The Expanse

Vehicle rental business, Europcar, is expanding its footprint in Australia as it diversifies its customer offering.

Late last year Europcar Mobility Group announced it was adding 3000 vehicles to its Western Australian operation and increasing the Europcar station network on the back of the franchise agreement with AUS Fleet Solutions (AFS).

On top of the announcement, it would introduce more commercial vehicles into its rental model, which it was continuing to adapt to better suit the current market.

The acquisition of additional commercial vehicles reflected its confidence in expansion and growing commitment to the transport and logistics sector, particularly the last mile delivery space with vans.

“The business has been looking at how supply chains are evolving and the impact of that with ecommerce growth,” says Jonathan Dexter, Europcar Australia and New Zealand Commercial Director.

“Last year we saw some good growth, particularly in the courier and last mile area. That’s part of the story of why we’ve taken on more vans and we will continue to look at opportunities to adapt our offering to meet market demand – a key part to our purpose of being a mobility solutions provider. We see the demand continuing to be strong into 2022 in transport and logistics.”

As a mobility solutions provider, part of what that means for Europcar is diversifying their value proposition.

The range of products Europcar offers is certainly changing, not only to better reflect the requirements of its customers but also to adapt to a rapidly changing market and consumer behaviour.

“That fits with our global strategy,” says Jonathan. “We want to grow the van and truck business along with our cars. We understand different customers have a range of needs. For instance, some require a number of vehicles to scale up for projects based on seasonality, whereas for others, it is the preferred model to other vehicle funding and ownership alternatives. Added to that, the pandemic is driving or accelerating change and adaptations in sectors which create opportunities for us, where potentially rental would not have been in the customer’s consideration set historically.”

Jonathan Dexter, Europcar Australia and New Zealand Commercial Director.

Europcar sees the type of vehicles on range being a cornerstone to their offering.

Passenger vehicles extend from compact vehicles, SUVs and prestige. Commercial vehicles concentrate on utilities with specifications up to mining, as well as vans and Pantech trucks.

“What we want to deliver is a range of vehicles that can apply for a customer’s varying use cases as well as addressing sector specific requirements,” Jonathan says.

This ties into what Europcar calls its high customer satisfaction mission.

“Clearly we want our customers to enjoy the product they’re driving and be safe. Whether that be for people that are moving house for a weekend, holidaying with family, in a replacement vehicle following an accident, driving to mine/construction sites or professional courier drivers,” Jonathan explains.

“In our NPS scores, vehicle quality is one of our key strengths and we want to keep it that way.”

The new vehicles Europcar is bringing into the fleet increasingly have enhanced sustainability credentials. Limiting both emissions and fuel consumption furthers the alignment with the company’s corporate sustainability goals. “Sustainability is a core element of our vision and mission,” says Jonathan.

“It’s a key requirement for where the world is going and what we need to do as a social and economic imperative. It’s a critical part of what we do and will continue to adapt to face current and future challenges within mobility.”

Economic forecasting has helped deal with the ongoing disruption of supply chain strangulations, COVID outbreaks, government mandates and fluctuations in product availability.

That means paying special attention to customers’ requirements and outlooks.

“While predictability has been difficult, particularly with the volatility we have seen over the last 24 months in travel, the better we understand our customers’ needs and direction, the more agile we can be to manage during dynamic market settings,” Jonathan says. “This works in concert with our fleet procurement and management, along with operations across the network.”

In terms of fleet procurement, one of Europcar’s key milestones for their sustainability objectives is reducing carbon emissions for its car and van fleet to reach an average of 93 g CO2/km for passenger cars and 144 g CO2/km for vans respectively, by the end of 2024.

This translates into having more electric, plug-in hybrid and hybrid vehicles.

IVECO Daily.

These vehicles are expected to drive the company car fleet around Australia moving forward.

“We have had electric vehicles in our New Zealand fleet since 2017 and in 2021 launched them in Melbourne and have since expanded into Sydney,” says Jonathan.

“We are also bringing in more plug-in hybrid and hybrid vehicles, particularly with the offering from manufacturers expanding. We see opportunity and appetite for lower and zero emission vehicles in a range of settings and use cases.”

For instance, providing corporations with lower emission vehicles for business travel or their fleets and consumers, for that matter, enables them to run a level of electric vehicles in a nimble way according to Jonathan.

“By linking that to our overall strategy, over recent years we’ve been evolving our offering as a rental player, into increasingly an ‘on demand’ model by the hour and also an alternative to car ownership via our long-term rental solutions and vehicle subscription,” he says.

These types of offerings, he explains, can be a trial to ownership or pre-ownership so that customers can test it out on their terms.

“From the initial customer feedback we received in the early days, range anxiety was an important issue to address with EVs,” Jonathan says. “Our experience is that education, dissemination of user information on the vehicle and support are really important for customers adopting electric vehicles in their rental and/or fleet mix. Ultimately, for most, the reason for reducing emissions is clear, it’s more a question of how it works practically that we need to help address.”

Looking ahead in 2022, Jonathan is optimistic about Europcar and the market.

“Internally, we have some new mobility products launching this year in Australia that I believe will provide real benefit to our customers, along with some exciting customer experience initiatives,” he says.

“Externally, we’re expecting more openness of interstate borders and gradually the return of inbound business. Add to that the arrival of new commercial and passenger vehicle models and the first full year with our new franchise partners, AUS Fleet Solutions, it makes for a thrilling year ahead”.

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