In collaboration with Union Mobility
In recent years, the automotive world is undergoing a revolution in many areas, perhaps the biggest revolution in the industry, since the first car was born, over 130 years ago;
One area is the all-electric car.
After years of propulsion by internal combustion engines and burning huge amounts of gasoline and diesel, the presence of the electric vehicle on the roads is becoming more and more significant, with growing market shares, and this in just a few years, since it was only a marginal phenomenon in the automobile market.
The global automotive industry talks about the radical changes that await us, to the point of announcing that within a few years, no more vehicles with internal combustion engines will be sold at all.
Another field is the autonomous car.
Already in the current era, cars have become semi-autonomous, the active auxiliary systems help the driver and in emergencies even work in his place, and these have become standard even in the lowest segments.
Absolute autonomy, in which the vehicle completely drives itself, raises questions about the way decisions are made and the considerations that take place when driving in real time, prioritization in emergency situations and in fact - to what extent human moral considerations can be given to the algorithm.
Beyond that, there is an understanding that owning a car is considered an outdated world view, and that is being replaced by the new view, which considers that the human need for a car is actually a solution for mobility and the provision of smart transportation services, without necessarily purchasing one.
The car manufacturers in the world who recognize the change in trend, adapt their way of operation, the products they offer and their entire relationship with the customer.
Prominent in this is Toyota, the largest manufacturer in the world, which announced that it is undergoing an organizational transformation and becoming a MOBILITY COMPANY, as a result of the same strategic decision, the Union Group, an importer of Toyota, Lexus and Geely, is also moving in this direction and founded the Union company about 5 years ago Mobility, which provides leasing services and advanced and diverse mobility solutions for all of the group's vehicle brands, while understanding that customers and their needs change.
We met Dor Pickel, CEO of Union Mobility, for a short conversation about the revolution taking place in the perception of the car and mobility.
Dor, tell us a little about the revolution that is taking place at Toyota and your preparation in the face of the changing perception of customers about the need to own a car
Already at the end of 2019, Akio Toyoda, the president of Toyota, announced that Toyota is preparing for the next era - connected, autonomous, shared and electric vehicles, and this has profound implications for the entire business model according to which the manufacturer operates.
In fact, the manufacturer defined that it is turning from a "manufacturer of wheels" into a technology company that provides smart transportation services and mobility solutions.
The new road map leads to significant changes in the products, the working methods and the relationship with our customers.
The immediate product which is widespread in North America and Europe and reaches us a little late is of course the private leasing, and in its local version - operational private leasing, but after that we will see a wave of flexible and technological solutions around the world of cars as a service.
We see an expanding trend of using private leasing. What are its advantages over a traditional car purchase?
The global trend of leasing programs is gaining momentum.
No less than 90% of the American car market has switched to various leasing programs, and in Europe this is also a very common phenomenon, with about 60% of the total car market there.
The perceptual change among the customers was made from the perception of ownership and belonging of a car, to the discovery of a new world of private leasing, where the traditional, business leasing is a solution that is becoming weaker in recent times.
We see a growing trend mainly among the X and Y generations, a young population that understands that buying a car involves quite a bit of hassle, risks and financial considerations, which are saved when switching to a private leasing program.
The concept today is to stop working for the car, and for the car to start working for me and serving me.
When you move from the concept of "ownership" to the concept of "use", you realize that there is no longer a need to use vacation days from work, just to take care of the car's affairs.
There is no need to deal with buying and selling the vehicle, you are prevented from arguing in the garage about the amount of the cost of the treatment or repair, there is no litigation with the insurance company about the amount of the policy, and a long and tedious procedure is also saved, after the vehicle has been damaged or stolen, God forbid.
In fact, all the calculations that are done before buying, such as how much I will buy, how much I will sell (or actually, how much I will lose), how much the interest on the loan will cost me, what is the alternative cost of the money I used for the purchase, maintenance costs, insurance costs, etc., all of these suddenly become irrelevant .
A private leasing program allows "peace of mind" and the feeling of "everything is included", without financial risk, and financial ones are absent from the equation.
In this model, all costs are defined in advance, and are spread over convenient monthly payments.
Our everyday is becoming more and more busy, at home, at work and everything in between and we are looking for every opportunity to OUTSOURCE and offload as many tasks as possible from our routine.
Since a detailed cost calculation reveals that private leasing is not necessarily more expensive than owning a car, and even if it is, the differences are not large, this makes economic sense for the transaction, and encourages a switch to private leasing.
Because of this, the share of the private leasing market only increases year by year.
Photo: TOYOTA,
You claim that private leasing is particularly suitable for the spirit of the current era. why?
One reason is the outbreak of the corona virus, which is a catalyst for a changing world and corresponding regulation, and therefore also caused a behavioral change of employees in companies.
Many of them work at least one or two days a week from home, and the use of the compact car is becoming less frequent, therefore private leasing programs, which take into account all costs and the actual distance traveled, and give "peace of mind", may be suitable for those employees who are used to leasing through the workplace, which takes taking into account a high usage threshold and costs derived accordingly.
Another thing, the current macroeconomic environment has caused uncertainty in the economy, and an interest rate environment that just goes up and up.
This directly affects the feasibility of buying and owning a car, since the customer asks himself: "Why would I buy a car and be encumbered by a loan that is attached to the prime, one that only "suffocates" my obligation, when there are solutions such as private leasing."
Dor, tell us a little about Union Mobility
The company was established in 2017, as a subsidiary of the Union Group.
Today there are over 5,000 vehicles managed in the company's fleet, and we are experiencing an increase of about 70% every year in the last 3 years.
Because of this, we set ourselves the goal of crossing the line of 10,000 vehicles in the company's fleet, within about two years from today.
Already today, among our customers, you can find banks, insurance companies and large industrial companies, and this alongside a focus on the classic area of operation known to us - the private customer and small businesses.
Out of the total sales of Toyota in Israel, for example, already over 10% of the sales activity ends in private or traditional leasing transactions.
It has long since ceased to be a niche service aimed at the picky customer.
Union Mobility deals in leasing solutions only for Union Group brands, namely Toyota, Lexus and Geely.
Does the company have advantages over other solutions on the market? After all, there are quite a few companies that can give the customer a leasing program, even on a vehicle from your group.
The product we give to the customer is different from other leasing solutions.
It is possible to make a mistake and assume that if two different companies offer me a private leasing program on a Toyota Corolla for example, these are identical products.
Our general approach advocates that "If you are interested in Toyota, you should start with Toyota's own private leasing program, one that will give you the best service. It is recommended that you do it on Toyota's home turf."
This means that your vehicle will be serviced at the importer's service centers, spread throughout the country, where only original spare parts are used, and the service is professional and reliable.
Even if I don't own the vehicle, it is still very important to me as a private customer or as a small business, that the tires, brakes and even the air conditioner filter be replaced according to the manufacturer's instructions.
Beyond that, the management of our relationship with the customer and the standards of our service at the call center, roadside services and in any operational matter that our customer needs, are among the highest that can be found in the industry.
Does your company have additional unique advantages, and solutions that cannot be found in competing companies?
First, our company develops services in the spirit of the manufacturer, with full adaptation for the local market, therefore we invest a lot of effort to ensure that our solutions are tailored and adapted to customers and their needs.
Beyond that, we allow the customer to choose any vehicle from our wide portfolio - in any finish level, model or drive version he wants, and at a low price difference, compared to the basic finish level.
Usually, when it comes to leasing, the customer is allowed in other companies a deal for one model finish level, and it is usually the basic one.
Since we understand that we also provide service to private customers, our solutions are more boutique, and therefore we know how to offer leasing programs for each and every vehicle from our brands, which we offer at all Union Motors sales points, spread throughout the country.
Finally, are Union Mobility expecting more interesting products in the future?
I can tell about two main tools, which are expected to join the main arm of the company, which includes the traditional (business operational) and private leasing.
The first, Toyota SHARE, is a shared vehicle and a dedicated application, through which vehicles will be displayed nationwide in a short-term use model, allowing maximum flexibility for the customer who needs a vehicle, even if it is used for an hour or only for one day.
This service is just around the corner, and we expect to launch it already at the beginning of 2023.
Another product, flexible leasing, will allow the customer to enter into a deal that obligates him for a period of six months to a year only, of a used vehicle.
This is a product for which we see high demand, especially in light of a period of vehicle shortages and long waiting times.
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In collaboration with Union Mobility
