19/04/2024

19 April 2024
19 April 2024, Comments Comments Off on Alexander Leopold – Erwin Hymer Group
Alexander Leopold - Erwin Hymer Group

Leading a giant Group in extraordinary times: a CEO’s perspective

We interviewed the CEO of Erwin Hymer Group: his statements clearly express the intention to strengthen individual brands, while maintaining a group synergy perspective

Words Antonio Mazzucchelli
photo Enrico Bona

For almost two years, Alexander Leopold has been at the helm of one of the giants in the global RV industry, the Erwin Hymer Group. The experience gained from 2015 to 2022 in leading one of Europe’s major companies, Dethleffs (Erwin Hymer Group), has allowed him to reach this top position well aware of the potential and challenges of the various brands. Here is his vision of the industry in a particular historical moment, where the market’s euphoria, the supply chain crisis, and uncertain forecasts for the future converge.

Aboutcamp BtoB − It’s been almost two years since you took on the role of CEO of Erwin Hymer Group: what assessment can be made of this initial period?
Alexander Leopold − We were able to continue our growth plan and make the Erwin Hymer Group significantly more competitive. We did this in an environment that was characterized above all by supply bottlenecks for chassis and vendor parts as well as surging prices. Our excellent contact with our sales partners and customers helped us to find viable solutions for everyone in these very difficult times. We communicated a lot internally with our brands to find the best solutions. We have been really successful in this. I see the Erwin Hymer Group and our holding company, Thor Industries, as a platform for knowledge transfer and internal services. In the area of development, for example, we support our locations with an internal development services pool that gives them the opportunity to purchase development capacities internally and deploy them without a training period. This enables us to reduce our development time while increasing our quality. We manage our business divisions using a few key financial figures, which we share very transparently with our management throughout the organization on a monthly basis. Our brands, which operate very independently, bear a high level of long-term responsibility for their company, their brands, their product range, and the financial result. We call this approach Power-to-the-Brands as part of our corporate management strategy. Our brands are at the forefront of communication, while the Erwin Hymer Group provides support in the background. This way, we promote the corporate values that are essential to our strategy, such as team spirit, entrepreneurship, and a spirit of innovation, and striving together to find the best solution. Another major milestone was the construction of our new plant in Poland, which was realized in record time with best practice solutions from our established and experienced locations. The whole team can be proud of this, and I would like to take this opportunity to thank our employees and suppliers for their dedication and commitment.

Aboutcamp BtoB − Erwin Hymer Group is a complex and diverse entity. How do the various facets of the group coexist, how to characterize the different brands, and avoid overlaps?
Alexander Leopold − We have consistently aligned our large house of brands with the different target groups and price bands. This not only allows us to avoid overlaps, but it also makes our brand portfolio and thus the Erwin Hymer Group very attractive for trade partners. The holding company plays a very important role here. It not only provides the necessary transparency and data to benchmark brand performance and thus develop it further, but also enables vertical synergies between the holding company and legal units, and horizontal synergies that would otherwise not be possible. One example would be our own test center, where we offer comprehensive component and vehicle tests for all brands. Another example would be a larger location taking over personnel services for other locations. Another good example is our new service company, which we launched on January 1. The new service company will enable us to provide industry leading support while also allowing to test new systems and processes. We attach great importance to the further development of our employees and managers, and offer tailored internal programs to ensure that the organization has the necessary skills to implement our strategy successfully and with maximum buy-in.

Aboutcamp BtoB − After a period of significant growth, the market is showing signs of a sharp decline. Is this entirely anticipated with a steady nerve, waiting for things to stabilize? Or should we fear a further decline?
Alexander Leopold − We have a state-of-the-art IT system landscape in sales and marketing that is standardized across all brands. The investments we have made in our systems allow us to have excellent transparency to know what is happening in the the market, where we need to provide support and where we need to further develop our dealer network. We can also share this knowledge with our trade partners, making us a valuable partner on the customer journey. We currently have an excellent order backlog, but we are also aware of our responsibility to our trade partners, who rightly expect us to react quickly to changes in the market by being flexible in our capacity planning as well as sales and marketing support. In my opinion, this is essential for sustainable succes and credibility and is also greatly appreciated by our partners. The strong partnership with our dealers helps us to further expand our market share. The recent tremendous success of our camper vans and urban campers shows the strength the structure of our organization has in the market. Within just a few years, we were able to become the number 1 pure motorhome manufacturer in Europe in line with our strategic plan.

Aboutcamp BtoB − Has the supply crisis concluded? What effects has it had, and what changes has it brought to Erwin Hymer Group?
Alexander Leopold − The supply chain is still not as stable as it was before the pandemic. We have expanded our range of chassis to be able to deliver and therefore remain attractive for our customers. This inevitably increases complexity. I could well imagine that there will be consolidation in this area. Every market phase requires its own strategy, and we must remain flexible. Our top priority is a shared understanding of our customer’s needs. Suppliers and manufacturers must make consistent use of this knowledge in order to be able to offer our customers attractive and relevant products. Another area we have to work on is our time-to-market.

Aboutcamp BtoB − In recent years, your Group has made a significant change regarding participation in trade fairs. This decision has brought some cost benefits but perhaps also some negative aspects. What are the strengths and weaknesses of this strategy? Will anything change in the future?
Alexander Leopold − I find it interesting that the word “cost” keeps coming up in connection with trade fairs. Trade fairs are an important tool in the marketing mix. At the same time, a trade fair is one out of over 20 touchpoints in the pre-purchase information-gathering and decisionmaking process of our customers. A well balanced and orchestrated marketing mix that is geared to the different preferences of our target groups is key. We are more than happy, to have broken new ground in our industry. Our internal customer analyses shows that RV customers are constantly evolving in the way they obtain information about products and services. Therefore we are constantly optimizing the interaction between analogue and digital touch points on their customer journey. We have been able to gain a lot of knowledge of what works and what doesn’t. I was pleased that each brand has taken its own and largely new path. We discuss the insights we gain as a team and incorporate them into our decisions. Let me give you an example: if one of our brands achieves a significantly higher conversion rate at one of the customer touchpoints, all other brands can benefit greatly from this better approach. This is one of the advantages of our group that I mentioned earlier: know-how and knowledge transfer. Each brand decides on the best path to reach and activate its target group. Therefore the decision to participate in a trade fair is not just influenced by total costs, but also by criteria like relevance for a brands target group as well as the cost-per-lead and cost-per-sale comparison with other sales marketing instruments. If, for example the costs of renting stand space at a trade fair go through the roof it will of course influence a brand’s decision for or against the participation in the trade fair.

Aboutcamp BtoB − Most of your companies are German, but you also have plants in other countries: how far do you push the delocalization, and how important is it to have production sites in the markets they serve?
Alexander Leopold − The focus on German production sites has historical reasons. We invest a lot of money in our brands, their differentiation and appearance. That is why we have had powerful export organizations for a long time. We have since developed this approach further. Today we have local sales organizations in all key markets. These ensure that we are very close to the market and can realize distribution and marketing synergies. We sell our valuable brands in all countries and do not need a separate plant with corresponding infrastructure costs in each country. Our sales partners and service quality also benefit from this. There is no other way to achieve such a high level of service in every country. And we attach great importance to this.

Aboutcamp BtoB − The increase in prices over the last three years has been staggering. Compared to 2021, for example, the price of Hymer B-Klasse 600 has increased by 45%. Why have camper prices risen so much, far exceeding the average inflation rates?
Alexander Leopold − When it comes to price increases, you really have to consider the extent to which the equipment has changed in parallel. We see that our products are fairly priced and, thanks to our aforementioned brand segmentation by target group and price level, we have the right offer for every customer need. If we look at the producer price index, we are not far off with our necessary price increases.

Aboutcamp BtoB − Surely, the purchasing power of your clientele has not increased as much. Could something be done to mitigate the prices?
Alexander Leopold − We are constantly striving to offer our customers actractive prices without having to compromise on our high standard of service. To this end, we are also in close contact with our suppliers. Manufacturers and suppliers must work together on more favorable concepts – despite our drive for innovation. Our bestprice brands are working flat out on more cost-effective concepts.

Aboutcamp BtoB − Not many years ago, your Group was associated with premium and medium-high-range products. Then, with some of your brands, you took significant steps, breaking the dominance of Italian and French brands in the medium and lower-medium market segments. Was it a long and challenging process? Was it worth it?
Alexander Leopold − Our positive market share development shows us that we are on the right track. We have proven that we can not only serve the best-value market but also the best-price market. But I admit that the best-price market is probably the more challenging one for us. We are continuing to work hard on this.

Aboutcamp BtoB − In the urban camper segment many players have invested significantly and you were among the first to enter the market. Has the public response been in line with the investments made or below expectations?
Alexander Leopold − We benefit greatly from having entered the urban camper segment so early on. We know that the urban camper customer has different requirements for the product, but also for sales. No one can take this expertise away from us, and one or two of the insights we have gained can also be applied to the conventional RV sector. We do not expect this market to continue to develop as dramatically in the coming years as it has in recent years, but with the lead management tools we have built up, we have great opportunities to get our customers excited about our brands’ products and to actively support our sales partners in customer acquisition.

Aboutcamp BtoB − How committed is the Erwin Hymer Group to the caravan segment? Do you consider it a viable area for investment, or is your expertise in motorized vehicles steering you towards a greater focus on motorhomes and campervans?
Alexander Leopold − We are continuing to invest in the caravan sector. Electromobility spurs us on to deliver top performance. This was proven by our successful Alpine Challenge with the Dethleffs brand. And with the Eriba, Bürstner and LMC brands as well as our brands for the UK market, we have strong and loyal caravan customer base.

Aboutcamp BtoB − Transition to eco-friendly engines and the RV world: what is Erwin Hymer Group’s strategy?
Alexander Leopold − Being part of the world’s leading manufacturer of leisure vehicles, we are working hard on the possibilities of alternative drive systems. With the next generation of long-range batteries, electromobility is also within reach for leisure vehicles. Together with our parent company Thor Industries and our strategic partners, we are currently laying the foundations for a fully electric travel experience.