The magic word for Europe's fleets in 2022? Flexibility

<!DOCTYPE html>     <html xmlns:og="http://ogp.me/ns#" xmlns:article="http://ogp.me/ns/article#" xmlns:book="http://ogp.me/ns/book#" xmlns:profile="http://ogp.me/ns/profile#" xmlns:video="http://ogp.me/ns/video#" xmlns:product="http://ogp.me/ns/product#" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:dc="http://purl.org/dc/terms/" xmlns:foaf="http://xmlns.com/foaf/0.1/" xmlns:rdfs="http://www.w3.org/2000/01/rdf-schema#" xmlns:sioc="http://rdfs.org/sioc/ns#" xmlns:sioct="http://rdfs.org/sioc/types#" xmlns:skos="http://www.w3.org/2004/02/skos/core#" xmlns:xsd="http://www.w3.org/2001/XMLSchema#" xmlns:schema="http://schema.org/" lang="en"> <head>  <meta http-equiv="Content-Type" content="text/html; charset=utf-8" /> <script> function recaptchaOnLoad() { if (typeof Drupal.behaviors.recaptcha.attach != 'undefined') { Drupal.behaviors.recaptcha.attach(); } };</script> <script src="https://www.google.com/recaptcha/api.js?hl=en&onload=recaptchaOnLoad&render=explicit" async="async" defer="defer"></script> <link rel="shortcut icon" href="https://www.fleeteurope.com/misc/favicon.ico" type="image/vnd.microsoft.icon" /> <meta name="description" content="In 2022 as in the previous year, European fleets will find themselves between a rock and a hard place. Or as they’re better known: the pandemic and the chip shortage. Will Europe’s fleets manage those issues well enough to continue their pioneering work with EVs and innovative mobility solutions? To a large extent, that depends on whether their suppliers can offer them what they need most now: flexibility. By Steven Schoefs, Editor-in-chief, Global Fleet (left) & Frank Jacobs, Editor, Global Fleet (right)" /> <link rel="image_src" href="https://www.fleeteurope.com/sites/default/files/shutterstock_278166458.jpg" /> <meta name="generator" content="Drupal 7 (http://drupal.org)" /> <link rel="canonical" href="https://www.fleeteurope.com/en/leasing-and-rental/europe/opinion/magic-word-europes-fleets-2022-flexibility" /> <link rel="shortlink" href="https://www.fleeteurope.com/en/node/776966" /> <meta http-equiv="content-language" content="en" /> <meta property="og:site_name" content="Fleet Europe" /> <meta property="og:type" content="article" /> <meta property="og:title" content="The magic word for Europe's fleets in 2022? 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By Steven Schoefs, Editor-in-chief, Global Fleet (left) & Frank Jacobs, Editor, Global Fleet (right)" /> <meta property="og:updated_time" content="2021-12-23T11:34:44+01:00" /> <meta property="og:image" content="https://www.fleeteurope.com/sites/default/files/styles/opengraph/public/shutterstock_278166458.jpg?itok=dDIIjaR2" /> <meta property="og:image:url" content="https://www.fleeteurope.com/sites/default/files/styles/opengraph/public/shutterstock_278166458.jpg?itok=dDIIjaR2" /> <meta property="og:image:width" content="1000" /> <meta property="og:image:height" content="683" /> <meta name="twitter:card" content="summary" /> <meta name="twitter:creator" content="@Fleet_Europe" /> <meta name="twitter:title" content="The magic word for Europe's fleets in 2022? Flexibility" /> <meta name="twitter:url" content="https://www.fleeteurope.com/en/leasing-and-rental/europe/opinion/magic-word-europes-fleets-2022-flexibility" /> <meta name="twitter:description" content="In 2022 as in the previous year, European fleets will find themselves between a rock and a hard place. Or as they’re better known: the pandemic and the chip shortage. Will Europe’s fleets manage those issues well enough to continue their pioneering work with EVs and innovative mobility solutions? To a large extent, that depends on whether their suppliers can offer them what they need most now: flexibility. By Steven Schoefs, Editor-in-chief, Global Fleet (left) & Frank Jacobs, Editor, Global Fleet (right)" /> <meta name="twitter:image" content="https://www.fleeteurope.com/sites/default/files/shutterstock_278166458.jpg" /> <meta property="article:published_time" content="2021-12-20T14:36:26+01:00" /> <meta property="article:modified_time" content="2021-12-23T11:34:44+01:00" /> <meta itemprop="description" content="In 2022 as in the previous year, European fleets will find themselves between a rock and a hard place. Or as they’re better known: the pandemic and the chip shortage. Will Europe’s fleets manage those issues well enough to continue their pioneering work with EVs and innovative mobility solutions? To a large extent, that depends on whether their suppliers can offer them what they need most now: flexibility. By Steven Schoefs, Editor-in-chief, Global Fleet (left) & Frank Jacobs, Editor, Global Fleet (right)" /> <meta itemprop="name" content="The magic word for Europe's fleets in 2022? Flexibility" /> <meta itemprop="image" content="https://www.fleeteurope.com/sites/default/files/shutterstock_278166458.jpg" /> <link rel="author" href="http://www.fleeteurope.com" /> <link rel="publisher" href="http://www.fleeteurope.com" /> <meta name="dcterms.title" content="The magic word for Europe's fleets in 2022? Flexibility" /> <meta name="dcterms.creator" content="Guests" /> <meta name="dcterms.description" content="In 2022 as in the previous year, European fleets will find themselves between a rock and a hard place. Or as they’re better known: the pandemic and the chip shortage. Will Europe’s fleets manage those issues well enough to continue their pioneering work with EVs and innovative mobility solutions? To a large extent, that depends on whether their suppliers can offer them what they need most now: flexibility. By Steven Schoefs, Editor-in-chief, Global Fleet (left) & Frank Jacobs, Editor, Global Fleet (right)" /> <meta name="dcterms.date" content="2021-12-20T14:36+01:00" /> <meta name="dcterms.type" content="Text" /> <meta name="dcterms.format" content="text/html" /> <meta name="dcterms.identifier" content="https://www.fleeteurope.com/en/leasing-and-rental/europe/opinion/magic-word-europes-fleets-2022-flexibility" /> <meta name="dcterms.language" content="en" /> <title>The magic word for Europe's fleets in 2022? 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class="easy-breadcrumb_segment-separator"> » </span> <span itemprop="itemListElement" itemscope itemtype="http://schema.org/ListItem"> <span itemscope itemprop="item" itemtype="http://schema.org/Thing" itemid="#4"> <span class="easy-breadcrumb_segment easy-breadcrumb_segment-title" itemprop="name">The magic word for Europe's fleets in 2022? Flexibility</span> </span> <meta itemprop="position" content="4" /> </span> </div> </div> </div> </div> </div> </header> </div> <div id="page"> <div id="main"> <div id="left-content"> <div id="content" class="column" role="main"> <a id="main-content"></a> <article class="node-776966 node node-blog node-promoted view-mode-full view-mode-full clearfix" about="/en/leasing-and-rental/europe/opinion/magic-word-europes-fleets-2022-flexibility" typeof="sioc:Post sioct:BlogPost" data-uid="0" data-contentGroup1="auteur-"> <header> <span property="dc:title" content="The magic word for Europe's fleets in 2022? Flexibility" class="rdf-meta element-hidden"></span> </header> <div class="required-fields group-image field-group-html-element"><div class="field field-name-field-image field-type-image field-label-hidden "> <div class="field-item even field-item-first field-item-last field-item-0"><div style="background-image: url("https://www.fleeteurope.com/sites/default/files/styles/headlines_width_850/public/shutterstock_278166458.jpg?itok=SbS9Gv9l");" class="single-image-background"></div></div> </div><div class="field-ct field-ct-transliterated field-ct-blog">Opinion</div><div class="addthis-wrapper"> <div class="addthis_inline_share_toolbox" data-url="" data-title="The magic word for Europe's fleets in 2022? Flexibility" data-description="In 2022 as in the previous year, European fleets will find themselves between a rock and a hard place. Or as they’re better known: the pandemic and the chip shortage. Will Europe’s fleets manage..." data-media="https://www.fleeteurope.com/sites/default/files/shutterstock_278166458.jpg"> </div> <div class="label-share"> <span>Share</span> </div> </div> </div><div class="required-fields group-content field-group-html-element"><div class="field field-name-title-field field-type-text field-label-hidden "> <div class="field-item even field-item-first field-item-last field-item-0"><h1>The magic word for Europe's fleets in 2022? Flexibility</h1> </div> </div><div class="field field-name-body field-type-text-with-summary field-label-hidden "> <div class="field-item even field-item-first field-item-last field-item-0" property="content:encoded"> <p><strong>In 2022 as in the previous year, European fleets will find themselves between a rock and a hard place. Or as they’re better known: the pandemic and the chip shortage. Will Europe’s fleets manage those issues well enough to continue their pioneering work with EVs and innovative mobility solutions? To a large extent, that depends on whether their suppliers can offer them what they need most now: flexibility. </strong></p> <p><em>By Steven Schoefs, Editor-in-chief, Global Fleet (left) & Frank Jacobs, Editor, Global Fleet (right)</em></p> <p><strong><img alt="" class="content-img-right" src="/sites/default/files/ss_fj.png" /></strong>Europe is the most mature market for corporate fleets. By sheer force of volume, with the added advantage of decades of experience, this is where trends are born – whether in terms of business models, financing options or technological solutions. Also, for the last few decades, Europe has been the world’s laboratory for regulations to reduce the environmental impact of transport and traffic. </p> <h2>Obvious disadvantage</h2> <p>As such, European fleets can pride themselves on playing a pioneering role in developing solutions to the mobility challenges of tomorrow – not just on a global scale, but also vis-à-vis the private markets across Europe. However, being ahead of the pack comes with an obvious disadvantage: if you have to do everything first, then there’s no road map. You’re inventing the future as you go along. Exciting, but also risky.</p> <p>And what does that future look like? Underlying the noise of accidents like the pandemic and the chip shortage is the signal of a much more significant shift in European fleet trends – the move away from the ‘classic’ operational leasing paradigm. No, leasing is not being discarded. However, having served corporate fleets so well over the past few decades, leasing is fast becoming just one of a wider range of options to serve corporate mobility needs.</p> <p>This megatrend towards a post-leasing future is the result of the high standards and strong confidence that European fleet managers have when it comes to innovation in mobility. That level of sophistication is in no small part the result of the strong maturity they have come to expect from the leasing industry. </p> <h2>Global Fleet Survey</h2> <p>Ironically, that sophistication now means that fleets are willing to look beyond the ‘classic’ toolbox of leasing solutions. But in which direction? The Global Fleet Survey 2021 provided some insights. </p> <p>According to that survey, European fleet managers more than their colleagues elsewhere in the world were interested in unbundling services from their leasing contract – particularly when it comes to fuel (59%) and insurance (51%), followed by fleet management (38%) and tires (17%). </p> <p>The survey also revealed another factor driving the realignment of European fleets with their suppliers: no less than 68% of European fleets require annual savings – slightly more than in other regions. The average savings required amount to 7.8% - again, more than anywhere else.</p> <p>In 2022, that realignment could become the snowball that turns into an avalanche; because on the other side of the equation, fleet suppliers will want to increase their prices significantly. </p> <h2>Iron law of economics</h2> <p>This is is not unexpected, or unannounced. The shortages of microchips and other essential resources are confronting OEMs with a critical lack of parts. That will continue to result in a reduced output of new vehicles. </p> <p>An iron law of economics dictates that, whenever there’s a supply shortage, prices go up. And indeed, OEMs will be tempted to ‘clean up’ the market, getting rid of all kinds of sweeteners they used to stimulate their sales in pre-shortage times. </p> <p>So, vehicle prices will go up. Fleet suppliers will pass on some of those price increases to their customers. In other words: leasing rates will go up too. Because of the supply constraints, fleets are holding on longer to their vehicles – meaning higher service and maintenance bills. </p> <h2>Preferred finance solution</h2> <p>And on top of all that, fuel prices are spiking, and are expected to remain high. Add all those factors up, and it’s not difficult to see that vehicle TCO will go up significantly in 2022.</p> <p>And yet. </p> <p>Despite fleet customers’ eagerness to unbundle, and to save; despite the shortage of vehicles and their rising cost – the curious fact remains, as attested by fully 93% of corporate fleets in Europe polled for the 2021 Global Fleet Survey, that full-service leasing remains the preferred finance solution of those fleets.</p> <p>That’s a rock-solid fundamental. And what’s more, it’s a stronger foundation than elsewhere in the world. So, let’s not treat the warning signs coming from fleet customers as the story of a divorce foretold. </p> <p>Rather, let’s see the relationship between European fleets and their leasing providers for what it is: an old and familiar one that largely satisfies both partners but that, in view of the rapid innovation in the fleet and mobility industry, is in need of some revitalisation. </p> <h2>Best-laid plans</h2> <p>The magic word? Flexibility. Over the past few years, corporate fleets have learned that the best-laid plans can get side-tracked by sudden events with a major impact. Like the pandemic, or the chip shortage. And possibly something else in 2022. Yes, they need long-term strategies. Electrification and the rise of mobility solutions will continue. </p> <p>But what they really want, is the flexibility to turn around those strategies to fit radically, swiftly shifting circumstances. </p> <ul> <li>For example, vehicle solutions in the mid-term space, that is currently being fought over by leasing and rental companies, who are both entering that space from different directions. </li> <li>And mobility solutions that add alternatives to the company car, without adding cost or complexity to the options that they offer to their employees.</li> <li>Last but not least: the broadest possible choice in the EV space. As shown by the 2021 Global Fleet Survey, no less than 90% of European fleet managers expect the number of full EVs in their fleets to increase by the end of this year – a higher share than anywhere else in the world. </li> </ul> <h2>Speeding up electrification</h2> <p>With fuel prices extremely high, energy markets in a crunch and vehicle demand continuing to be strong, the need for flexible fleet solutions will only increase in 2022. Suppliers with the most versatile offer in terms of EVs will be at an advantage, because if anything, the crisis factors are speeding up electrification rather than slowing that process down. </p> <p>Fuel prices could become volatile, climbing even higher than they are today. That would definitively push forward the evolution of EVs, from a choice for achieving sustainability and improving CSR, to an indispensable tool for achieving efficiency and improving TCO. The chip shortage too is turning out to be a push factor for electrification. Supply issues exist for all vehicle brands, models, and types, but EVs seem to suffer less from delivery delays.</p> <p>We could see an exponential increase in electrification in 2022, and perhaps those targets to achieve 50% or even 100% electrification, typically by 2030, will be brought forward by several years.  </p> <p>The major obstacles will be, as ever: EV market maturity and EV charging infrastructure. The solution is to tread carefully, go step by step, and start in EV-ready countries. As the world looks to Europe for many other trends, so Europe looks to its more advanced EV markets for the way forward – the Netherlands, Norway, Sweden, and the UK.</p> <h2>Supplier consolidation</h2> <p>One final factor threatens to further complicate the relationship between fleet customers and their suppliers: consolidation. At the end of 2021, we witnessed one major merger in North America (Donlen and Wheels) and the start of talks for potentially another one in Europe (ALD Automotive and LeasePlan). </p> <p>This is in addition of the accelerated acquisition, no doubt also partially driven by the pandemic, of smaller fleet, lease and mobility players by larger ones. Larger global footprints by an increasingly smaller number of suppliers can lead to efficiencies of scale. However, from a customer point of view, such a Champions’ League of Mobility with just a few big players remaining reduces the opportunity to benefit from competition between the suppliers.</p> <p>All of which will make for an interesting new year, from the perspective of the Fleet and Mobility industry. European fleet managers will be called upon to review and adapt their fleet policies and strategies to bring them in line with changes in the present and the future, both foreseen and unpredicted. </p> <p>They will build in flexibility and integrate new solutions, to satisfy both their overall corporate goals and the benefits expectations of their employees. Among the winners of 2022 will be those fleet suppliers that are flexible enough to offer the flexibility their customers require.  </p> <p><em>Image: Shutterstock</em></p> <p><span><a href="https://conference.globalfleet.com/?utm_source=Website&utm_medium=Article&utm_campaign=Editorial"><img alt="" src="/sites/default/files/image1_8.jpg" /></a></span></p> </div> </div> <div class="field-regions-with-themes field-name-field-channels"><div class="field-item"><a href="/en/regions/europe">Europe</a></div></div></div><span property="dc:title" content="The magic word for Europe's fleets in 2022? 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The magic word for Europe's fleets in 2022? Flexibility | Fleet Europe