Jaguar Land Rover (JLR) says it wants fleet drivers to have a more engaged relationship with its retailers.
As a result, it has moved its key accounts to a direct sales model, explains Andrew Jago, general manager fleet and business, in preparation for going to the full agency model in 2024.
Jago says there was resistance from leasing companies originally, but the feedback is now positive he affirms.
“It is our desired position for the retailer to have a direct relationship with the customer,” Jago continues. “No one drives one of our cars as a job-needs car. We believe our customers deserve a consistent experience and retailers are the key touchpoint for that. We want them to have the best experience.
“Under the conventional corporate supply method through a nominated retailer or third-party logistics provider, the car arrives at the business or home with no connection to the local dealer, but at some point the driver has to visit a retailer. If they have to work it out for themselves that doesn't feel very joined up to me.”
Jago says he expects the corporate market to come back strongly after years of decline, saying that analysts expect some 1 million drivers to come back into a company-supplied vehicle.
“Salary sacrifice is the big driver of this. When those drivers who opted out of the company car for a cash reimbursement and a personal contract hire deal come back into the market, they’ll be in for a shock as rental prices have increased so much. Which is why I think salary sacrifice schemes will make such a big difference.”
Jago adds: “There’s no question that fiscal incentives favor corporates at the moment.”
Nevertheless, vehicle supply remains a problem for JLR. Already, 50% of its 2023 production plan is sold, while customers continue to wait up to 12 months for vehicle deliveries with chip supply still a problem, particularly around the Meridian sound system. Jago says JLR updates the leasing companies every two weeks on its supply position. Nevertheless, model-year updates remain “challenging” with such long wait times.
Growth in subscriptions
While Jago is confident on corporate sales growth, he says he expects car subscriptions to account for 15% of the car market over the next five years.
“It’s a big growth area,” he says. “Initially the market has been driven by high net worth individuals and transient people on a 12-month UK posting, but what we’re likely to see in the future is people wanting more flexibility as they exit personal lease agreements.”
Jago says it will bring more people into the brand, which is why he’s looking to support the company’s subscription channel called Pivotal.
“Subscription will help customers try different name plates. If their life changes it provides the flexibility to upsize or downsize, and if the change is financial, they can move up or down as required. We have been pleasantly surprised by the proposition. The art is to understand what age of vehicles work and how to manage refurbishment and vehicle optimisation in shorter cycle subscriptions. It’s about how we can tune into different trends in the market.”