As one of Hungary's leading fleet management companies, LeasePlan Hungária's leasing activities cover the entire lifecycle of a car, from purchase, financing and operation to full service, taking the burden of car management off its customers. The company has recently organized a webinar with an overview of the automotive industry. The CEO of LeasePlan Hungária Plc., Tímea Pesti highlights the main issues for Diplomacy&Trade.
“This year is much more difficult than the last year. The side effects of the COVID-19 pandemic impacted the car manufacturers and is now slowing down the entire market. The other reason of the slowness is that so many companies are still struggling to regain the normal speed, efficiency, and results. Thus, they are hesitant to sign up for longer commitments. Other companies are in restructuring, rebuilding their strategies, which again delays all the decisions. Companies that are continuing their activities as before have to face different issues like price increases. There are basic models with a price increase of over 20% already. Several clients could not follow this increase, which means they cannot get the same car for the same or similar leasing fee. For us, the major difficulty is – because luckily, we have quite a large number of orders – the delivery time. So, if I'm placing an order today, next March and April is the promised delivery date, which is quite long and you have to be very patient,” she explains.
Flexible solution offered
As for the conclusions LeasePlan can draw from these developments for the near future, Tímea Pesti stresses that they keep the clients informed and try to manage expectations, “which is not easy because in many cases, the branded staff don't know when they can deliver. What we can do is supporting them with information on how to manage the fleet, how to manage these longer periods. We also have a special fleet, which is for shorter demand between one month and 24 months, so we can bridge the gaps with this ‘FlexiPlan’ fleet. It's a flexible solution that works differently than the long-term contracts. That fleet is of over 600 cars now, which is really a big number. We started also the benchmarking activities because aside from makes and models that are running out, the CO2 emission quotas also cause problems. The market completely changed: beforehand, you wanted a car and you got it. Now, it's rather the supply side that defines how many cars, which engine they can or want to supply because they need to meet the CO2 emission quota. And for that, they need to make an optimized mixture of their product. If one engine type quota is already fulfilled, then, they are not producing any more. So, we are helping the companies to do kind of benchmarks, what the available engines and types are and how to optimize their fleet in terms of cost as well, because the cost structure has been changed too. Interest rates are going up as well. So, almost all the elements are in motion.”
Committed to sustainability
Another topic of discussion at this webinar was e-mobility and Tímea Pesti notes that LeasePlan is really committed in all sustainability topics. “Since we are managing almost two million cars worldwide, including 17,600 vehicles in Hungary, that's quite a significant contribution to CO2 emission, so, we need to do different actions to offset this.”
The number one issue in this regard is to help companies transfer their fleets into a green fleet, which can be full electric, plug-in hybrids or a mix of full electric and traditional engines. “That's really difficult change management because how you drive, how you manage your car is very different from what you were used to. For instance, if you are running out of petrol, normally, you can fill the tank up in five minutes but if you have an electric vehicle, that's a very different story: you need to know where a charging station is located, you need to give thought to your travel plan and you can use your car differently. One of the positive side effects of COVID-19 is that more and more companies are putting sustainability into the focus. So, now, every week, we have a client approaching us how to transform their fleet into a green fleet, and most of them are starting immediately with electric vehicles. The difficulties are the charging stations. Home charging is also a challenge, and even if you manage, how can you settle that bill with your company, that's not regulated either. So, there are still open questions but we need to start somewhere, so, I'm always telling companies that they need to do it step by step. It is a big change for the company and for the car users as well,” she adds.
She has been providing only green plated (that is environmentally friendly) new cars for her colleagues since 2017. “First of all, it is being a kind of role model, show a good example that we are committed and we are not just talking about it but doing it. Certainly, we want to gain experience, how it feels, how to operate, how you maintain, how you feel about these cars generally.”
Helping in the pandemic
Last year, LeasePlan supported the social care work – in the times of increased health risks – of local authorities with cars, fuel contributions and volunteers. The CEO says they really find that there is a need for help. “We lived through a tough situation in the pandemic in Hungary. We have cars coming back at the end of the leasing cycle, and we need to sell them. So, we took a couple of cars out of this stock, and gave it to the municipalities or hospitals. We gave them to doctors and testers who did not have enough cars to go to people’s homes and do PCR tests. Other cars helped deliver food to elderly people who couldn't get out from their homes during the lockdown. We also supporting a children's hospital. For two months, every day, one of our colleagues picks up the remaining rolls and bread at certain shops of a bakery chain after closing and delivers it to the hospital, thereby also helping hospital staff who hardly have time to go shopping during the day as well as the children to have some nice bakery stuff. So, if we can help and can give back to society, we do.”
The need to go back to normal
As regards LeasePlan Hungária’s plans and expectations for the years to come, she says she is always quite an optimistic and positive person. “We do our best in maneuvering through this difficult period and helping our clients to survive together as well as the suppliers to survive together. I think the coming year is still going to be difficult. First of all, we don't know what will happen in the fall, so if another Covid-19 wave is coming, we can see that many of our clients or partners or their suppliers will be in trouble, many companies are in danger of not surviving another period of lockdown. That is, of course, a big uncertainty. Also, regarding the automotive supply problems, I think the total recovery is expected around spring next year. So, we expect some improvement in the fall. Some manufacturers will get back to normal or close to normal sooner, but if we talk about the entire market, it is probably next spring. Regarding our work, myself and our management believe that the new normal is back to normal,” Tímea Pesti concludes.
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