LeasePlan operates in an extraordinary market that has been strong and resilient for over 50 years. Looking ahead, we can achieve so much more. There is a megatrend from car ownership to car subscription services that is driving structural growth in our markets. To capitalise on this opportunity, LeasePlan’s strategy is to become the world’s first fully digital Car-as-a-Service business. Our digital approach will enable us to enter new market segments, delivering digital services at digital cost levels, and ensure we fully capitalise on our global scale and market leading positions. Ultimately, our aim is to create the conditions for further profitable growth in the years ahead.
To capture the growth opportunities we see ahead of us, we have developed five strategic priorities, each of which is supported by a detailed implementation roadmap.
01. Continue implementation of Digital LeasePlan programme to enable accelerated profitable growth
To capture the growth opportunities we see ahead, LeasePlan is building a digital business model, which will enable us to deliver digital services, at digital cost levels, using the latest technology. Our objective is become the world’s first fully digital Car-as-a-Service company, digitally integrating our services with an exciting range of new and highly specialised services, skills and competencies, through alliances with third parties. Within this context, LeasePlan’s initial focus is to make a step change in service and cost by digitising core processes and customer journeys. This will not only help us to provide our customers with the best possible service experience, but also lead to digital cost levels. We will also use our growing digital capabilities, services and pricing power to accelerate our expansion into the fast-growing SME and Private segments. In addition to enabling growth in all Car-as-a-Service market segments, our Digital LeasePlan programme will support the development of new digital platform businesses that leverage existing core LeasePlan competencies towards new markets and customer segments – an approach which has already delivered significant results in the form of CarNext.com.
A key element of our digital strategy is to completely digitise our customer journeys. This will not only help us to provide our customers with the best possible service experience, but also lead to digital cost levels. Our initial focus is on implementing the following customer journeys:
- Help me choose my car online – providing corporate drivers with an effortless online experience, enabling them to choose and customise their lease vehicle
- Digital SME onboarding – offering SME prospects the possibility to select and order their car online through an interactive showroom
- Following my fleet – enabling fleet managers to easily manage their fleets via a new Fleet Manager Platform
- Keeping me safely on the road – creating a seamless, integrated RMT offering for our drivers
Next Generation Digital Architecture
Our digital infrastructure is based on a Next Generation Digital Architecture (NGDA) a versatile, dynamic and modular system, that will enable us to:
- Realise an entirely new generation of smart fleet products and services by leveraging data from our 1.9 million vehicles
- Create and scale new internet-based businesses and marketplaces that leverage our existing core competencies, and integrate third-party platforms into our digital Car-as-a-Service ecosystem
- Digitise every aspect of our customers’ journeys in a frictionless way and at digital cost levels
02. Accelerate growth in Car-as-a-Service via digitally enabled growth in new market segments
Today, LeasePlan is the global leader in the large and growing Corporate segment of the Car-as-a-Service market. However, the ownership to subscription megatrend is also driving growth in the SME, Private and Mobility provider segments of the market, where penetration rates are extremely low. Going forward, LeasePlan’s Car-as-a-Service business will develop digital growth strategies for the SME, Private and Mobility provider segments. These strategies will leverage a direct digital sales and service approach via online platforms such as our SME Showroom, as well as strategic partnerships with OEMs, financial institutions, and leading mobility providers. In addition to expanding into new market segments, we will further focus on our mature and highly profitable Corporate segment business via actions including: the further roll-out of our popular ‘full package’ EV solution, which includes home and office charging; the introduction of new products and services in our Insurance & Damage Handling and Repairs, Maintenance & Tyres (RMT) businesses; the launch of a Group-wide LCV approach to capitalise on the growth in last-mile delivery; and the digitisation of our core customer journeys to further improve service levels while driving down costs.
03. Grow CarNext.com
CarNext.com is a pan-European digital platform for high-quality used cars and a significant proofpoint of how we use digital technology to develop new platform businesses based on existing LeasePlan core competencies. Through CarNext.com, customers can now buy or subscribe to a wide range of high-quality used cars both from LeasePlan’s European Car-as-a-Service fleet and, increasingly, from the fleet of trusted third-party suppliers. In doing so, we are disintermediating the wholesale and local dealer market and building a pan-European digital marketplace. In addition, CarNext.com operates a B2B online auction platform for professional buyers, and provides third-party suppliers with an end-to-end solution to resell their cars in an efficient and financially attractive way. Going forward, CarNext.com will continue to enhance the service it offers its customers by investing in its digital platform and data analytics capabilities, exploring financing solutions for B2C customers, and growing its network of trusted third-party suppliers and partner services. A key focus will continue to be the further development of the ‘Asset Control Tower’, via which CarNext.com maximises the value of the cars on its platform (including those of trusted third-party suppliers) by determining the best geography and channel in which the cars should be marketed (B2B, B2C, Used-Car-as-a-Service).
CarNext.com is managed by its own dedicated management team. We continue to review various strategic alternatives for CarNext.com, including a potential full or partial separation of CarNext.com from the Group, whereby LeasePlan would continue to sell its used cars through the CarNext.com B2B and B2C platforms.
04. Aim to achieve net zero tailpipe emissions from our funded fleet by 2030
Climate change is the biggest challenge we face as a society, and as road transport accounts for around 20% of global CO2 emissions, we are determined to play our part. LeasePlan has therefore set the ambitious goal of achieving net zero tailpipe emissions from its funded fleet by 2030, taking a leadership role in the transition from internal combustion engines to electric and other alternative powertrains. Our sustainability strategy has three key focus areas: shaping the future of low-emission mobility; strengthening our contribution to societal wellbeing; and reducing our own environmental impact.
For further information on our sustainability strategy, please refer to Sustainability Strategy.
05. Drive operational excellence
LeasePlan is achieving operational excellence through the implementation of an integrated pan-European operating model that leverages our scale and best practices across European countries. In this context, in 2016 LeasePlan launched its ‘Power of One LeasePlan’ operational excellence programme in Europe. This has enabled us to implement proven best practices across European countries (e.g. steering to independent service providers in RMT and rolling out a standardised insurance proposition to our Corporate customers) and capture efficiency gains at a headquarter and country level. While the ‘Power of One LeasePlan’ has now been largely embedded in the organisation, our commitment to operational excellence and effective cost control remains at the forefront of our strategy, supported by our Digital LeasePlan initiative and our cross-company ‘Performance Excellence’ programme. Through this programme, our overall company targets are translated into specific KPIs for individual employees, creating a culture of ownership, accountability and performance across the company. In addition, in 2019, LeasePlan introduced a zero-based budgeting methodology to further embed a culture of cost discipline across the company.
Driving sustainability through our business
Global LCV Strategy
The LCV market is growing strongly as a result of its importance to last-mile delivery services and the desire to reduce the number of heavy goods vehicles (HGVs) in urban areas. To support the specific needs of businesses that operate LCV fleets, LeasePlan has developed a new LCV proposition.
“These vehicles are fundamental to our customers’ business, and they are revenue generating, so the most important thing about LCV leasing and fleet management is to understand the importance of keeping vehicles mobile and on the road,” says Mark Lovett, Head of Commercial Vehicles.
How does the LCV solution work?
LeasePlan provides its LCV customers with a reliable end-to-end service through the entire process. Our teams advise customers on which vehicle to choose, and on the specifications that will make a vehicle fit for purpose. We also understand the importance of matching vehicles with the right products and services to maximise their ‘uptime’.
As we continue to roll out our LCV offer, we’ll be looking to expand our electric LCV (ELCV) offer. For LeasePlan, this will be an exciting market opportunity and a new focus area.
“LCVs are fundamental to our customers’ business.”
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