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Mercedes' new power play

Date: 26 July 2018   |   Author: Rachel Boagey

Rachel Boagey reports on the number-one premium fleet brand's plans for a diverse and electrified future.

It's all about an eco future for Mercedes as some of its key UK management explained at a recent fleet lunch in London. Despite an uncertain market, Rob East, head of fleet, said Mercedes is focusing on sustainability, in order to overcome the difficult challenges.

"For fleet specifically, June was an exciting month," he told BusinessCar. "We're making sure we manage broader channels such as rental and, by doing so, we're outperforming the market by 9% on fleet and business registrations, making us still the number-one premium fleet brand." 

East concedes that there is confusion in the market, partially down to the new emissions test procedure (WLTP). "It's creating lots of uncertainty. We're seeing fleet managers put policies on hold and company car drivers trying to make an educated guess as to what car to have for the next two to three years." 

As a result East is witnessing a broader convergence between fleet and retail markets. "We're starting to see a shift in fuel type in fleet from diesel to petrol," he says, "but what we're also witnessing is the demand for electric vehicles (EVs) and plug-in hybrids (PHEVs). From this, we're seeing the PHEV market grow rapidly - it's up 25% for the overall market and has been a bit of a challenge for us."

Despite the WLTP issues, East said the manufacturer is choosing to see the opportunities too. "We're arming our fleet network with the facts, doing workshops for our retailers and talking to fleet managers," he continued. "All OEMs have a level of responsibility to do this but we're taking it one step further from our position of strength and knowledge." 

Andrew Dean, head of e-mobility, also spoke at the lunch and focused on Daimler's global initiative, CASE - which stands for Connected, Autonomous, Shared and Electrified. "Mercedes will be taking each of these aspects and working on developing them over the next few years. Some may be further off and others more achievable sooner, but all of these elements are the way in which we as a brand are going to continue to improve and stay relevant," he said. 

"If we focus on the 'E' - the Government's Road to Zero emissions strategy has just been released - and fundamentally all of the noise surrounding it could mean fleets are very confused. This is where CASE comes in, to help customers make more sense of how Mercedes falls in line with these changes."

Dean revealed that Mercedes will be offering a total of ten EVs in its portfolio in all segments by 2022 and, if hybrids are included, it takes the number to 50. "Our Mercedes EQC launches this autumn at the Paris Motor Show, which is an SUV of a similar size to the GLC. It's a very exciting time for us, and we're building the services and the products for absolute customer convenience moving forward."

Mercedes doesn't hide the fact that it still sees a really strong proposition for diesel in the market though. That's why it will continue to invest and East revealed that the manufacturer will be completing its E-Class portfolio with a next generation of diesel technology, which will be a diesel plug-in hybrid. "Diesel still can be the right proposition, so we have moved it into the future where we believe our customers want us to take it," he said.

Mercedes also aims to invest in a corporate charging infrastructure for its customers so that it can support fleet drivers as they transition to EVs. "This tech is very exciting for us and we're looking forward to expanding our presence in this arena," East added.

Then there's a fleet-focused Connect Business telematics solution set up by Daimler. "Mercedes Me is very good for individual drivers but the fleet companies have not really been able to access its benefits, so Connect Business plugs that gap," East said. It's basically a full telematics suite for fleet managers that allows them to monitor the whole car including logistics and routes where the vehicle has been. "Drivers can use the app to switch between private and business journeys and it will offer a CO2 coach too, as well as being able to tell if a service is due and if the batteries are charged up. 

"If a Mercedes vehicle is stolen, the app will be able to initiate an immobiliser on that vehicle so that the next time it comes to a stop, the system will immobilise that vehicle in a safe way." 

Another priority, that East claims is in the brand's very DNA, is customer service, something Mercedes wants to continue to focus on to differentiate it from the competition. "During challenging times in a challenging market, we will continue to focus very much on customer retention and loyalty. Following our 48-hour test drive initiative launched in January this year we have had lots of positive feedback, from removing all of the barriers end-users face when trying to choose their next company car," said East. "Many people who used this service were first-time Mercedes customers so that's really positive for us. We had over 200 follow-ups after it from over 3,000 test drives. If fleet customers get a patchy experience, then they won't choose to stay, but if they get support before purchase as well as throughout the life-cycle and at defleet, it could make a big difference."

Another way the manufacturer is improving its customer service is by enabling fleets to have access to flexible demos. "If a driver has an SLC but needs an estate for their holiday, we will try and organise that. They're just small elements of differentiation from other brands, but it will go a long way," East concluded.