Investment in its CarNext.com business and IT infrastructure saw LeasePlan Corporation’s profits fall 79% to 31.8 million euros in Q2.
The net result compares to 152.4m euros for the same period last year.
This year’s financial performance has been impacted by 14m euros cost increases largely related to its CarNext.com used car sales platform and a decision to stop development of LeasePlan’s Core Leasing System in favour of a Next Generation Digital Architecture, leading to an impairment of 92m euros.
During Q2, LeasePlan also saw its serviced fleet grow 2.8% to 1,856,000, and the number of vehicles sold through the CarNext.com platform rise 35% to 15,700.
Tex Gunning, CEO of LeasePlan, said: “The car as a service market is expected to grow substantially over the next five to 10 years driven by the mega trend from car ownership to mobility as a service.
“In order to deliver these new mobility services to millions of customers, we need a business model that is entirely digital, meaning delivering digital services at digital cost levels and leveraging our rich data sources through AI technologies,
“This requires a traditional architecture that is flexible, scalable and adaptable to new emerging digital platforms and digital technologies.
“Traditional process-oriented IT architectures are not fit for purpose in the digital world and therefore we have taken the strategic decision to stop the development of our core leasing system in favour of a more dynamic and modular next generation digital architecture.
“While leading to an impairment charge this quarter, this architecture will enable us in the future to offer a new range of smart fleet products and services to millions of customers with significant expected efficiency benefits.
“We also continued to increase our investments in Carnext.com as it ramps up its marketing activities in support of the increasing volume of vehicles being sold through its marketplace.
“As such, we are particularly pleased to see Carnext.com continue to grow strongly and successfully increase the volume of third-party vehicles sold through its digital marketplace.”
CarNext.com sells used ex-lease cars to consumers and it now has 37 delivery stores in 22 countries. It launched in the UK in August last year.
Overall B2C volumes were up 35% to 15,700 vehicles, retail sales up by 56% and runrate B2C sales penetration at 23%.
LeasePlan also launched Tess, a pilot app that allows private lease customers in the Netherlands to share their cars with friends and family.
Last year, for the first time in a decade, LeasePlan was dislodged as the UK's second biggest leasing company in the FN50.