The past, present and future in the automotive aftermarket
Erik Staat Head of Global Operations, LeasePlan
Since the Covid-19 pandemic hit us last year, it soon became clear that we had to make the safety of our clients and drivers (and of our employees and partners) our top number one priority. Our message at that time was to stay at home and only use your lease car when needed. With the coming back to normal operations, we see an increase in vehicle usage leading to more service events. With this and the uncertainty of the global chip shortage leading to supply chain disruptions, working in partnership with your leasing provider has never been more important in ensuring your fleet is mobile on the road.
The past: impact on vehicle usage and services
Garages, tyre fitters and body repair shops had to close down in many countries. Vehicles were locked up in the garages and could not be picked-up. So we had to make sure that clients affected received a replacement car to ensure their mobility.
In the first three months of the Covid-19 the number of vehicle service events dropped by 50%. The number of damage repairs went down even more significantly: close to 60% versus normal ‘pre-Covid’ operations. Seasonal tyre changes were delayed since there was no urgent need to do so. People stayed at home, cars were not being used so why bother changing your winter tyres to summer tyres. New vehicle issues appeared like dried out wiper blades, battery failure, but also more complex issues like water entering engines coming from the fuel tank due to the vehicles standing still for a longer period. This leads to the rusting of parts like your differential and your vehicle not being able to drive.
Your leasing partner as first point of contact At LeasePlan we actively communicated with lease car drivers to consider us their first point of contact. We were in regular touch with our network of garages and knew which ones were operating and their availability. So we were in the position to guide lease drivers to the right garage avoiding long waiting times. Together with our preferred partner network we made protocols on how to service vehicles in accordance to the new health regulations. Sanitation of the vehicles after servicing became the standard.
Once the Covid-19 restrictions were released gradually across countries, the vehicle service requests started to come in again. Because of the peak in requests we still had to manage the inflow of service requests carefully to minimize the disruption in the daily life of our clients. We supported drivers the best way possible, offering services like guaranteed slot availability and pick-up and delivery services.
The present: managing your fleet in the current automotive aftermarket
A few things became clear to me while managing our clients’ vehicle management and driver services during these uncertain times.
Managing in life vehicle events in a frictionless manner requires partnership. Partnership with your lease drivers who want to drive a vehicle which is safe, partnership with the garages executing the work to ensure your drivers are serviced the best way possible, and partnership with my colleagues across the globe who did a tremendous job taking into account the challenges Covid-19 brought to us.
Next to partnership, communication is one of the key success factors. Openly communicating to all parties involved, keeping your drivers updated in a regular fashion and telling them that LeasePlan is there to service: ‘You do the driving, we do the rest’. And we are happy to do so!
3. Keeping the vehicle in shape
Our fleet aged over the last 2 years and the average vehicle age is now 27 months vs 25 months in 2019. Contracts are being extended at the request of our clients and at the same time, new vehicle deliveries are being delayed (due to product issues caused by e.g. semiconductor shortage) so existing vehicles drive longer. An older fleet increases the chance of technical issues and more complex repairs. And here we count on our lease drivers. We trust that they treat their vehicles with good care and give it some extra attention. Here's some tips on how your drivers can keep their vehicle in shape.
4. Letting your leasing partner guide you
We see that the car parts supply chain is being disrupted due to the semiconductor shortage and logistical challenges. It impacts repair times in the garages and the pricing of spare parts. And longer repair time means your vehicle can’t be used affecting your own business. My advice: get in contact with your local LeasePlan team; they are more than happy to guide you to the right garage. LeasePlan carefully monitors the supply chain and we will do our utmost best to select the garages with parts availability.
The future: electrification and connectivity trends in automotive
One thing for sure, the automotive industry will change and this change is actually accelerated by the pandemic. Fleet electrification is the biggest one in my view. It’s going so rapidly with new OEMs entering the industry, but also the traditional parties accelerating their electrification. This will impact the after sales market. Vehicles are less complex and require less service, but at the same time workshop technicians need to be trained as cars are becoming a driving software device. Because of all the technology, damage repairs will become more complex, but at the same time this technology (e.g. ADAS: Advanced driver-assistance systems) will also help in reducing the number of accidents. And we do see that electric vehicles consume more tyres. The EVs are significantly heavier than the traditional ICE vehicles and they have more torque, ultimately leading to rubber being consumed faster.
Another development that will go into second gear is the connected vehicle. It somehow goes hand in hand with the fleet electrification, although nowadays the fast majority of new ICE vehicles being produced are connected as well. Connectivity helps us to act more proactively in managing your fleet. It will keep you fleet in the best condition and we will be able to jointly manage the mobility of your fleet. For example, by avoiding vehicles going for maintenance during peak times in your business. Maximizing uptime, we call this. Obviously data privacy needs to be ensured while dealing with connected vehicle data. This is another topic that is high on the agenda of LeasePlan together with Leaseurope (the European Leasing Association).
Let’s stay connected. We are keen to keep you posted on new developments. If you are interested, I found this nice read by McKinsey & Company about the automotive aftermarket beyond the coronavirus.