From vehicle finance provider to mobility service provider: Mercedes-Benz Bank grows with new products
- Contract portfolio grows by 12 percent in 2017 to 26.9 billion euros
- CEO Franz Reiner: "The trend is towards flexible vehicle use and telematics-based billing."
- New offers "InScore" and "Mercedes me Flexperience"
Stuttgart - The business model of Mercedes-Benz Bank is transforming rapidly due to substantial changes related to customer needs. The traditional car loan has given way to flexible-term financing long ago, with the option to give back the vehicle, continue the contract or buy. The world of leasing has seen even greater change. Leasing instalments have become flat rates, including insurance and service. There is also a growing demand for vehicle rentals and telematics-based products. At the same time, the digitalisation of the business, along with smartphone bookings, is progressing. "In future, we will also integrate mobility services such as car sharing into our vehicle financing, in addition to making offers specifically for electrically powered vehicles," says Franz Reiner, CEO of Mercedes-Benz Bank AG and Member of the Board of Management of Daimler Financial Services AG with responsibility for the European market.
In 2017, which marked the thirtieth anniversary of the company, Mercedes-Benz Bank posted record figures. The contract portfolio, i.e. the value of all vehicles financed and leased, grew by 12 percent to 26.9 billion euros. This represents a total of around 970,000 cars, trucks, vans and buses on the books. In the meantime, one in every two Daimler vehicles in Germany is on the road with a contract from Mercedes-Benz Bank. "Whereas, previously, our focus was on the financing of vehicles, it has now turned to every facet of automotive mobility. The trend among our customers is towards flexible vehicle use and detailled billing that uses telematics to record the actual use," adds Reiner.
Launch of new offers
In Autumn 2017, Mercedes-Benz Bank introduced its first telematics-based car insurance policy "InScore" in the German market. Customers can directly influence the amount of their insurance premium with a "driver score" made up of driving style, driving time and route. This allows a discount of up to 30 percent compared with the conventional amount. The data for calculating the insurance premium comes straight from the vehicle via a factory-installed Telematic Control Unit (TCU). At launch, the insurance policy was available for the new E-Class and is now being rolled out for new Mercedes-Benz model series.
The new offer "Mercedes me Flexperience" will in future give customers the option to drive up to twelve different vehicles for a year for a fixed monthly instalment. The rental price includes all costs from insurance to service and repairs to tires, including 36,000 kilometers a year. The new offer is based on Mercedes-Benz Rent, the rental offer from Mercedes-Benz Bank. The joint project was developed by Daimler Financial Services and Lab1886, the innovation hub of Daimler AG. The centerpiece of the mobility offer is an app that allows the customer to digitally manage the complete handling of the vehicles round-the-clock. This extends from choosing their "dream car" to picking up and returning the vehicle. Pilot operation will launch in the next few weeks with two of the largest car dealer groups within the German Mercedes-Benz Cars Sales network, BERESA and LUEG.
Tailwind for 2018
Mercedes-Benz Bank has continued on a successful course in the first two months of 2018. "We're off to an excellent start. At of the end of February, new business was already up by 14 percent in comparison with the year before. With the new A-Class and C-Class, this year will see two high-volume models come to market, which means an additional tailwind for us," says Franz Reiner. Around one million customers currently use Mercedes-Benz Bank, be it for vehicle financing or insurance, fleet management or direct banking with overnight or time deposits.