Star Quality: Rob East, head of fleet, Mercedes-Benz
Looking back at a turbulent 2017 but with plenty of new initiatives on the horizon, Mercedes-Benz’s head of fleet, Rob East, sits down with Craig Thomas.
How has 2017 been for Mercedes-Benz’s fleet operations?
“Very positive. Certainly, it’s been a tough market. We were always very prudent in planning for 2017. We recognised there was always going to be an element of political and economic uncertainty. But if I look at the fleet market, the market is down 5% but we’re still showing positive growth of 2%. So, broadly it’s been another successful year.”
What’s been particularly successful for you, model-wise, in the fleet market?
“Our three key products are A-, C- and E-Class. What’s great to see is the level of demand we still have for A-Class, despite the fact the car is now almost in its last full-year life cycle.
“Where we’re very fortunate with A, C and E is that they’re all seen as the strongest car in the sector. C-Class is still remarkably strong and it’s having a facelift in mid-2018. And we’re now one year into life of E-Class and I think certainly the feedback we have on that car is nothing short of phenomenal.”
How do you see 2018 shaping up?
“We’ve got a number of product initiatives or launches that will be fundamental to our success.
“One is new A-Class, which we’ll see first in June. For us that’s particularly exciting and I think is a really great statement in terms of future Mercedes-Benz product.
“The second exciting product element for us in fleet is the launch of diesel plug-in hybrid C- and E-Class, which will probably be in around Q3 and certainly we can see opportunities for those cars. They will have all the benefits of a battery electric car, but also the real-world fuel economy of a diesel.
“Our strategy is really clear: we want to maintain our position as the number one premium fleet brand through sustainable growth.
“We’ll also be looking at how we can continue to develop our e-mobility strategy as we recognise that we’re in a very rapidly changing world. I think there is a greater level of end-user and driver acceptance of different types of powertrain and it’s not just about preparing our offer from a product perspective and a sales offer: it’s how we make sure we prepare our retailer network for this fundamental, once-in-a-generation shift.
“Another element that we’ll continue to focus on is around the connected car, because again we recognise that fleet managers, end users and lease companies want to engage with the vehicle in a slightly different way. We’ve seen a huge uptake level in our ‘me connect’ proposition, which is very much a retail proposition. so from Q1/Q2, we’ll launch ‘connect business’, which is a full telematics suite that gives a much greater level of functionality, particularly to fleet managers.
“The final element that we see as a massive opportunity is all around the kind of fleet customer experience. One thing we’ve done recently is that we’ve replotted what would be the optimum customer journey – particularly user choosers, because we recognise that they buy with the same mentality as a retail customer. But they don’t always get the experience so we’re looking at those key interventions along the customer experience, along the customer journey, to ensure that fleet customers get an exemplary experience. Because if they get an exemplary experience throughout the whole life of the car, when it comes to replace the car it’s an easy choice to choose Mercedes-Benz again.”
So what differences will fleet users see?
“One thing we’re launching is an end user demo campaign. We’ve never done it before: we’ve always provided lots of demos to lease companies or to fleet managers, but we’re actually targeting end users directly. Because there will still be a range of end users who think that Mercedes-Benz is out of their reach, which it simply isn’t. So we’re going to cover the insurance to make it easier, the car’s going to be delivered to the end user’s house, which is a really clear statement of intent that we’re going to be amplifying our focus on the end user channel. They’ll have the car for 48 hours and get to live with it.
“Over the next three to six months we’ll be talking about other key interventions, critical around the purchase, the journey of the car and the life of the car with the end user.
“This is all about evolution not revolution. It’s all about an understanding what are the critical elements if you’re an end user or a user chooser, those critical touch points throughout your pre-purchase experience and, once you’ve got the car – because again, if we make it exemplary there’s more chance you’ll use us again. There is no doubt as we go into a toughening market, our focus will move from this very acquisitive focus to much more about loyalty. So what we want to do, in conjunction with the lease companies, is to start to measure customer loyalty, which I’m not aware anybody does at the moment. That for us is going to be a real differentiator.”
How are you seeing fleets responding to the diesel issue?
“Undoubtedly, in the retail market we’re seeing a significant riching of our mix in terms of petrol. We don’t see that quite so much in fleet because in terms of current company car taxation regime it’s still advantageous to take a diesel car over a petrol car even with the 1% surcharge announced recently. I think it’s about them taking a balanced, pragmatic view.
“Of course, we’ve got some London-based end user customers who are moving to a petrol-only policy. But we’re not seeing a significant shift. For us as an OEM, all we can do is just give customers that broader choice around powertrain, so our customers have a powertrain choice that fits their requirements.”