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New Kopel Group Mobility solutions and much more

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By Cristian Cojanu
Relying strongly on its group synergies, New Kopel Group estimates more double-digit growth for its business units. In an interview with Business Arena, Tal Lahav, CEO New Kopel Group, spoke of the group's objectives, market outlook and its challenges in the current economic context.
Based on your experience in the industry, what are the strong points that New Kopel Group can rely on in this market and what are the challenges?
New Kopel Group is not just another operational leasing and car rental company, it is the group that brought operational leasing to Romania and integrated it into the “One Stop Shop System”. This allows us to offer maximum flexibility and benefits in the automotive industry through our business segments that comprise car rental, operational leasing, second-hand car sales, an authorized Opel/ Dacia/ Renault and multi-brand garage, and an Opel dealership. Thus, we can stay close to our customers (partners), be flexible, and provide tailor-made solutions for our customers at a unique cost-to-benefit structure. Currently, a majority of our customers are using all our business units, through our Group Synergy.
The challenge in our activity is to continue positioning our group as a top-quality provider, close partner to our customers, offering maximum flexibility and business solutions, at the most competitive cost-to-benefit ratio, in order to build a loyal and appreciative client base.  

What are your priorities in erms of business development and expansion in 2017?
We are developing all our business segments based on our plans and budget, without prioritizing one segment over the other. Our main business drivers are the operational leasing and rent-a-car fleets that give a boost to all our group’s operations, but we are simultaneously working on developing and constantly improving all our activities in order to secure maximum synergies and the best value for money for our customers. In addition, being a group with a proactive, dynamic, and entrepreneurial spirit, we are constantly looking to find new innovative business ideas, whether through acquisitions or development of business solutions.

As the Group has announced plans to invest in excess of 20 million euros in its local operations, what are the main objectives for each individual division in 2017?
In 2017, New Kopel Group plans to increase the operational lease and rent-a-car activity by up to 20 percent. At our second-hand car dealership, New Kopel Group plans to increase the number of cars sold by up to 15 percent. At the Union Motors dealership and workshop, one of the biggest such operations in Romania, the objective is to increase the level of activity by 15 percent.  
We look closely at the market and at our customers, so we can understand their needs. We also look at our own operations in an effort to develop a synergetic, proactive group, with a talented and creative team of professionals. We are able to offer all the existing solutions in the automotive industry in one place, and provide our customers with a partnership which includes, among others, tailor-made solutions, top-quality services, and flexibility. We support SMEs and startups, offering them the same advantages bigger companies have access to. The professionalism, innovation, and dedication of our managers and employees make us different, while we promote the “Always Yes” philosophy. In 2017, we will also continue to concentrate on the development of our employees, as they are our main asset.

What were last year’s main achievements at New Kopel Group, and what aspects of business did not yield the expected results?
New Kopel Group had a successful 2016, with an investment value totaling 13 million euros and over 1,000 new cars bought. The turnover increased by over 10 percent to more than 26 million euros. Our used car business recorded sales of 50 - 100 cars per month, selling to individual retail customers, while our operational leasing and rent-a-car fleet grew to around 3,500 cars under management at the end of the year, posting an increase of around 20 percent. Over the same period, Union Motors’ showroom and service garage saw a 30 percent increase in operations. In 2016, we continued to focus on SMEs and startups, and on increasing our market share in the operational leasing segment. In the car rental business (SIXT Rent a Car), our objective was to maintain the same growth we recorded in 2015, and expand the fleet to over 800 cars in all segments. Also, the company had a sales target of at least 1,500 new and second-hand cars. Opel Union Motors (new cars) and SIXT New Kopel Second Hand (used-cars) each contributed to achieving that target.

How would you describe the general development prospects
of Romania’s fleet management and car rental industries?

Overall, the operational lease market maintained its upward trend. We believe the market is going to continue to grow in 2017 and in the years to come. At the same time, Romania’s market still has a development gap compared to other CEE and EU countries, and further growth is inevitable. The main market stimulator relies on an improved understanding of the operational leasing product and its benefits. Step by step, more companies understand that it is better to invest their money in their core business, while, at the same time, they enjoy the know-how, experience, and economies of scale provided by the operational lease companies. In addition, car rental industries are highly dependent on the country’s investment in its general infrastructure and leisure facilities and promotion, in order to attract tourism and FDI into the country.

What could be the winning strategy for boosting new and used vehicle sales in 2017?
In the used vehicles segment, we will continue to focus on local retail clients, offering our “Prima masina SH” package and the most comprehensive bumper to bumper warranty, a unique product in Romania. When our customers buy a used car from us, they have peace of mind, because they gain access to some unique features such as a two-year comprehensive, bumper-to-bumper warranty, first owner guarantee, a transparent car history, and a competitive financial offer. In the new car segment, we are going to concentrate on fleets, commercial cars, and creating comprehensive cars plus service packages at a competitive price-to-value ratio.

What is your view on the level of competition in your industry?
Generally speaking, the automotive industry entails a large number of participants, with especially large numbers of new market entries in the leasing and rental segments. The level of competition in the operational leasing and rent-a-car segments depends on the perspective we take on the market. Competition should result in more supply of cars and more power for the consumer to receive better quality at competitive prices. We are very much in favor of proper competition that will motivate us to stay innovative, always on our toes, and generate an improved consumer experience. Currently, there is a relative surplus of companies operating in these market segments compared to the level of existing demand. That said, competition does not always go in the right direction and improve customer experience. Instead, companies may get into a market-share war, generating price averse conditions, which, in turn, result in lower quality services provided to customers and many obstacles on the ho­rizon for the market. Indeed, there are many aspects that can lead to an increase in the volume of cars under active management, including economic, infrastructure, and tourism development, an increased awareness and better understanding of the benefits of such services. Even so, in order for customers to enjoy the best value for money, the market must go through a process of consolidation over the next period.

What are the most sought-after services and products?
We provide comprehensive solutions to our customers, through our one-stop shop system, which facilitates their access to our car rental, operational leasing services, second-hand car dealership, authorized Opel/ Dacia/ Renault and multi-brand garage, and Opel dealership, with the best possible piece of mind and value-for-money package. We achieve this through our “Always Yes” philosophy and group synergy, offering advantages and maximum flexibility to our customers, who can choose one service or a complete package of services, while still enjoying maximum advantages resulting from our group synergies. The majority of our customers are serviced by all our business units, through our Group Synergy, and I cannot make reference to specific services that are more on demand than others. 

What elements give your company an edge against competition?
We have always had a major goal: to be unique and different. With our “Always Yes” philosophy and state of mind, we are different and unique in attitude, in services, in caring for our customers, in forming partnerships, and in building a team of talented and caring managers and employees. And this is a reality. Our daily focus is to keep this high standard alive and secure it with real actions. A differentiator is the fact that we have the “One-Stop Shop System” and the Group Synergy. Also, we are unique in the fact that we support SMEs and startups, companies that are in development stage. These companies are the companies of the future that need our support now. They operate in an environment with more challenges and risks, but they also need mobility solutions, a car or a small fleet. New Kopel Group has the desire and ability to support the growth and development of these segments because of the flexibility given by our Group Synergy.

What changes in Romania’s economic and social scene could lead to a boost in revenues in the business segments covered by New Kopel Group here?
The automotive industry is sensitive to various market developments, both on the local and global scene. Factors such as pollution taxes, insurance market changes, the development of hybrid, electric, and autonomous cars, etc. have significant effects on the automotive industry. In addition, the overall market development, mainly driven by increased FDI due to more growth opportunities and stability, regulatory stability and incentives for business development, infrastructure investments, tourism promotion, etc. will all result in growth in all segments of the automotive industry. In addition, the improved market awareness about operational leasing and its benefits is going to result in a boost for the automotive industry in Romania.

Where do you see the Group in five years?
Recent global and local macro and micro changes, developments and forces have created a context in which long-term plans are becoming less and less frequent and relevant. Still, we have long-term views and aspirations in the Romanian market, and we aim to keep the annual double-digit growth, and develop our activities and position in the market, so that we are the top choice supplier in the automotive industry, offering the best value for money, partnership, and flexibility to our customers. We have the ability and resources to develop and change to meet the market’s needs. We have the ability to manage risks, and we are lucky to have a talented and creative team, able to lead the boat to the shore under all weather conditions.

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