Special targets for growth
FCA has ambitious plans to grow its true fleet sales with large corporates and SMEs, while simultaneously developing its core funding offer to appeal to the emerging private lease market.
The strategy crosses European boundaries, although the company’s greatest aspirations are in those markets where fleet accounts for a sizeable proportion of annual registrations, in particular, the UK.
Alessandro Grosso, EMEA (Europe, Middle East and Africa) head of fleet and business, is the man tasked with achieving FCA’s growth targets. His responsibilities extend across the sales operation, including international corporates, national accounts, low and medium enterprises and new mobility services, such as car pooling and car share, working with a team of 400 throughout the region.
Grosso’s FCA career spans almost nine years, taking in logistics and fleet roles in Italy, all spent working across every FCA brand – Fiat, Alfa, Jeep, Lancia, Abarth and Fiat Professional.
He is seeing the market change, fuelled by the rise in people opting out of company cars in favour of a cash allowance, leading to a rise in grey fleet. It’s a market FCA is keen to capitalise on.
“There is a personal contract hire challenge in the UK as more people avoid the business car and take the cash to spend on their own car,” Grosso says. “It is important for FCA to offer those solutions, but we have to be able to manage them for profitability.”
Aligned to the private lease offering is FCA’s web-based affinity scheme, Privilege, which is offered to staff of its business partners.
“We can offer them the chance to choose the right deal and buy at the best discount and the best lease rate,” Grosso says. “It gives us another entry point to the big corporates and we have already sold more than 10,000 units across EMEA. The best markets are UK, Italy and France.”
Across Europe, FCA enjoys a 5% share of true fleet car registrations, but its position in the two biggest markets – Germany and the UK – presents potential for further growth.
“The UK and Germany are targets for growth. Here we see 50% of the EMEA fleet, but our market share is below that of the best markets for us and gives us opportunity for growth,” Grosso says.
His solution includes appointing a dedicated international key account manager in the UK to help build relationships with the large corporates, working alongside new UK fleet and remarketing director Iain Montgomery. Previously, that responsibility lay at a pan-European level, with the UK sitting on a framework arrangement. However, it failed to recognise the UK’s greater level of fleet sophistication and different taxation policy to mainland Europe.
Adjusting the structure will enable FCA to demonstrate to European fleets based in the UK that it understands the market.
Grosso is bullish about the product opportunity awaiting FCA in 2020 as it begins its electrification strategy. The company’s first hybrid, the Fiat 500, arrives shortly followed by plug-in hybrid versions of the Jeep Compass and Renegade. A full electric 500 is scheduled for late 2020/early 2021 as is a plug-in hybrid and fully electric Alfa Romeo.
FCA created an eMobility department a year ago dedicated to maximising the opportunities offered by electrification. It has been working across the business, bringing together dealer network training, customer experience and sales operations to ensure everyone understands the new models.
“You have to have all that in place to be successful,” says Grosso. “We have a target of 30% penetration in Europe by 2030.”
The Nordics, Netherlands and Belgium have moved quickest on electric, with Germany and the UK lagging behind due to taxation and mindset – “for example, in Netherlands people are more willing to drive small vehicles that are suited to electric”, explains Grosso.
He adds: “I believe that if we want to be the first and to deploy the numbers that we want, then we have to attack the low and medium enterprises and the private market.”
FCA’s pricing will be competitive, but of equal importance is its adherence to brand values to deliver the optimum solution with no compromises. Therefore, electric Jeeps will need to be completely capable off-road, while Alfa Romeos must live up to their performance heritage and Fiats will offer practical solutions.
“Electric will be a strong part of our strategy, especially with the emissions regulations, but we also have new engines for petrol and they will be important,” Grosso adds.
“We see diesel in decline, particular in private where it is down to 30% of the market, but it is important in the business channel where it is still 50%. In 2020-21, diesel will still be a strong part of the business market for those organisations with bigger mileages.”
Electrification forms one strand of FCA’s mobility strategy, which also encompasses connectivity and autonomy. All FCA cars now feature connected technology linked to services and data to support the customer.
FCA is also moving into shared services with a number of projects, including with Wind Tre, an Italian telecoms company which is using the new Panda Connected by Wind for its corporate car sharing.
Grosso is mindful of the core business, though: “These are good opportunities across Europe – car sharing is an ideal solution if you need something for a few minutes – but we are a carmaker and our main focus is to sell cars not services.”
He adds: “I foresee people will use their car to go from a rural area to the edge of the city. Then they will park and use public transport or car share to get into the city. It will be a multi-way of transportation.”
The final component of the FCA EMEA fleet strategy centres on the relationships it has with leasing companies, especially its own captive funder Leasys, which will enable FCA to grow business via the broker channel.
“Leasys is our best player in the market,” Grosso says. “2019 was strong. We had the right strategy to leverage PCH and PCP, and also the broker channel. Now we have to take the right steps with the big corporates. These are the important channels.If we want to increase of volumes, we have to increase them with Leasys. But we can’t only do it with them; it has to be with all the big players.”