“2018 was ALD’s best year ever”
"We’ve had just over 10% growth in 2018, almost all of it organic. It was ALD’s best year ever”, says Tim Albertsen, Deputy CEO of ALD. An impressive accomplishment in a challenging market. What’s in store now?
The changeover from NEDC to WLTP, the festering diesel issue, a faltering world economy – not to mention the whole Brexit thing: the challenges were many this past year. But Tim Albertsen is smiling.
“ALD has been outperforming the market for some years now. That’s because of our strong foundation: our full-service lease product is still growing very fast, in particular with SMEs. Key to reaching this and other segments are our partnerships. So we’re in a good position to stay ahead of the market.”
Who are your partners?
“OEMs still represent the biggest portion of our partnerships. Then there are banks who want to diversify their services with a strong full-lease offer. In recent years, we’ve branched out to include retail partners, for example Blablacar and AXA, but also energy suppliers and new mobility providers. We’re currently looking at big retailers for private lease, perhaps also mobility services. We firmly believe that our partnership model still has lots of potential.”
Isn’t there also a potential downside to partnerships? They may end, after all.
“We get that question a lot from potential investors. But while some of our partnerships do end, the overall number increases. And most are quite stable, some are even more than 15 years old – and still expanding in scope, like our partnership with Nordea Finance in the Nordics. Of course, there’s always the risk of losing a big international key account. But these relationships are long, close and mutually beneficial. It’s not just plug-and-play.”
Germany was a difficult market last year. How did ALD perform?
“Our business model in Germany has always been a bit different. Germany is Europe’s most competitive market. To compete, you have to take a lot of risk on residual values. We decided long ago that’s not worthwhile to be in the most competitive segments. Yet Germany is one of our most developed markets – via our partnerships. They allow us to reach the Mittelstand and bypass the big corporate clients, except where we have commitments to global key accounts.”
Another difficult market is Turkey.
“Given the economic uncertainty in the country two and a half years ago, with several local players going bankrupt, we decided that it would be prudent to stabilize our fleet. The Turkish market is still a challenge with interest rates remaining high and we will continue to monitor local developments as we do in all of the markets where we are present.”
ALD made it its mission to become the leading player in Latin America. How is that going?
“Our Latin American business is growing very nicely, thanks in part to some of our European customers – especially Spanish ones – that have a presence there. This shows the advantages of having a big pool of international key accounts.”
“Chile is growing really fast, which is impressive for a greenfield operation. Hot on its heels is Colombia, which hit the 1,000-vehicle mark in a very short time. In all, we’re very happy with our progress on the path to becoming market leader in the region.”
And as for Asia-Pacific…
“… We’ve been interested for a long time, but also careful not to spread ourselves too thin. Now our structures in Latin America are up and running, we’re definitely looking at our options in Asia-Pacific. It’s a region with a lot of fleets, and a lot of our key accounts would like us there. Also: two-thirds of all megacities will be in Asia. Those are ideal venues for smart mobility. So that’s another reason. Asia-Pacific is the last part of the world where we should be present, but aren’t yet…”
Something else – private lease. You’ve said you prefer partnerships for this, rather than ALD’s own brand. Why?
“Because ALD isn’t a household brand. That would make promoting private lease under our own brand far costlier. Our first choice would be to work with partners with strong consumer-facing brand value, and with strong distribution networks. At some point we may offer ALD-branded private lease, but not right now.”
For electric-vehicle leasing, you’re working with major providers like E.ON (in Germany and elsewhere) and Enel (in Italy). What’s their motive to get into the game?
“EU law allows consumers to switch electricity providers almost overnight. These big providers already have strong customer relations. EV leasing is just another way to create a long-lasting relationship. If you have a leasing contract and a home charging station with one provider, you’ll be less inclined to switch to another one.”
How is EV leasing evolving?
“It’s really taking off. We’ve seen a growing interest in EVs over the past 18 months – and a big increase in vehicles with alternative powertrains in our fleet.
Supply remains a challenge, but that’s improving all the time. By 2020, OEMs promise a much wider range of EV models.”