Ron Santiago, Managing Director, Europcar Mobility Group UK, looks at the current challenges and opportunities facing the rental market.
Agility has proven to be our most valuable asset since the start of the pandemic. With our airport business ceasing overnight, along with our domestic leisure business, our focus was to support our corporate customers as they needed to keep employees mobile during the lockdowns over the last two years. We achieved that through all areas of the business being agile – flexible in their approach to change and embracing a new way of doing things.
Supply and demand
But now we are facing some new challenges. Where we had a surplus of vehicles during the height of the pandemic – and therefore chose to reduce overall fleet numbers – we now have the opposite problem. The consequences of Covid created factory closures and materials shortages which, as has been well publicised, have affected vehicle supply globally. Along with many businesses and private motorists across the country, and even though we have strong partnerships with most manufacturers, we have found it difficult to access new vehicles. So, once again, we are applying flexibility to how we manage our fleet to ensure we can continue to serve our customers, while waiting for availability to improve.
As a consequence some of our fleet is now a little older than we would normally expect. However, with our consistently high levels of servicing and maintenance, as well as sanitisation after each rental, we are doing the best we can to maintain the standard that our customers have come to expect. We have had to have vehicles serviced and MOT’d as well, something we don’t tend to do under ‘normal’ circumstances, as our vehicles are usually the youngest fleet in the market. However, we’re living in a new world and the servicing and MOTs are necessary to ensure the safety of our customers, which is paramount to us.
A shift in gear
And it’s not just about a shortage of vehicles in the market. With the Government’s aim to end petrol and diesel vehicles in the UK by the end of 2030, fleet managers are reviewing their options, moving towards hybrid and electric, and wanting to try them out before they buy. Rental offers the ideal opportunity to do just that, as well as provide the flexibility to be an additional part of their corporate fleet mix.
These hybrid and electric vehicles will form part of our longer term subscription products that we are looking to offer once the challenge of vehicle availability has passed. There has been a shift to subscription based ‘usership’ in different aspects of our lives for years, for example, your TV subscription. We see our transition into subscription offerings as hugely complementary to our existing business – a real strength for our future.
This shift in customer behaviour has meant we need to make a change in our own station infrastructure, installing electric charge points, several of which are already in place, with more planned to roll out over the coming months.
Another ‘usership’ opportunity that we are seeing is fleet managers looking to utilise their existing pool fleet for corporate car-sharing. Our innovative new ‘Tap and go’ technology can be installed into pool cars with the option to either just install the technology and booking platform or, have access to a fleet too. Not only is this an effective method of ensuring optimum use of vehicle resources but it also means that companies no longer need to rely on ‘grey fleet’ cars. The benefit to employees is that they won’t be using their own vehicles which tend to be older, less reliable, more polluting and are not usually fitted with the latest safety features.
Staying agile will remain the watchword as we move further into 2022. Vehicle ‘usership’ rather than ‘ownership’ – whatever the duration – we will continue to support businesses to make the most of their opportunities without having to commit to potentially burdensome capital expenditure in uncertain economic times.