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Sixt+ allows fleets to play waiting game
Date: 09 October 2020 | Author: Sean Keywood
Having a car on a month-by-month basis is a good option for many fleet drivers in the face of rapid changes affecting all aspects of the industry.
That's according to rental firm Sixt, which has just launched Sixt+, its new car subscription service.
Sixt+ allows customers - from a fleet point of view either employees with a cash allowance, or employers directly - to take out a subscription on a car that includes costs such as servicing and insurance, with monthly payments, and with cancellation possible on one month's notice.
The firm's global sales director Stuart Donnelly told Business Car that the inherent flexibility of this arrangement had many advantages for fleets, especially in light of the coronavirus pandemic.
He said: "If you combine the economic impact with the fact that more and more people are working from home and travelling less, there is then the question about whether organisations even need to give cars to employees anymore.
"There is so much uncertainty, it is effectively turbocharging the discussion that took place even before the pandemic, where people were already evaluating [their fleets] due to urbanisation, the need to focus on sustainability and reducing carbon footprint, and the wish to move to electrification.
"Why we think Sixt+ therefore serves as a good alternative to a company car is it provides a great deal of flexibility, because you don't need to commit to a three- or four-year lease term."
Donnelly believes that this flexibility will also be attractive to drivers considering an EV, but perhaps not ready, or unable, to make the jump just yet.
"A lot of people are interested in moving to EVs and hybrids, because of the tax benefits, but there are extensive lead times on those cars because there is simply not the supply, and the infrastructure is still not mature enough, and people are unsure still about whether it will fit with their lifestyle.
"So rather than taking another diesel or petrol car for four years, you're seeing people say to their companies 'We don't want to have another lease car for four years, can we take a car for six or 12 months and wait and see how the market develops?'"
Although Sixt+ might help drivers wait for EVs, it does not offer them itself, although Donnelly says it would like to add them in future.
Donnelly explained that the Sixt+ experience should not be alien to company car drivers.
"We strongly believe Sixt+ has an excellent place in place of company cars, whether it be a short- or medium-term solution, but ultimately it has the look and feel of what you would typically get with a company car.
"You can tailor your mileage. You will have all of the services included with service and maintenance, tyres.
"You can have a new car, as our fleet is typically turned over every six months."
According to Donnelly, corporate customers are typically looking at Sixt+ on a longer-term basis than consumers.
"Most of our corporate customers are looking at replacing leasing cars, [although] not exclusively, because we don't think it's ever going to be a one size fits all, and we don't see Sixt+ as fully replacing the company car.
"We would still expect that corporates would have a mix of . maybe 50% leased cars, but maybe some Sixt+ agreements, maybe some shorter-term rentals. But the longer you keep the vehicle when it comes to corporate, the more attractive the economics become."
The rental industry has been hit hard by the coronavirus pandemic, and Sixt has needed to pivot towards more longer-term rentals, which Donnelly says Sixt+ should help with.
"In the rental car industry in general, everyone, including us, has suffered. We believe we've weathered the storm relatively well.
"We've already seen a strong demand from both consumer and corporate [for Sixt+] and we're very hopeful that will help us to continue to weather the storm positively."
