Under the Microscope: We talk to Europcar's managing director, Gary Smith
14 March 2018
Author: Rachel Boagey
Europcar is prepared to roll out electric cars, but there are a few obstacles remaining. Rachel Boagey reports.
Since it was founded in Paris in 1949, a lot has changed at Europcar.
The car rental company now operates in 130 countries the world over, and during its expansion has had to widen its horizons to adapt to the changing needs of its customers.
"There's been a hell of a lot of change," Europcar's MD Gary Smith tells granitekitchen in the company's head office in Watford.
In fact, one of the reasons for these changes, Smith explains, is that rental as a business cannot exist in isolation anymore. "You have to bring in the wider aspects of mobility now, otherwise you become too narrow-minded. One of the things we've done in the UK and as a wider group is looked at the other aspects of mobility, meaning we don't see ourselves as just a rental company anymore."
Europcar refers to itself instead as a mobility solutions company and, from a UK perspective, has spent much time looking to broaden its range of products to suit customer needs in rental, whether they want a car for a day, a van for the weekend or a car for a year.
To broaden its offering, the company has made a number of acquisitions, including London-based chauffeur business Brunel in 2016, which handles the driver services aspects of its business. It has also acquired Ubeeqo in France and E-Car in London so that there is additional expertise in car sharing in different markets. Another acquision is Snapcar, which is more of a peer-to-peer service. "This sits between car sharing and rental, and further widens our scope in the mobility spectrum," says Smith.
From a company car perspective, Europcar can offer all of those services to its customers who can pick individual offerings to suit their needs or use them as a single service. "We've pooled all our services together under one portal, so that customers can book the taxi, the car share and the long-term rental if that's what they need," Smith says.
The portal is called Europcar One. "It packages everything together so there is one account, one statement and it pulls in all of the various services you use in a very simple way," he explains
Despite the fact that rental is not Europcar's sole focus today, Smith says it is still the company's largest priority. "It's not going to go away; it will just shift in terms of people's requirements."
One of the main reasons for this, explains Smith, is that there's a whole change in terms of the customer desire to own assets and vehicles. "We always use the analogy of mobile phones," says Smith. "People don't want to buy a mobile phone and spend £500 on one, they want to rent it and pay per month, and that's the model that's changing for cars. That plays beautifully into our business as a rental provider. We provide that flexibility, calling upon the service as and when you need it without having to tie yourself down."
Differentiating itself from other rental companies or leasing providers is something that Europcar takes seriously. "For us, it's about the service we provide. If you wanted a straightforward car, you could get one," he says. "For businesses, we want to make sure our cars are ready with the right products - which is effectively sat-nav and Bluetooth - as we want to make sure it's accessible, able to get from A to B and suits the customer."
Another differentiator is the fact that Europcar can deliver vehicles to a home or work address for its business customers. "It's not something that all our competitors do and provides a strong level of service to our customers. It's all about trying to make sure we provide the customer a service that makes their lives easy and keeps their hassle to a minimum, and that's our DNA," Smith says.
Because Europcar constantly refreshes its line-up of over 55,000 cars, the average age of its vehicles is five months, allowing the company to adapt very quickly to changing customer requirements. Smith says Europcar fully believes electric is the way forward for the car market, but that trying to introduce EVs onto the fleet in the past created issues.
"We started bringing electric vehicles onto our fleet two years ago, with an aim to make 5% of our fleet electric by 2020, and unfortunately we found there was no user demand for the vehicles," he says. "There was anxiety around using them and we worked quite hard, as a business, to break down those barriers."
Despite all the hard work, the demand just wasn't there. "We decided to use the vehicles for our delivery and collections service," explains Smith. "When we deliver a car and our drivers come back in another vehicle, we made it an electric one so that the runner leg was emission-free. We branded them up with Europcar electric imagery so that everyone would start to see electric vehicles moving around - it's all about creating awareness."
And that's exactly what the company continues to do. Last year, it ran an EV roadshow with Go Ultra Low in Manchester to promote awareness of EVs. "We want to drive the awareness, because if we're not careful, local governments will make decisions on how cars are going to be used in cities and we want to make sure that we're there to provide access to these low-emission vehicles."
"It's all about trying to make sure we provide the customer a service that makes their lives easy and keeps their hassle to a minimum, and that's our DNA."
Ultimately, Smith believes that to make Europcar an ongoing success, his role is to look at what the next five to ten years brings and make sure that the company's focus is on the right areas.
When it comes to EVs, the company has to wait for the correct infrastructure, and enough of it. "Infrastructure is key and that's coming slowly. Investment is being made now in cities, but the infrastructure is still being built. As soon as this starts to happen, then it will become much easier for us to offer vehicles to suit," says Smith.
"The range you're getting from some electric vehicles now makes it perfectly viable for them to be adopted on a mass scale. It's now possible to get 75% charge in around half an hour and you can go for around 350 miles - pretty much the same as a normal tank. It's just the availability of charging points that's a problem now."
In the meantime, the company is investing in hybrids and plug-in hybrids. "We're certainly offering more hybrids this year than any year previously, as we're trying to offer the vehicles that customers want. We're committed to electric and will continue to have some on our fleet, but with our business we just have to wait until the demand is really there and then we can adapt," says Smith.
In terms of diesel, he hasn't noticed a big change in customer demand for it, especially in fleet. "We're positioning ourselves slightly away from it and preparing for that change, but if our customers want a replacement vehicle they often want like-for-like, so that's often diesel," he explains. "They're saying it is still an absolute requirement and will be the case while the government continues to drive this
Another trend that Smith has noticed is car connectivity. "Our customers want a smooth, quick, easy service and demand for this is increasing. The 'remote access to car' service is something we've offered for two to three years now and, to be honest, it hasn't been that popular so far, but this is something we see changing and catching on in the not-so-distant future."