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[NEWS] Subs exclusive: Lynk&Co boss on how the brand apes Netflix

Subs exclusive: Lynk&Co boss on how the brand apes Netflix

Lynk&Co 01 static
The Lynk&Co 01 plug-in hybrid

Wide-ranging interview as CEO Alain Visser explains what makes the Chinese car maker different

Alain Visser is CEO at Lynk&Co, having taken the helm of the disruptive Chinese car maker after a glittering career at manufacturers including Volvo, Opel and General Motors.

Having been founded in 2016, Lynk&Co launched initially in China in 2018 and expanded into Europe in 2020, taking advantage of its Geely ownership to use the CMA platform also exploited by Volvo.

Its first car, a compact SUV, is simply titled the Lynk&Co 01, with the 02 crossover and 03 saloon following. A hatchback was also under development, but its future is uncertain, the 04 name now tipped to be given to an e-scooter.

The 01 is sold in Europe as a hybrid and plug-in hybrid, with prices starting from €39,000 (£34,000). It's also available on a monthly subscription - with a one-month cancellation period at any time - for around €550 (£472) per month, and so-called members can recoup some of those costs by sub-letting their cars.

Here Visser details the firm’s unique selling points and extraordinary success to date and talks about changes that he expects in the future.

What makes Lynk&Co different?

“We have three key differentiators. One is that if you choose not to buy, it's only one month you have to sign up for. The other is that during that month you can share the car. So when it’s idle, you can sublet it and reduce your fees. The third one is that we don’t have dealerships, but we do offer membership - and part of that community is that you get perks beyond the mobility from the car itself, such as concert tickets. That side has only just kicked off, because of Covid, but it’s ramping up.

“Beyond that, there's also another key point of the concept: its simplicity. Our specifications are straightforward: there are no options and you can have the car in blue or black, that’s it. It’s super-simple, so you don’t drive away with any regrets, except maybe that you chose the wrong colour. And if you feel that way and join as a member, yes, you can swap each month.”

How is it going in Europe?

“The truth is we’ve got more customers than cars at the moment, which is something of a luxury problem to have!

“To give you an idea, we launched the brand in Europe a bit more than a year ago, with the goal of having 9000 members, as we call them. We ended last year with 90,000 members, and today we’re at about 120,000.

“We’re in seven markets in Europe and have done almost no marketing. Our research suggests we have an awareness level of about 5%, so 95% have never even heard of Lynk&Co. To have 120,000 customers open to us despite that is way better than we could ever have hoped for.”

Which markets are your biggest?

“The Netherlands is the biggest market, which makes sense, as we started in Amsterdam. Interestingly, Italy is second - and we only opened there two months ago. And I know it’s a strange answer, but we don’t yet know why. The people in both countries just seem very open to change.

“We’ve not done any marketing - well, almost none - but the customers just keep coming in. Of course, we ask them their motivations, and from that we can see many themes. But if I were to try to sum it up, I would say that we hear that more and more customers are just tired of the traditional car-buying system.” polls its audience weekly, but only 1-2% say they would consider a car subscription. Is that a British peculiarity?

“Well, the latest statistic I was looking at was that in the German market, the figure is about 40% - and the UK and Germany usually align quite well.

“It might be that the people polled don’t align with the demographic who might subscribe or it might be that the term ‘subscription’ isn’t perceived the same way.

“In truth, we don't see ourselves as a subscription company. Other car companies use it as a new term for what is effectively leasing, be it for three, six or 12 months. What we offer is akin to Netflix. The uniqueness of our business model is you only have to commit to one month. It’s closer to renting than leasing.”

Have you got that message across clearly enough?

“I have to admit that one of our biggest issues is communication. When we launched subscription, we assumed people would associate it with Netflix and Spotify and understand. That was back in 2016. But then the whole industry picked up the name and used it for something else: this short leasing model.

“That’s why we now refer to membership. It’s a semantic debate, but for us it's so important that we make it clear to our customers and potential customers that it's one month only. That’s a key benefit of our model.”

Even if they are going about it differently, all manufacturers see ownership models changing. Call it whatever you like, but is short-term ownership going to grow as fast as people think?

“Yes, but to go back to my previous point, I think the concept of subscription is being abused. What a lot of manufacturers are offering is totally over-rated. It’s marketing talk for a short lease, and that’s very different to where I see the opportunity.

“The trend I see is the opposite almost: that people are ready to do something other than lease or own a car. We offer that alternative.”

Ford’s boss recently said that if you catch it advertising its EVs during the Super Bowl, something has gone wrong. Do you agree that the traditional approach to marketing cars has to shift?

“Well, first of all, we don’t have the difficulty of having to decide if we do or don’t advertise at the Super Bowl: we can’t afford it! I also find it strange to say that it's the shift to electrification that's driving the shift. Why would it being an electric car make you do something else? It’s just another machine to do the same job, so why would you use that as the reason to switch and communicate differently?

“It’s fine to have different opinions and approaches, but you have to think about why you did what you did - presumably it worked - and then see if there are different conclusions for now. It’s also hard to say we’re right and they’re wrong. There are just different approaches.”

What's the turnover of your members like?

“Actually, it's extremely low. We have a churn at the moment of about 3%. When we look at those cases and ask why they step out, it’s also interesting. It's almost never because they're dissatisfied or changing to another car; it's because they're suddenly changing to another job, they move so it doesn't work for them or they die.”

How many members sublet their cars?

“Today it’s 20%, which we think is quite promising.”

The British stand accused of being unusual in not wanting to share their cars. You plan to launch here in time, so do you have data that backs that up?

“A friend from another manufacturer used the phrase that the British look at the car the same way they look at their toothbrush: it’s not for sharing!

“Well, all I can say from our experience in other markets is that we’re seeing the opposite happening. Everyone can change, and our experience suggests that there’s a growing part of the population that doesn't have that ownership needs in the same way that many people do today. Why own something that sits and does nothing for the majority of its life? If it's standing there parked for five days, why not make money out of it?”

You’re hinting at a generational shift there?

“Yes, but our customers are younger but not necessarily what many would call young. The average age of our members is 40-45, which is about 10 years younger than the industry average but hardly a millennial-only customer base.

“I think the key lesson there is that it’s not just a matter of age but rather mindset. People are fed up with car dealers. They're fed up with complexity. We have the answer.”

Why are they willing to pay more than they would for a traditional, longer-term lease for this flexibility?

“All our surveys suggest the main reasons for choosing us are our simplicity and flexibility. But, yes, 550 a month for a car? It's a lot of money in some respects, but if you look at what you get for that money, it’s a very good price. Comparable with leasing a car, a lot cheaper than renting one. We offer good value, clearly.”

Do you have any issues with wear and tear?

“Not yet. Of course, there are some edge cases - but as many good as bad. We had one customer who fitted a new exhaust, had the paint touched up and more; the car was like new! In general, there seems to be no issue of people not looking after the car as they don’t own it. There’s the odd exception, but they're very rare.”

You seem energised by life at Lynk&Co. Is this a very different car company?

“I almost wouldn't call it a car company. This is the first time in my career that I'm doing something as a passion. I spent 35 years doing the traditional car company thing. I enjoyed it. But this is so different. I see it as a revolution against my old life. Eighty per cent of our employees have never worked in the car industry, and that internal spirit of really rocking against the establishment is really energising.

“Prior to this role, I had spent at least 10 years pondering why the industry just kept doing the same thing. I tried, but no matter how much the world changed, we just kept going the same way. Why wouldn’t it change? Well, if you got it right, it was wildly profitable. It didn’t make sense to change. But starting a new brand with Lynk&Co has given us the excuse to do it a different way. We’re taking a different path - and treading that path is my passion.”

Is Lynk&Co just about cars?

“No. Definitely not.”

I’m guessing e-scooters and the like would make sense?

“Yes, definitely. We’re not just about cars. Beyond that, wait and see.”

Is offering plug-in hybrids the right approach? Wouldn’t full EVs be better for brand-building?

“I'm absolutely convinced that the future is pure-BEV and that the moment will arrive sooner than we think. You can see the acceleration happening now, with the cost-of-living crisis. The move from combustion to hybrid to BEV is happening fast.

“The only reason we didn’t go BEV today is that the charging infrastructure isn’t good enough. I have 100% confidence that in a short period of time, it will be 100% - but today that’s not the case. Today, we can offer customers 70km [43 miles] of electric range and then the engine if they need to go farther, rather than waiting for two hours at a charging station to top up. The majority of our mileage is done on electricity.

“But absolutely we want the transition. I think within two years, we might have reached the point where that’s possible.”

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