Meeting Fleet Challenges: An Interview with MHC Mobility COO Nick Salkeld

Nick Salkeld is the chief operating officer of MHC Mobility. If the name of the COO sounds familiar but the leasing company does not, that’s because MHC Mobility was only formed back in summer 2021.

So first a quick bit of history.

In spring 2021, the Hitachi Capital Vehicle Solution parent, Hitachi Capital, merged with Mitsubishi UFJ Lease & Finance Company - one of the world’s largest and diversified financial groups. The new company was named Mitsubishi HC Capital Inc. and its rebranded leasing and mobility offering - MHC Mobility - was then launched across its European subsidiaries in July 2021.

So that’s the historical background.

MHC Mobility now operates in nine European countries, with a presence in Austria, Belgium, Czech Republic, Germany, Hungary, the Netherlands, Poland, and Slovakia, and as Novuna Vehicle Solutions in the UK.

Global Fleet Management had the chance to speak with Salkeld about the mobility company’s plans under its new name and how it was helping fleet customers manage a range of challenges, from lack of vehicle availability to changing operational methodology.

GFM: Lack of vehicle availability is causing real issues for fleet managers. How is MHC Mobility helping fleets tackle the issues?

Nick Salkeld: It's a tough one and it’s an issue that is affecting us all across Europe - whether you are an OEM, where it’s a challenge over vehicle supply - or as a supplier, where we have challenges supplying vehicles. And then you have the customers.

We are working with and advising our customers all the time. There are some OEMs that are not accepting orders, while some OEMs have availability - so then a customer needs to decide what course of action to take. Our role is to provide advice on what those options may be, where lead times can vary from six to 12 months and vehicle delivery dates remain unreliable.

But the most critical aspect for our existing fleets is that we maintain fleet mobility. To overcome this we are extending contracts or offering flexible leasing solutions that have more flexible termination periods. So we have changed our landscape to keep customers mobile. It’s unprecedented - but we have to work together. We are supporting customers 100% so they stay mobile and informed.

GFM: Perhaps you could explain further about these flexible leasing solutions?

NS: We have a variety of flexible solutions on offer. Customers may not want to lock into a long-term contract because they want to stay flexible if vehicle availability was to improve, for example. With some of the more flexible products they can terminate without cost. In Germany, our flexible leasing contracts account for over 50% of our total contracts.

We also have existing stock from which to provide choice.

That’s not to say we don’t still have a substantial market for fixed term contracts, but we have to offer a wide range of solutions to the market. For example, we’re very committed to providing Mobility-as-a-Service (MaaS) and offer options such as e-bikes to support customers in their sustainability goals. Successful companies will be those that are agile and able to provide a range of options to suit current market conditions. As a business, we have to be less rigid.

GFM: The switch to EVs is fairly advanced in the UK thanks to generous tax breaks. In Europe that's not the same case. Why do you think this is?

NS: We see the UK is well advanced on its fleet electrification journey. But Europe is catching up, with battery electric vehicles (BEVs) taking nearly 10% of the market in Q2 2022. The Netherlands and Norway have strong EV portfolios and government incentives in Germany are promoting EV uptake, as well.

It’s not uniform across Europe, of course, but we think it’s a critical part of our business agenda to help support that transition. And you can’t do that by sitting back. You have to take a leading position.

That said, the EV charging infrastructure needs improving, and remains challenging. There has been a noticeable change in the fleet dynamic, from range anxiety to now charger anxiety as an issue that’s noticeable in the UK, the Netherlands and in Germany. We need government support on this, to take the lead.

But if we can be pioneers with our customers to take the lead on electrification, we can certainly make a difference. And let’s face it, we don’t work in isolation. We work with national and local governments to promote sustainability, that’s vitally important to us.

We don’t want to talk about it - we want to act upon it. It’s actions that we are taking to support customers to EV.

GFM: Talking of actions, what can you do to help fleets with the electrification process?

NS: First we need to explain the importance of leasing as an enabler, simply because of the initial cost of EVs, while there is also uncertainty around residual values (RVs). Leasing can help fleets here. So what we do is provide a total cost of mobility through a leasing proposition.

In the UK, we have good customer communications which we are rolling out to Europe. It’s important to provide data so customers have visibility on their fleet. It really is a partnership to navigate through some of the uncertainties associated with EVs. It’s a step-by-step process.

GFM: What does sustainability mean to customers across Europe – and what are the key trends and insights from European markets?

First of all, it's a massive topic for a lot of companies in terms of the environmental, social and governance (ESG) agenda, and that includes us.

In terms of trends, we’re seeing a realization that flexible solutions are becoming part of the fleet landscape. We are working to analyze how many vehicles a customer needs in their fleet through detailed fleet consultancy. In addition, we are considering what alternatives might be available, such as public transport.

Recently our parent company acquired the remaining shares of Mobility Mixx, a MaaS and smart mobility provider in the Netherlands. With Mobility Mixx becoming a wholly owned subsidiary alongside MHC Mobility, it will help our overall decarbonization and mobility service strategies. This is really empowering customer businesses as they make their journey into sustainability.

We are also seeing a shift to a greater uptake of leasing because of the move to EVs and decarbonization. It makes sense in terms of acquisition costs, RVs and data visibility on cost.

But it's not just corporate clients. We’re seeing private individuals more focused on sustainability and seeing them take up leasing more widely.

Mobility Mixx is an important part of our offering and an important change for us. We want to integrate solutions into the leasing discussions we’re having. So we are now looking at a Total Cost of Mobility (TCM) rather than Total Cost of Operation (TCO).

Every country is on a different pathway to MaaS. In the Netherlands the transport infrastructure is advanced so there are many alternatives to the car as a fleet tool. That’s clearly not the case in all European countries. But we are trying to get away from the jargon. After all, as a company we've always provided mobility. So we don’t see a big change - customers need mobility and need the best customer service possible.

The difference is the breadth and scope of the solutions, which are not traditional. And solutions such as the Mobility Mixx Card - providing companies with access to mobility budgets - is an important part of that.

GFM: Finally, what can we expect from MHC Mobility as it expands in Europe and globally?

NS: At the moment we are in nine countries - and we want to grow in Europe. Customers want wider coverage so geographic expansion is important for us - but that will depend on the companies that we can acquire and the greenfield sites available to us.

However, we need to keep the focus on customers: that’s the business DNA and that will not change. So as our organization grows and expands we must retain that level of service as a constant.

We also want to show leadership on the sustainability agenda, whether that’s by offering zero emission vehicles or by offering sustainable alternatives. Our job is to push and lead on that business agenda.

Finally, we want to have a human approach to what we do. We want to keep things simple and at a level that we can all understand. And make sure we deliver - that’s critical to us.