SIXT SE Transforms – The Next Generation Takes The Wheel of The Global Car Rental Giant

For more than half a century mobility pioneer Erich Sixt managed the car rental giant SIXT SE, building it up from being a local Munich-based car rental company, which he took over from his father in 1969, to become the market leader in Europe. Today SIXT has more than 250,000 vehicles, and is present in around 110 countries worldwide.

His sons, Konstantin and Alexander, recently took the wheel and are now Co-CEOs. We caught up with the Sixt brothers to discuss growth, innovation and digitisation.

“SIXT has always been a very IT-driven company and took advantage of the opportunities of digitization early on. Erich Sixt personally drove the digitisation already in the 1970s by implementing client/server infrastructures and Linux-based operating systems,” they tell us.

At the beginning of 2019, the company digitised its entire product portfolio and merged it into a central digital mobility hub called ‘SIXT ONE’, with 250,000 own vehicles, over 1,500 connected partners and over 1.5 million drivers.

“Ever since, the company has driven the continuous digitization of all processes, products, and structures and focuses on providing an absolutely premium digital customer experience. The success of these efforts is also reflected in the booming e-commerce business: In 2019, the share of digital reservations via online & mobile increased to 70%,” they explain.

SIXT ONE has also teamed up with external mobility suppliers such as TIER and Lyft. Car rental, car sharing, and cab and ride services are now available in one app, with one single login and one single payment service.

“These partnerships are part of our SIXT ride service via which SIXT offers its customers a comprehensive range of cab, ride and transfer services worldwide via the SIXT app. For this purpose, SIXT cooperates internationally with over 1,500 partners and thus gains access to over 1.5 million drivers. The SIXT app thus comprises one of the world’s largest networks of cab and ride-hailing services.”

Its customers can be picked up in 250 major cities in Europe and the U.S. and book transfers in advance in over 60 countries and 500 cities.

“In the UK SIXT’s collaboration with Addison Lee allows customers the peace of mind of riding with trained and licensed drivers, within cities or as intercity transfers,” they add.

Back in the Black

In the more than 100 years of the company’s existence, the year 2020 will probably go down as its most challenging year. Pre-Covid-19, SIXT had gone from record year to record year during the past decade. But, due to the rapid spread of the virus, the car rental business literally collapsed overnight. SIXT reacted quickly and implemented a strict and rigid crisis management program with immediate effect.

“By reducing the average number of vehicles in the Group’s fleet by 25% compared to 2019, SIXT was able to decrease the cost basis substantially and thereby release significant volume of liquidity. All in all, the company was able to implement massive cost savings of almost EUR 600 million in 2020 and thus successfully encountered the economic effects of this historic crisis. This led to an overall profit of 2 million EUR for the Financial Year 2020 despite the effects Corona had on the travel industry as a whole,” they explain.

“At the same time, SIXT also saw the opportunities and chances inherent in each crisis and went into the offensive by investing into the company’s future: By acquiring ten strategically highly relevant airport stations in the USA, SIXT drove forward its internationalisation strategy. The international premium mobility provider expanded its product portfolio with the successful launch of the car subscription offer SIXT+ and reinforced the top management with top-notch candidates.”

Despite the second lockdown in the fourth quarter of 2020, SIXT was able to work its way back into profit by the end of the year. 

“A solid financing basis with substantial free financial funds of currently significantly more than EUR 2 billion is making the company superbly fit for the future. The equity ratio stands at a record level of 31.5%, and existing credit lines give full freedom of action on the capital and financing front once the restrictions to travel activities and tourism end. Therefore, SIXT is fully set to get out of the box first, as soon as business in the mobility and travel industry picks up speed again,” they add.

Looking to the future, with driverless taxi services being tested in the U.S. and China, we asked the brothers for their thoughts on autonomous technology and whether SIXT will get involved.

“SIXT is already one of the largest fleet operators with core competencies in the area of cost-efficient fleet and yield management. Therefore, it would definitely make sense to get involved in this future business once the still pending technical restrictions will have been solved. At SIXT, we are convinced that one should always be open and prepared to the possibilities and chances the future holds,” they respond.

A new generation of customers is…rightly making new demands on contemporary mobility.

The Sixt brothers are taking the helm at an exciting but challenging time for mobility companies. With increased urbanisation and rapidly growing populations, cities will be even more densely populated in the future. 

“Today, the world’s population already spends a total of around seven billion hours a year in traffic jams. Added to this is an increasing environmental pollution, which is forcing numerous metropolises to take drastic measures,” they say.

“A new generation of customers is therefore rightly making new demands on contemporary mobility. These customers want an innovative mobility mix that offers simple, fast and flexible solutions, while at the same time providing more free space in cities and ultimately making their own cars and the associated costs unnecessary. Only an integrated, multimodal, and at the same time borderless mobility solution can really remedy the situation.”

“SIXT sees the partnership approach of its ONE mobility platform as a contribution to a sustainable future mobility set-up. Because a collaborative approach, including all mobility players, also and especially public transport, is essential to master these challenges. On the regulatory side, too, the way must be sustainably paved for the future of mobility. Otherwise, drones, autonomous driving and CO2-free cities will remain only a vision of the future,” conclude Konstantin and Alexander.