Sixt Takes Steps to Set up Itself as Viable U.S. Competitor

Sixt’s Kennedy discusses:

• How he reworked Sixt’s strategy to competitors in North America
• New options coming subsequent yr
• The demand panorama for electrical autos

Germany-based automotive rental firm Sixt has set its sights on being a viable competitor to the main gamers in the USA since 2011, when it started working within the nation. It wasn’t till this yr, although, that it not solely made the J.D. Energy North America Rental Automobile Satisfaction Research but in addition got here in third place, behind solely Nationwide and Enterprise, and with a rating properly forward of the trade common. BTN senior editor of transportation Donna M. Airoldi spoke with Sixt head of North America Tom Kennedy about that survey, the corporate’s technique for the area, the expansion of its company journey market, and what’s in retailer for the long run. Edited excerpts observe.

BTN: What do you assume made the distinction this yr for Sixt to debut within the J.D. Energy North American automotive rental survey?

Tom Kennedy: Traditionally, we have been small and due to this fact weren’t actually touching sufficient prospects nationally to be related within the survey. After I began [at Sixt], we have been in 29 airports. We’ll open our fiftieth airport this month. … So, No. 1, we grew to the size the place we have been related. No. 2, we actually focus as an organization on customer support. … In the event you have a look at the professionalism of our crew, we take excellent care of our folks, however we additionally practice them very particularly. Then, candidly, all of us fail sooner or later. As a customer support group, if we do not do one thing the shopper needed, we be sure we recuperate that buyer and care for it on the again finish. We be sure we’re premium in how we care for the shopper’s challenge and resolve it for his or her full 100% satisfaction. All these components go into our philosophy … and all of it suits collectively in how we have been capable of get that No. 3 rating.

BTN: You joined Sixt in November 2020, the center of the pandemic, after a profession working in journey for automotive rental firms, airways and lodges. How did you deal with the challenges then and recuperate to the place you’re you at present?

Kennedy: I used to be recruited by the Sixt household and got here out of retirement to assist them construct out the U.S. enterprise. Given my expertise, it is onerous to search out of us which have that journey expertise that are not underneath non-competes. I did not should cope with the challenges of the early pandemic and all of the vehicles that needed to be returned or offered. The aim for me was to return in and check out our fleet technique, check out our place available in the market. The largest problem was that we weren’t rising, and the way may we develop profitably?

We did not have the precise fleet technique; our holding prices have been very excessive. I do not assume we had the precise concentrate on the way to open markets. Then in our current markets, what have been we lacking from a buyer standpoint? We tackled all these to verify the product was proper on the fleet. We had the precise period of how we maintain the vehicles, and we type of aggressively attacked with airports we weren’t in that we needs to be which are in bigger markets.

BTN: How did these adjustments assist your company enterprise section?

Kennedy: We couldn’t compete for contracted company enterprise if we did not have sufficient presence. No. 1 was to resolve the presence, and No. 2 is the method, and we’re nonetheless engaged on this, however Sixt traditionally was a counter product. I mentioned, you need to have a counter-bypass expertise significantly for enterprise vacationers but in addition frequent leisure vacationers. They need to get the automotive, they need pace. We began introducing a brand new course of this yr of a counter-bypass expertise, which we’re nonetheless refining, however we’re rolling it out subsequent yr. As soon as we had the presence, then a special course of and the precise product, now we’re related. Now we are able to go and compete to be an alternative choice to the massive three within the U.S. market. That was actually the aim during the last 4 years of coming into the corporate. And naturally we now have a giant presence in Europe, so should you’re a world firm, we clearly can present you world service whether or not you are within the U.S., Canada or Europe.

BTN: That are the 2 airport areas opening quickly?

Kennedy: John Wayne in Orange County, [Calif.], and New Orleans. Our technique is to be within the prime 70 to 80 airports, after which some smaller airports that fill out the community. 

BTN: Now that you’re extra related, how has the company section been performing for the area?

Kennedy: We’re nonetheless very, very small, however we have been rising fairly properly on a share foundation. [Previously,] no company would entertain us as an alternative choice to Avis, Hertz or Nationwide as a result of we simply did not have the presence. Now that we’re in 51 airports this yr and have a counter-bypass course of, and we’ll be launching a revised loyalty program, which is also vital within the U.S. marketplace for these frequent vacationers, I believe we now have all of the elements now to aggressively compete for that company frequent traveler. 

We’re beginning to get traction. We now have some massive model names that we now have both a secondary or tertiary place in, and we provide an alternative choice to the massive three. We now have availability midweek, we now have newer vehicles, we now have a greater expertise. We now have a really premium, aggressive product that I’d argue is the gold normal, which traditionally has been Nationwide. …  Our goal at Sixt is to be like an alternative choice to Nationwide.

BTN: What are company journey managers asking for?

Kennedy: An important factor is availability in product, [particularly] midweek and the place enterprise vacationers are touring. [They also want to know] is it clear? Newer? An excellent product? And [they also want] transparency, consistency of what you are charging. Then, “How do you acknowledge me if I’ll offer you my enterprise?” Which means, what’s your loyalty program, which we’ll relaunch and make it higher. “How do you care for my enterprise vacationers?” As a result of the company journey supervisor doesn’t need to hear from their inside folks. They need a worry-free relationship. 

BTN: You have talked about the upcoming new loyalty program. Are you able to share any particulars about what can be totally different?

Kennedy: It will be someday in 2025. We’re tweaking it now. We need to be sure once we do launch it, it is pristine and it comes out from considerably of a differentiation from what’s provided there at present. We do have a extra recognized loyalty program in Europe, and within the U.S. folks aren’t conscious we now have a loyalty program. I believe that is partly as a result of it isn’t been designed across the U.S. traveler and was extra designed across the European traveler. The U.S. and European vacationers have totally different wants and aspirations. So, a loyalty program within the U.S., be it airways, automotive rental or lodges, is desk stakes. It’s a must to have it; it must be aggressive. 

BTN: What else differentiates Sixt?

Kennedy: In the event you have a look at our app, you may lease, rideshare and subscribe all on our app. I believe we discover enterprise vacationers and even frequent leisure vacationers actually like how they work together with us as a full mobility supplier. … We’ll proceed to enhance on how we get that buyer journey to be seamless, fast and worry-free. I additionally assume we’ll be testing issues. We now have in [a few] airports now a factor referred to as “Proovstation.” That is the place the automotive is scanned and if you return, the automotive is scanned once more [for damage]. One of many buyer ache factors is harm: “I did not trigger that harm, it was someone earlier than me, I don’t need to get charged for it.” We’re putting in these Proovstations. 

BTN: The place are they situated?

Kennedy: We’re in Miami, Fort Lauderdale, Atlanta [and Charlotte, with] Washington Nationwide and [Orlando coming soon]. We’ll develop it the place we are able to the place the airports have that infrastructure out there. We’re additionally going to check [technology with which] you may return the automotive and will probably be checked for gas ranges and mileage and what time it was returned. There is a transponder within the automotive that electronically uploads that data. There is not any human intervention. In the event you can eradicate the human judgement and put extra of it into an automatic means, the purchasers have better belief in our relationship with them.

BTN: What’s Sixt’s sustainability technique, particularly with electrical autos?

Kennedy: In some markets, EVs are very welcome and wanted and needed, like in California. We’ll observe what the shopper demand is. 

The charging infrastructure of airports may be very restricted. Our means as an trade and an organization to give you the chance on a return to recharge that automotive in a fast means may be very challenged in sure airports. That must be constructed up. Airports are working with the automotive rental trade to put in that infrastructure, however it will take somewhat extra time. 

We’re all a perform of shopping for these property and having to resell them sooner or later. … With EVs evolving, with expertise evolving so quickly, the vary for instance, getting higher battery life, the variety of fashions coming into the market, that places pricing strain on older EVs and due to this fact can put strain on the resale of these EVs. That is one thing as an trade and an organization we now have to be very cautious about. Proper now, there’s a restricted quantity of demand for [EVs] as a result of there nonetheless is vary nervousness. There are quite a lot of components that go into that buyer demand combine. I’d say we’re a detailed follower, and we’ll go along with what our prospects need.

BTN: Do company managers ask you about EVs for his or her offers?

Kennedy: They need to know what your EV technique is. However we discover rather a lot that when the company vacationers really journey, they do not actually need an EV. They’d relatively have an [internal combustion engine] automobile as a result of they’re conversant in it, they know the expertise, they do not have to fret concerning the vary nervousness issues and the recharging. So, the journey supervisor often needs to deliver that up, and we’re very happy to offer and provide that availability for them. However when the traveler reveals up, they truthfully would relatively have an ICE automobile than an EV.