Norbert van den Eijnden has spent most of his career in the car-leasing industry, so he had no trouble recognising a standout opportunity when it crossed his path. That opportunity was Alphabet International, a division of BMW Group. At the time, Alphabet had about 200,000 car-leasing contracts. “But it was not very well organised,” says Norbert. “I saw the opportunity to make it bigger and become one of the leading players in the industry.”
A growing fleet
Norbert took on the CEO role in January 2009, and in 2011 Alphabet acquired ING Car Lease, adding about another 230,000 cars to its fleet, he says. Today the company has more than 600,000 cars spread across 18 countries. “In our industry, the growth we’ve recorded in the past five years is considered quite strong,” he says. And he’s not planning to put the brakes on any time soon. As well as targeting increased market share in its current locations, Alphabet is expanding into Asia–Pacific. “We are already in Australia, and we have been working on China and several other Asian countries as well.”
BMW Group acquired Herald Leasing, one of China’s leading leasing providers, in mid 2015, and Norbert believes they will begin to see the fruit of that acquisition in 2017. Continuing to grow means negotiating the many challenges facing the automotive industry: vehicle CO2 emissions, electric cars, driverless cars, and the implementation of IFRS 16, the international accounting standard on leasing, just to name a few.
Not as easy as abc
International customers also present an ongoing challenge. Often there is an expectation that they will be able to access a standardised package that will work across different countries. But that is difficult to achieve when each country has its own tax and legislative approach to car leasing.
The impact of big data is another unknown. “Because of the length of time it takes to develop cars, sometimes it looks like the industry may not change too much, but then there are changes going on that might be quite disruptive,” explains Norbert. “You have to make sure that you have a strategy and a system that is flexible enough to react to changes that you do not foresee today, because this industry will change completely and that is really the biggest challenge that we have.”
Usage not ownership
There is one shift occurring that this CEO thinks will work in the company’s favour: people are beginning to think of mobility in terms of usage instead of ownership. With that trend in mind, Alphabet became the first company to launch a corporate car-sharing service, AlphaCity. “Most competitors have corporate functions like that, but none of them have an integrated service like we have,” he says.
Alphabet has also been ahead of its competitors in seeing the opportunities offered by electric vehicles. It launched and invested in its AlphaElectric product innovation in 2013 because it sees the future potential in offering more sustainable and cost-effective options. As Norbert explains, the eMobility program can use GPS technology to track the usage of a particular fleet over a period of three to four weeks, and then it can provide the customer with advice on how adding some electric vehicles to the fleet could impact mobility costs. “Let’s say the fleet is 100 cars. We might tell them how many cars could be electric and how that could reduce the total cost of mobility, after factoring in the cost of installing charging stations and the CO2 emissions that will be saved,” he says. It also provides customers with advice on where to install the charging stations.
“Although we still have a fragmented landscape at country level, we now have one app that we can offer to an international customer and it gives them direct access to the country’s systems and direct access to the contract details. And it can be synced with a user’s personal diary.” – Norbert van den Eijnden
One Alphabet
So how is Norbert positioning Alphabet internally to ensure it is future-ready? “Today this industry is characterised by international companies which have local subsidiaries offering a lot of services that are specific to that particular country. A couple of years ago, we decided to try and get away from that,” he says. Its strategy now is to become “one Alphabet”, with a business model that has one product landscape, one process landscape, and one system. “This one system will take a few years,” he adds.
As a starting point, the company has worked hard at building up the communities in each country. “We are very interactive with our countries. We have built up communities around every possible topic, and we now have a cross-functional team structure and we benchmark that.” It has also launched the projects it needs to complete in order to support the strategy. “These projects are very much focused on achieving operational excellence by first defining what we want the product to be like and then how we want the process to work so that we have one process that is the same for all countries in the end.”
The project for the sales organisation was started in mid 2014 and completed within 18 months. “We are now doing exactly the same for our operational department, and it will be followed by the finance department,” says Norbert.
From the customer’s perspective, it has introduced AlphaGuide , an app that Norbert describes as the first step towards its aim of having a single system.
Partners in every country
On the supply chain side, Norbert says it has an “enormous” amount of partners and suppliers, with some of them driven by the customer’s desire for a particular supplier. “In every country, we have dealers and we work together with all of them,” he says. “There are also non-branded service outlets, such as Kwik Fit or Euromaster, that have workshops in other countries and we try to deal with them to have an efficient supply chain. Of course, we are looking for the ones that deliver the highest quality and premium services, and we try to improve their processes through the long-term relationship we have with them.”
Although it deals with local and regional suppliers, Alphabet steers business to international suppliers where possible. “Some of the tyre suppliers and glass suppliers are international and we try to steer business to these international suppliers. But we are a very customer-driven company, and if our customers tell us they want their drivers to have freedom of choice when it comes to dealers, then we respect this,” explains Norbert. If, on the other hand, the customer is more focused on cost, then it will steer the customer towards the international supplier. “At the same time, we try to organise things in a way that the driver is not disadvantaged,” he says.
