5 minute read
Supplier stories
Mycardirect
Duncan Chumley, CEO of Mycardirect and David Murray-Hundley, chairman of its parent company AAM Group, explain how the car subscription business has gone from strength to strength in 24 challenging months
LIKE AND SUBSCRIBE
It’s fair to say Mycardirect has proved popular with drivers.
Mycardirect recently celebrated two years in business. One of the biggest achievements in that time has been making the company profitable, which is rare for a car subscription business. This year we’ve had three times the revenues of a year ago, with around 2530% of that coming from the fleet and business sector. Tellingly, around 60% of the new business has been in electric vehicles. That growth enables us to reinvest in the business and also to get the car subscription message out all areas of the market. We are obviously keen to continue that journey and we see a lot of opportunities and potential for EVs on subscription as they become a bigger part of the UK vehicle parc.
The response from the fleet industry has been better than expected.
We first came up with the idea just as the world was going into lockdown, but we thought it was going to be more of a B2C proposition. But, actually what we found is that the interest from the B2B sector is growing. Some of that is driven by the rise in demand for EVs, because businesses are looking at the sector and figuring out how they introduce them into their fleets. In many cases, companies don’t want to commit to four years with a certain car when they don’t know it will work for them or not.
We’ve got ambitious future targets.
Over the next 12 months, we’d like to have 1,000 subscription vehicles out in the fleet market – and we don’t see any reason why that’s not achievable, based on the current inquiries. Obviously, the only caveat around that is supply, but that’s an issue clearly out of our control. We’ve also seen interest within the van sector and, from our perspective, offering LCVs as well as cars gives fleet customers more choice, which they value.
Big fleets are testing the water – and that’s fine with us!
Some of the fleet customers we have on board are household names. A lot of them love the flexibility because, while they have a 500-vehicle fleet, they don’t take 500 cars on subscription. They appreciate the fact that they are able to run 50 or so vehicles on a subscription setup to find out how it works for them.
Flexibility is key to the business model.
The agreements can be as bespoke as the customer wants and they can pick and choose from different elements to be covered. We offer various subscriptions from one or three months right up to 36 or 48 months. But within that time, drivers can upgrade or downgrade, depending on their situation or requirements. We make sure everything is transparent upfront and that the customer or driver understands the package they have. For example, the mileage options are either 1,000 miles a month – which is standard – or 2,000 miles a month. Outside of that, for certain clients we will offer 3,000 miles a month coverage.
The effects of vehicle and chip shortages have been limited on the business.
We’ve managed it well, partly helped by the fact that we have a mix of new and used vehicles to offer. We also have great relationships with the OEMs and one of the things that surprised us, as outsiders, was the trouble people getting hold of vehicles and waiting years for the right ones. The experience we have within the group and the relationships we have built means that we are able to overcome those issues and get people into the cars they want.
The size of the company has its efficiency benefits.
We know that at OEM level, or big corporate companies, it is sometimes difficult to be reactive or dynamic. There are so many people involved and layers of authority and structure that it presents a real challenge. But we’ve been able to make decisions really quickly. For example, we’ve had phone calls from a manufacturer offering us 10 cars and made a decision on those vehicles there and then.
Admittedly, the business would’ve grown even faster if there was more vehicle availability, but that will come in the future.
People are very open to alternative vehicle acquisition options now.
Maybe before covid and the shortages, people wouldn’t consider a company such as ours. But things have changed and we are seen as inclusive, from the point of view of drivers and customers. They are interested in people who can deliver and a package where they don’t have to worry about tyres, maintenance and servicing issues – it’s all covered by us. From their point of view, they can get everything they need from us and vehicles they can rely on.
The past two years have been great, we hope the next two are even better.
From a pragmatic point of view, we want to continue on the growth curve that we’ve got and continue to reinvest in order to make Mycardirect the leading vehicle subscription company in the UK. Whenever a driver thinks about car subscriptions, we want them to automatically think about us because we’ve become a household name. Keeping the shareholders and the chairman happy would be a bonus!
The UK market has so much potential but we’re not averse to looking further afield. Maybe not in mainland Europe, but the US market might be slightly easier to crack. But if and when we do that, it will be fairly localised – Boston, for example – as opposed to the whole of the country.
