In his previous role as UK marketing director at Peugeot, if Mark Pickles wanted to boost awareness of a product he would simply shoot an ad and pay for a prime time slot on TV.
It’s a different proposition as managing director of Free2Move Lease UK, the brand that was formed two years ago from the merger of Citroën Contract Motoring and Peugeot Contract Hire and is part of Free2Move – PSA Group’s mobility brand.
“The way we will build awareness is by growing our sales so by being present in more parts of the market and by growing our sales in that market,” Pickles says. “We’ll build reputation and we’ll build new services and products over time.”
Pickles joined Free2Move Lease UK as commercial director in September and was appointed MD when Duncan Chumley left to pursue other interests in December (see fleetnews.co.uk, December 17, 2018). He admits he is “still on a learning curve” with the brand.
“It was too good an opportunity to pass up,” he says. “While I can’t pretend I’d got to the bottom of the sales and marketing, I could see the potential in the business and I could see, above all, the team and the progress that had been made in rebranding, which is a brave thing to do for an established business.
“Coming in two years into that journey I can see some immediate opportunities.”
Pickles is currently reviewing how Free2Move Lease UK “attacks the market” and where its strengths lie.
“At the moment I’m testing everything as anyone new to a business does,” he says.
“I go and say, ‘show me, do we do this? Don’t tell me we do this, show me. Do we do it well? We’ve got lots of KPIs and indicators, lots of customer satisfaction data, which is very strong and positive but show me the things we don’t do well, show me the opportunities’.
“It’s exciting when you do that because you think ‘OK, these are the results we’re achieving today and if we can attack these 10 things better wow, what is the potential for the business?’ And it’s huge.”
Pickles anticipates growing the number of new vehicle contracts Free2Move Lease UK sells this year by 30% compared to 2018 (a mixture of renewals, conquests and growing its penetration with existing customers), followed by further growth of 15-20% in both 2020 and 2021.
Those predictions are based on the market remaining stable and a “soft and sensible Brexit”. If a ‘hard’ Brexit occurs, Pickles believes “the rate we fall by should be less than the market”.
His confidence comes on the back of a “strong” start to the year with sales in January up 35% year-on-year, although January 2018 was “slightly weak”.
Pickles says January 2019 saw pent-up demand, where people who had deferred ordering a new car while the new WLTP fuel testing regime was introduced, came back into the market, although he acknowledges there is still uncertainty about how WLTP will apply to company car tax from April 2020.
He believes growth this year will come through the dealer network and wants to focus on the core business i.e. captive finance and the immediate opportunities there before expanding Free2Move Lease’s multi-marque proposition.
Multi-marque is currently a “small but growing part” of the business, although Pickles declines to reveal numbers.
“In terms of the priority, it’s a lower priority, but it’s not a case of ‘if’ we’ll grow that business, it’s more a case of ‘when’,” he says.
“We’ve got lots of opportunities on the captive side of our business which are huge. Therefore, I want to make sure we exploit all of those before I go fishing in the next pond which is bigger, but has perhaps got many more predators in it.”
Pickles says that Free2Move Lease is “sensible” in its approach to multi-marque and has no desire to be “the biggest leasing company on the planet”.
He is sticking with Chumley’s aim of 10% of the volume being multi-marque in three years’ time but “won’t live or die by” that number and will review it every year and decide whether to accelerate it or not.
“We’re not going to go out and buy that business at huge cost because it doesn’t make sense strategically. To get to a scale on multi-marque that would give us a massive competitive advantage it is way more than 10%, it would have to be 50% to 60% of our business, and that’s not very realistic in the next three years.”
However, 10% is achievable in Pickles’ view.
“If I look at our medium and large corporate customers, most of them will have at least 10% of their cars or vans with someone else. Therefore, if we can do a good job with those people and provide that service, there’s your 10% straightaway,” he says.
“Let’s say I’ve got a customer who may operate a medium or large fleet of Peugeot or Citroën vans and we’ve been trading with them for many years. However, the senior management team or the owner of that business drives a Range Rover, a Mercedes or a BMW. In the past we weren’t able to offer those products. Today we can and we are able, therefore, to simplify the procurement process for that business. That’s an example of one of the strategic sides of our multi-marque business. So, at the moment, it’s more of a defence strategy than an attack strategy.”
Opportunities in going electric
Pickles believes one of the biggest opportunities lies in electrification, with all PSA Group’s UK brands (Peugeot, Citroën, DS and Vauxhall) expected to bring out new plug-in hybrid electric vehicles (PHEVs) and pure battery electric vehicles (BEVs) over the next two years (see fleetnews.co.uk/psagroup).
“We’re not new to electric, we’ve had electric vehicles (EVs) before, but the scale of them and the amount of our sales that will be electric – either hybrid or full electric – is going to accelerate very rapidly,” he says.
However, first he believes there is a need to educate fleet customers, particularly SMEs, about total cost of ownership rather than focusing on the headline rental.
Pickles is also keen to overcome drivers’ concerns about range.
“For some customers, EVs will meet 95% of their mobility requirements but there will be that ‘I want to take my summer holiday in the south of France and I like to drive’,” he says.
“That’s going to take a few days in an EV if you’re going a couple of hundred miles then recharging so we will build extra product and service around that. We can solve that problem through short-term rental or through a car sharing agreement or whatever that might entail.
“I know a lot of people have already been out into market with products and withdrawn them or found them very expensive or very hard to make money from, but we’re looking at all of those.
“Those will give us a real opportunity to emphasise the Free2Move brand. The clue about what we will do is in the title: we’re not just providing you with a car, we’re providing you with freedom and mobility.”
At the moment Free2Move is largely European-focused with car sharing schemes in Paris and Madrid, and a Free2Move mobility-as-a-service app which has yet to be marketed in the UK.
But Pickles believes there will be opportunities in the future. “At the moment we’re quite traditional, but our growth potential is in those two words – free and move,” he says.
Telematics key to growth
Free2Move Lease’s telematics offering, Connect Fleet, which launched last year (see fleetnews.co.uk, April 27, 2018) is a “big part” of Mark Pickles’ growth plan.
Free2Move Lease is able to take data, such as maintenance alerts, fluid levels and speed, direct from Peugeot, Citroën and DS vehicles, enabling a proactive approach to maintenance and mileage management. Customers can also choose to have a telematics box fitted to non-PSA vehicles.
Servicing, MOT and excess mileage reminders, and a servicing booking line are standard, while for £6 (plus VAT) Free2Move Lease UK will book and manage mileage, servicing and MOTs to help avoid excess mileage/missed servicing charges. It will also act as a point of contact between the driver and the dealership and customers can receive regular reporting on the maintenance status of their vehicles.
For £10 a month, the fleet management pack adds the ability to monitor fuel consumption and mechanical alerts and to view vehicle usage reporting based on hours/timings. The eco driving pack (£11 a month) monitors the eco performance of drivers and suggests how it can be improved. The highest level (Geolocation for £12 a month) allows customers to locate vehicles in real time and receive point of interest notifications when a vehicle enters or exits a defined zone.