On the sidelines of this year's mobility trade fair IAA Mobility in Munich, VW announced that its finance subsidiary Volkswagen Financial Services is planning to acquire a significant stake in the Dutch bicycle leasing provider Bike Mobility Services (BMS), a subsidiary of the Dutch bicycle manufacturer and vehicle importer Pon, with whom VW already cooperates. Volkswagen is thus entering the bicycle leasing business, following a trend of recent years: the bicycle business is booming.
According to the German Bicycle Industry Association (ZIV), the turnover of the bicycle industry in Germany was at a record level of around 7.26 billion euros in 2022. The main drivers of this positive development are e-bikes, which are becoming increasingly popular and accounted for 48% of total sales in 2022.
Cycling is becoming more and more popular, and not without reason: cycling is healthy, cheap and an environmentally friendly way of getting around. This also applies to the commute to work. Thus, the number of employees who cycle to work is continuously increasing. More and more companies are recognising this and learning that by promoting cycling among their employees, they are not only contributing to climate protection, but also doing something good for the health of their workforce. By means of bicycle leasing, companies can offer their employees a company bicycle and thus explicitly promote cycling.
According to its own statements, the VW Group wants to become Europe's largest manufacturer-owned bicycle financier. To this end, VW wants to acquire a stake in Bike Mobility Services (BMS), a subsidiary of the Dutch bicycle manufacturer Pon. BMS owns brands such as BusinessBike, Lease A Bike and B2Bike, making it Europe's leading bicycle leasing company. BMS currently provides company bicycles to over 600,000 employees in 65,000 companies, ranging from large corporations to SMEs. The leased bikes are delivered and serviced through a network of 8,000 bike dealers. 90% of the bikes are electric.
VW's decision shows that the market is booming and many companies want to expand the classic fleet business and extend the mobility offers for their employees to include bicycles. Larger companies in particular increasingly wanted to offer bicycles for their employees in addition to company cars, and there are several reasons for this.
On the one hand, companies see themselves in an increasingly intense competition for the best skilled workers, and with an attractive service bike offer they have the opportunity to offer potential applicants, but also existing employees, a modern and sustainable employee benefit.
Secondly, companies need to start becoming more sustainable. From 2024, the EU's Corporate Sustainability Reporting Directive will require companies with more than 100 employees to record and report the CO2 emissions of all kilometres travelled by employees in commuting and business trips. In conjunction with the EU climate targets, this increased accountability means that companies must reduce their corporate carbon footprint. Less is more effective than more and more employees cycling to work.
After all, companies play a central role in the mobility turnaround and in achieving the overarching goal of making the transport sector more sustainable and environmentally friendly. Health, climate neutrality and cost reduction speak for a new mobility strategy by companies for their employees.
There are also parallels between the bicycle industry and the automotive industry, because the higher the investment for a bicycle, the more relevant financial services such as leasing become, not least to boost and stabilise sales for manufacturers. And the trend is clearly towards more expensive e-bikes, which leads to an increasing demand for financing. Experts see a market potential of 10 billion euros for company bike leasing.
Until now, a company car has been a coveted salary component for many employees. In Germany alone, there are currently around five million company cars. However, the wind seems to be gradually changing. For many employees, the new luxury class is "maximum flexibility with the greatest possible sustainability". This is also shown in a representative study by the digital association Bitkom: 96 percent of the people surveyed in Germany state that their mobility behaviour has changed significantly in recent years, becoming more multimodal in particular, i.e. people no longer commit to a single means of transport but adapt their choice of transport to their situation, needs and requirements.
One beneficiary of this change in social behaviour is the bicycle. 39% of people use bicycles more often than before and with the e-bike boom, older and automotive people in particular are using bicycles more often. The boom in e-bikes also has positive effects on company bike leasing. Especially with more expensive e-bike models, company bike leasing is starting to be particularly financially rewarding for employees. In the context of salary conversion, leasing enables employees to save up to 40% compared to the conventional purchase of a bicycle.
These are some of the reasons why companies can reduce or even do without company cars and instead opt for alternative mobility offers such as a company bike or a mobility budget. More and more companies are also putting alternative mobility offers into practice, and many more could follow the trend. For example, at the beginning of 2023, SAP became the first large German company to introduce a comprehensive mobility budget for its employees as an alternative to a company car. This decision is remarkable because the software company has the largest fleet of company cars in Germany with around 17,000 vehicles.
In addition to company bike leasing, companies have other ways to encourage their employees to cycle to work. These include, for example, providing suitable on-site bicycle facilities such as secure, spacious, covered bicycle parking, sufficient charging stations for e-bikes or changing areas, coat hooks and showers.
However, employees may not always want to cycle. Depending on work, private circumstances or weather conditions, they will sometimes want to make other mobility choices. Therefore, companies should allow their employees flexibility in mobility. For example, by providing them with a mobility budget for public transport, shared mobility such as e-bikes, car sharing or e-scooters, taxis or fuel credits. This is also suitable for car commuters who want to cycle more for business meetings.
The potential for more journeys by bike is there: statistics show that just under half of all employees live less than 10 kilometres from their workplace. This is a distance that can easily be covered by bike (under 5 kilometres, the bike is even faster than the car), but a large proportion of them do not cycle to work. And even if you can't convince all of them, it would of course be very helpful if a larger part of them would use the bicycle. With the above tips, companies can already start doing this!
