Alphabet International: Innovation drives profitability and growth – Martin Stremplat

With 537,000 vehicles in 18 countries, Alphabet International has successfully established itself as a viable top player in the international fleet market. Dr Martin Stremplat, the company's chief financial officer, gives insight into the company's secret to long-term growth and financial success.

What distinguishes Alphabet from other fleet-management providers?

Dr Martin Stremplat: From the get-go, we've targeted innovation. This sets us apart from other players and gives us a leading edge in an evolving market. Additionally, years of fleet-management experience provide us with in-depth industry know-how and, more importantly, a firm grasp on customer expectations. Altogether, this has allowed us to rapidly develop from a basic fleet-management company to a sophisticated provider of tailor-made business mobility solutions.

As CFO of a profitable global company, how, in your experience, does fleet management pay into a company's financial performance? What about leveraging it to save costs?

Financial planning is at the core of any successful business strategy. Alphabet's predictable, transparent cost structure allows customers to optimally plan their financial resources. A second equally important factor is our ongoing dedication to cost-saving. This concept stands in marked contrast to traditional cost-cutting, which often eliminates extraneous expenses across the board and leads to decreased employee satisfaction. Cost-saving means finding ways to save without sacrificing quality or scope of services.

What are Alphabet's core values? How do they give the company a competitive advantage?

At Alphabet's core are aspects like our consulting approach, ongoing commitment, extensive industry knowledge and focus on customer needs. As part of BMW Group, we are also very reliable; customers can count on Alphabet to be around for years to come. Our multimake strategy - we offer vehicles from all manufactures - allows us to respond to every customer requirement and ultimately give each one the cars they want. These values give us a competitive advantage by making us the first to offer certain mobility solutions, like AlphaCity. While many competitors are just now entering the corporate car-sharing market, we've been there since 2010. Today, we have a wealth of experience and are continuously enhancing our products.

Alphabet is active in 18 countries. How do you capitalise on your global presence and international network?

Our global presence enables us to provide exceptional customer service to international customers. They operate worldwide and we follow them wherever they go. The Alphabet International division specialises in managing large international fleets and offers a combination of global reach and local presence to ensure things run smoothly, which, actually, is another competitive advantage. In summary, we offer customers everything from one single source and create synergies that tap into unexploited potential.

Also, having 537,000 Alphabet vehicles on the road worldwide gives us considerable leverage. Every car requires regular maintenance and replenishment, and our size gives us leeway to negotiate favourable prices with preferred suppliers; for instance, on fuel and tyres. We pass these savings along to our customers.

The automotive industry is facing turbulent times. Despite this, how do you maintain a strong financial foundation?

We're constantly seeking new ways to increase our portfolio's profitability. As a full-service provider, the fleet-management services we offer also boost our profitability. While there is a general trend towards outsourcing, Alphabet offers services like fuel management, driving-licence checks, insurance and so on - all in-house. Furthermore, owning our key assets also has a very positive effect on our profit margin. What's more, directly steering the services helps us secure purchasing advantages.

Having said that, we have a healthy portfolio we can build on with innovative products and services. For example, AlphaCity, our corporate car-sharing solution, or AlphaElectric, our comprehensive, easy way to integrate eMobility into fleets. To advance the future of business mobility, we launched Alphabet Mobility Budget in the Netherlands. It provides flexible, seamless mobility and truly illustrates how we reach our customers by broadening our scope.

Why has the leasing market gained so much ground recently?

Change in consumer behaviour is a primary reason. Today, people are more interested in procuring services than owning assets. Companies also enjoy a number of advantages, such as tax breaks or a fleet with the latest cars. In addition, fringe benefits and employee incentives have become instrumental for companies in the so-called "war for talent". Motivational leasing for employee recognition is gaining ground and, of course, a company car still makes a big impact when attracting new talent.

Over the past few years, has the market consolidated more or less than you expected?

Overall, there's been little movement due to the financial crisis. In fact, Alphabet was one of the few companies in the industry to undertake an acquisition. We believe that the current situation will persist, with top players continuing to dominate and no new players entering the market.

What will the leasing industry look like in the future?

What we know is that mobility will keep growing more complex, which demands a broader portfolio of products and services.

Also, business mobility will continue to radically evolve. We've already witnessed the shift from owning to sharing. Now electric vehicles are here to stay. In the future, connectivity will play an increasingly important role, along with sustainability and the need for CO2 reduction.

What does this mean for leasing companies?

It all comes down to flexibility - in terms of the leasing contracts themselves, and our portfolio of products and services. In summary, flexibility, sustainability and convenience are, and will remain, hot topics in business mobility.

How can Alphabet ensure long-term success?

Alphabet will continue to lead the way in international business mobility. Profitability and growth demand an innovative approach, and a comprehensive business vision. These elements build the foundation for Alphabet's long-term success.

Dr Martin Stremplat, Alphabet International's chief financial officer.
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