Volkswagen Financial Services: huge variety from one supplier
How easy is it for a company to invest in state-of-the-art cars at a fair price? Finance Director Europe takes the passenger seat as Volkswagen Financial Services' head of international fleet, after sales and used car Knut Krösche and Giuseppe Tommaso, director of fleet sales at SEAT, discuss the biggest trends in mobility management.
Fleet managers (FMs) are under constant pressure to reduce costs while maintaining the safety and technological advances their employees have come to expect from a company car; they need to find a vehicle that offers more, for less.
SEAT recently unveiled its new Leon ST station wagon. The car iterates upon earlier members of the family, retaining the dynamic design and sporty characteristics but with added practicality. Giuseppe Tommaso, director of fleet sales at SEAT and Knut Krösche, head of international fleet at Volkswagen Financial Services reveal the vehicle's potential for fleet.
What are the biggest considerations for fleet managers at this time?
Knut Krösche: Fleet is one of the biggest parts of the customer's cost structure, often second after HR, so it's good to manage that professionally. You can do that from the fleet management side or from the product side by choosing the right car. That's why FMs should begin to look into the SEAT brand, because it's high quality and very good value for money.
The new Leon is the beginning of this story, but they will be successful because it's such an excellent car. Customers with SEAT cars already in their fleet are very happy with their decision.
Giuseppe Tommaso: The decision-makers of a company's fleet are squeezed between reducing cost as much as possible, and are also pushed for better cars, new features and improved services. So their lives are difficult - knowing how to combine the two areas.
The only way to resolve this is to be really competitive in terms of offering. This is one of our core competencies, because we can offer a product that surpasses a customer's expectations at a very attractive cost of ownership.
What trends have you seen fleet managers responding to?
KK: Especially with large companies, they are reducing their number of suppliers. In that respect, Volkswagen is very attractive, because you have one supplier but a variety of brands.
GT: I see the tendency for big companies to ask more for one international contact instead of different local ones. In this case, we have an advantage, because we are a multinational company. We are present in more than 75 countries, have a very solid presence in financial services and can summarise different local markets with one voice.
With well-established competitors in the fleet market, how can SEAT stand out from the crowd?
GT: We have competitors everywhere, but we are a newcomer, and customers are always looking for something new, something different. We can differentiate ourselves and give additional support in specific areas, and the way to enter into this market and beat the competitors is by offering more for less.
If we offer better customer care, a better product, better technology, a dynamic design and a more attractive interior, the drivers and the FMS will appreciate this.
With advances in office technology such as video conferencing, are businesses starting to rely less on company cars?
KK: Actually, we see the opposite. Even in IT, companies are going more in the direction of getting people back in the office, because it turns out it's actually really important to have staff in, seeing the people. It depends on the industry, but I think the sectors that have gone down this route already are starting to return to the traditional office structure.
As for people who work from home, they may well still need a car to get to their customers.
GT: It is right that businesses nowadays are increasingly relying on new technology to save costs, so that virtual conference experiences are experiencing a remarkable upswing.
However, at the time of fast-moving technological innovations, it becomes even more important to maintain personal relations with customers and suppliers. It is the direct contact with them that distinguishes you from the competitors and mobility is crucial for doing so.
How do you see fleet management evolving over the next few years?
GT: The car will still remain the perfect tool for mobility, because you can decide where to go, when, how fast... There is no other way to guarantee this level of flexibility.
Customers are also looking for more efficiency, though. When I go to the airport, I leave my car there - maybe somebody else could use it while I'm away? This could be a new tendency, but we're still far from that sort of car-sharing situation, as it's difficult to combine all the customers' different needs. Customers want flexibility but also efficiency and these characteristics are not really connected at first glance.
KK: Cars definitely are at the core of the supply chain of mobility. Could we have a smarter use for times when one driver isn't using it? This means we'd be likely to see contract adjustments - short term, pay by mile, things like that. But the car is still fundamental, so we need some business perspective. Businesses will not get rid of cars but may well find different ways of using and owning them.
What's next for SEAT?
GT: Last year, we launched the Leon ST station wagon, another member of the Leon family. We are receiving a lot of awards. We beat our competitors in many test drives. Our engineers have really done an excellent job.
We also recently announced a new SUV. We are investing to make our brand more appealing and modern. The recognition SEAT receives from other companies and the customer side for its new products shows that it is worth it.
KK: We have attractive service and maintenance packages around SEAT, and we go together to the customer and say the combination of vehicle and financial services will give an unbeatable package. Plus you get everything from one hand: we always follow the car throughout Volkswagen Group, and we are the ones that can best do the services in our SEAT workshops. We ensure the car is solid, so the customer gets the best services for the best price.