The average life span of a company in 1958 was 61 years. In 2016, that number dropped to just less than 18 years. Three short years later in 2019, it was down even further to about 10 years. And in today’s pandemic-stricken world, it’s likely that figure has continued its downward spiral.
So when companies last for more than a century, which the prevailing theory is that only roughly half a per cent of all companies do, then it’s certainly applause worthy. And when they last more than 150 years, well, then it’s a cause for celebration. In 2018, Fahrzeug-Werke LUEG AG, more commonly referred to as LUEG, turned 150 and celebrated big.
Its pre-pandemic bash saw hundreds, including the founding family, come together to revel in the company’s 150 years of success. It was a significant moment for LUEG and one CEO Martijn Storm doesn’t take lightly.
“I am very proud to be a part of this company,” he shares. “I feel responsible for carrying on the legacy of the family and their 150-plus-year success with the company. It is something they put on my shoulders, together with my two executive board members Stefan Jansen and Benjamin Kaiser. And I feel confident and secure in the strength of our team.”
Martijn has been CEO of LUEG for almost two years. He moved up after spending a few years as CFO and COO, where he oversaw the day-to-day operations and financials of the business. Even though he’d never been in the automotive industry before, he did like cars, and even more, he liked a good challenge.
“Four years ago, when I first had discussions with the founding family, they knew the CEO position would become available. And it was possible that I would become the successor,” Martijn recalls.
“But what really attracted me to the company was the challenge. They wanted to change the company from a traditional automotive retailer into more of a service providing company in order to survive. This strategic challenge and the opportunity of having a huge role in steering the company through this transformation was attractive.”
Shifting gear
LUEG was founded in 1868 and, at the time, it was focused on building carriages, not cars. Surprisingly, the company was around decades before cars were even invented. So its first successes lied in crafting durable and luxurious carriages for royalty like the Spanish king and Russian tsar.
The crisis is something you have to go through, but you should never forget where you want to go.
Later, once automobiles became a viable form of transportation, LUEG, which represents Volvo, Mercedes-Benz and Ferrari, shifted gears and began focusing on automotive retail and was met with wild success. It wasn’t until recently that the company decided to further widen its focus in order to survive the rapid pace of modern times.
“We are convinced that automotive retail will change dramatically over the coming years,” Martijn shares. “Therefore, we have added a second pillar more focused on services around mobility, which is becoming more and more important to us. As a human race, we absolutely cannot live without mobility.
“It means freedom. Mobility allows us to reach our destinations, but it also goes beyond geo-coordinates. At LUEG, we are just a small part of the mobility chain, but we’re a crucial part of it. And that makes me really proud.”
As of late, LUEG has got into fleet management and insurance claim management. It also started a company named GEWA-Karosserieund Fahrzeugbau-GmbH focused on building specialpurpose vehicles such as ambulances. Even more, it’s brought to life a new startup called LUEG Basecamp GmbH that focuses exclusively on mobility as a service, enabling it to become a service provider for ecommerce giant Amazon’s Last Mile delivery solution.
Even with COVID-19, LUEG continues on, seemingly business as usual. “We have a turnover of slightly above €1 billion,” Martijn says. “In total, we are 12 legal entities and we have around 1,700 employees, mainly in the Rhein-Ruhr metropolitan area here but also in Saxony and Switzerland. We are headed in the right direction. And now we have to go through this pandemic – there’s no way around it. But if we stick together, we will manage.”
Crisis averted
Martijn wasn’t in his role long before the COVID-19 pandemic made its rather unwelcome arrival. He took over in January 2020 with high hopes, feeling more inspired than ever, but then things took an unexpected turn.
We invest a lot in new retail platforms because we are convinced that boring retail is dead. The retail formats we’re developing today, together with Mercedes and Volvo, for example, are far from boring. It’s more like we’re creating an experience.
“We were a new management team with myself, Stefan and Benjamin, then after two months, the pandemic hit. All of a sudden, we had to start making decisions where we could not rely on experiences from the past. We had to go with our gut feelings and base decisions on common sense,” Martijn remembers.
“But we made decisions, acted quickly and became more agile. And throughout it all, everything we did was always customer and employee oriented. In times like these, you can’t forget your customers and employees.”
Keeping aligned with the values that matter most certainly helped LUEG navigate the crisis. But perhaps even more importantly, the company never wavered from its strategy – something Martijn believes made all the difference.
“The crisis is something you have to go through, but you should never forget where you want to go,” he says. “We never lost focus of our strategy. Of course, we spent a lot of time dealing with the crisis, but at the same time, we also spent a lot of time investing in the future. Like everyone, we had to adapt on some small parts, but in the end, we stayed focused. It’s been a valuable lesson learned.”
Like many businesses during this challenging time, LUEG also had much of its workforce working remotely. So to keep morale high and spirits lifted, Martijn jumped right in, sharing home videos with the team.
“Basically, we were all at home, but we still wanted to communicate,” he says. “It was a good thing we had invested in digitalisation and had the Teams platform ready to go long before the pandemic.
“I remember recording my first home video for our employees during the first lockdown. The executive board and I shared some of our personal lives in these videos. It gave them confidence that we’d make it through and helped gain their trust. Giving this trust and having the open communication with key management teams really helped us manoeuvre successfully.”
And it’s safe to say, LUEG has come out even better on the other side in some ways. “I’m convinced that every crisis also drives positive developments,” Martijn shares. “The flip side of being more than a hundred years old is it can be difficult to change processes that people are so accustomed to. There’s that rigidity. But that’s where the crisis helped a lot.”
During this challenging time, LUEG has been able to convince its employees and customers to do things differently. The pandemic made them more receptive to change and the company became more flexible. As a result, LUEG now has soaring satisfaction scores from its customers and employees. Even more, it has experienced strong growth.
“In the middle of the crisis, in automotive retail and mobility, we were able to grow because we were growing our business models. We even grew our staff last year by around 10%,” he says.
“It’s because we’re always open. Polestar changed its retail formats and now Volvo and Daimler are considering the same. And I’m not blocking that. I’m always there for an open dialogue, understanding the change and trying to influence it in a way that helps us and them. It’s crucial to stay open-minded.”
Innovative instincts
Since the company’s earliest days, innovation has always played a central part in its development. Something Martijn maintains has been critical to its survival. “If LUEG wasn’t always on the cutting edge of innovation, then it would not be over 152 years old today,” he emphasises.
“We survived the first paradigm shift where it went from horses to cars. And now, cars are becoming more of a service product. Adapting quickly to change and new challenges is part of the culture at LUEG, and it is drilled into internal operations right alongside sustainability.
No longer is it OK to simply go about business, focusing solely on self. In a world so heavily impacted by climate change, it’s more important than ever to weave sustainability into every thread of the company’s DNA. “We are a company focused on e-mobility,” Martijn says.
“E-mobility is a much more sustainable way of being mobile. We have developed, constructed and operate Europe’s largest connected charging infrastructure with 340 charging points in one spot. Operating this Infrastructure facilitates last mile deliveries in the Rhein-Ruhr metropolitan area in a sustainable way. We have built a new centre for Volvo and its sister brands like LEVC and Polestar, where we obviously sell the car. But even more, we focus on the consultation around e-mobility to help customers understand this new solution, showing them how it’s much more than just a car.”
Martijn says many of LUEG’s competitors aren’t entirely on the sustainability bandwagon yet, arguing that e-mobility isn’t a long-term solution. But for LUEG, it’s the company’s future.
“E-mobility is the way forward and we are dedicated to it,” he says. “We are focused on sustainability and look to be a leader in that field. You have to adapt. Although we expect that combustion engines will have their place in the future, likewise, we believe e-mobility does too.”
Sustainability is also measured in the company’s everyday operations. And it’s clear something has been working because LUEG didn’t get to become a centenarian by accident. “To have a truly sustainable business, you need to keep the holy trinity – customers, employees and stakeholders – in balance in every decision you make,” Martijn says.
“You have to satisfy all three of them. You can’t just satisfy one and forget the other. It may work in the short-term but not the long-term. In every decision, you must consider those three stakeholders. It’s crucial to survive.”
Crucial collaboration
Over the decades, LUEG has achieved many successes. However, it couldn’t have done it alone. That’s why the company is so invested in its stakeholder relationships. “We have developed from a small family company into a large and diverse business group. And despite all of the changes, our roots will always be present and of great importance to us,” Martijn shares.
“Crucial to that is our day-to-day cooperation and the communication with our employees. We work together and collaborate, and we offer them a lot of training and education, which helps with retention. It’s our people that make the business.”
On the other hand, maintaining positive relationships with its customers is an absolute must. With open communication, a solid reputation and by remaining inventive, allowing customers a better, simpler and more streamlined experience, LUEG fares well in this regard. “Customer-centricity is crucial,” he stresses.
“We measure their satisfaction with us every day. We invest a lot in new retail platforms because we are convinced that boring retail is dead. The retail formats we’re developing today, together with Mercedes and Volvo, for example, are far from boring. It’s more like we’re creating an experience.”
And no less valuable to this mission of collaboration and success are LUEG’s supplier relationships. Far beyond transactional, these partnerships run deep.
“We depend on our suppliers, not only the OEMs but also other suppliers like construction companies,” Martijn explains. “It’s about being open, honest and fair. It’s not always about the last dime. Instead, it’s about having the relationship and understanding each other. We do that with customers, we do that with suppliers and, for us, that’s crucial.”
When it comes to the future of the business, Martijn is confident that keeping the “holy trinity” in balance and moving towards a more service-oriented solution will ensure LUEG’s next 150 years of success. However, vital to this, he says, is continually challenging the status quo.
“You have to ask those hard questions, those strange questions. You can’t follow along blindly doing things one way simply because that’s how they’ve always been done,” he says. “It’s an asset that I’m not from this industry because I have the broader perspective to ask these questions and question how things have always been done.
“I’m the guy coming from retail, coming from the chemical industry, coming from finance and international business, so that’s the experience I bring in. And I’m always the one that’s asking, ‘Why do we?’
“We want to set new standards in terms of customer focus and customer experience in the retail segment. And, above all, we are a family company, and we will remain a family company.”
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