Mercedes-Benz achieved an unprecedented back-to-back win in the most improved fleet manufacturer of the year category after impressing judges with its continued investment in new models and support for the corporate sector.
The carmaker has ambitious growth targets in fleet, announcing plans last year to top the fleet sales charts in the UK by 2020. That ambition remains in place, according to fleet and remarketing director Nick Andrews, but it doesn’t simply relate to registrations.
“We also want to be number one for customer experience,” he says. “However, we don’t want to sell cars for the sake of selling cars – it’s not number one at any cost.”
Mercedes-Benz has already tasted life at the top, hitting No1 in March for true fleet sales among premium brands. Head of fleet Sally Dennis is keen to continue that momentum. “We are on plan and we are working towards maintaining that position,” she says.
Andrews adds: “We can become No1 without becoming complacent.”
Fleet News: Mercedes-Benz has been through a revival in fleet. How did you achieve this?
Nick Andrews: Four years ago, we recognised that we had to appeal to a younger audience. That was not just about expanding the range; it was also about the development of the brand – and that’s subliminal. We have made the brand more dynamic and more accessible. We have taken the traditional barriers away.
Sally Dennis: We have to maintain the momentum of the customer communications, dating back to 2012, that our doors are open for business, we are approachable. Our field teams work closely with customers to understand their business and how we can work with them and get our cars on their choice list but also to help the fleet manager to answer questions from HR, FD and driver.
NA: We now have 11 strategic account managers and we are seeing success on the back of this team. Fleets want direct contact with the manufacturer. It works, so we will invest in more.
SD: People investment is key; it makes the difference. Not everyone knows Mercedes-Benz, we can’t assume that they do. We have a real task to spread the word and find more .
FN: The A-class was arguably your comeback car. You now have a wider range than ever; what’s next?
SD: We have the GLC , which is a car we’ve never had before. It’s in a huge segment and will attract customers that have never touched a Mercedes-Benz before. At the moment, we have less than 30 models; by the end of next year we will have 40-plus. We will also have more hybrids – we are on a CO2 journey. Plug-in is part of our future strategy – our objective is to have a hybrid in the line-up for all new models . It will be as regular as having an estate with a saloon.
NA: For consumers, hybrid is the ideal proposition because there is no range anxiety. The order take for the C350 is bonkers – demand is phenomenal and is outstripping supply. I wish we could build more cars.
SD: It would be ideal if all new houses had a charging point. We are being held up in development by other industries.
FN: With all the talk about moving into new segments, how do you keep the focus on your core models?
NA: Our focus internally is ‘aces’: A-, C-, E- and S-class. We have to get our core strategy right because everything else is niche. We have the right product and account management, and we work closely with customers to get it right as they evaluate all the manufacturers.
FN: How do you see the future of the connected car?
NA: We recognise that cars will be more connected which is being driven by consumer demand. Technology development will be a focus area for the future. With Connect Me, a large proportion of our model range can be connected to individuals via their smartphones to unlock/lock the car, check fuel levels and tyre pressure, and control heating. If the car is in an accident, it can contact our customer centre and the emergency services.
FN: Some leasing companies are concerned about the degree of control systems like Connect Me will be able to exert over the car and the driver. What do you say?
NA: Our message is we want to be joined up in our approach. There has always been an underlying fear over ownership. Has it materialised? No. it’s not in our interest to do anything but work closely with the leasing industry.
SD: This technology is coming; it’s the way the world is going. So let’s work together to find a solution.
NA: Of course we want to know what individual customers feel about our car. But we take a tripartite approach to work with the end user and the leasing company to benefit all. We aren’t out for our own gains. We want the leasing industry to be successful for our mutual benefit.
FN: So what are the benefits of Connect Me to Mercedes-Benz?
NA: It’s about the consumer having better interaction with the product. We differentiate through technology and our interior design. There is no underlying strategy to take control of the customer.
FN: What trends are you seeing in the fleet sector?
SD: The decision-making process is speeding up for drivers who are doing a lot of decision-making themselves but, at the same time, there is more complexity in tenders. For example, for CO2 and safety questions. Salary sacrifice is also slowing down the process because a lot of drivers don’t read the terms and conditions.
NA: Price is still at the top of the tree. Finance, HR and fleet all have their own demands. Our value as a premium brand is to help a company attract and retain employees. And now we have a broad range to go with an organisation’s requirements. We hope this will help us to get to more restricted badge fleets.
FN: While you are keen to grow fleet sales, you’ve also increased daily rental registrations in the first quarter of the year. Why?
NA: It’s seasonal. We know our plan for this year – it’s planned to the single car – and it’s weighted to H1 over H2. Rental is important to us and we embrace our rental partners – it’s a great generator of used cars for our retailers and it’s a permanent demonstration of our products. The key to success is ensuring you have enough demand when the vehicles are returned.
FN: What action have you taken to reduce running costs for fleets?
NA: Part of our strategy is to have residual value leadership in the premium sector. Leasing companies need to have confidence that their forecasted residual values will be achieved – we want to bring that certainty.
Mercedes-Benz has been making real efforts to widen its exposure to retail and company car drives, through sponsorship of golf, tennis, fashion week and, of course, through its F1 team. “Our message to fleet is ‘we have a car for you’,” says Dennis.
Fleet is of increasing importance to Mercedes-Benz and it’s a market that remains buoyant this year.
“There is confidence in the economy; the fleet market is up and it will continue to grow,” Andrews says.
“We continue to enjoy a company car culture in the UK and there are no indications that will change. We have exceeded all targets on CO2 and BIK, and the car is still an important part of employee job searches.”