take evasive action in various situations to reduce the likelihood of crashes, or reduce the severity of impact.
Fleet News: Why should fleets consider the E-Class?
Rob East (RE): Market response to the car has been phenomenally positive.
I think it’s like a tour de force in terms of technology.
We held a fleet event recently and we demonstrated some of the active safety systems, which received high praise.
While the exterior design is evolutionary, the interior is a real step forward. It’s got a real sense of occasion.
Customer feedback has been positive and I think it’s an aspirational product.
How is Mercedes-Benz perceived in the fleet market?
RE: We made a statement to become the number one premium car brand (Daimler global sales) and we achieved it four years ahead of plan.
In the UK we’ve been on a journey. Our compact car range has never been stronger.
It signifies and demonstrates the huge shift of where we’ve come from to where we are today.
We invested in ‘brand sharpening’ to make the brand much more appealing to a wider audience.
We were admired but not necessarily desired. We were premium but perhaps appealed to an older audience.
We’ve changed that dramatically with the new A-Class and I think we are now seen as a really cool brand.
Sales have grown by 124%. In 2010 we sold 75,000 cars (fleet – 35,914). Last year we sold 168,414 cars (fleet – 93,128) in the UK.
How has the fleet team changed since you joined in 2009?
RE: We got some feedback that we could be inconsistent and quite difficult to deal with. Arguably we didn’t have the most competitive product from a fleet perspective either.
We’ve worked really hard to be more consistent and be easier to do business with.
Fleet has become an ever more important part of our mix and we think there is now more convergence between the fleet and retail channels than ever before.
Moving forward we’ve got four priorities. At the centre is maintaining our position as the number one premium brand, a position we have held for the past 25 months (all fleet channels).
We want to be easy to consider, easy to buy from and easy to stay with.
Do you think fleet and retail customers get the same level of service?
RE: We are mindful that fleet customers don’t always get the experience that the retail customers do, even though they expect the same level of customer service.
We want to use customer experience as a differentiator, it’s very much work in progress but we want to deliver what is absolutely the best level of service.
There are multiple owners of a fleet customer, be it fleet manager or leasing company, and we will take those stakeholders on the journey with us.
We want to make sure fleet customers and drivers aren’t the forgotten customer.
Have you seen a shift away from diesel?
RE: For Mercedes-Benz ‘E-Mobility’ is a priority.
There is a considerable shift in consumer demand towards electric. Certain cities are banning diesels and countries are becoming much more sensitive.
In the UK market, there has been a significant shift. Market share is only 4% but accounts for more than 90,000 vehicles.
The product development shows no signs of slowing down and battery technology is improving by the day.
Our current portfolio has a suite of electric products in it. We have battery-electric B-Class and the new Smart electric range.
Our plug-in hybrid variants will increase with GLC shortly and every new car we launch from now will have a plug-in hybrid variant.
In 2018 we are launching a diesel plug-in hybrid which will give fleet drivers all the benefits of plug-in along with the fuel economy of diesel.
Will there be developments of connected technology?
RE: There is lot of discussion and speculation around this technology – we were early to market in 2014.
We recognised that customers wanted to interact with their car in new ways.
The leasing industry was nervous when we launched, but that is changing.
Shortly we will launch a Mercedes me connect business proposition.
It will offer a much broader telematics suite, addressing some of the requirements for an end user and a fleet manager.
We believe connectivity will form the basis for all our mobility solutions.
Are you concerned the exclusivity of the brand will be affected by higher volumes?
RE: The growth reflects two things: a much broader product portfolio and the fact the market has shifted towards premium brands.
Finance products such as PCP have helped to fuel that growth.
I’m not concerned about exclusivity I think our growth just reflects a broader spread of product and a fundamental shift in the market.
Has it been a challenge to protect the residuals?
RE: For us it’s all about having a balanced and sustainable channel mix. If you look at our overall volume rental is less than 7%.
We are showing growth this year but we do 80% of our rental volume in the first half of the year.
Motability is an incremental opportunity. We see no risk because across their 600,000 car portfolio the amount of Mercedes in context is pretty small.
We have less than 8,000 in Motability.
The really important message is about managing the sales channels effectively and making sure we don’t overheat any particular channel.
Retention forms a big part of East’s plan for the future of Mercedes-Benz fleet.
“We’ve got a lot of work to do. One of the key priorities for us is for every time fleet customers touch the brand it is exemplary,” he said.
“We need to show that fleet customers get this really consistent brand experience.
"The Holy Grail for us is that when they come to replace their car it’s a no brainer to stay with us. We see it as a real differentiator, if we get that whole customer focus piece right that will be ideal for us.”
Pictured: (L) Rob East, Mercedes-Benz Cars UK's head of fleet and Matt Dyer, LeasePlan's managing director.