Jean-Pierre Bizet, CEO of D’Ieteren

In 2010, D’Ieteren achieved record results, thanks to favourable developments in its three activities. The perfect opportunity to reflect on the recent past and examine priorities for the near future with Jean-Pierre Bizet, CEO.

• Following the excellent results achieved in 2010, what are your priorities for the next few years ?

  The situation is specific to each activity.

  In the Belgian car market, D’Ieteren Auto’s ambition is to continue gaining market share, having exceeded 20% in 2010 – a record in the last decade – mainly reflecting the attractiveness of our product offering. We will be able to continue to rely on our highly dedicated dealers and D’Ieteren teams, superior products and technologies, and high customer satisfaction with our level of service.

  Belron’s objective is to keep up with its growth by developing its presence even further in its existing markets, and through continued geographical expansion. Belron’s ability to delight its customers, and deliver value to insurers and fleet partners, is at the heart of this ambition, together with the sharing of best practices worldwide.

  Avis Europe is emerging from the financial and economic crisis as a much fitter and stronger competitor. The differentiation of its two worldwide brands together with a continued focus on cost competitiveness, superior service, and fleet utilization will support further profit recovery. Avis Europe will also focus on developing emerging markets, particularly China, and new mobility solutions, such as its ‘Avis on Demand’ and Business Pack initiatives (more information on page 46) .

• D’Ieteren is said to be a highly cyclical group. Is this really the case? What are the main external factors influencing the earnings of the three activities ?

  D’Ieteren is less cyclical than many believe. Witness our profit resilience through the recent crisis. The situation is different among our activities, though. Belron, the largest contributor to our bottom line, is not very cyclical, as vehicle glass breakage is linked mostly to miles driven, which vary only slightly with the economy. Belron is, however, sensitive to changes in weather conditions.

  The Belgian car market is definitely impacted by changes in GDP growth, but the business fleet segment acts as a stabiliser. Many other factors play a role, such as product innovation by car manufacturers, the modest but consistent growth of the car park, and government incentives.

  At Avis Europe, volumes do fluctuate with the economy, and in particular with changes in enplanements as half the rentals are made at airports. The observed long-term increase in air traffic is, however, a positive catalyst.

• D’Ieteren Auto and Belron generate strong cash flows and Avis Europe no longer seems to need cash: what will these cash flows be used for in the future ?

  First let us not forget that over the last six years we have invested roughly €750m of these cash flows in raising our equity stake in Belron from 56% to 93%, and in participating to two rights issues of Avis Europe, in 2005 and 2010. Meanwhile, we have maintained a reasonable debt leverage in our three activities. Our priorities for the future are simple: (1) make sure we have the financing capacity to make any investments necessary to maintain the competitiveness of our three activities; (2) examine attractive investments which would fit closely with our group competences; (3) and reduce our debt.

   

• Public authorities are trying to reduce car usage in cities and tax CO2 emissions. Has this policy affected D’Ieteren Auto ?

  We notice a trend towards the purchase of smaller vehicles and smaller engines. This is certainly linked to the increasing “green” awareness among motorists and to CO2 incentives. Roughly one third of new cars sold in Belgium in 2010 benefited from the government incentives. The quality of the Volkswagen group’s brand and model ranges enables us to play an active part in this development, thanks to appealing small models and cleaner engines.

• Although many car manufacturers have launched or will shortly be launching electric vehicles, Volkswagen seems to be lagging behind. Doesn’t this threaten D’Ieteren Auto’s market share in Belgium ?

  Did you know that VW was a pioneer in this area? The fully electric Golf CitySTROMer was launched in 1993! But the market is not ready yet for the electric car, with the lack of charging infrastructure and the uncompetitive total cost of ownership of electric vehicles compared to their diesel-engine equivalents. What’s more, Belgium has been hesitant so far in offering incentives for electric vehicles. We’ll have to be patient until electric vehicles become a significant part of the market and of the car park. That said, electrical vehicles are one of the priorities of the Volkswagen group, which announced the E-Up for 2013. We’ll therefore be ready when needed.

• Are you concerned that the import contract between VW group and D’Ieteren may end at some point ?

  VW Group’s practice is to distribute through importers in smaller European markets such as The Netherlands, Belgium or Switzerland. Our relationship with VW has been in place for 62 years now! And on several recent occasions, VW group presented us with the “Best Importer” award, thereby showing their appreciation for the role we play in Belgium and the 20% market share we achieved.

• What is Belron’s position in existing markets? Are there still opportunities for acquisitions and for organic growth ?

  Belron is the world number one in vehicle glass repair and replacement with a growing share of the markets in which it is present. The market being fragmented, there is significant potential for further growth. And there are many countries in which Belron has no presence and some, like China and Russia, which Belron has only just penetrated.

• Belron’s success is based on partnerships with insurance companies. What are the benefits for them of working with Belron ?

  Working with Belron enables insurers to reduce their costs, most notably through the repair of windscreens, which avoids a replacement later on. It also enables insurers to offer their policy holders an unrivalled level of service.

• Avis Europe is gaining a foothold in emerging markets, predominantly in China. Is this a definite priority? What are the benefits for the group ?

  Emerging markets will become increasingly popular tourist and business destinations. This is why we have been en early entrant into China almost a decade ago. Also, residents of emerging markets are travelling more frequently to western countries providing a increasing source of inbound reservations.