Alain Visser, CEO of Lynk & Co (2): ‘We are the wild horse in the stable’
Alain Visser, CEO of Lynk & Co, preaches the revolution. He doesn’t want to sell cars anymore, he wants to lend them monthly, and he wants his clients to share them. In this second part of the interview, he explains how it works.
Visser has no high opinion of the current car business. Over the years, cars may have evolved quite significantly, but the business of selling them hasn’t. “Over the last decades, I have been shocked by this industry telling us that it’s revolutionary. I think it isn’t.”
“The industry today is still designing and engineering cars, producing them in big factories, and shipping them to dealers who sell and repair them. It started 120 years ago like that, and that’s how they’re still trying to do it today.”
Visser tells us that all future prognoses tell us that this model is at its very end. He wants to sell mobility, so he started a model where clients subscribe to rent a car monthly. But Visser doesn’t like to call it subscription anymore.
“In fact, other manufacturers have stolen the idea from us, but what they do is not at all the same. Most brands talking about subscriptions now are, in fact, implying a form of leasing. That’s why I have introduced the notion of membership in this context.”
“I really think that Lynk & Co is the wild horse in the stable. We ask our clients to become members of a community. As part of that community, they do not only rent a car; they can also participate in events, go to musea, restaurants, the gym, etc.”
“We also want to make this ‘renting’ as simple as possible. For the moment, our cars are only hybrids (model 01). They come fully optioned, and they are only available in blue and black. The result: you sign your membership on Monday, and on Wednesday, you have your car.”
Of course, Visser doesn’t want to bet on one horse only; one can still buy a Lynk & Co. “Until now, we see that 70% of our new clients are members; they go for the monthly renting and want to be able to stop it at their convenience, every month.”
“One of the problems of the traditional car industry is the distribution system. The system of dealers is expensive and old-fashioned. We will have 16 ‘clubhouses’ all over Europe and pop-up stores where you can see the cars, test them, and book for events and other things.”
Service at home
Of course, a car needs maintenance from time to time. Having no dealers of their own, Lynk & Co will use the existing Volvo dealers to service the cars. It’s always nice to have a ‘sister’ who can deal with this aspect of the business, and apparently, Volvo likes it. They’re already doing the same thing for the other, pure electric sister, Polestar.
“Our members don’t have to bother much about service. Their car is being delivered and fetched at their home, and they always get a replacement. The cost of service is included in the membership, and we aim to see the cars in our network as little as possible.”
Who are the potential customers? Seeing the scheme, one tends to think that Lynk & Co is aiming at the so-called Millenials, the people who prefer subscribing to services instead of owning products. “Our clients are not exclusively young people; they have a young or different mindset. We see that most of the early adopters are between 30 and 50. An open mind has no age limit.”
“Today, customers think differently. They’ve started to share things, from bikes to cars, and even their houses. Of course, many people still want to buy a car, but the number of customers who want something different is growing. We go for this 10% (but growing).”
Innovating is also the fact that a member can share his car with family or friends. The ‘owner’ of the car can then recuperate part of his monthly fee by charging others. That’s why Lynk & Co sees other sharing companies as their biggest competitors. Companies also can be interested in this scheme.
“Companies can have a pool of our cars in their car park. I reckon that, in the future, this will be 30% or more of our business. We see rental companies evolve in this direction. With their subscription policies, they’ll become the biggest competitors in this mobility industry.
“At the moment, the profitability of the sharing business is horrible. Almost everyone is struggling in this business to survive. But our added value is the membership, the emotion, the events on the side. We will be judged by the number of members, not the number of cars sold. That’s why we need to have a high occupancy rate for our cars.”
Only in Europe, for the moment
Lynk & Co is already proposing cars on the market in China since 2018. But there, almost all the cars are sold (some 125 000 in 2018). “The Chinese market is still very traditional. Proposing a sort of subscription to a Chinese customer is offending him/her. Our business model for Europe is big news over there.”
“In Europe, we aim for 10 000 members in 2021, and more than 100 000 by the end of 2023. Already now, we have 5 000, most of them in Sweden and the Netherlands. As usual, the Belgians are no early adopters.”
One should think that a quite revolutionary concept matches electrification perfectly. But Lynk & Co doesn’t offer pure electric cars yet. “The future is pure electric, that’s for sure. But to be the family’s unique car, it’s too early because the infrastructure is not ready yet. Our business case has to be simple and hassle-free. For most clients, this means hybrid at the moment.”
Unique selling proposition
The USP of Lynk & Co doesn’t lie in the product (yet) but in the people who work there and the customers they want to attract.
“Our car is brutally simple, you take it, or you leave it; that’s part of our business plan. But in the people who work for us, you can see the unconventional mixture of our customer base.”
“80% of them have never worked in the car business. 50% of them are female. At our headquarters in Gothenburg, we count 24 different nationalities. Our head of marketing doesn’t even have a driver’s license. Maybe, we still have to work on that…”