Today, LeasePlan operates in two large and growing markets: Car-as-a-Service for new cars under the LeasePlan brand and, with CarNext.com, we are active in the high-quality 3-4 year old used car market.
There is a clear megatrend from ownership to usership and subscription models taking place in both the new and high-quality used car markets. Increasingly, our customers – whether they are Corporates, SMEs, Mobility providers or Private individuals; whether they want a new car or a high-quality used car – want a Car-as-a-Service with no strings attached. In short, they want ‘any car, anytime, anywhere’. This development is being accelerated and enabled by digital disruption, market disintermediation, and the ‘blitzscaling’ of entirely new business models.
To deliver our vision of providing our customers with ‘any car, anytime, anywhere’ in a changing automotive landscape, we have identified the following strategic priorities, each of which is supported by a detailed implementation roadmap.
Our strategic pillars
01. Implement Digital LeasePlan
03. Grow CarNext.com
04. Achieve net zero emissions
05. Drive operational excellence
01. Become a ‘Digital Service Integrator’ through Digital LeasePlan
New technologies such as artificial intelligence, advanced robotics, blockchain, autonomous electrified cars, hyper connectivity, the internet of cars, and the emergence of clean, renewable energy sources are collectively creating massive disruption and uncertainties. These developments are enabling new products, services and business models, including Batteries-as-a-Service, Tyres-as-a-Service and new approaches to financing and insurance services.
LeasePlan aims to lead these developments and enhance its leadership position in our large and growing markets by becoming a digital services integrator. We will achieve this through our total transformation from an analogue business into a fully digitally-enabled business, delivering digital services through digital platforms and leveraging the latest digital intelligence technologies.
Digital LeasePlan will bring together our core Car-as-a-Service product offering with an exciting range of new and highly specialised services, some of which will be developed and offered jointly with third-parties. These products and services will all be logical adjacencies to our current business and leverage our core competencies and proprietary data.
Furthermore, through Digital LeasePlan, we will fully automate every aspect of our business to the deepest and most granular level. This will enable us to not only further grow our businesses efficiently, but also provide the best possible service to our customers.
Digital LeasePlan consists of several implementation horizons, with the first horizon focusing on delivering fully digitised customer journeys and the complete automation of every aspect of our business. Additional horizons focus on leveraging our proprietary digital intelligence and data – all of which is now being brought together in our new LeasePlan Global Data Hub – to develop a range of ‘smart’ products and services (e.g., predictive insurance and maintenance products), as well as entirely new marketplaces.
In addition to delivering cost-reduction opportunities, we expect Digital LeasePlan to generate significant long-term commercial and competitive benefits.
02. Continue to grow our core Car-as-a-Service business
In our core Car-as-a-Service business for new cars, we literally turn cars into a service. If a customer wants a car, we take care of everything: we buy the car, finance the car, insure the car, take care of any maintenance and repairs; we also put tyre on the car in the winter and the summer, we give road assistance if somebody needs it, and we also provide fleet management services to our customers. Essentially, we provide car subscriptions – like you have for your iPhone, for Netflix or for Spotify – and offer a complete end-to-end service for a typical contract duration of three to four years.
LeasePlan has been providing Car-as-a-Service for more than 55 years. We now have close to a EUR 10 billion revenue business and 1.8 million cars in our fleet. Going forward, we will benefit from our leadership position in this large and growing market by targeting disciplined profitable growth in the most attractive and service-intensive segments of the market: Corporate, SME and Mobility provider customers. Within these segments, we will build on our current offering with innovative new products and services in areas including repairs and maintenance, insurance, and low-emission vehicles. LeasePlan’s leadership position will also be further enhanced by our Digital LeasePlan programme, which will enable us to continue to grow our business in a cost-efficient manner and deliver a superior online and offline service to all our customers.
Looking further ahead, we expect autonomous vehicles to be a source of profitable growth for LeasePlan with asset-light mobility providers – such as Uber and Lyft – requiring a specialist like LeasePlan to provide the backbone to their autonomous vehicle fleets. LeasePlan is currently exploring partnerships in this area.
03. Grow CarNext.com
Launched just over a year ago, CarNext.com is a pan-European digital marketplace for high-quality used cars.
Through CarNext.com, customers can now buy, lease or subscribe to a wide range of high-quality used cars both from LeasePlan’s European Car-as-a-Service fleet and the fleet of trusted third-party suppliers. In doing so, we are disintermediating the wholesaler and the local dealer market and building out a pan-European digital marketplace.
Leveraging the data analytics of its ‘Asset Control Tower’, CarNext.com maximises the value of third-party suppliers’ cars between B2B, B2C, and Used-Car-as-a- Service (UCaaS) and by determining the best geography in which the cars should be channelled. CarNext.com also provides third-party suppliers an end-to-end solution to resell their cars in an efficient and financially attractive way and has been successful in signing up third-party suppliers to its platform.
CarNext.com has a guaranteed supply of cars from LeasePlan’s Car-as-a-Service business. As part of a global and independent player with a long operational track record and digital focus, CarNext.com benefits from key competitive advantages. These include scale; wider remarketing and partner support networks worldwide; a larger and more predictable supply of high-quality used cars; and more options to steer these used cars to the most valuable channel at the end of the initial lease contract (B2C or B2B, domestic or cross-border, buy, lease or subscribe).
04. Aim to achieve net zero emissions from our total fleet by 2030
Climate change is the biggest challenge we face as a society. LeasePlan is therefore proud to be taking a leadership role in the transition from internal combustion engines to electric and other alternative powertrains. We have set ourselves the ambitious goal of achieving net zero emissions from our total fleet by 2030, supporting the effective implementation of the Paris Agreement and climate-related Sustainable Development Goals.
Key elements of our sustainability strategy include educating customers on What’s next in low-emission vehicles, facilitating the uptake of low-emission vehicles with attractive customer propositions and transitioning LeasePlan’s own employee fleet to an electric vehicle (EV) fleet by 2021 so we can walk the talk and learn by doing.
In 2018, we were proud to introduce our ‘full package’ EV product – now available in 10 countries across Europe – to make the transition to EVs hassle free. The product is underpinned by our partnership with Allego, via which we provide LeasePlan EV customers with access to personal charge points at home and at work. In addition, to support our customers with their sustainability ambitions as they make the transition to zero emission mobility, we have introduced carbon neutral contracts through our partnership with Land Life Company. Under the partnership, LeasePlan customers will be able to offset their fleet emissions through Land Life Company’s innovative reforestation programme. Land Life Company is a leader in the sustainable and technology-driven reforestation of degraded land in the EU and US.
05. Drive further operational excellence through the ‘Power of One LeasePlan’
LeasePlan is committed to achieving operational excellence through the implementation of an integrated pan-European operating model and by leveraging scale and best practices across European countries, allowing us to achieve optimal service delivery at the lowest possible cost.
To achieve these objectives, in 2016 LeasePlan launched its ‘Power of One LeasePlan’ operational excellence programme in Europe. This has enabled us to re-design our organisational set-up, further centralising key functions, implementing proven best practices across European countries and capturing efficiency gains at a headquarter as well as at country level. The ‘Power of One LeasePlan’ has now been largely embedded in the organisation.