Interviews
2 fév 24

After a record 2023, “Arval will become a tech company and green energy distributor”

Our annual new year's meeting with Arval's top executives in Paris was as delicious as the 2023 results presented by their CEO and CCO were exceptional. “Our Arval Beyond strategy runs to the end of 2025, but we will achieve all our targets already this year”, said Arval's Chairman and CEO Alain van Groenendael.

Arval Beyond is a five-year plan with four axes of growth: sustainability, connectivity, mobility, and fleet growth. Despite the pandemic, which broke three months after the launch, Arval is well ahead of all targets. “That’s why we’ll launch our new strategic plan not in 2025, but at the end of this year,” says Mr Van Groenendael (left on the picture).  

Where are you with fleet growth?

Mr Van Groenendael: “In 2023, we realized a record organic growth of 6.9%. We grew in all market sectors, well above market average, and better than our main competitors. Arval’s average leased fleet growth since 2019 is 7%.  

Bart Beckers (Deputy CEO and CCO): “In our international customer base, we grew by 8%, in a segment that usually grows by around 3%.”

Mr Van Groenendael: “We also take pride in the value of our partnerships. Next to our Global Alliance (see box), our banking partnerships are also developing well. Our OEM and Distribution segment is growing the fastest: at a rate of 30% over the past five years. At the moment, we have a total of 14 OEMs for which we have developed 69 partnerships.”

What about sustainability?

“Our strategic objective is 350,000 BEVs by 2025, and more globally 700,000 electrified vehicules. In 2023, Our BEV fleet grew by 85%, and 18% of our new contracts – PC and LCV combined - in Europe were BEVs, versus a market average of 14.7%. To facilitate electrification, we have several partnerships – for example with ChargePoint - and in-house offers – such as our new Arval Charging Services.” 

“With our bike leasing offer, available in 14 countries, we also focus on two-wheel sustainability. This segment grew by 65% compared to 2022, to around 7,000 bikes. It’s a young product, but with immense potential.”

"Last but not least, we have been very recently awarded with the Gold EcoVadis medal: a proof of our lasting commitment to sustainability, in all aspects of our activities."

A third pillar is mobility. What’s been happening there?

“Smart mobility has become an important strategic growth axis. In 2023, we had more than 105,000 active users of Arval Flex, our flexible model of subscription, and 125,000 booking were made on Arval Car-Sharing platform. When we started our strategic plan in 2020, mobility was mentioned in 15% of tenders. Now it’s 80%. Our customers understand that sustainability is about more than EVs, it’s also about mobility and decreasing their CO2 emissions overall.”

Finally, connected technology.

We are on the verge of becoming a tech company. We recently partnered with San Francisco based Ridecell to create best-in-class fleet management systems, connecting to all logistics operators. That will help us scale up vehicle usage across multiple life cycles. That’s important for EVs, but also for formulas such as re-leasing and flex leasing.” 

Already today, 50% of our contacts with drivers are completely digital. And two thirds of operations like maintenance and repair are completely automated. Do you know that we already have more than 100,000 vehicles for which we receive the data directly from the OEMs? In total we now have more than 630,000 vehicles connected, within Arval Connect. Also, we just approved a budget of €10 million for AI development. Why? All this helps us gain time and increase quality, which is nothing but excellent customer service.”

With your 2025 targets achieved this year, how will you set your new ones? 

“In our upcoming strategic plan, we will focus on improving the customer experience for sustainability and electrification, for example by focusing on seamless payment and the EV charging experience. Additionally, we want to continue improving our customers’ TCO, for example by guiding them to the right powertrain at the right time and place.”

“We also want to become a key actor in the multi-life cycles of the vehicles – an area where a revolution is about to happen. Instead of having one vehicle for a specific driver, we will have thousands of vehicles that our fleet management system will align with the changing needs of our customers. For example: the first four years or a vehicle could be a traditional company car lease, then four more years in flex lease, subscription or second-hand lease formulas.” 

In terms of sustainability, we want to become an energy distributor ourselves. Using bi-directional charging, we can send green energy from our vehicles to where it is most needed. Keep in mind that an EV battery of 80 to 100 kW equals five days of energy consumption in an average flat!” 

Mr Beckers: “We build, test and try our new initiatives in collaboration with others: our teams of course, but also our customers and our partners. We know we can’t achieve success all by ourselves. And that’s why strong partnerships are so vital for us.”

On Monday 5 February Arval announced a major partnership with EV manufacturer BYD. Read all about it here.

 

Arval’s Global Alliance 

In 1995, Arval and its North American partner Element launched a Global Alliance to better serve the international needs of their customers. In 2023, Japan-based Sumitomo Mitsui joined – bringing the Alliance to a total of 4.4 million vehicles across 56 countries.

“We and Element really wanted Sumitomo as a strategic partner to activate the truly global aspect of our alliance,” says Mr Van Groenendael. “Asia-Pacific is an important growth region for fleets. For their part, Sumitomo comes to us to learn about electrification and ESG.”

Adds Mr Beckers: “The value for our global customers is that our alliance really works, with the expertise from each partner to increase the value proposition for our customers. So it’s more than responding to global tenders: it’s sharing advice and best practices.”

 

 

Arval's 2023 results
Leased fleet increased by 6.9% year on year to just over 1.7 million vehicles.
  • Of those, large international corporates accounted for 440,000 vehicles worldwide (+8% compared to 2022), 
  • local corporates 696,000 vehicles (+3%), 
  • the retail segment 506,000 vehicles (+12%), and
  • Arval Flex, the flexible subscription model with 105,000 active users, just over 60,000 vehicles (+9%).
Of that total, 
  • more than 166,000 are now BEVs (+85%). BEVs made up 22% of new vehicle orders in Q4 2023. 
  • more than 633,000 are now connected (+39%), more than 100,000 of which via OEM-installed technology.
Arval Re-lease, the used-car leasing solution, is now live in 21 countries, five more than in 2022. 
In all, Arval has 8,388 employees serving more than 300,000 customers in 29 countries.

 

Copyright picture: Arval, 2024.

Authored by: Steven Schoefs
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