Sixt Launches Subscription Service as Latest U.S. Expansion Tactic

Sixt’s Sebastian Birkel discusses:

  • Corporate use cases for long-term rentals
  • Acquiring former Advantage locations
  • Becoming ‘top-of-mind’ for U.S. consumers

On the heels of its recent expansion in U.S. locations, Sixt in recent weeks launched a new subscription plan, Sixt Plus, for U.S. customers, in which they can rent vehicles long-term for a monthly fee. Sixt North America CEO Sebastian Birkel spoke recently to BTN transportation editor Michael B. Baker about the new service and potential use cases as well as other strategies the company recently has launched to grow its presence in the U.S. market.

BTN: What drove the launch of this new service?

Sebastian Birkel: There is a change in the mobility needs. Some are more interested in individual mobility than they were before. Mass transit and some other products have become less attractive because of the pandemic, so for them, it’s a great way if you don’t own a car to get access to a car for however long you want it. The minimum we have is 30 days, but anything beyond, you can keep it as long as you want.

BTN: What are some other use cases? Do you expect much corporate use?

Birkel: In these uncertain times, you’ve seen the unemployment rate, so people might not be as eager to commit to financing for several years now, so for them, it’s a great way to get a car and mobility without a longer-term commitment. Anybody in the corporate world who has an assignment that goes longer than a month can get from an attractive price point a car without any obligation. You can also talk about expats, or I recently had a friend of mine who bought a car but has to wait until November until the new car is available, because some of the manufacturers are having heavy delays in distributing cars to the dealership. They wanted the car as a trade-in immediately, and he has to bridge between now and November. There are also markets like Hawaii which are known for people going for an extended vacation, where they spend two or three months on the island. The current zeitgeist is people want to pay for what they get on-demand, and if they don’t need it any more, they switch it off, like Netflix or Spotify. That’s the same with our product.

BTN: Is the U.S. your first market for this?

Birkel: Germany started it, and once they had tested it and rolled it out, we adapted it to the United States.

BTN: What happens if there are maintenance issues?

Birkel: Maintenance in general, such an oil change, or at some point the tires are down, you bring it to the branch, swap the car and get a new one. If any light comes on on the dashboard, just take it to the branch.

BTN: What are some other new services you have been adding recently?

Birkel: From 2020, we first opened up our car retail sales business, which now means you can not just rent a car from us but you can buy it, and you can finance it and lease it. This was just another piece we added in terms of being a fully wholistic mobility provider. In July, we acquired 10 concessions out of the E-Z/Advantage bankruptcy, giving us access to the whole New York metropolitan area. We had Boston, and we also bought two concessions in Hawaii and added Houston as a new market. For places like Denver and Orlando, where we had a presence before, and Las Vegas, we also moved on-airport now, giving our customers the full premium experience we have when they rent. [We recently] announced the partnership with Lyft in the United States, that Lyft now allows ride-hailers to get a car rental from one of our branches through the Lyft app. 

BTN: Do you see this as an opportunity to increase Sixt’s standing in the U.S. market?

Birkel: There is so much uncertainty in the market right now. You also have Hertz, which declared Chapter 11, so how is that going to impact the overall landscape? They used to have 440,000 vehicles, and they’re going to shrink dramatically. There are people like us who are waiting for what comes out of that, because we are ready to take over a bigger marketshare. Market size isn’t everything. Thinks have changed so dramatically over the past six months I couldn’t even give you a reliable figure for my marketshare in the United States right now because I can’t even gauge the market. 

Other than that, we were working very hard and have been very successful over the past eight to nine years to become a relevant player in the U.S. market. We already were a solid number four even before E-Z/Advantage went bankrupt. We were on the heels of the Big Three. There was a gap but we were closing that and continuously expanding, and we want to continue to do that. We are in the phase where, first, we needed to get the customer to realize we were there as a viable player. Once they make that connection, we also want to present ourselves not just as a pure car rental player but playing the whole spectrum of mobility offerings that are out there, which we already have in Germany. It’s more about talking about the mobility sector as a whole and becoming more top of mind for the customer. 

BTN: What’s your long-term projection for business travel recovery?

Birkel: I don’t think we are going to be back to 2019 levels by the end of next year. You don’t know how the vaccination is going to play out. Still, we’ll see business travel come back at some point. We see it internationally as well. I still don’t believe a videoconference is a total substitution to one-on-one interaction. When you go to trainings for new hires [for example], it’s just different, if you want to portray the culture of the company. It will come back. It’s a matter of when, not if.

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