Vinzenz Pflanz: “Sixt will increase focus on U.S. and accelerate EV penetration”
If you want a masterclass in growth in the mobility sphere, keep a close eye on Sixt. The company is determined to expand well beyond its home market Germany and its core business, rental – but without neglecting either. “We will focus strongly on the American market. The rental business at some airports is bigger than in some entire countries in Europe,” says Vinzenz Pflanz, whose recent appointment as Chief Business Officer (CBO) is pivotal for the company’s ambitions.
In late September, Sixt announced the appointment of Pflanz and James Adams to the management board. Adams, previously CEO of Sixt UK, also became the company’s new Chief Commercial Officer. Pflanz, who until then was President of Corporate Sales, became CBO – a new function, with a responsibility for both vehicle purchasing and sales.
How does that role fit in with Sixt’s growth ambitions? And what are those ambitions, precisely?
“Basically, in my new role, I’ve kept the responsibility for sales, and added the responsibility for purchasing. Why? Because we think we can achieve significant synergies with both. And to build on our already strong relationships with OEMs. We will work to develop those relationships OEM by OEM, and country by country.”
Why is that important?
“As you know, the automotive industry is going through a phase of vehicle shortages at a global level. In other words: this is no longer a buyer’s market, it’s a seller’s market. Now, this may tempt some OEMs to pursue a strategy of short-term profit maximalization. Our goal in developing closer ties with the OEMs is to help them understand the long-term value of a relationship with us. We can be valuable partners for them in terms of digitization, electrification, lead generation, and last but not least, protecting residual values.”
If it’s a seller’s market, will OEMs be interested in having this conversation?
“Yes, for several reasons. For starters, retail demand has been shrinking since June. So it’s becoming less of a seller’s market, and more of a buyer’s market again. Plus, OEMs are also concerned about maintaining their market position vis-à-vis new brands, for example the Chinese market entrants.”
The appointment of yourself and James Adams was presented as the result of Sixt’s strong growth, and also in anticipation of future growth. Does this also come with a change in strategy?
“No. If anything, it’s a confirmation of our ongoing strategy. Sixt has been pursuing the internationalization of its business for years. I am keen to continue that, and to focus strongly on the North American market. The vehicle rental market in the United States is four times the size of its European counterpart. The rental business at some U.S. airports is bigger than in some entire countries in Europe. Miami International Airport, for example, is as busy in terms of rental vehicles as Austria and Switzerland combined. And there are quite a few other airports with massive rental traffic – Los Angeles, Atlanta and Philadelphia, to name just a few.”
If I’m reading the press release right, it seems to me that James will focus on digitization, while you will pursue international growth. Is that a fair assessment?
“That is indeed why we were appointed, and what we will focus on. But we will do this as a team, in close cooperation. Growth and digitization are complementary goals: one reinforces the other. James and I work well together. Our offices are next to each other, by the way, so that helps as well (laughs).”
Can you give an example of how growth and digitization complement each other?
“Let’s return to the U.S. market. We’re already present at 39 of the top 40 airports, and we’re the fourth-biggest vehicle rental company in the country – we’re number one in Europe, by the way. We want to grow our presence in the U.S. and achieve greater market penetration by distinguishing ourselves by our product – offering premium cars only – and by our service. For example by offering vehicles at the terminal itself, so you won’t have to take that bus from the terminal to the rental facility. And by perfecting the seamless handover of vehicles, via a service we call Sixt Express. Digitisation will help us achieve and improve that level of service.”
The U.S. is indeed an important market, but Sixt isn’t forgetting the rest of the world. I recently read you’re opening a business in, of all places, Iraq.
“Yes, and that’s not as crazy as it sounds. Our business is in Erbil, in the Kurdish-administered north of the country. That is the most secure part of Iraq. There is a large Kurdish community in Germany, and there are direct flights from Berlin. So we expect to do good business there.”
Where else is Sixt planning to grow?
“Thanks to a partnership, we’re now the third-biggest player in Australia. We have presence in Africa, but we’re planning to expand significantly. We’re currently in negotiations to enter an important African market – No, I can’t say which. We’ll announce this probably early in the first quarter of next year. And in Europe – where we’re already number one, as I’ve mentioned – we want to extend our product, offer more things via the B2B and B2C channels. We’re developing formulas for vehicle subscription and truck rental. And we still see room to grow market share in countries like France, Spain and Italy, especially in seasonal, tourist-based rentals. Here, we see particularly apt applications for EV rental.”
“Islands are ideal locations to introduce electric vehicles. Take an island like Mallorca. You can’t drive further than 80 km. So, range anxiety disappears!”
Sixt recently ended its long-term leasing branch, and is focusing on shorter-term mobility solutions. However, mobility-as-a-service – MaaS for short – is not really taking off. What’s your view on where this is going?
“In essence, MaaS should allow the company car user to seamlessly jump into other mobility modes. What you need for that to be possible is the right legal and fiscal framework. That’s the case in those few countries where MaaS is doing relatively well, like the Netherlands and the UK. Where that framework does not exist, like in France or Germany, MaaS is struggling.”
“Sixt already offers products that offer the flexibility we require from MaaS, for example our Sixt Flex subscription. And we’ve already built a platform that is ready for the MaaS future. Meanwhile, we’re lobbying with the EU to get the regulations and incentives that MaaS needs introduced at a European level.”
So, when will that MaaS future arrive?
“It’s going much slower than I would have expected a few years ago. Even in advanced countries like the Netherlands. Why? The mobility market is highly fragmented. There are no major MaaS suppliers. And the setup is very complex. Big corporates want tailored MaaS solutions, and those are often too specific to ‘export’ to other users. I do think we will eventually get there, but it will continue to be slow going.”
Sixt has the ambition to have at least 70% EVs in its European fleet by 2030. With the supply issues in mind, is that still feasible?
“Because of the market situation, our EV target for 2023 is on the conservative side. But we will ramp up sharply from 2024, when we will also invest €50 million in getting both DC and AC charging infrastructure at the majority of our own locations. So yes, I’m confident we’ll get there. EVs are ideal for the rental market, by the way. The average distance a rental car drives in a day is 268 km – well within range of current EV models.”
Vinzenz, in closing I have a question that has nothing to do with Sixt, but that has preoccupied me since our last call, in late September. At that time, you were going to the famous Oktoberfest. Why do they call it that if they hold it in September?
“As a native Münchener it was great to move back to the city after having been away for 14 years, in large part because of the Oktoberfest (laughs). And you’re right, it does start in September – on the Saturday after the 15th, to be exact, and it goes on until the first Sunday in October. But it used to be exclusively in October, until 1872, when they moved it forward in the calendar. This was to benefit from better weather: the Indian Summer, or as they call it here: Altweibersommer (“old wives’ summer” – Ed.) Who knows, perhaps with global warming, they’ll move it back?”
Thanks, and zum Wohl!
Picture: Fleet Europe, 2022.