Heading towards a year in the hot seat as far as Seat’s fleet sales are concerned, Peter McDonald has scored a couple of big wins that have helped propel the brand forward in fleet profile terms.
Appointed head of fleet last December, McDonald moved from his previous role as head of planning to succeed Steve Robertson. Winning British Gas’s fleet business in 2010 was Seat’s most high-profile deal to date, and its parent firm Centrica renewed and extended the arrangement this summer, around the same time as BusinessCar revealed a joint Seat deal with Audi to snare financial giant Zurich’s business. That was the first time two VW Group brands had worked together, and the ability to offer mainstream and premium models – replacing Vauxhall and BMW – was crucial to the deal.
“We’re now more confident and have the confidence to speak to large fleets. Centrica has helped that and you can imagine who we had to beat to win the Zurich deal, which was done on whole-life cost and product,” McDonald tells BusinessCar. “I think my team is much more confident walking into any fleet in the UK and being seen and having a case. Maybe that wasn’t there in the past.”
With the Zurich deal, the Leon 1.6 TDI 5dr is the benchmark car for the majority of eligible employees, who are then able to move up to higher-specification or more powerful Leon models, or into an Audi.
“We’re proud to have been able to introduce Audi,” says McDonald. “There are elements of the fleet where Audi doesn’t have the right product, or has interest in, and elements of the fleet that they do, so together it’s a really compelling proposition to work together to give the best of both worlds.”
“Our interest is in Leon volume, but drivers have the ability to move up the Audi range,” he continues. “People can walk up through the Leon range, to a Tech Pack or FR derivative, or to a Leon ST or an Audi. And we’re quite happy if they’re moving to Audi.”
Product
Seat’s range will continue to grow, with a small SUV scheduled to appear within two years, likely teased by a concept car during 2015.
But before that comes a revision for the Ibiza supermini, due next year, with a focus on interior improvements. That car, McDonald says, will find a role in salary sacrifice and Government procurement channels, aided by a car that at first glance doesn’t have a big fleet angle: the Mii by Mango.
A tie-up with Spanish fashion house Mango, the range-topper of the Mii city car range is designed to help make the car stand out from its almost identical VW Up and Skoda Citigo siblings launched at the same time as the Mii.
“The Mii struggled to differentiate from the other offerings – this will help differentiate it from the sister brands and get a good RV,” says McDonald. “I see real opportunities with salary sacrifice – it won’t be the biggest volume car, but it’s important as Seat grows that we execute the entire portfolio.”
He says the company will end up covering 80% of the true fleet marketplace in terms of sales once all the new product is launched, rather than a “niche one- or two-car marketplace”. That will help the firm’s growth ambitions, with Seat looking to increase its market share from 2% to 3% among so-called true fleet end-user and contract hire business.
“We don’t intend to do it overnight. There’s a three-year plan and we’ll have SUVs to help us get there,” McDonald explains. “Growth is coming in end-user business – not all mega fleet or all small fleet. It needs to be in all channels.”
Seat’s fleet boss declares that the firm has the appetite for more large deals such as the Centrica and Zurich ones, but is aware “how aggressive” rival firms can be when pitching.
“It’s not the intention to win every Zurich-type deal – we don’t have the resource to beat Vauxhall and Ford to every deal – but we know we have to take a share and it’s good end-user business and good brands to be associated with,” he says.
In preparation for growth, Seat two years ago doubled the size of the external customer-facing fleet team, according to McDonald, putting it at a similar size “to some competitors with a much larger share than us”, he claims. “We’ve got the infrastructure in place to grow,” he adds. “We’re growing and want to considerably increase the number of customers we work with, and need to speak to customers and get them to demonstrate our product
Looking to the future, McDonald isn’t perturbed about the lack of development Seat is showing on alternative fuels.
“Being part of the VW Group, there is all sorts of investment in alternative fuels – vehicles to fit niches,” he explains. “At this moment, my team can concentrate on where the marketplace is and today that’s really low CO2 out of conventional engine technology – diesel at 87g/km, 184hp Leon five-door at 109g/km. That’s where the market is.
“It’s good we’ve got access to that technology going forward but it’s not imminent,” he continues. “Low-emission diesel is where the market is today and what fleets are purchasing today. We want to speak to fleets about what they can procure now and need now, not in three years.”
A new X-perience
Seat will launch its first four-wheel drive model by the end of the year, in the form of the Leon X-perience. Along the lines of the Audi Allroad models, the X-perience offers extra ground clearance and off-road-style cladding, and will be offered with either 150hp or 184hp versions of the 2.0-litre diesel engine.
“One thing we believe will be an interesting niche is the 150hp X-perience with 124g/km,” Seat’s fleet boss Peter McDonald tells BusinessCar. “Knowing there are a whole bunch of fleets with a 130g/km cap, there are very few cars with 4×4 capability within that; the only one lower is Suzuki.”
Seat is also looking to emergency service and rapid-response fleets as an opportunity for its four-wheel drive Leon ST X-perience.
“We know it’s a big opportunity from what we have seen with the sister brands. There are a whole bunch of cars sold through these channels and we’d like to take some of that opportunity,” he continues, also targeting fleet user choosers. “We want to leverage the opportunity with end-user fleets – do you want a BMW 1-series or Mercedes A-class, or a car with the same rental, but with 4×4?”
