The Business Car Files: Skoda
07 October 2021
Author: Sean Keywood
Fleets are turning to an electrified vision of the future - one that Skoda has the models to deliver, as head of fleet Henry Williams tells Sean Keywood.
During the past 18 months, with normal life so regularly interrupted by lockdowns and other measures linked to the Covid-19 pandemic, many people and organisations have found themselves with time on their hands to reassess the way they do things. That includes fleets, who, according to Skoda head of fleet Henry Williams, made use of that time to pause and take stock about the way they wanted to operate. And from his point of view that's a good thing, because he says these reassessments are often turning out to have been in Skoda's favour - as evidenced by its fleet sales figures.
He says: "Despite the pandemic, demand especially through this year has been particularly strong.
"Obviously through last year a lot of the big corporates were reassessing their policies, because [with] such a seismic shift as Covid, people don't know whether their workforce is going to be working from home or still out and about, and obviously business travel was not required for a lot of it because of the lockdowns we went through, so an awful lot of fleet managers that I talk to took the time to reappraise what they are doing with their fleets.
"Having said that, we came out with a record market share last year, so we still had a really good time of it and actually within our corporate space, with our blue-chip customers, which is our key focus, we managed to take the same share as we did in the year before, so we came out of it in a pretty good place.
"This year, first of all up to the end of July our market share is now 5%, versus 4.6% last year, so again we are growing ahead of the market place and we have got a record order bank in place as well now, which is phenomenal. We have seen that coming through since about March time - every month has been a record in terms of our order bank. So the corporate customers are now coming back in strength I would say."
Williams says that part of the outcome of managers' fleet reassessments is an increased interest in Skoda's electrified cars, such as the iV-badged plug-in hybrid versions of the lower-medium Octavia and upper-medium Superb models.
He says: "The move to electric products and hybrid products has been accelerated, I think because of the pandemic. We obviously had the [low CO2] tax breaks in position before the pandemic came in, but I think it's that time to reassess what the fleet's vehicles are being used for which has really come into it.
"We are seeing particular success with our hybrid products on Octavia and Superb, where a lot of fleets are reassessing what they do with petrol and diesel. There is still a place for petrol and diesel, but there is definitely a move towards hybrid."
In addition to the hybrids, Williams says the new fully-electric Enyaq iV has received a very strong reception.
He says: "We only officially launched it in June, but we've already surpassed our number for the year, on the fleet side. And what I guess it's doing for us is [with] some fleets which we haven't been engaged with, major fleets, it's giving us new conversations around the rest of the fleet as well.
"For the size of the vehicle, for the equipment in the vehicle, for the price of the vehicle, there isn't anything else out there that can beat [the Enyaq iV].
"There's a lot of smaller EVs out there at around the same price point, but if you have got a family - because these are cars for businesses and company car drivers, but ultimately they need to be useful in the weekends and evenings as well, if they have hobbies or kids or anything else [where] the size of the car and practicality is really, really important - then it's really hard to beat the Enyaq iV. It's a real key product for us."
For the car industry as a whole, the complications caused by the pandemic have been joined in recent months by the semiconductor shortage, which has led to widespread new vehicle production and supply problems. But while Skoda is not immune, Williams believes it is in a relatively strong position.
He says: "I think from our perspective our focus is on keeping lead times as short as possible for our customers, so that's about making sure we are prioritising customers in that supply chain and also being transparent with the information as we get it.
"Largely to this point we haven't been as affected as some other manufacturers, but of course as it is with many industries, it will begin to have an effect through the second half of the year, so our focus is on looking after those customers and ensuring we get as much information to them as possible around what the lead times are."
Despite the complications posed by the pandemic during the past 18 months, Williams and the Skoda fleet team have still managed to introduce new initiatives for customers.
"The kind of things we've been introducing are around improving the customer experience," he explains. "So, for example, we have a fleet price initiative with leasing companies to offer them additional value around servicing of their Skoda products, such as labour rates agreed with our dealer network across the UK.
"We have, for our emergency service customers, what we call a one-stop shop, which is quite rare in that sector of the marketplace [in] being able to package together the conversion of the car, because a lot of them need blue light packages putting on to them and to be able to lease that in one go.
"We have also been really helping our field teams, both in-dealer and the team that works directly for me, through what we call Digital Assistant, a tool they have on an iPad, which gives them live whole life cost comparisons versus competitors and all of the product information on every car, so we are able to really facilitate a move to more video-based customer meetings."
Williams adds that Skoda has also enhanced its Virtual Showroom service, first introduced around three years ago.
He says: "For example, the Enyaq iV was in there six months before we launched the car, so that customers could have live tours of the vehicle and we do specific fleet sessions where we invite corporate customers in to view the car early, remotely of course because of Covid and lockdowns.
"It enables a different way to experience the product than just to test drive the car, though of course we offer a really robust test drive programme as well."
A long-standing strength of Skoda's fleet business has been its appeal to blue light fleets, and Williams says this is testament to the strength of the firm's products.
He says: "If you see, for example, rapid response ambulances, their job is to transport a paramedic to the scene of an accident within a short space of time, so they need to be reliable, practical and, by definition, value for money, because it is money from the government that is being used. So it helps to reinforce a lot of our brand values.
"We supported emergency services a lot during the pandemic by putting on additional demos and proactively offering demonstrators out to them, because there is a requirement for additional vehicles anyway, so we were really proactive and forward with that."
Skoda's established reputation in the sector allows Williams and his team to build on long-standing relationships with blue light fleet managers.
He explains: "It's a really enjoyable experience to interact with these fleet managers within ambulance, fire and police.
"These cars are never standing still, they are on call 24 hours a day, so they absolutely have to perform and if they don't, they won't buy the product, so to have so much repeat business coming through I think again is testament to the quality and reliability of what Skoda stands for."
As for the outlook for Skoda in fleet in the months ahead, Williams expects its electrified models to continue to spark customer interest, and for its focus on high-level customers to keep paying dividends.
He says: "From the product side of things, our strategy is going to really focus around our iV cars - Octavia, Superb, and Enyaq.
"I guess from a customer perspective and a fleet perspective the corporate marketplace is coming back strongly. I would expect that to continue through the rest of this year. That's always been our underlying focus, blue chip corporate customers - that's how we've grown the business to the level that we have today, so I think that will continue to improve as we come out the other side of the pandemic, as business confidence, which actually I think has been fairly robust, improves further.
"If we look at our metrics internally that we mark ourselves against, every single one of those is positive and on the up, and better than we thought it would be on 1 January this year, much better. So we're feeling very, very positive.
"We might be unique in that situation, I don't know, but certainly from our perspective we are having a very good time of it at the moment."