Company Car Today

Paul Barker grabs a cuppa and a chat with one of fleet’s most influential figures – Coffee With… Rob East, General Manger, Corporate Sales, BMW Group

BMW is about to get serious about electric vehicles, with the launch of three before the end of 2021. We talk to fleet boss Rob East about where that puts the brand.

You’ve got a trio of new EVs coming through before the end of the year. What are you looking forward to most and where are the opportunities with those vehicles?

Order take for iX3 (see page 36) has been, frankly, astonishing. Early feedback from customers who’ve picked up their cars has been super-positive, and you look across the press reports and the response has been great; great build quality and a great engineering integrity, great range.

Then we move on to iX, and having spent a lot of time in iX, that car is nothing short of astonishing, in terms of both its performance and the fact that it’s a very attractive design. It gives us such a huge opportunity with the M50 with its range of way more than 300 miles; it’s a really strong proposition.

And then, of course, we have the car that is probably the most relevant to the corporate sector, in the shape of the i4. Having driven this car, both in 40 and 50 derivatives, it’s got the most astonishing performance, and really feels like a BMW. The feedback from the lease companies where they’ve seen it and driven pre-production cars has been so positive. So for us, that car just provides us with a significant opportunity to really start to and continue to increase our share of pure electric vehicles.

Are the opportunities across the board? Are there any particular places where you think you might be able to capitalise on most?

Our strategy is very clear. It’s about increasing our true fleet volume. We’ve wound back on our rental and short cycle, so since 2019 we’ve reduced it by 80%, and our big focus is true fleet.

So whether that be SME through our Business Partnership Programme, whether it’s through our national end-user or indeed our public sector channels, that’s where we see the very strong opportunity.

But also, we are seeing growth in the market. From the survey we did, we’re seeing 72% of our customers saying that their fleets are only going to get bigger, and that people are going to return to company cars. And even now, the corporate market looks in pretty good shape, undoubtedly fueled by adoption of BEV technology. So, if I was to summarise, we see opportunity in true fleet, and certainly we see growth in the market, notwithstanding the supply challenges.
How severely are the supply challenges of a worldwide shortage of semiconductors affecting you?
It is challenging, let’s be really honest. In the short-term, because we’ve got very flexible production systems, in half year one we could largely compensate. I think that we’ve seen some challenges in half year two, everybody has. So it’s challenging, but where we can we’re compensating, and we’re also being very open and transparent with customer communications to explain what’s going on. But I think in 2022 we do see some opportunities as the world gets back to some type of normality.
Have you been needing to do things like changing specs on cars or make other tweaks, or do you think you’ve been affected slightly less badly compared to some others?
It’s really difficult to say. It’s really difficult to judge how we’ve been affected relative to others; we took some quite pragmatic action. So, we decontented where we could but without a fundamental shift. For example, we removed certain tech, such as Harman Kardon and wireless charging, but we wanted to make sure that the fundamentals of the car stayed the same. We were quite sensitive about decontenting. We’ve also taken other actions, for example with our own internal car scheme, we’ve extended the time we have those cars to free up more stock to go back into both retail and corporate channels.
Have you seen waiting times get longer as a result? Has it been challenging in terms of trying to keep that customer contact going and making sure they understand when their cars are actually going to arrive?
There is huge amount of ambiguity globally in the automotive sector about what’s going on and when it will resolve itself. So I think when we have a development, we’re keen to share it. What we have done through our key account team, they’ve been picking up with individual customers to say, look at these cars, let’s give you a very clear update about where we are but again, the situation is very dynamic. So you can’t pinpoint it; often it can be affected plant by plant, and continent by continent in terms of where the cars are produced, and it’s pretty fluid. So the best we can do is to be as open and honest with customers as we can. What’s interesting is that we’ve seen very low levels of cancellations.
Have you seen customer and driver expectations shift as a result of the past 18 months?

We are seeing the shift in behaviour where, coming back to iX3, historically customers want to see a car, drive a car, live with a car for a weekend before they order it. We didn’t see that with iX3, we’ve not seen it with iX and certainly not with i4, where people are happy to order on the basis of just seeing the car and having an online experience. I think some of that is down to the trust they have in our brand, the reputation that we have in terms of the quality of our products.

But in the past 18 months, we’ve had to engage with customers in a slightly different way. And certainly we’ve seen customer expectations change with the adoption of BEV, because there are decreases in people’s mileage profile, and the usage profile has changed. This is the most amount of change our industry has gone through in 70 years.

Where do PHEVs fit into the current landscape with the move to full EVs being quicker than a lot of people might have expected? Who is buying plug-in hybrids, why and how will that change going forward?

Order take is very strong. Because some end-users still have in place a predominantly PHEV policy. Like it’s always been for us it’s about customer choice. It’s very difficult to say the customer is x, y and z; some people still choose to have a PHEV, maybe their user profile is slightly different.

We’ve got very strong expectations around PHEV. We get a very nice balanced mix of customers all the way through from X1 up to 7-Series, where we are still seeing demand for those products. And I think there still is an education phase for some end-users who maybe still are not quite prepared yet to make that full transition to pure electric. We will still continue to be very clear, it’s about customer choice across the powertrains, whether it be diesel, petrol, plug-in hybrid or pure battery electric vehicle.

But of course, we are seeing certain trends. Diesel demand is dropping off. But that’s not the end of diesel for us. We’re still committed to clean diesel and there will still be a place for it. The same with petrol, and then making sure we maintain a strong PHEV and indeed BEV proposition.

How is the Inside Edge driver rewards programme going, now you’ve been running it for more than a year?

It’s been well received. It’s a programme that continues to evolve. We’re always looking for what’s the next piece of content, and are the rewards fit for purpose. We run lots of competitions, we get lots and lots of driver engagement. As a brand, we’re really proud of that because, as an industry, we’ve all talked about how we can’t get to the end users. So instead of keep talking about it, we did something about it.

The sign-up levels have been positive. It creates lots of advocacy, and it gets us to have that ongoing dialogue with people. For example, a load of Inside Edge company car drivers joined us at the PGA Wentworth, a really tangible way in which they get that brand experience and the feedback has been really, really positive. As has support from both fleet managers and lease companies.
What can you do with Inside Edge? Is it more of the same or what can you do to increase its impact?
I think it’s about that constant assessment, about making sure the rewards are fit for purpose. Of course, we haven’t gone through the full cycle yet. We want to take people through the whole journey from acquisition of the car through the life, to choosing their next car. So it’s still in the development phase. But we’re open minded about how it develops. We take lots of customer feedback. We’ve had lots of site surveys to say what works, what doesn’t work, but also I think there’s an opportunity that, longer term, we also integrated with the My BMW app. That’s the next logical development. Because it’s having that integration and, like most automotive brands now, to really get the full use and experience of your car, you need to have the app.

East on...

Over-the-air updates

Customers like it, and they are mindful that you can have an update without having to go to a retailer. It does it while the car is having its downtime. The response has been good, because it’s very reliable. Customers have been finding it easy; the car says it’s going to update, it does and you get in and it’s done.

Rob East, General Manager, Corporate Sales, BMW Group

ELECTRIC REALITY

While BMW has long sold the i3, and as only an electric model since 2018, the next few weeks will see the brand enact a huge expansion, going from one to four electric models almost overnight.

First up, with early customer deliveries already completed, is the iX3,  an electric version of the X3 that gives the brand a full offering of EV, PHEV, petrol and diesel on the same model.

That’s followed before Christmas by the iX, a large SUV that’s topped out by a 523hp xDrive 50 model that has a 380-mile range.

First up, with early customer deliveries already completed, is the iX3 an electric version of the X3 that gives the brand a full offering of EV, PHEV, petrol and diesel on the same model.

Also by the end of this year, BMW’s most fleet-relevant EV will also launch, in the form of the i4. Priced from just over £50,000, the electric version of the 4-Series Gran Coupe will offer two versions with range of 367 or 316 miles.

Top picks

East selects his stand-out cars

Past:

BMW Z8

We have a silver and red Z8 in the head office foyer at Farnborough (pictured). It’s not because I want to be James Bond, but that car has just aged so well, it’s so cool.

Coffee With - Rob East, General Manager, Corporate Sales, BMW Group - Top Picks - Present - BMW X5 PHEV

Present:

BMW X5 PHEV
It’s an amazing car with a great powertrain, it’s super-efficient and plays a part in us all having a role in a sustainable future.
Coffee With - Rob East, General Manager, Corporate Sales, BMW Group - Top Picks - Present - BMW X5 PHEV

Future:

BMW iX
Next year I have an iX coming, which I am beyond excited about. The car is just such a positive statement to the future of BMW. It’s got all the dynamics, great quality, it’s got an amazing powertrain and amazing technology inside.
Coffee With - Rob East, General Manager, Corporate Sales, BMW Group - Top Picks - Present - BMW X5 PHEV