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Sixt's Stuart Donnelly discusses
Though a longtime powerhouse in the European car rental
industry, German car rental company Sixt established its U.S. presence less
than a decade ago. This year, Sixt continues its expansion into new U.S.
markets, and it expects the U.S. eventually will be its biggest market,
according to Stuart Donnelly, senior director of group international sales for
the U.S. and Northern Europe. Donnelly spoke recently to BTN transportation
editor Michael Baker about U.S. expansion plans as well Sixt's expansion from the
car rental industry to wider mobility offerings.
BTN: What are
Sixt's plans for the U.S. this year?
core focus is to hit the top 30 metropolitan areas. At the moment, we're around
16 or 17. We have a plan to add another six stations this year, maybe more.
We're in the process of opening a location downtown in Manhattan. We also hope
to move into Chicago O'Hare, once the rental center is built. We have an
expansion team currently looking at Salt Lake City; Portland, Ore.; Denver, which
is expected by the end of Q2; Washington Dulles; Cincinnati, Ohio; and Hawaii,
two sites on Honolulu and Kauai. We don't plan to be on every street corner,
but we will be strategically located.
BTN: How big a
role will corporate business play in that expansion?
Donnelly: The U.S.
is the second-biggest market for Sixt outside of Germany. We work with a lot of
global customers, and those customers have a presence in the U.S. In the past,
we've not served them [because] in the U.S., at least, Sixt was dominated by
retail vacation rentals. But we're looking to increase our presence amongst the
corporate customers. The objective initially is to open those key locations in
each of those major cities, metropolitan areas and airport sites. It's a $30
billion market, and we have $400 million of revenues now, so there is such a
big opportunity. We expect very soon that the U.S. will surpass even Germany.
BTN: Have you
been growing your sales resources amid this expansion?
growing everything. One of those elements is me. Previously, we had colleagues
that were selling each of the business lines individually to customers, but as this
year, we centralized those activities into one global function, and we
significantly reinforced the team. I concentrate on the U.S. and Northern
Europe, [and] I have three counterparts responsible for different global regions.
BTN: How are you
differentiating Sixt as it enters the market?
Donnelly: Sixt as
a company prides itself in premium service, premium cars and premium quality.
More than 60 percent of our fleet is premium brand cars, and that matters to
our customers, especially Europeans traveling to the U.S. Europeans by the very
nature of the market over here they are used to driving premium cars, particularly
on the pharma/tech side. They don't want a mainstream manufacturer, like a
Hyundai. The other thing we bring [beyond short-term rentals] is the MyDriver
product—a ride-hailing/taxi alternative that provides airport transfers. It's a
pre-book arrangement currently, though we look to go on-demand in certain
locations later this year. This is a super solution because [business
travelers] going into cities like Chicago or New York don't need a rental car.
If they rent a car, they drive into the city and they park the car in a garage
that charges them $60 a night for parking. If they have to go a few blocks or a
few miles to an appointment, they don't use the car, they get an Uber or take a
yellow cab. They're paying twice.
mentioned the sales reorganization. What is driving that consolidation of
has developed a number of complementary solutions. We basically can provide
corporates and consumers with mobility around the globe, from six minutes to
six years. It is our mission to make mobility so affordable that owning a car
will only be for the rich. Imagine [a car owner in] downtown Chicago, in
Miami or New York. They use the car one hour a day on average. Why do you need
to finance the cost of a car 100 percent when you're using it for one hour a
day? Many people do it through convenience, through history or tradition, but if
you had a reliable set of tools and solutions at your door not only from Sixt
but also using public transport, then you'd maybe think twice if you look at the
cents per minute cost. We have cities in Europe now that are banning diesel
cars entering the city center. We have taxation systems that incentivize super
low-emission vehicles, like electric vehicles and petrol hybrid vehicles.
BTN: Do you see
this concept working in the U.S. without that type of regulation?
the institution in the U.S., Trump's government, is not so pro reducing carbon
emissions, but different states, including California, are very focused on low
emissions. Soon enough, the things that are happening in that area in Europe
will impact the U.S. If you own one of those high-emission vehicles, you're
stuffed, because your car will be worth very little, and you have to get rid of
that one and get another one. Maybe you get a low-emission vehicle, which is great
in the city, but when you drive [farther out], maybe you need an SUV or a truck
with a petrol engine. Sixt [wants] to drive the future of mobility [by
creating] flexible mobility solutions that are a mix of pay per minute, pay per
day, pay per month type solutions, maybe with a subscription model connected to
it. [This] gives people the flexibility to interchange their vehicle and decide
whether they drive or are driven. When you have a need, you go into your
smartphone to the Sixt app and look up what is the best solution for you. [On
the corporate side there's an opportunity] to replace the traditional company
car with an alternative driven by a long-term rental program, where [employees]
receive a new or nearly new car every six months. They get an app where they're
able… to interchange cars based on budget, lifestyle and employment status.
BTN: What are the
next areas of concentration for Sixt?
Donnelly: We are launching SixtOne this year. We have
invested more than 150 million [euros] in developing the technology and it will
launch in Q2. SixtOne will provide one app that will locate, reserve, start, drive
and bill the vehicle, including your preferences. For the first time, it will provide
the ability to offer cars without [rental] branches. You have cars geographically
located, and people pick them up. That's an innovative program. A lot of companies
in the U.S. need a ridesharing type solution [to] transit employees from home
to the office. Instead of mass transport, some prefer to transfer privately in
a car, maybe sharing that car with another person. We look at providing solutions
like that. It's about morphing together the world of travel and fleet,
challenging tradition and looking at doing things in different ways.
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