International Fleet World July 2014

INTERNATIONAL

FLEETW RLD All that matters in the world of fleet July 2014

SE AT.COM/BUSINESS

THE NEW SEAT LEON ST WITH ONLY 85g OF CO2 EMISSIONS PER KM

WHAT OUR CUSTOMERS SAY… “WE CAN SAVE A LOT OF MONEY WITH THIS CAR” Guido Krings, Director Fleet, Unify GmbH & Co. KG., formerly Siemens Enterprise Communications.

VISIT US NOW ON SEAT.COM AND DISCOVER MORE TESTIMONIALS OR SCAN THE QR CODE

SEAT FOR BUSINESS

TECHNOLOGY TO ENJOY Average consumption: 3.2 - 5.9 l/100 km. Average CO2 mass emissions: 85 - 137 g/km.

internationalfleetworld.com

A STRIKING ACQUISITION

The new NX hybrid crossover. Striking design meets innovative technology. Discover more at lexus.eu/NX

The new NX

INTERNATIONAL

FLEETW RLD All that matters in the world of fleet

July 2014

contents

SE AT.COM/BUSINESS

THE NEW SEAT LEON ST WITH ONLY 85g OF CO2 EMISSIONS PER KM

WHAT OUR CUSTOMERS SAY… “WE CAN SAVE A LOT OF MONEY WITH THIS CAR” Guido Krings, Director Fleet, Unify GmbH & Co. KG., formerly Siemens Enterprise Communications.

VISIT US NOW ON SEAT.COM AND DISCOVER MORE TESTIMONIALS OR SCAN THE QR CODE

SEAT FOR BUSINESS

TECHNOLOGY TO ENJOY Average consumption: 3.2 - 5.9 l/100 km. Average CO2 mass emissions: 85 - 137 g/km.

internationalfleetworld.com

Managing Editor Ross Durkin ross@fleetworldgroup.co.uk

17 Insignia’s 1,600km on one tank of fuel.

26 The rise of Hitachi Capital in Europe.

40 MINI’s fleet proposition.

45 Revised X-Trail tested...

Publisher Jerry Ramsdale jerry@fleetworldgroup.co.uk Editor John Kendall john@fleetworldgroup.co.uk Deputy Editor Alex Grant alex@fleetworldgroup.co.uk Business Editor Natalie Middleton natalie@fleetworldgroup.co.uk Features Editor Katie Beck katie@fleetworldgroup.co.uk Sales Director Anne Dopson anne@fleetworldgroup.co.uk Sales Executives Darren Brett darren@fleetworldgroup.co.uk Claire Lake claire@fleetworldgroup.co.uk

04 Fleet Review Editor John Kendall on the rise of the electric vehicle.

06 Inside knowledge Dieter Fess of BF Forecasts on the bigger picture in Europe.

Circulation Manager Tracy Howell tracy@fleetworldgroup.co.uk

08 News The biggest stories from a month in the international fleet world.

Head of Production Luke Wikner luke@fleetworldgroup.co.uk

16 RVs Europe’s increasing optimism in the future used vehicle market.

Designers Tina Ries tina@fleetworldgroup.co.uk

17 Road Trip Alex Grant drives the new Insignia 1,600km on one tank of fuel.

Samantha Hargreaves sam@fleetworldgroup.co.uk

26 Interview Simon Oliphant on how Hitachi Capital is expanding into Europe.

30 Interview HME fleet director Adrian Porter on exciting times ahead.

32 Fleet Focus How Brazil’s low levels of car ownership makes it a prime target.

Published by Stag Publications Ltd, 18 Alban Park, Hatfield Road, St Albans, Herts, AL4 0JJ tel +44 (0)1727 739160 fax +44 (0)1727 739169 email ifw@fleetworldgroup.co.uk web internationalfleetworld.com

34 Remarketing Can existing systems adapt to a changing market place?

37 Remarketing How relaxing import tariffs could affect the Australian market.

38 International Fleet Academy The challenges of a Pan-European fleet.

40 Profile MINI’s success in the USA and its plans to capture business sales.

44 Launch Report Infiniti Q50 / Nissan X-Trail / Iveco Daily / Renault Trafic.

STAG Publications

®

To subscribe to Interational Fleet World visit: www.fleetworldsubscriptions.co.uk

48 Global Fleet Forum A round-up of activity on the popular fleet forum.

50 Fleet in figures Breaking down the global vehicle sales by region. internationalfleetworld.com / 03

fleet review

This month, editor John Kendall looks at the rise of the electric vehicle and why it’s an exciting time for fleets in Brazil.

Electric dreams By any estimate, the take-up for electric vehicles remains low, with the possible exceptions or countries like Norway, France and Israel, where the authorities, and/or domestic manufacturers have made a greater effort to make it easier to own and operate them.

One of the issues is range. I remain confident that this is an area where we will see some significant changes in the near future. You only have to look at the latest EVs to see how much technology has advanced in the past few years. I think we can expect to see mass market EV models with a range of around 320km in the next five years or so and if that proves to be the case, it will make models far more acceptable, assuming the price is right.

Another issue is the ease of charging itself.

We do not yet have a single standard for connectors and software and it seems unlikely that we will agree a universal standard. But one connector and one agreed software standard in one region seems like a reasonable thing to ask for.

I'm currently driving a Mitsubishi Outlander PHEV. Like other countries, the UK is scrambling to keep up with installing a charging network, but progress is being made. At the moment, many public charging points are free to use. This makes long distances with rapid charging a greater possibility than it was before. For plug-in hybrid owners, it means that running costs can be brought down further. I can rapid charge the Outlander to 80% of charge in the time it takes to stop for a cup of coffee. But I still have to wrestle with a large 20kW connector that is hard to connect and disconnect, with a heavy cable. That might be a problem for some drivers.

Wireless charging could be a route and we

04 / internationalfleetworld.com

Outlander PHEV can be rapid-charged to 80% of charge in the time it takes to stop for a cup of coffee.

explore that in this issue. It could make charging far simpler and with trouble again brewing in the oil-producing Middle East, we need a viable alternative to oil if we are to avoid more economic chaos.

Potential for fleet growth Brazil is one country which has a sustainable alternative fuel in the shape of bioethanol, mixed in a 22% mandatory blend with petrol in the nation's filling stations.

Only the US produces more bio-ethanol.

Brazil is also a nation with huge potential for growth in the automotive sector - a large country with comparatively low rates of car ownership, despite the number of manufacturers producing cars in the country.

Eyes in Brazil are probably focused on other matters as I write this and the country's economy has slowed following a period of growth, but most observers expect a return to growth later this year.

visit internationalfleetworld.com

inside knowledge

Successful European car industry strategies?

European nations need to set aside their differences and see the bigger picture, reckons BF Forecasts’ Dieter Fess.

T

he European Car industry is still under do. Because, on one hand, they might be not as severe strain. Because of the so called successful as the Mini “offspring” and, on the policy of austerity, which is predomiother, the margins in this segment are far too low nantly driven by Germany and a few other to support the whole brand – not to mention the European countries, the demand for goods, Fiat Chrysler group. Fiat will rely on the small including cars of course, is drastically on the and compact SUV segments which are still prosdecline, especially in Southern Europe. pering and, at the other end of the market, it European car producers, therefore, seek to sell looks as if Maserati is doing a very good job. This their cars elsewhere, for instance to the US and make could be the exclusive and elegant China. Russia looked to be prospering and could pendant to the so-called premium makes from have turned out to be the biggest car market in Germany and is – together with Jaguar – a very Europe – even ahead of beautiful alternative to Germany – but given the the often very clinical current circumstances, no German design. one knows which course One rising star and a Russia is sailing under falling one: Lancia. This Putin´s command. traditional make will So, at the moment, only be available in the Russia is a “failed state”, in future in Italy. After the respect of demand for Delta days, this make was cars. Let’s take the German known for strange design manufacturers aside for a experiments and theremoment and look at who fore the decision is hard else there is. Unfortunately, but absolutely right. we don’t find very encourRenault seeks salvation Maserati makes an exclusive and elegant aging signs: PSA is now a in co-operating with alternative to premium German brands. company which will be Mercedes and, of course, dominated by Dongfeng (literally East Wind in Nissan and besides that they want to enlarge Chinese), one of the three largest Chinese car their E-fleet which, under current circummanufacturers. PSA concentrated too long on the stances, could turn out to be the “wrong horse”.

European markets and, as a consequence of the The biggest growth market for German cars is demand crisis in Europe, it was hit even harder. the US, although Volkswagen still struggles to Now, with the help of Dongfeng, they will try and establish a dominant role. But, because the US divert production to the Chinese market as well, has a large export deficit, the EU and North where Citroen already plays an important role America want to settle the free trade agreement. but Peugeot is almost unknown.

It is fair to say, however, that such an agreement Where Fiat is drifting to is – somehow – mystewould favour Germany and the US would rious. Yes, there is some success for the Cinquebecome its biggest export market. France’s posicento in the hip quarters of cities in the US, but tion as the biggest trade partner of Germany here in Europe a large part of the Fiat model would be weakened. family needs to be renewed. Punto and Bravo It is high time, therefore, to understand Europe are old and just relying on the Fiat 500, and its as a team and not as a bunch of (sometimes) derivatives, is probably not the smartest thing to skilful soloists.

06 / internationalfleetworld.com

business news

ALD Automotive Finland to acquire 100% of Easy KM

Element Financial buys PHH Arval for $1.4bn

LD Automotive Finland has entered into a definitive agreement with Governia, the Finnish stateA owned investment company, to acquire 100% of the

lement Financial Corp is to acquire the assets E and operations of PHH Arval, PHH Corporation’s North American fleet management services busi-

shares of the fleet management company Easy KM. Easy KM is a leading leasing company specialising in commercial vehicles and manages a fleet of 8,000 vehicles. The acquisition, which forms part of ALD International’s plans for continued strategic growth globally, is intended to provide unique expertise in serving the public and municipal sector in Finland.

“With this transaction, ALD Finland acquires a unique expertise in offering tailor-made solutions to the public sector and reinforces its capabilities in commercial vehicle management,” said Pekka Kivinen, MD of ALD Finland.

The transaction is expected to close in the second half of 2014.

ness, for around $1.4bn in cash.

The transaction will rank Element as one of the leading equipment finance companies in North America, with the addition of more than $4.6bn of total assets, including more than $4.0bn of net investment in fleet leases.

Steven K Hudson, Element’s chairman and CEO, said the transaction, “provides us with a fully integrated North American fleet management offering that complements our other three business verticals at the same time that it is accretive to our shareholders and immediately improves our capital efficiency.”

The firms added that a Transition Services Agreement between Element and PHH Corporation will ensure that service to customers will not be disrupted in any way.

Sofico to drive fleet client benefits with regional restructure ofico has introduced a new autonomous, regionalfocused structure in a move to benefit customers S as well as aid its continued expansion.

The global fleet and leasing software solutions provider will now run seven regional units in Belgium, the Netherlands, UK-Germany-Austria-Switzerland, Southern Europe, Asia, Japan-South-Korea and Australia-New Zealand.

Jan Bouckaert, head of business development at Sofico, said: “As well as providing enhanced and more targeted services for our customers, this new organisation structure will also allow us to better support future growth and expansion in to new markets.”

NAFA announces new dates for International Fleet Academy AFA Fleet Management Association has announced N a change in dates for its 2014 International Fleet Academy (IFA).

Originally scheduled for 14-16 July at Rosen Shingle Creek in Orlando, Florida, NAFA’s IFA will now take place 5-7 November 2014 at the same hotel.

In announcing the change in dates, NAFA’s CEO, Phillip E Russo, noted that a large event in Orlando is causing sold-out situations at NAFA’s hotel as well as surrounding facilities.

For more information, please visit:

www.nafafleetacademy.org

08 / internationalfleetworld.com

Enterprise Rent-A-Car continues expansion with new operations nterprise Rent-A-Car has opened operations in the new markets of Belgium, Czech Republic, E Cyprus, Bosnia Herzegovina and Macedonia as part of its phased expansion programme.

The new operations mean that the Enterprise brand is currently operating in 19 European countries with more in the pipeline.

Over the past two years, Enterprise Rent-A-Car has extended its network across the continent to countries that represent more than 90% of the European vehicle rental market.

ALD gains French state fleet contract for third time he Union of Public Purchasing Groups (UGAP), the French public procurement centre operating T under the supervision of the Ministries of Economy and Finance and the Ministry of Education, has awarded its entire tender to ALD Automotive France for the third consecutive time.

The agreement covers the management of all fleet services of the State, its operators, public institutions and local authorities, a total volume of nearly 70,000 units for a period of three years, adding to the 50,000 vehicles under management in the previous contract.

For the latest news, visit internationalfleetworld.com

Masternaut bought by FleetCor Technologies & Summit Partners

G

rowth equity investor Summit Partners has announced that it is acquiring European telematics giant Masternaut for an undisclosed amount from Francisco Partners in a joint venture with FleetCor Technologies, Inc. Under the deal, Masternaut’s management team led by CEO Martin Hiscox will continue to operate the business and remain shareholders in the company.

Ron Clarke, chairman and CEO of FleetCor, said: “We are delighted to team up with Summit Partners in acquiring Masternaut. In a short period of time, Masternaut has developed the best-in-class telematics product and a pan-European footprint. We at FleetCor have valuable fleet customer and partner relationships in Europe. Combination of the two would allow us to deliver more value to our clients, differentiate our product offerings, and ultimately grow our businesses.”

fleetweet a few soundbites from a month in fleet

@CAPAutomotive Offical Twitter account for valuations specialist, CAP

#worldupcarfacts Ghana: foreign-registered cars are not allowed on Ghanaian roads between 6pm-6am.

Fine and vehicle impounds are enforced!

@Lebeaucarnews Phil LeBeau, CNBC Auto and Airline industry reporter

ALD’s Christophe Duprat becomes new chair for Leaseurope Automotive Steering Group

L

easeurope has announced the appointment of Christophe Duprat as the new chair of its Automotive Steering Group (ASG) effective 5 June.

The ASG is responsible for developing arguments and positions on EU regulatory and legislative issues in the automotive sector. It is supported in its work by sector specific Working Groups, namely the Car Rental Working Group, the Car Leasing Working Group and the Truck Rental Working Group.

Mr Duprat is currently director of strategy at ALD International after joining the firm in 2006 following six years of strategy and management consulting.

He takes over from John Lewis who is retiring from the industry.

New Global Fleet Services website to support international fleet operators

G

lobal Fleet Services (GFS), an international alliance of leading fleet management companies, has launched a new website, offering increased functionality to serve as a resource for fleet managers across the globe.

The alliance manages more than two million vehicles in 78 countries and includes ARI, Eqstra Fleet Management, Localiza Fleet Solutions, ORIX and Renting Colombia.

Jim Creighton, chairman of the board for Global Fleet Services and vice president, global strategy and alliances at ARI, said: “The design of the website exemplifies our partners’ commitment to providing comprehensive fleet management strategies that help to implement best practices and reduce the total cost of ownership for our multinational clients.”

Stat of the Day: #GM has now recalled more the 20 million vehicles this year.

@Jon_Quirk Jon Quirk, editor-in-chief, Auto Trader magazine

For me, the Model S reveals both how languid the last 100 years of automotive development have been & the brilliance burning underneath.

@MikeH_CAP Mike Hind, head of PR, @CAPAutomotive

California's investment in hydrogen infrastructure & the vast cash the EU is investing in same spells the end of petrochemical addiction...

@MrJamesMay James May, Top Gear presenter

I've picked up my BMW i3.

It's a bit weird driving around in The Future. By the way, Germany wins the World Cup.

@HenryJFord Automotive correspondent, Financial Times

From the Model T to the aluminium F-150, @Ford turns 111 years old today, apparently #HappyBirthday

internationalfleetworld.com / 09

Impress with less.

The new C 220 BlueTEC with CO₂ emissions of just 108 g/km.

A Daimler Brand

A lightweight construction, state-of-the-art materials, and a super-efficient engine make the new C-Class the best in its segment. It gives you everything you could ever want from a car of this class – even smaller fuel bills, and even greater driving enjoyment. www.mercedes-benz.com/fleet

Fuel consumption urban/extra-urban/combined: 7.6–5.2/5.1–3.7/6.0–4.3 l/100 km; combined CO₂ emissions: 140–108 g/km.

Provider: Daimler AG, Mercedesstraße 137, 70327 Stuttgart, Germany

Efficiency class: B–A+.

environmental news

On a charge Could wireless charging speed take-up of electric vehicles? John Kendall asks the questions.

Which connector?

EV charging is in something of a muddle, with two different types of connectors in Europe, some cars that can be fast charged and some that cannot, while the US 110v grid poses its own unique issues.

There is an agreement to work towards a standardised set of plugs and connectors and communication software in Europe. That would be a welcome step forward.

Another possibility is gaining support too. There’s nothing particularly new about inductive charging.

Just about everyone who uses an electric toothbrush will be familiar with the technology, with no direct electrical contact between brush and power point.

Induction is also vital to the workings of the electric motor. Inductive charging has been used on electric vehicles in the past. General Motors’ ill-fated EV1 from the 1990s used the technology to recharge the car’s batteries, by inserting an inductive ‘paddle’ into a slot between the car’s headlamps.

Ground effect The focus is slightly different now and centres on fitting a charging pad to the ground, or embedding it under the road surface. A similar pad is fitted to the car, then all the driver has to do is park over the pad – with the help of a guidance system and activate the charging. There is no need to plug in to a charging point.

Qualcomm Halo is developing the technology with a view to licensing it to vehicle manufacturers and EV equipment suppliers and is trying to standardise the technology as far as possible. A ground pad is around 600mm by 600mm and between 20mm and 30mm deep.

Adaptable technology Anthony Thompson, vice president of business development at Qualcomm Halo says the company is following the European charging systems for plug-in charging and will offer a 3.3kW stan-

12 / internationalfleetworld.com

dard charger, 6.6kW fast charger and 20kW rapid charging system. The pad fitted to the vehicle would vary in size according to the charging system used.

For the 3.3kW system the vehicle pad would be around 250mm x 250mm x 18mm. For vehicles with higher ground clearance, it might be necessary to make the pad a bit bigger. It would be bigger still for a 6.6kW charger – approx. 480mm x 300mm. The two systems could be combined in one pad, but another larger pad would be needed for 20kW charging.

Guidance system Lining the car up over the pad is quite critical and Qualcomm Halo, working with vehicle manufacturers, has come up with a circular dashboard display with a smaller circle at the centre. “As the circles around the segment fill up,” explains Anthony Thompson, “They change from red to amber to green, so you can see where you are very quickly at a glance. “Once you reach green, there’s an audible tone to indicate the vehicle is lined up.”

Qualcomm Halo has been working towards three different types of ground pad. One is surface mounted, which would be comparatively simple for fitting to a driveway, garage, car port or business car park. For heavier duty applications, such as a supermarket delivery vehicle fleet, either a flush fitting or a covered pad is preferred to reduce the possibility of damage. In the short term, Qualcomm Halo expects both induction and plug-in charging systems to be fitted to vehicles.

But that could change, “I think we’re focused on the premium segment with EVs and plug-in hybrids at the moment,” says Thompson, “Talking to us, those manufacturers are using phrases like ‘This is just going nowhere with the plug’ and ‘There won’t be a plug in five years, it will have to be wireless.’

That’s a huge shift from when I started talking to these guys five years ago. There was a real suspicion over whether wireless charging was possible.

“Then it shifted to ‘How efficient is it?’ Then to ‘How safe is it?’ Now we’re talking about ‘What’s the cost?’

For the latest EV news, visit evfleetworld.com

Q &A

With deliveries of the right-hand drive Model S underway in the key UK market, Tesla CEO and co-founder Elon Musk discusses long-term plans for Europe and ambitions to make electromobility accessible to all.

What are you anticipating in terms of sales volumes for Europe?

Our hope for Europe is that we sell a comparable number of cars to America, and we expect to increase our activities in Europe quite a bit. One of the things we’re in the process of doing is expanding our final assembly operations in the Netherlands, and we also expect to most likely establish an R&D centre in the UK next year or the year after.

Then we’re likely to establish a factory, probably on the Continent first, and in the future probably in the UK. It really depends on the volume of cars we’re able to sell. Beyond final assembly,once we anticipate our production will be over half a million cars per year it makes sense to have a factory in Europe and in China.

Do you ever plan to monetise the Supercharger network?

It doesn’t cost that much to charge a car, so we can either be chintzy and charge people a few pounds or we can charge them nothing and build it into the cost of the car. So we’d rather not have you get your wallets out for some small amount of money every time, we feel confident that we can maintain the cost of Superchargers over time.

Also we want to add solar power and stationary battery packs, so once you factor in the capital cost once you have the solar power to charge the cars every year you’re really talking about maintenance costs which are very small. Usually we don’t pay any rent, in some cases we’ve actually been paid to have a Supercharger there, and electricity costs are low to zero once you have solar panels and stationary battery packs.

It’s just the capital costs and ongoing maintenance.

which is currently 135kW and rising, and they have to agree with the business model which is we don’t charge people on a per-charge basis. They just need to contribute to the capital cost proportional to their vehicles’ usage of the network.

When will other models arrive in Europe?

The Model X will hopefully start deliveries in California in the second quarter next year, then right hand drive at the end of next year. Our third gen car will be about €25,000, but its true cost is less than that because you don’t have to pay for petrol, which is expensive and there will be some Government support, so it might be comparable to a €15–20,000 car.

We’re aiming for three years.

We want to democratise electric cars and make them viable, but at the moment they’re more expensive than we would like.

The UK is expected to be the largest European market for the Tesla Model S.

Are other manufacturers able to use the network?

The intent of the Supercharger network is not to create a walled garden - any other manufacturer that’s interested to use it we will accommodate. They need to be able to accept the power level of the Superchargers,

internationalfleetworld.com / 13

manufacturer news

in brief

Peugeot targets Asia & Europe with new 508

EU new car registrations rise 4.5% in May

P

eugeot has unveiled its new 508, with the brand saying both Europe and China will play key roles in sales.

Available as a saloon, SW estate and RXH four-wheel drive hybrid estate, the new model bears more assertive exterior styling with a new front-end that will be progressively rolled out on future models.

New features include Blind Spot Sensors and a reversing camera and there’s also now a range of connected services.

Among the upgrades, the 2.0-litre BlueHDI 150 diesel with a six-speed manual gearbox will emit 105g/km CO2 in the saloon and SW estate, down from 109g/km and 110g/km respectively.

Peugeot’s HYbrid4 technology is carried over to the saloon and the RXH and offers 85g/km and combined fuel consumption of 3.3l/100km.

New car registrations in the EU rose 4.5% in May, marking the ninth consecutive month of growth and 6.8% YtD, according to new igures from the ACEA. However, it added that in absolute figures, May’s total of 1,093,448 registrations marked the second lowest result to date for the month of May since it began the series in 2003 with the enlarged EU.

Slovakia recognised for road safety achievement by ETSC Slovakia has been recognised for making the most progress in reducing road casualties since an EU target to halve road deaths by 2020 was set four years ago.

A new report published by the European Transport Safety Council (ETSC) shows that over 2010-2013 Slovakia made a dramatic 37% reduction in total deaths of road users.

Third-generation Iveco Daily is launched internationally

NAFA publishes Fleet Information Management Guide

veco has unveiled its third-generation Daily, which is said to offer bestIpassenger in-class loadspace volumes, comfort and driveability equal to that of car’s interior, and further improvements in fuel efficiency.

Completely revamped, with 80% of components redesigned, the new Daily retains its classic ladder frame chassis structure, offering benefits including maximum bodybuilding flexibility for chassis cab versions.

Produced at the Iveco Suzzara plant, near Mantova in Italy, and at the Iveco Valladolid plant in Spain, the new range features both a restyled Daily chassis cab version and a completely new Daily van.

NAFA Fleet Management has published its ‘Fleet Information Management Guide’ to provide a thorough review of the fundamentals of leet information management (including leet information management systems, FIMS) and review leet system selection and technology options to consider.

To ind out more about NAFA’s ‘Fleet Information Management Guide,’ visit the NAFA Store at: www.nafa.org/FIMG

Most European carmakers on track to hit 2021 CO2 targets, finds report ive out of seven European carmakers are on track to meet their CO targets by the 2021 deadline if they F keep progressing as they have since the introduction of 2

the law in 2008, according to a new report by T&E. If they continue their pace of progress made in the past six years, Volvo, Toyota, Peugeot-Citroën, Renault, Ford and Daimler will all hit their targets early while Volkswagen and Nissan are on schedule.

14 / internationalfleetworld.com

On the other hand, if they don’t accelerate their current rate of CO2 reduction Fiat would miss their target by one year (2022) and BMW by three years (2024).

Several Asian carmakers will have to increase their rate of progress because otherwise they will exceed their targets by several years. Suzuki, Hyundai, Mazda and Honda have just announced a collaboration to improve the efficiency of engines by 30% by 2020.

New Vivaro

TOP PERFORMANCE. LOW BUDGET. With best-in-class Total Cost of Ownership.

Designed to get work done. opel.com Fuel consumption combined 6,5–5,9 l/100 km; CO2 emissions combined 170–155 g/km (according to R (EC) No. 715/2007).

RVs

Analysing leasing and residual value confidence in the Eurozone and beyond...

Europe enjoys a positive outlook Forecast residual values are on the up across Europe, reflecting a common optimism in the future used vehicle market, reports Experteye.

I

n the last quarter, every nation surveyed in the Experteye European Leasing index reported a positive improvement in the forecasted residual values used to calculate contract hire rentals, the UK showing the largest three month increase with a +4% rise.

Budgeted servicing, maintenance and repair (SMR) costs, on the other hand, delivered mixed opinion, with three nations showing price rises and three showing reductions. Italy’s budgets have fallen by -6.6% for the quarter and -12.4% for the year whereas in Spain SMR budgets are up by +0.9% since March 2014.

The Experteye European Leasing index survey tracks forecasted residual values (RV), servicing, maintenance and repair (SMR) costs and rental rates in six European countries using data supplied by major leasing companies.

For some time the UK has topped the survey for residual value optimism, with a +5.8% increase in the last 12 months. Yet UK fleet operators have also suffered the greatest price hike with a +5.6% increase in annual rental costs.

Since June 2013 all other nations have seen their costs come down with French rental rates dropping by -6.3%, Portuguese by -5.3%, Italian -3.8%, Spanish -2.5% and German by -1.6%.

Market summaries – 3 and 12 months to May 2014

FRANCE: Rental rates in France have come down by -6.3% in the last 12 months, the largest price reduction of all nations surveyed. There has also been a -3.4% price drop in the latest quarter. After a year that saw a +1.5% rise in forecasted residual values, the last quarter saw a lesser +0.6% improvement.

SMR budgets fell by -0.2% since March 2014 after rising by +1.3% in the last year.

GERMANY: Rental rates continue to fall in Germany, with a -0.5% reduction in the last three months, following a year that saw a -1.6% saving to fleet operators. Forecasted residuals are showing signs of improvement with a +0.4% increase for the year and +0.2% for the quarter. SMR budgets dropped by -3.1% since June last year but have gone up by +0.4% since March 2014.

ITALY: Italian leasing companies have reported some dramatic reductions in their budgeted SMR costs with a -12.4% fall in the last year and -6.6% for the quarter. Forecasted residual values are up for both the year (+3.2%) and the quarter (+1.5%) and rental rates have reduced by -3.8% and -3.7% respectively.

PORTUGAL: SMR budgets are down by -6.7% for the year, and -3.6% for the quarter, following a less dramatic but similar trend to Italy. Portuguese forecasted residual values have seen very little movement, with a +0.1% increase for the quarter, and -0.1% fall for the year. Rental rates fell by -5.3% since June last year and leet operators continue to see prices drop with a -2.1% reduction since March.

SPAIN: Rental costs fell by -2.5% in Spain last year, with a -0.7% reduction in the most recent quarter. SMR budgets have gone up slightly since March 2014, with a +0.9% rise. This follows a year that saw them fall by -1.3%. Forecasted residual values have been fairly stable with a +0.3% annual increase and a +0.8% quarterly improvement.

UK: UK fleet operators have suffered a +5.6% increase in average rental prices in the last year, by far the biggest price hike across Europe. However in the last quarter they have come down by -0.2%. UK leasing companies also lead the way in their optimism in the future used vehicle market with +5.8% improvement in residual value forecasts during the last 12 months and a +4% rise since March this year. SMR budgets fell by -0.2% last year but rose by +0.7% this quarter.

CHANGES IN RV FORECASTS, SMR COST FORECASTS AND LEASE RENTALS Forecast Service, Maintenance Current Rental Rates and Repair Costs 3-month change 12-month change 3-month change 12-month change 3-month change 12-month change +0.6% +1.5% -0.2% +1.3% -3.4% -6.3% +0.2% +0.4% +0.4% -3.1% -0.5% -1.6% +1.5% +3.2% -6.6% -12.4% -3.7% -3.8% +1.0% -1.0% -3.6% -6.7% -2.1% -5.3% +0.8% +0.3% +0.9% -1.3% -0.7% -2.5% +4.0% +5.8% +0.7% -0.2% -0.2% +5.6% Forecast Residual Values

France Germany Italy Portugal Spain UK

Notes: • The comparisons are for vehicles with a contract duration of 36 months/90,000km.

• Twelve-month comparisons show change since June 2013.

• Three-month comparisons show change since March 2014.

16 / internationalfleetworld.com

• Rental rate changes compare the rates in effect at the time of the survey with those in effect three or twelve months ago.

• RV and SMR changes show the change in participating leasing companies’ forecasts of residual values and maintenance costs over the period.

ROAD TRIP Insignia ecoFLEX

Now this is range anxiety Nobody can drive 1,600 kilometres from the UK to Germany and back on one tank of fuel, can they? IFW sent Alex Grant across Europe in the refreshed Insignia, armed with only travel sweets and a light right foot.

ยก internationalfleetworld.com / 17

ROAD TRIP Insignia ecoFLEX

¡

“

Sixteen hundred kilometres, on one tank?”, the man at the petrol station counter smirked, handing me a folded VAT receipt. “Hope you’ve got breakdown cover ready - you’ve got no chance.”

I had a little more faith in the task ahead than he did, but not much. If fuel economy claims sound too good to be true, there’s frequently a reason for it, and on paper at least the refreshed Opel Insignia is nothing if not ambitious.

Its subtle design update last year tackled a number of D-sector criticisms head on.

List prices came down, discounts were removed, new equipment made an appearance and, most importantly, the two most popular engines for leets dipped under 100g/km for the irst time.

At 3.7l/100km, the pair of 2.0-litre diesel engines are frugal enough to give the Insignia the longest range in its class without resorting to downsizing, hybrid technology, wacky wind tunnel design, or stripping equipment. You even get a full-size spare wheel in the boot.

In theory, that means you can ill the

18 / internationalfleetworld.com

Insignia’s 70-litre tank and travel 1,892km before grinding to a fuel-starved halt.

Enough for us to travel from Vauxhall’s head of ice in Luton, to sister brand Opel’s headquarters in Rüsselsheim, just outside Frankfurt, and arrive back at the start point with range to spare. Big news for a car which will do most of its work on the motorway. In theory.

In practice, though, it has to be able to do this without needing to hypermile. Time is a precious commodity for business drivers and a 90kph motorway trip is a good way to add unnecessary hours to the working day. So in the spirit of real world driving, we’d set the car the additional challenge of covering the return journey without modi ications, without coasting downhill, slipstreaming or driving at abnormally low speeds.

Our car had come straight from Vauxhall’s business demonstrator fleet, and had spent the last 4,000km being run in at the hands of potential corporate customers up and down the UK. However, concern number one: the indicated range when brimmed was 1,100km, which if true

Getting the most out of an Insignia Small wheels – the new 16-inch alloy wheels introduced last year not only improve real-world economy, but they’re good for ride quality too.

Tyre pressures – Vauxhall has two recommendations for tyre pressures.

We used the Eco setting, adding 0.5 bar to the front and 0.6 bar to the rear compared to Comfort.

Speed limiter – most core leet cars include a speed limiter as part of the cruise control system. We set ours to 115kph, the UK motorway limit, and maintained it.

Air conditioning – with the ventilation system on, we were able to keep the air conditioning switched off and stay comfortable.

“With the display reading 3.8l/100km, ‘surely this is going to be easy’ we laughed.

We were to be proved wrong.”

would mean rolling gently and incongruously to a halt on an Autobahn verge somewhere on the way back. My only hope was that the computer was used to test drives being carried out at more pace than we were planning.

We illed the tank thoroughly in Luton and my lack of con idence was short-lived. Recent improvements to the Insignia’s aerodynamics were showing up in near non-existent wind noise, and the new 16-inch alloy wheels were smoothing the rougher bits of the British motorway network. With the Insignia refusing to break the 115kph limit I’d set, we’d reached the Channel Tunnel showing an indicated 3.9l/100km.

Coquelles brought the day’s second coffee, and ive minutes to set the navigation for Rüsselsheim. The irst section of the route through Belgium was to be vital.

Against the undulations of the British motorways, the Belgian A10 highway casts a roughly surfaced but lat, straight route towards Brussels and the economy crept up further, reaching 3.8l/100km around Brugge and barely dipping as we crept

through roadwork-induced traf ic.

Sixth gear was the perfect tool for the job, and at 115kph just outside the peak torque, but with the still large capacity engine allowing it to waft along with barely any input from the turbocharger and no need to downshift.

We reached a rest point at Dutch-German border with the display reading 3.8l/100km, feeling relaxed but in need of caffeine and fresh air. Surely this was going to be easy, we laughed. We were to be proved wrong.

The Autobahns showed up just how slow our UK speed limit is compared to the rest of Europe. Crossing the border into the steep inclines of the Eifel mountains, our speed limiter meant thorough checks of the rear-view mirror to avoid being wiped out by the high speed convoy of German executive saloons in the outside lane, while the sun set behind us.

But it’s a safe and relaxing way to travel, highlighted by our third traffic jam of the day, caused by a BMW 3 Series spinning off the carriageway under heavy braking in the wet, barrelling onto its roof at the start of a section of roadworks.

internationalfleetworld.com / 19

¡

ROAD TRIP Insignia ecoFLEX

¡

Heading for home...

The Insignia rolled into Rüsselsheim at 10:30pm, with ache-free occupants keen for a rest after the hours of concentration. The Insignia tinked gently in the underground car park, showing just over a third of a tank was missing and an average of 3.9mpg over the irst 779km. Enough to make the return journey look simple, even with a detour into Opel headquarters the following day.

A car park lined with Insignias awaited us at Adam Opel Haus the following morning. The company’s glass-and-metal clad headquarters form a small part of a site over half the area of Monaco, where its founder began building sewing machines in 1862, and almost 110,000 Insignias leave the factory here each year. A small hint of the importance Opel places on its lagship car.

I had a brief three hours to take in the facility and meet Opel leet boss Ian Hucker, before beginning a time-conscious trip back to our scheduled Euro Tunnel crossing that evening.

Driving steadily on the way over had made the journey a relaxed one, with no concerns about straying over unfamiliar speed limits or collecting ines.

¡

20 / internationalfleetworld.com

Hyundai i40

A winning combination.

The inspired i40 does not stop at premium comfort, smart technology and stand-out style. With its unmatched 5 Year Unlimited Mileage Warranty and impressively low maintenance costs, the i40 is a car that just keeps on delivering. For more, visit www.hyundai.com/eu

Hyundai Leasing Combined Fuel Consumption for i40 Wagon: 4.3 - 7.7 l/100 km, Combined CO2 Emissions 113 - 179 g/km. The 5-year unlimited mileage warranty is valid in all EU member states + EFTA. Warranty is subject to local terms and conditions. For taxi or rental usage model specific restrictions apply. For more, visit www.hyundai.com/eu

ROAD TRIP Insignia ecoFLEX

for home... ¡ Heading The return journey had a deadline, but with a little restraint we left feeling con ident that we could get back to our start point.

Belgium had other ideas. With the clock ticking down to our train crossing, the Brussels ring road had choked on a combination of pre-rush hour traf ic and an accident, and the Insignia’s navigation diverted us into the city centre. This was a gamble, and it didn’t pay off. We rolled into 90 minutes of gridlocked traf ic, roadworks and every-driver-for-themselves aggressiveness that we couldn’t contend with while maintaining a steady right foot.

Frustrating, but we were powerless.

No amount of aerodynamic upgrades, clever gearing or engine tuning can mask the damage done getting the Insignia’s bulk moving in bumper-to-bumper stopstart traf ic. Short of pushing the car we were short of options other than simply watching hours of hard work ebb away.

By the time we reached a service station just outside the city, the all-important average consumption igure had lifted over 4.0l/100km for the irst time

and the weather was starting to turn.

That valuable economy-boosting section through West Belgium and Northern France did us no favours either, the trees craning backwards in a strong headwind and the wipers roaring up and down the windscreen with the additional drag.

Unsurprisingly, our economy continued to slump all the way back to Coquelles. By the time we parked on the train, the gauge was showing 4.2l/100km – a disappointing place to be after such a promising start, but Luton was still within reach.

On the positive side, Brussels had pushed our repatriation back beyond the rush hour and the motorways were clear, even through the dreaded Dartford crossing. Without the headwind, our economy igure was beginning to climb again, and as we passed the M11 junction of the M25, the dashboard inally told us that we should be looking for a fuel station soon. We’d covered 1,500km.

I could sympathise. With eight hours of travel under my belt, refuelling was on my agenda too. The tiredness had

started to materialise in clammy oxygen-starved palms, uncontrollable slow yawns and dry eyes that no amount of mineral water could cure. But, with over 160km of range left, the detour around the two closed M1 junctions into Luton didn’t become much of a concern.

A different, but similarly perplexed, fuel station attendant greeted us in Luton, where the Insignia took just over 64 litres of fuel on board, equating to around 4.1l/100km. I paid up, we checked again and with a gurgle the tank belched out one last gasp of air.

Another 1.7 litres disappeared down the iller neck, bringing it back to an unshakable brim.

It had breezed it. With two adults, 30kg of photography gear, a headwind and Brussels traf ic against us, the Insignia had not only got us back to Luton with range to spare, but it had made it look easy. We’d averaged 4.16l/100km over 1,587km, enough to cover an incredible 1,683km on one tank of diesel, and all without relying on a breakdown truck.

Building the Insignia Opel has built cars in Rüsselsheim since 1899, and the plant now has 3,300 employees on two lines building 800 cars per day, of which 300 are Insignias and the remainder are Astras. The plant handles 70,000 parts per hour, of which 70% are sourced from Europe, and each Insignia takes 20 hours to build.

22 / internationalfleetworld.com

Insignia significance

Ian Hucker, European director fleet and commercial vehicles at Opel, explains the importance of the Insignia in a diversifying market, and how the refresh brings it up to date.

I

nsignia was designed to be our lagship. It showed everybody what we could do in design, comfort, technology and it’s built here in Rüsselsheim, so not only is it our lagship car but it’s built at our European headquarters. We had short supply from year one, and with the new car it’s gone lat out once again.

The package works and we’ve tailored it around fleet customers and user-choosers. For example, Tech Line in the UK is very well established and we’ve executed that same idea across Europe. In Germany, that car was running at 50% of orders from a standing start. It’s what the fleet managers typically drive, so when they make decisions on other vehicles in the fleet, it does help us elsewhere.

Fleet is quite traditional; the C and D segments continue to dominate, but the D segment has shrunk in size. The key thing for us is we also need to be in those other segments where the drivers are moving to. Zafira Tourer has grown significantly in fleet this year and one of the reasons is you can move from Insignia without losing the features you’re used to. Then it’s more of a lifestyle choice.

The other thing we’ve seen is four wheel drive variants are up 40%, and for me this is one of the spin-offs of Country Tourer. Yes that’s 5%, and we knew it would be a niche part of the segment, but the awareness building of four-wheel drive capability has really helped. It’s Germany, Austria and Switzerland that are the areas where four-wheel drive penetration has really accelerated.

That diversi ication of product over the last ten years, where it used to be if you had a Corsa, Astra and Vectra you were pretty much done, the rest was all niche. These days it’s not that clear-cut. So inding these nuances, different ways of approaching the market, such as Country Tourer, are very important to have all bases covered.

internationalfleetworld.com / 23

ROAD TRIP Insignia ecoFLEX

¡

“It had breezed it. With two adults, 30kg of photography gear, a headwind and Brussels traffic against us, the Insignia had not only got us back to Luton with range to spare, but it had made it look easy.”

Our trip in numbers 5 countries 4 traffic jams 8 roadside coffees 4 stale Belgian sandwiches 124 M&Ms 2 days 1 tank of fuel 4.16l/100km average 1,587km covered

24 / internationalfleetworld.com

INTERNATIONAL

FLEETW RLD

Online now!

For all your fleet needs, visit internationalfleetworld.com

NEWS from the global fleet community

INSIGHT from experts into the fleet industry

ADVICE best practice for running your fleet

INTERVIEW Simon Oliphant, Hitachi Capital

Hitachi expands into Europe Poland, Turkey and France are among the European countries where Hitachi Capital will be expanding its fleet activities. CEO Simon Oliphant talks to John Kendall.

H

itachi Capital Vehicle Solutions (HCVS) is the UKbased leasing and contract hire division of the Japanese Hitachi company, probably best known for its consumer electronics, but with many other interests including health care, rail systems and defence systems.

HCVS is part of the company’s financial services division – Hitachi Capital Corporation - based in Japan and representing around 5% of the parent company’s annual turnover of approximately €152bn. Hitachi Capital has had a presence in other markets for a number of years. This has added offices in Singapore, Hong Kong, the UK and the USA. The largest overseas subsidiary is in the UK, split into four principal businesses: asset finance, consumer finance, factoring and HCVS. According to HCVS CEO Simon Oliphant, Hitachi’s expansion has principally been driven from Japan. “The language started changing a few years ago,” he says, when the company started to suggest that it might need to think differently, that it didn’t have all the resources it might need in Japan and might need to rely more on its local management teams.

This led to the establishment of new regions and structures two years ago. The US business now covers North and South America. Europe is covered from the office in the UK. Asia has been split into China and associated countries and South East Asia, i.e. Singapore and Hong Kong.

The UK office was tasked with expanding business into Europe. “There are two principal parts to the expansion strategy,” says Simon, “One is to support Hitachi Group business – providing asset finance to Hitachi Group businesses and their customers and expanding the HCVS business. A team was formed from Japan and the UK and carried out research into pretty much all the countries in Europe.”

As a result, the team decided that it wanted to start business in a country where leasing and contract hire was a mature business, one where development was already under way and one where the business was still in its early stages. The chosen countries were France, for mature business, Poland where business development was already under way and Turkey, where business was in the early stages.

Simon’s view of expanding into Poland is that the business is still growing, “Even in the recession, GDP growth

26 / internationalflfeetworld.com

remained positive, it just slowed down. There’s lot’s of support from the EU, so there is money to invest in infrastructure. It’s a well-educated society, where the people like both the British and the Japanese.

“We have three principal strands of our strategy to enter a country: buy, build from scratch, or find a partner. We are carrying out a country-by country analysis to decide which one of those applies. I decided in Poland that buying was the best route. The market has matured; you’ve got all the big players there so to establish a start-up would take a long time. We looked at about four companies altogether, found Corpo Flota and we completed on 3 April.”

Corpo Flota was a privately owned company and the owner also operates a Toyota dealership. “He wanted to focus on growing the dealer business, so was open to selling the company,” says Simon, “It was a very friendly acquisition.” The company founder has been retained as an advisor, “The relationship between the business we bought and his Toyota dealership and other businesses is still an important one, so it’s in both our interests to make that work,” Simon believes.

The Corpo Flota operation covers mostly business-tobusiness dealings. “The portfolio is principally what we would call contract hire and fleet management,” says Simon, “There’s not a lot of straightforward finance lease in it. Their customers fall into two categories really. All want a full service leasing product. There are those that are cash rich and choose to buy - they take a fleet management package, then those that prefer contract hire.

“There’s a mixture of business, with large customers – well known brand names, such as Coca Cola and quite a few small and medium sized companies. Poland is a smaller market. That same segmentation in the UK would translate into a customer running 3-4,000 vehicles, another customer running 500-1,000 vehicles, then 100 or 50 below that. It’s just that model scaled down to where that’s 10 or 15 cars, 50-150 cars and a large fleet would be a customer running 100 vehicles or more.”

Simon expects growth from the Polish business, “That expansion will come from general growth in the market place, as people become wealthier and also penetration because it’s a full-service leasing product, or contract hire and there’s still room for growth as customers move away from the more traditional financing methods. The

¡

“We have three principal strands of our strategy to enter a country: buy, build from scratch, or find a partner.�

internationalfleetworld.com / 27

INTERVIEW Simon Oliphant, Hitachi Capital

Hitachi expands into Europe.. for us is that we can help accelerate their ¡ opportunity growth. Partly by providing funding but also by sharing knowledge and expertise.

“Hitachi Europe has assisted with the Corpo Flota acquisition. This is a division of the company that was established to support Hitachi companies around Europe. The company has a number of offices around Europe including Poland. One of the research team that studied the European expansion chose to re-locate to Poland and operates from the Hitachi Europe office there.”

Knowing that a due diligence process would be required before acquisition, HCVS recruited locally, hiring someone with a banking and leasing background with experience of the local fleet market. He recruited a second team member with a similar background, making the Polish-based team three-strong. With Simon leading the operation from the UK, he used the UK-based team to form an acquisition team used to the process, to liaise with the team in Poland. This has evolved into a supervisory board in the UK and management board in Poland.

Different business cultures tend to present different challenges and Simon says that he learned an interesting lesson during the Corpo Flota acquisition. Companies below a certain size in Poland are not required to submit audited accounts. Corpo Flota had just reached the size where accounts were required. “The difficulty in the due diligence was that we had no historic financial information that had been audited,” says Simon. “So they were having to actually construct it for our purposes, which made it longer and more complicated for us and put a strain on them. We got there in the end but I would say the process was extended for that reason. So there is a lesson there.”

Currently, the Corpo Flota fleet runs to some 3,500 vehicles. “Our plan is to get inside the top 10 in the next three years,” says Simon. “There are synergy opportunities. We can share customers and suppliers where there are European suppliers and potentially we can share systems, as well as knowledge and knowhow. They have very good knowledge in Poland and they are experts in their own market. What I think we can do is to help their growth and development by taking things that we perhaps take for granted in the UK and see how much of that can be applied there. Things like on-line authorisation, which is standard in the UK. Systems in Poland tend still to be manually based.

“There’s a very big IT community in Poland in a low-cost area of development around Cracow. Tapping into that, with expertise that is English speaking and not too far away, I can see some opportunity there.” Poland could also open up business in other Eastern European States.

28 / internationalflfeetworld.com

Moving into Turkey is HCVS next move. Simon believes that the company could use one of two strategies for the market, “We could do a start-up there because growth is so rapid. You could start from scratch and have a reasonable sized company in three or four years time. I think acquisition is a good opportunity as well. I don’t think we need to partner there.

“The exchange rate is recovering, interest rates have started to fall and the stock market has improved, so the signs are that they are through the difficulties.”

HCVS is not planning to stop after it has established its operations in the current target countries, but will adopt a progressive country-by country approach.

Expansion brings opportunities for economies of scale. IT is one area, where a core system accessible through the ‘Cloud’ and adapted to each country’s needs, could be developed. “There are global and European tyres suppliers,” adds Simon, “A Michelin tyre will be the same in any European country. Then things like on-line authorisation. There are opportunities with systems or associated systems to share those across Europe and share the suppliers as well.

“I like to do our own ‘Due Diligence’, which makes it onerous from a workload point of view, but you actually get to know the company yourself,” says Simon. “Assuming things are going in the right direction, you start to form relationships – get to know people, which is a great help for the post-acquisition period. There are at least eight to 10 people from my office in the UK that know the team in Poland now and they can carry on that co-operation.” The acquisition in Poland has given Simon and his team an understanding of what additional resources might be needed for the next time. Simon likens the recent process to the acquisition of the Lombard business in the UK in April 2013, “In some ways that was a much bigger deal in terms of value and vehicle size and it was UK based, but the same principals apply. You know what assets you are buying, you know which customers you are dealing with, you know the strengths of the people that you’re hoping to acquire with the business and data quality, how you plan to integrate it post acquisition and get the benefit out of the acquisition subsequently.

“I always say to people about that post acquisition period, that the due diligence is really important, just for understanding what you are buying. I think that one of the reasons that a lot of acquisitions fail is because people focus too much on the financial side, when in fact the people side is probably equally, if not more important. The post-acquisition strategy is probably just as important if not more important than the due diligence.”

INTERVIEW Adrian Porter, Hyundai Motor Europe

Can do better... and will Adrian Porter, European Fleet and Remarketing Director for Hyundai Motor Europe (HME), explains how the new Genesis is a sign of even better things to come from the Korean manufacturer. Ross Durkin reports.

F

leet is one of the more conservative sectors of the motor “HME is serious about the fleet market and my job is to idenindustry, where long memories and entrenched views tify the strategic changes necessary to put us in the right posican be an obstacle for OEMs seeking to change perception to grow in the future and to move to a higher level of fleet tions. All too often we hear of plans to improve product qualcompetence overall. ity in the future. Hyundai has chosen to demonstrate its “We know we can’t deal with every leasing and rental design, technical and production capabilities by bringing a company in every country in Europe. Our strategy is to be new car to Europe that is the embodiment of its objectives – a selective and to develop a deeper, more serious relationship move that was well received by an audience of senior fleet with a smaller number of really key players.” executives recently.

And this strategy would appear to be paying dividends as the Speaking at a VIP Fleet event in Hamburg, HME’s European company finds itself on the receiving end of more and more Fleet and Remarketing Director, Adrian Porter, explained the pan-European or global tenders. Meanwhile, Mr Porter is thinking behind the move to bring small numbers of the new acutely aware of the need to get the right balance between fleet Hyundai Genesis to Europe. He said: “What we are doing with and retail business, and to ensure that fleet business is coming the new Genesis is showcasing the future of Hyundai. through well managed channels.

“The car will only be brought to Europe in very small numbers, and only with one engine Genesis is a potential game-changer – a 3.8-litre V6 – which doesn’t really make it a for Hyundai, showcasing the fleet model. What’s important is that it demoncompany’s quality, design strates the quality, craftsmanship and techniand technical capabilities cal capabilities that will go into Hyundai’s new models over the next few years.”

Hyundai plans to sell a few hundred Genesis models in Europe this year. Total sales for the Hyundai brand in Europe will be a little less in 2014, compared to 2013, and Porter points out that the company is taking the opportunity to make a number of qualitative improvements to its business, including fleet, before making a renewed push for growth from the middle of the decade.

“In 2014, Hyundai will make qualitative enhancements in strategic areas, helping the company grow organically rather than pursuing market share gains at any cost.

Our market share will grow as the year progresses on the “We have a new leasing and rental manager in Chan Uk Jun strength of new model launches towards the end of 2014 and and this is an important sector for us. But it has to be controlled start of 2015. We are using Genesis to demonstrate what our as well in order to protect residual values and make sure the customer can expect from Hyundai in the future.” right kind of used stock is available to the dealer network.”

Porter joined HME at the beginning of 2014 after a Small numbers of Hyundai Genesis models will find their way successful career at organisations such as ARI, Ford and to markets across Europe during the course of the year. However, Mercedes-Benz. And his appointment to a newly created, its significance will not be its contribution to this year’s market senior-level position in the organisation is a further sign of share, so much as a statement of intent about what is to come in the company’s serious intentions in fleet. the future. The company can do better… and will.

30 / internationalflfeetworld.com

“My job is to identify the strategic changes necessary to put HME in the right position to grow in the future.�

internationalfleetworld.com / 31

FLEET FOCUS Brazil

Fleets to score in Brazil Low levels of car ownership, natural resources and a growing market mean there’s everything to play for in Brazil, reckons John Kendall.

T

he football World Cup might be dominating the headlines about Brazil at the moment, but the motor industry is an important element in the country’s economy. Brazil’s motor industry trade organisation is Associação Nacional dos Fabricantes de Veículos Automotores (ANFAVEA) and among its members are Audi, DAF, Fiat, Ford, Honda, Hyundai, Iveco, Mahindra, MAN, Mercedes-Benz, Mitsubishi, Nissan, PSA Peugeot Citroën, Renault, Scania, Toyota, Volkswagen and Volvo, as well as local manufacturers.

Kia Soul Kia has supplied a fleet of official vehicles for the 2014 World Cup in Brazil.

32 / internationalfleetworld.com

ANFAVEA may be the only motor industry trade body that also includes agricultural machinery suppliers, which is a good measure of the importance of the agricultural sector to the Brazilian economy.

Brazil’s manufacturing sector accounts for around 28.5% of gross domestic product (GDP) and the motor industry is an important element alongside steel, petrochemicals, computers, aircraft and others. In global terms, the Brazilian economy is the seventh largest by GDP. As Scotiabank points

out, vehicle ownership is low in South America generally, averaging 166 cars and trucks per 1,000 people. This compares with 680 per 1,000 people in the developed nations of the G7 and a world average of 180 per 1,000 people.

Brazil is the world’s second largest producer of ethanol fuel, second only to the US. The country is reckoned to be a sustainable biofuel economy, using sugar cane as the feedstock. The US Environmental Protection Agency designated Brazil’s sugar cane ethanol as an advanced biofuel because it offers a large reduction in total life cycle greenhouse gas emissions. Brazilian petrol contains a mandatory blend of 22% ethanol. The sugar cane industry, as well as mining, provides a ready market for pickup trucks.

Largest car market in South America Scotiabank data suggests that South American car sales have grown by 11.5% per annum in the past decade. Brazil is the largest market in the region and accounts for some 60% of the overall volumes. It is now the sixth largest market in the world. The light vehicle market has cooled in recent months and has gone into decline. As we report elsewhere, LMC Automotive reports that in the January to May period, sales in Brazil and Argentina declined by 9.2% compared with the same period in 2014. Scotiabank attributes the decline to a slowing economy, rising interest rates, high household debt and falling consumer confidence.

According to the Scotiabank report, “Auto loan rates in Brazil have jumped 4.0 percentage points over the past year.

While the increase is in line with the 3.75 percentage point hike in the central bank’s overnight rate since March 2013, auto loan rates now exceed 23% and have become unaffordable for a typical family. Rising inflation – currently 6.3% – has also dampened household purchasing power this year.”

But Scotiabank expects the economy to improve later this year following the Brazilian presidential elections in October.

“Despite the decline in Brazilian car sales through April, we expect purchases to begin to improve after the presidential election in October. The Brazilian Real has strengthened by 9% against the U.S. dollar since late January – partially reversing a 20% plunge from last April through early February – suggesting that the monetary tightening cycle, triggered by weakness in the currency may be coming to an end. In addition, despite a slowing labour market, unemployment in Brazil remains below 5% – 3.0 percentage points lower than the average of the past decade.”

Opportunities for fleet growth What effect is all this having on the Brazilian business car sector? Fleet management companies are well represented in the country.

“There are some big fleets in Brazil,” says Pascal Vitantonio, general manager of ALD Brazil (left), “And we are trying to bring the highest standards of fleet management that you

would see in other countries. Players like ourselves and a couple of others see our role as contributing to making the market more mature and more professional.”

A lack of official statistics makes it difficult to estimate the size of the business car sector in Brazil. Scotiabank reckons that total new car sales reached 2.76m in 2013 and will probably remain at around that figure this year. Pascal Vitantonio estimates that around 10% of the new car total, so 300,000 vehicles a year are outsourced to leasing companies. He believes this number is growing year-on year. “Every company has their own estimate – we compile numbers and we cross-check numbers with competitors and the car makers,” he says. “Everybody has their own definition of the corporate car market. Some include taxis, some include Government fleets, which are very specific.”

Preference for locally-built models Not surprisingly, the fleet sector favours manufacturers who build cars in Brazil. Fiat has produced cars in Brazil for many years and leads both the retail and corporate markets. Volkswagen is the second largest and also has a number of production plants in Brazil. General Motors builds cars in Brazil too and is currently renewing its product range. Ford holds the fourth place in the market – another manufacturer with a long history or manufacturing in Brazil. Behind the top four come Hyundai, Nissan, Honda, Toyota, all holding a market share in the 5% to 7% range.

Business car users in Brazil tend to be like they are anywhere else in the world; “Company cars in Brazil can be a tool, can be a benefit and most of the time are both,” says Pascal.

“The car is a very significant component of the benefit package and not just for top executives. There’s a large fleet of executive cars, some produced in Brazil, others imported. Then there are special vehicles used in agriculture and mining.”

Trend towards operational leasing In terms of fleet financing, Pascal identifies a trend to move vehicles off company balance sheets and use operational leasing or other fleet management methods. He believes it is a clear medium term trend in Brazil, particularly as the economy has slowed and companies pay more attention to costs.

“Finance leasing is still a solution,” he says, “more for individuals, rather than companies. There are no clear tax advantages on inance leasing, compared to a personal lease or long-term renting. Some customers still prefer to buy their own vehicles and when they look for external funding, they will probably use the banking sector rather than manufacturer inance.

“Because of the size of the retail market, manufacturer finance is very focussed on the retail market,” says Pascal, “They don’t dedicate much resource to the corporate sector.”

Looking ahead, Pascal expects slow growth in the business sector, but he expects the balance between owned and outsourced fleets to change a lot. “We are optimistic that outsourcing is going to grow in Brazil in years to come.”

internationalfleetworld.com / 33

REMARKETING The Changing Market

Remarketing reborn Are traditional remarketing channels to change or can existing systems adapt to to a changing market? Steve Banner investigates.

Italian government uses eBay Are the world’s leading auction groups wasting their time and money by investing in more and more auction centres and carefully-crafted online remarketing services? Are they at risk of being eclipsed by other approaches to vehicle disposal?

That would appear to be the case if a recent initiative by the Italian government is anything to go by.

Determined to cut costs and shake up the way the country is run, the administration of newly appointed Prime Minister, Matteo Renzi, has decided to auction off through eBay some 1,500 chauffeur-driven executive cars used by politicians and senior civil servants in various government departments. Vehicles that have been deemed non-essential include Maseratis owned by the Defence Ministry along with BMWs, Alfa Romeos and Lancias operated by other ministries, including the Interior Ministry.

However, the move has not dented the confidence of BCA and other auction companies that they will continue to play a key role in the re-marketing of ex-fleet vehicles.

New Dutch auction site for BCA BCA has recently expanded into a 16-acre (66,000m2) site at Barneveld in the Netherlands complete with physical, Live Online and digital sales capabilities. The centre includes inspection lanes and imaging bays, a test track and a pre-sale preparation area and is close to both the A1 and A30 motorways.

The move coincides with BCA’s acquisition of Fleetselect Online Car auctions, which it says is the biggest Dutch online re-marketing platform. It boasts a buying base of almost 6,000 franchised and non-franchised dealers, car supermarkets and traders.

Both decisions are particularly interesting, given the used car shortage in the Netherlands recently highlighted by Maarten Bekkers, country manager for online marketing platform Autorola.

34 / internationalfleetworld.com

The shortage has arisen as a result of the major fall in new car sales and the decision by many large leets to extend their leasing agreements in 2009 and 2010, which is now affecting the availability of second-hand stock. To that can be added the volume of used cars being exported by the Dutch to take advantage of similar shortfalls elsewhere in Europe.

“Vehicles are often making 10% to 15% more than they would if they were sold in their home market,” Bekkers says.

“As a consequence, as many as 60% of cars sold through our online platform are being purchased by buyers outside the Netherlands.”

The profit that can be made by vendors makes the extra administration work involved worthwhile.

The result is that Dutch dealers are now frantically trying to import second-hand vehicles from Germany, Hungary and Poland in particular to compensate for the lack of locally sourced models.

Largest indoor auction facility in Irish Republic Returning to the topic of investment, Wilsons Auctions is now well established in its new 19-acre (77,000m2) site in Dublin in the Republic of Ireland. “It’s Ireland’s largest indoor auction facility with separate halls for different kinds of assets so we can run four auctions simultaneously,” says branch manager, Ricky Wilson.

Last year saw Wilsons hold what it says was the first manufacturer closed auction in the Republic of Ireland, for Citroën. The sale incorporated Live Bid, which meant that dealers from all over the country could participate.

is targeting its services at independent dealers and the budget-price end of the used car business.

Sites have already been established in Atlanta, Georgia and Phoenix, Arizona.

Multiple online auctions

Manheim upgrades North American facilities

On the other side of the Atlantic, 2013 saw Manheim spend over $26m (€19.24m) on expanding and upgrading its facilities and services in the USA and Canada. The investment included the provision of extra sales lanes, new and upgraded inspection, preparation and body shop facilities and the addition of Digital Lanes.

In place in Manheim Ohio and Manheim New Mexico, they replicate the buying experience online without the need to run vehicles through physical lanes. Manheim aims to have such lanes in place at a dozen locations by the end of this year.

Among the company’s biggest projects was the construction of a 27.7-acre (112,000m2) site in Riverside, California, which offers certification and inspection services to Volkswagen Credit and Audi Financial Services.

Nor is Manheim expanding solely in its own premises in North America. Earlier this year it joined forces with Hendrick Automotive Group, which operates 87 dealerships in the USA, to create Hendrick’s first on-site auction lane.

Based at the group’s location in Charleston, South Carolina, it is being used to dispose of trade-in vehicles sourced from the company’s 11 dealerships in and around the city. “It’s a solution that is helping us save time and money and sell more vehicles,” says Hendrick vice president, Chris Little.

Last autumn Manheim announced the creation of Go Auto Exchange, a joint venture with DriveTime, one of the USA’s largest subprime credit second-hand car dealers. It has resulted in the establishment of a new auction business that

Manheim’s eagerness to embrace the latest technology is illustrated by the way in which it is working with other North American remarketers. This includes ADESA and ServNet, to help create a multiplatform bidding solution that will allow for simultaneous bidding on vehicles listed on multiple online auction sites. The aim is to enable a car to attract bids from multiple online auctions from the moment it is offered for sale, until the winning bid is made.

The auctioneers have set up a steering committee, which has engaged Auto Auction Services to build and maintain the hub technology that will be used to synchronise bidding between the multiple online platforms. The new initiative should be ready to be piloted later this year.

“We believe this product will be better than anything offered in our industry today,” says Jim Hallett, chief executive of icer of KAR Auction Services, ADESA’s parent company.

“It’s the type of solution our customers have been asking for because it will provide maximum exposure for their vehicles,” he continues. “It will mean more bidders for their cars and more choice for dealers.”

internationalfleetworld.com / 35

¡

REMARKETING The Changing Market

¡

ADESA holds weekly sales at 65 centres across the USA, Canada and Mexico and its online auction venues include ADESA LiveBlock. It also builds and manages online sale platforms for vehicle manufacturers.

New pricing tool from Autorola Elsewhere, Autorola has introduced a new pricing tool called INDICATA for dealers and manufacturers which uses real-time data with the aim of ensuring that dealers do not over or under-price stock, thereby harming their profitability. Now available in Denmark and Spain, it is being rolled out in the Netherlands and will be launched in Belgium, Austria, Sweden and Portugal this year.

Autorola’s Fleet Monitor asset management system is being used by Danish leasing company AL Finans to manage the re-marketing of its 3,500-strong car contract hire fleet.

Having installed the new package in January, it is using it to automate end-of-contract inspections and damage re-charges. The company says it has already seen used vehicle stocking days fall by 52%.

“We are processing more cars in less time,” says remarketing manager, Rene Egeskov Jensen. “Automated letters are being sent to customers three months prior to de-hire which makes it easier for us to book cars into our de- leet compound.”

Fleet Monitor is being employed by UniCredit Leasing in Italy at 21 locations.

“We have made bespoke changes to it to fit in with UniCredit’s systems and it should speed up the process of converting assets into cash,” says Autorola country manager, Thomas Andresen. “It will also help UniCredit determine the best remarketing channel for each vehicle.”

Online remarketing expands globally Online remarketing is steadily expanding worldwide.

Autorola Germany has partnered with Ford to run the latter’s first-ever live online auction in the country. May 2013 saw Autorola debut in Turkey.

The move makes sense, says the company given the country's sheer size. This means it takes prospective purchasers a long time to travel to and from physical auctions. So far as the vendor is concerned, opening up stock to a countrywide base helps increase the number of bids received and the prices realised. Buyers can bid round-the-clock for the duration of the auction.

Autorola introduced what it has to offer cautiously at first, conducting an extensive education exercise aimed at potential users. No more than 30 cars were offered during the first, four-day, auction that was held.

36 / internationalfleetworld.com

Tax increase sparks used car interest in Turkey “The majority of Turkey’s used vehicle stock comes from Istanbul and the surrounding area and when buyers make a purchase the vehicles head either south, west, or east to be sold by franchised dealers and independent used car dealers,” says Autorola Turkey’s country manager, Oguzhan Saygi.

“For our irst sale we worked with vendors to extract historical information on the vehicles and took photographs of each one to optimise provenance and ultimately buyer con idence,” he continues. “This worked as we managed to sell a few cars in our very irst sale, which was a huge achievement.”

During the subsequent six months, Autorola Turkey held 73 successful online auctions. Around 90% of the cars being entered are from the leasing industry,with major lessors such as Otokoc Otomotiv and Hedef Fleet working closely with Autorola.

“Interest in used cars continues to grow, especially now the government has increased the special consumption tax, which has caused new car prices to rise,” he says. “Used prices are now rising in turn and the leasing and rental companies have grasped the benefits of online remarketing.”

“Dealers are also beginning to realise that online represents an efficient use of their time when stocking their used forecourts, which will become even more important now that the demand for second-hand cars is expanding,” he adds.

Cost favours online in Australia Autorola is also making its presence felt in Australia, helping the insurance industry dispose of salvage cars online rather than having to collect them and pack them off to conventional auctions; a time-consuming and expensive exercise given the size of Australia.

“If a car or commercial is written off in the outback then it could be transported 1,000 miles before it reaches a physical auction,” explains Autorola Australia country manager, Philip Browne. “The salvage value may only be A$500 (€345) but the transport costs could be as much as A$2,000 to A$3,000 (€1,380–€2,070), which does not make economic sense.”

Use Autorola’s platform and the vehicle can stay where it is and be offered for sale immediately accompanied by photographs and a service history.

It is an approach that is good for the environment too because eliminating the requirement to transport cars to auction centres cuts fuel usage and CO2 emissions.

“We’ve had consultants from Impact Sustainability look at three months’ worth of data from our current client base and they reckon that by eliminating the need for 2,000 truck journeys we have reduced CO2 emissions by almost 185 tonnes,” Browne says.

“Such reduction are proving very popular with major corporate clients who are much more aware of the impact of their business on the environment nowadays,” he adds.

REMARKETING Australia

Shake-up down under Managing director of Autorola Australia, Philip Browne, considers how relaxing import tariffs on used cars could change the Australian car market.

B

y the end of 2017, volume car production in Australia will cease. Ford and GM both announced that they would close their operations last year. Toyota announced in February that it would close down by the end of 2017, ending some 60 years of Australian car production. The announcements ful il the prediction made by former Ford boss Jac Nasser last year, that once one manufacturer closed, the others would follow because the supply chain would not be viable.

Australia is already one of the most competitive car markets in the world with over 60 brands for sale from car manufacturers around the world. This stiff competition has in turn led to new cars becoming some of the cheapest to buy anywhere in the eastern Asia-Pacific region.

The main car production factories belonging to GM, Ford and Toyota are set for closure over the coming years. This is due to government financial incentives coming to an end and the rising costs of exports.

And with import tariffs being reduced, the Australian market could be set for further competition and upheaval over the next few years.

The New Zealand government of the 1990s adopted a similar policy. Import tariffs were reduced to zero letting in a large number of cheap, older Japanese cars to address its ageing car parc.

As well as helping contribute to the closure of the country’s car assembly plants, the cheap Japanese cars with a lack of vehicle provenance potentially compromised the safety of Kiwi motorists.

Nearly 20 years on, the Australian market looks to be heading in a similar direction to New Zealand. The Australian Productivity Commission (APC), the Government's independent research and advisory body, has the market’s future in its hands.

It is considering relaxing car import tariffs to allow more Japanese used cars to be imported into the country. But with that comes the potential of cars with no servicing or safety provenance reaching Australia by the bucket load.

The older a car gets in Japan, the more expensive it is to tax and keep on the road. As a result, there is a rich volume of cars ready to be exported.

More serious is the potential threat of compromising Australia’s used car prices. These are already at a record low.

The Kiwi market is now looking at only allowing lower emission used cars to be imported in future as the country looks to reduce emissions of its car parc over the coming years. This is already leading to more premium cars being imported from the UK and could lead to a reduction in the older cheap imports coming in from Japan.

Preservation of the environment is also a major focus in Australia so one option might be to restrict imports to those that meet strict emission levels.

Whatever the outcome of the APC’s ruling the Australian automotive sector is set for further change at a time when the country’s manufacturing and mining industries are also facing a stiff challenge.

internationalfleetworld.com / 37

NAFA International Fleet Academy

Challenges of operating a pan-European fleet Reproduced with the kind permission of NAFA Fleet Management Association, this is the latest in a series of extracts from the International Fleet Academy Global Fleet Guide.

CHAPTER 3

European-wide fleets This chapter will provide an overview of some of the major challenges to establishing a pan-European leet. It is not intended to provide all the details required; rather, it offers a perspective that will help in an initial approach and highlight some key areas to examine – including differing languages, currencies and tax initiatives.

EUROPE European Union Members: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom Currency: Euro - Eurozone members: Austria, Belgium, Bulgaria, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain Swiss Franc - Switzerland Pounds Sterling - UK Zloty – Poland Krona – Sweden Languages: Many and varied Europe is a region containing numerous countries; however, many international organisations think they can treat it as a homogeneous region. With the advent of conference calls and webinars, and in light of the pressure on travel budgets, it is common to try and manage a leet globally without actually going to visit the major markets. In order to fully appreciate the differences in each market there is no substitute for visiting the country in question at least once, and building a face-to-face relationship with colleagues in these markets.

38 / internationalfleetworld.com

Pan-European management of leets is increasingly common and shares many of the same issues and characteristics of global leet management, only on a smaller, regional scale.

One way to divide and study the European leet market is in terms of maturity. The company vehicle is a mainstay of the larger markets in such places as Germany, France, the United Kingdom, Italy and Benelux, where company purchases can account for over 50% of the total market.

In the Southern and Eastern European markets, however, the company vehicle is not as common.

Market differences In general, company-assigned vehicles are more prevalent in Europe than in other global markets. In the US, for example, a company vehicle is a tool of the trade – a salesperson’s car or a delivery van, for example. A ‘perk’ vehicle for managers is relatively uncommon and normally exists only for limited senior executive management positions. In Europe, the company vehicle is not only a tool of the trade to get the job done, but is also offered as part of the employment package, even if the vehicle is not required to perform the job in question. The ‘perk’ nature of these vehicles introduces a new dynamic to the leet market and involves the Human Resources department in the decision-making process.

Another impact of having more ‘perk’ vehicles is that the European leet market acts more like the retail market. All drivers want the latest model with the latest features, and the brand plays an important part in driver satisfaction. As a result, average leet vehicles in many European markets are

“Leasing is often an area of confusion for global companies when working in European markets.”

typically models that would be perceived as luxury brands in other global markets, such as BMW and Audi.

Taxation plays a major part in European fleet selection as drivers are subject to pay taxes according to the type of vehicle selected. These taxes are often linked to CO2 emissions. As a result, manufacturers are constantly striving to develop vehicles with lower CO2 emissions, which are still attractive in terms of performance. Diesel is the fuel most commonly used for economic reasons, although this does vary according to local taxation rules.

Country preferences also come into play French drivers tend to prefer Renault, Peugeot, and Citroen; Italian drivers prefer Fiat and Alfa Romeo; and Germans prefer BMW, Audi, and Mercedes.

Leasing arrangements In terms of leasing in Europe, the closed-end lease is standard and is also known as a ‘contract hire’ or ‘fully maintained operating’ lease.

The leasing company takes the residual value risk and services are bundled with the monthly payment. Also, pricing is vehicle-speci ic since each vehicle has a different residual value. In addition, costs for services differ from vehicle to vehicle and also depend on the duration and mileage limit of the lease in question.

Leasing is often an area of confusion for global companies when working in European markets due to different business models and varying levels of transparency and lexibility.

As the closed-end lease is less transparent, it is common for companies to choose more than one leasing company. Some companies use a third-party intermediary and bid out each and every vehicle. The bene it of this approach is price competition. The downside is that the relationship with the leasing company becomes more of a price relationship than a strategic one. No single leasing company has access to all the data on the leet, and often, the monthly rental is only a small piece of the lifecycle cost of the vehicle. Higher cost savings may be realized through a more strategic consulting relationship.

Readers can review the full article – and much more – by purchasing the Global Guide through the NAFA website: www.nafa.org/

internationalfleetworld.com / 39

PROFILE MINI

“MINI has been quick to capitalise on the opportunities offered by the economic boom in Asia.”

The British are coming With the USA now representing MINI’s biggest market and expansion into BRIC territories underway, the British icon has gone truly global. MINI hopes to continue its success story in 2014, with a fleet-focused five-door Hatch waiting in the wings...

40 / internationalfleetworld.com

view

Manufacturer MINI Total sales 2013 305,030 Headquarters Oxford, UK Share of BMW sales 18.4% No. of models 9

from the top

American success story...

S

ince its purchase by the BMW Group in 2000 as part of an acquisition deal for the Rover Group, MINI has gone on to capture the imagination of international buyers in a way that few could have predicted. Key to MINI’s enduring success is the fashionable, plucky, ‘Cool Britannia’ image that was cemented by the brand’s starring role in the 1969 classic The Italian Job, and has infused the new generation of MINIs now available in more variants than ever before.

MINI recorded 305,030 total sales in 2013, up 1.2% over 2012 igures. The USA remains the largest market for the brand, with a record 66,502 cars sold, followed by the home-market of the UK with 51,933 vehicles registered.

Its soaring popularity in the USA has been brand’s biggest international success story, carving out a niche for its supermini range in a market where saloons and minivans are the norm. It is perhaps as a result of this preference for larger models that the range’s bulkiest model, the compact crossover Countryman SUV, has been so successful with American buyers, coming in just ahead of the ever-popular Hatch as the brand’s best-selling variant in the market in April 2014. As part of its ongoing strategy for the US market, MINI recently announced plans to launch a diesel variant of the Clubman model in late 2016/2017.

MINI has been quick to capitalise on the opportunities offered by the economic boom in Asia, with mainland China accounting for 390,713 deliveries of BMW and MINI vehicles in 2013 - an increase of 19.7% over the previous year. The BMW Group also posted double- digit growth in many other Asian territories, including South Korea, Japan and the Middle East, with MINI’s strong brand identity helping to capture interest in an increasingly crowded market.

Continuing its global expansion, a year after launching the MINI range in India, the brand began local production of the Cooper D and Countryman in Chennai in Spring 2013. MINI has ive showrooms in India - in Delhi, Mumbai, Hyderabad and Bangalore, and while market penetration remains low compared to other territories (418 total sales in 2013), MINI is con ident its share will grow as awareness increases.

To implement its strategy for global growth, with sales of over two million cars forecast in 2016, MINI has also expanded production to The Netherlands, with production of the new Hatch scheduled to start at the BMW Born Plant from summer 2014. The BMW Group will bene it from the favourable location of the VDL Nedcar plant in terms of logistics and proximity to the core MINI production network in the UK, with plants in Oxford, Swindon and Hams Hall.

April 2014 saw a year-to-date sales dip of -13.2% for the brand, with 78,785 units sold. MINI attributes this slump to the imminent launch of the new core model Hatch, causing potential buyers to delay their purchase in favour of the new variant. With a strong recorded interest in the new model, the company is con ident there will be a swift recovery in the retail igures later this year.

MINI Global sales, by country Country USA UK Germany China France Total

2013 66,502 51,933 34,268 28,613 19,099 305,030

2012 66,123 51,410 36,302 23,275 21,483 301,526

% change +1% +1% -6% +23% -11% +1.2%

James Morrison, corporate development manager at MINI UK, explains how an expanded model range has helped the brand target business sales...

How has MINI performed globally so far in 2014?

The UK is the second largest market for MINI in the world. We’ve had a strong start to the year with 16,138 sales up to the end of May and we now have the strongest forward order bank for MINI Hatch in the brand’s history. We expect our 2014 sales to exceed those in 2013 by the end of the calendar year.

How important has the Countryman been for MINI's fleet sales?

The MINI Countryman has been a fantastic success for MINI leet sales in the UK. It has enabled us to win business with leets where speci ic criteria exist, including the number of doors or seats. In the UK, we further enhanced this position last year with the introduction of the MINI Countryman Business model – an enhanced, leet-speci ic offering which is priced very attractively.

With the introduction of the new MINI Countryman, all petrol and diesel variants are now EU6 compliant. This enhancement, combined with reduced CO2 emissions on a number of variants, will ensure the MINI Countryman is well placed within its competitive ield.

How has the Clubman performed against expectations?

The MINI Clubvan captured the hearts and minds of many small businesses when we started sales last year. It illed a gap in the market for a small, premium van with high desirability. Many business customers told us that MINI Clubvan was the ideal vehicle to sign-write because it matched their premium aspirations.

In the UK, the MINI Clubvan outsold our sales estimates and the production capacity we had available.

¡

internationalfleetworld.com / 41

PROFILE MINI

¡

Where are they made?

3 1 2 5

4

6 Manufacturing plant locations 1

2 3 4 5

6

FIN fleet in numbers

20% MINI’s approximate share of UK car production.

100 The number of countries MINI exports to worldwide.

€2bn

The total investment in manufacturing operations at Oxford, Hams Hall, Swindon & Goodwood, UK (£1.6bn).

42 / internationalfleetworld.com

Plant Oxford, Oxford, UK – Assembly of MINI Hatch, Hardtop, Clubman, Convertible, Coupe & Roadster Plant Swindon, Swindon, UK – Pressing and sub-assembly facility Plant Ham Hall, Birmingham, UK – Engine production facility Plant Steyr, Magna Steyr, Austria – Assembly of Countryman & Paceman Plant Born, Born, The Netherlands – Assembly of new Hatch at VDL Nedcar factory from Summer 2014 Plant Chennai, Chennai, India – Assembly of Countryman & Cooper D

Five-door hatch targets fleet sales

M

INI will launch a ive-door version of its smallest Hatch model this autumn, the irst time in its 55-year history that the supermini has ever had rear doors.

Debuting with the four Cooper trim levels in October, followed by the One and One D in November, the additional bodystyle allows MINI to compete with key premium rival the Audi A1 Sportback, and to cater for ive-door only leet policies without moving drivers up to the larger Countryman crossover.

Gaining 72mm in wheelbase and 161mm in length, used to increase legroom and boot volume respectively, the ive-door Hatch is designed to provide a solution for customers who would otherwise defect to other brands for extra space, as well as targeting conquests from other brands and growing overall sales.

There is a €750 price increase for the larger bodystyle.

Speaking to IFW, corporate development manager, James Morrison, outlined the brand’s expectation for the model: “We certainly have ambitious plans for the new MINI ive-door Hatch, particularly in the corporate sector. Looking at our competitors in this segment, it is clear that ive-door vehicles outsell three-door models by a considerable margin, and when we speci ically look at corporate sales, there is an even stronger bias towards ive-door models. We hope to serve additional customers for whom the three-door Hatch was not previously an option.”

MINI has previously hinted that the next Clubman could also follow suit. The concept car, shown at the Geneva Motor Show in March, featured a pair of rear doors instead of the controversial single rear-hinged Club Door used on the current model.

MINI is also continuing to trial its MINI E. concept, which represents the brand’s contribution to the BMWi electric vehicle project. First unveiled in 2009, MINI claims a range of 150km and a power output of 204hp for the Cooper conversion, which has already undergone strenuous testing in markets including the USA, UK and China.

At the other end of the spectrum, MINI unveiled its Superleggera TM Vision concept on the shores of Lake Camo in May 2014. An exclusive interpretation of an open-top two-seater created in partnership with Touring Superleggera, the agile two-seater boasts an electric drivetrain, designed to give the car a distinctly modern driving dynamic.

The brand has no current plans to put either concept into full production, instead using the projects to trial new R&D techniques and demonstrate the versatility of the range.

MINI fleet model range

COMIN

G SO O N

!

MINI Hatch 3-door

MINI Hatch 5-door

MINI Cabriolet

Variants: 3dr hatchback Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 3.4-5.8l/100km CO2: 89-136g/km

Variants: 5dr hatchback Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 3.6-6.0l/100km CO2: 95-139g/km

Variants: Convertible Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 4.0-7.3l/100km CO2: 105-169g/km

MINI Coupe

MINI Roadster

Variants: 2dr coupe Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 4.3-7.1l/100km CO2: 114-165g/km

Variants: Convertible Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 4.5-7.3l/100km CO2: 118-169g/km

MINI Pacemen

MINI Countryman

Variants: 3dr coupe Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 4.4-7.9l/100km CO2: 115-184g/km

Variants: 5dr hatchback Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 4.4-7.9l/100km CO2: 115-184g/km

MINI Clubman

MINI Clubvan

Variants: Estate Markets: Europe, North America, South America, Africa, Asia, Australia Fuel: 3.9-7.2l/100km CO2: 103-167g/km

Variants: : Small van Markets: Europe, Asia Fuel: 3.9-6.5l/100km CO2: 103-152g/km

internationalfleetworld.com / 43

Infiniti Q50 2.2d Premium Auto A stylish newcomer in an established segment, but the Q50 has an Achilles heel, says Alex Grant.

SECTOR Compact Executive PRICE €39,140 FUEL 4.8l/100km CO2 124g/km

T

he Q50 is to be a turning point for Infiniti in Europe. had the potential to be a real headache but InTouch is Aiming for a small share of the compact executive attractive to look at, intuitive to use, and the real-time trafclass, it’s tasked with helping the Japanese premium fic information is accurate too. brand significantly increase its sales and will lay out the Unlike Lexus, Infiniti isn’t chasing a large fleet share with foundations for the lower-medium Q30 launching next year. its hybrid technology. Instead, the Q50 uses a 170hp 2.2That’s a tough segment to crack. Volvo and Lexus have litre, four-cylinder diesel from Mercedes-Benz, which comes struggled in the past, Jaguar and Alfa Romeo are readying pretty close to the segment’s benchmarks on fuel economy new models, and Infiniti is a relative unknown at present. and CO2 emissions and will be the likely fleet favourite.

Sadly it’s not the car’s best point. The engine has the sort Sales and residual values have also been tricky with no comof coarse rumble which disappeared from most compact petitive diesels and a range starting at the Executive class. executive cars a couple of generations ago, vibrates through But the groundwork is underway, the dealer network is the cabin at idle and only really settles expanding its coverage and senior-level down at high speed. Power delivery is appointments are frequent. Infiniti also strong and fuel consumption of around isn’t looking to knock the dominant 5.4l/100km is respectable, but the lack players off the top of the sales charts, of refinement is surprising in a car which which should keep the Q50 a refreshing, otherwise feels very slick and polished. avant-garde choice.

The rest shapes up nicely. Ride qualIt’s a good-looking car, with swooping ity is firm, but no moreso than any of its bodylines and its own sense of style rivals on large wheels, and the steering which is markedly non-German. The is responsive if a little lacking in feedlongest wheelbase in its class means back. Do the sums on the seven-speed plentiful rear leg room, and most cabin automatic gearbox, though, as the sixmaterials are of a high quality. There are speed manual is much closer to sega few hard plastic parts dotted around, ment benchmarks on running costs and but it’s clear that the Q50 was benchcosts €2,190 less. marked against European rivals, rather An exclusive, stylish Infiniti’s steer-by-wire setup, which than Japanese ones. choice in a segment removes the mechanical connection But perhaps the most noticeable difdominated by three between the steering wheel and front ference inside is the infotainment syswheels, isn’t standard on SE or Premium tem. The Q50 groups most functions ever-popular models, trim levels. This reduces vibration and into a tablet-style touchscreen in front it’s only a lack of diesel automatically corrects for weaving and of the gear lever, with the option to refinement which lets high crosswinds, but it polarises opindownload additional apps, and only the Q50 down. ions and is worth trying on the road basic controls are assigned to the rotary before ticking the option box. commander on the centre console. This

what we think

44 / internationalfleetworld.com

Nissan X-Trail A radical change for the new X-Trail will make it a much bigger fleet car, explains Alex Grant.

SECTOR SUV PRICE €26,790–€38,250 FUEL 4.9–5.3l/100km CO2 129–139g/km

W

up for luggage space and stick with five seats, so this is ith a retail-heavy sales mix and relatively small available in all trim levels. Four-wheel drive, third-row volumes, the Nissan X-Trail has never been a big seating and Nissan’s stepped CVT gearbox are all offered player in the fleet sector. But this third generation as optional extras to suit buyers’ needs. car stands to have a much more important role in the range.

The cabin design and materials feel familiar from the There’s a much wider market for the new car. Nissan will Qashqai, and all five-seat versions feature the same lugsell the X-Trail in 190 markets, doubling production to half gage board system as the smaller crossover, allowing the a million units per year, built at nine sites instead of the huge boot to be separated into useful smaller spaces using four for the outgoing model. sections of the load floor.

Not all of that growth comes from new markets though.

As in most MPVs, the third row offers just enough room In Europe, the X-Trail has to satisfy two distinct groups of for adults on short journeys, if the middle row is pushed customers. It has to meet the towing and functional needs forward, but it’s better suited to chilof the traditional X-Trail buyer, while dren. Five and seven seat versions can offering a range wide enough to fill in be equipped with a folding passenger for the discontinued Qashqai +2. seat, giving a 2.6-metre load length.

Nissan says these are customers who The biggest differences are felt from want the low running costs and car-like behind the wheel. Although the X-Trail driving experience of a crossover, but shares its modular platform with the with more boot space than the five-seat Qashqai, there’s been a marked attempt Qashqai. A fifth of the Qashqai’s massive to make it feel more like a D-Segment sales volume was the seven-seat model, estate car than its agile smaller sibling. so while fleet sales have only swung Motorway manners are excellent, the from 25% to 40% of the total, it's a engine delivering strong performance share of a much larger number. despite its small size and ride quality is It means whole-life costs have come respectable even on large wheels, but under scrutiny. The old 2.0-litre, 173bhp there’s noticeably more body roll on engine has made way for the same 1.6The X-Trail feels like tighter roads. litre dCi 130 diesel used in the Qashqai. It’s a scaled up Qashqai, Broader appeal is guaranteed, though. a very quiet engine which doesn’t feel complete with carSales of the first Qashqai have shown overwhelmed by the larger X-Trail, despite that customers like rugged but car-like the drop in power. Most importantly it like running costs crossovers with low running costs, more slashes CO2 emissions to 129g/km and and crossover styling, cuts fuel consumption to 4.9l/100km for than utilitarian off-roaders, and the verwhich bodes well satility on offer here makes it a worthy the predicted fleet-favourite two-wheel for fleet popularity. step up in the range. It’s a good foundation drive manual version.

Most fleet drivers are expected to size for replacing the very popular Qashqai +2.

what we think

internationalfleetworld.com / 45

Iveco Daily There is plenty of substance to go with the style in Iveco’s third generation Daily, says Dan Gilkes.

SECTOR Large van PRICE from €30,000 FUEL from 6.7l/100km CO2 from 179g/km

T

range of 2.3-litre and 3.0-litre diesels. Both Euro 5B and he Daily van range represents 55% of all Iveco Euro 6 heavy-duty ratings are available, with Euro 6 modsales worldwide. The Italian manufacturer has els having both SCR and EGR. Overall Iveco is claiming a invested €500m in the third generation Daily to drop of 5.5% in fuel consumption, with savings of up to roll off the production lines in Europe, Brazil and China 14% available when combined with an optional Eco Pack and, despite initial appearances, 80% of the body is new. that incorporates improved aerodynamics, an Eco switch Unlike many LCVs, Iveco has stayed true to its heavyin the cab and smart alternator and air-conditioning sysduty design maxim and retained a separate ladder tems along with Start/Stop. The Eco switch allows the chassis and body construction. However, this time around driver to switch between two engine torque maps, to allow the company has designed its panel vans and its chassis the van to run with less torque when unladen, saving fuel. cabs as two separate models, to better meet the needs of In the cab Iveco has lowered the driver’s seat by 15mm their individual customers. and raised the top of the windscreen The rear overhang has been reduced by 40mm. The result is a dramatic and wheelbases extended to improve improvement in visibility for taller load efficiency and handling, while drivers, even when using the sun visor. panel van models have been stretched The new dash layout looks smart further, to an incredible 19.6m3 capacity. There are still vans, crew cabs, chasand reveals a host of storage shelves and cubbies. There is a wide range sis cabs and minibus versions available of infotainment systems available and gross weights top out at 7.0 tonnes.

All van models up to 3.5 tonnes get a including the IveConnect platform, new quad-lead front suspension system that brings together audio, Bluetooth, sat nav and a rear view camera in a sinwith double wishbones and transverse gle touchscreen monitor. leaf springs that delivers improved Perhaps the most appealing fact handling and stability, yet retains a about the new Daily was outlined by remarkably tight turning circle. HeavyIveco sales and marketing director, duty models will retain the quad-tor The changes to Daily Guiliano Giovannini, though. Despite torsion bar set-up, providing an axle are far more than improvements to fuel consumption, the rating of up to 2.5 tonnes. Single rear skin deep, offering wheel models also benefit from new prospect of reduced operating costs, the availability of larger body volumes rear suspension geometry that concustomers operating and the fitment of upgraded suspentributes to a 55mm reduction in rear cost savings and floor height, making the van easier to sion, he says that Iveco will keep prices improving the for the new van “virtually unchanged.” load and unload. driving experience.

That fact alone should be enough to There are a host of engine outputs available, from 106hp to 205hp, from a tempt buyers into showrooms.

what we think

46 / internationalfleetworld.com

Renault Trafic Downsized engines give Renault Trafic’s economy, emissions and power a boost, says Dan Gilkes.

SECTOR Mid-weight van PRICE €22,000–€32,000 FUEL from 5.7l/100km CO2 from 155g/km

R

with no less than 14 storage areas offering a total of enault’s mid-weight Trafic van has been a huge 90 litres of space. DAB radio and Bluetooth connectivity success across Europe, so changes to the formula are standard and the van will be offered with a range of have had to be well thought out. Engine capacity infotainment solutions including sat-nav and Renault’s has dropped, from 2.0 litres to a range of four 1.6-litre R-Link multimedia system. motors, though maximum power has risen to 140hp, Trafic will be the first Renault van to get R & GO, an from a twin-turbo version.

Android/iOS application that allows tablets and smartFuel consumption and emissions levels have improved phones to connect automatically to the vehicle’s radio systoo, with the dCi 120 twin-turbo engine offering a claimed tem. With cradles available for most phones and tablets, 5.7l/100km and CO2 emissions as low as 155g/km.

R & GO allows the devices to be used as independent This certainly hasn’t been at the expense of driveabilnavigation systems and to interact with the van’s radio. ity however, as both the single- and twin-turbo engines Designed to work as a mobile office, deliver strong torque outputs that Trafic now comes with a laptop table easily pull a half laden Trafic. All modbuilt into the back of the central pasels drive through a slick six-speed senger seat, first seen on the larger manual gearbox, with no option for an Master van, that can be turned to face automated manual yet on the smaller the driver or the passenger. As well as engines. Renault admits that it is workpanel vans, Renault will offer a Snoeks ing on this though. crew van with rear seating for three on Both L1 and L2 versions of the van both the L1 and L2 vans. There are also have been extended by 21cm overall, full passenger carrying versions with shared between additional cabin space seating for up to nine people plus 550 and a longer load bay that now accomlitres or 890 litres of luggage in the L1 modates three Euro pallets in either and L2 versions respectively. version. An optional load-through flap All Trafic models now come as stanin the steel bulkhead allows longer dard with ESC stability control, incorloads to extend through below the With more carrying porating Grip Xtend, Hill Start Assist passenger seat, with a second flap in capacity, improved and Trailer Swing Assist systems. A the front of the seat base permitting specifications and reversing camera is available as an loads into the passenger footwell. This option and the vans come with a wide gives the L1 Trafic a maximum load reduced ownership costs, view mirror mounted on the passenger length of 3.75m and the L2 a load Renault’s new Trafic sun blind to remove the blindspot to the length of up to 4.15m, with load vollooks set to carry on as a offside of the vehicle when reversing. umes now ranging from 5.2m3 on the European market leader.

A range of trim levels will be offered, L1H1 model to 8.6m3 for the L2H2.

There are big changes in the cab, depending on country.

what we think

internationalfleetworld.com / 47

MANAGEMENT Global Fleet Forum

global

Join the

connecting the international fleet community

Safer, more efficient trucks John Kendall, Editor, International Fleet World

Global Fleet Forum is International Fleet World’s new international network and digital forum, launched in March 2014.

At the heart of the Global Fleet Forum is a team of fleet professionals who play a key role in the industry, either as fleet managers, consultants or fleet suppliers. These fleet experts provide a regular feed of information that is posted on the website forum in the form of discussion topics.

Typical areas of interest include, but are not limited to: taxation, finance and accounting, legislation, environmental issues, fleet safety, insurance, fleet management, supply issues and security.

Fleet suppliers are permitted to respond to queries if it is felt that their response represents honest and impartial advice. This aspect of the service is strictly moderated in order to ensure that the quality of information provided remains of the highest standard.

We have already attracted a strong network of international fleet professionals, and our expert contributors have submitted a number of thought provoking discussion topics, a few of which are previewed to the right.

We hope you will consider joining us in this exciting new venture into the world of fleet.

To find out more about the Global Fleet Forum and request membership, please visit:

theglobalfleetforum.com

48 / internationalfleetworld.com

The overall length of an articulated truck has been limited to 16.5 metres in the European Union for over 20 years, giving rise to the flat-fronted cab to maximise the available load carrying length in the trailer.

The European parliament has just allowed the overall vehicle length to be relaxed. This will permit longer cabs that could provide a more tapered front, improving both visibility and aerodynamics. It could also help to reduce injury by providing the space for an impact absorbing structure. Truck manufacturers are supportive.

2022 is the date set for mandatory introduction. “Not good enough!” say some; the EU is once again caving into lobbyists from vehicle manufacturers.

Building a cab is the most expensive part of a truck and since a fraction of the number of new trucks are sold compared with cars, they stay in production for around 20 years to make a return on the investment. Mercedes-Benz, Volvo and Renault have all launched new cabs in the past two years or so. MAN, Scania, Iveco and DAF are all using older cabs. The costs involved will be easier for these companies to factor in but it’s a tough call for the three that have just launched new cabs. All manufacturers have also had to accommodate Euro 6 emissions regulations recently, itself another costly exercise.

“Lorry efficiency has remained stagnant for 20 years,” William Todts, senior policy officer at sustainable transport group Transport & Environment claims.

Not if you analyse what has happened in that time.

Truck gross weights have risen, so trucks are carrying more. Engines have been downsized and even with the heavier weights, fuel consumption has generally reduced.

Fewer trucks are running around empty too. Efficiency has improved in several ways.

Trucks use more fuel and so cause more pollution than other road vehicles because they are the largest and heaviest. But carrying freight in one large vehicle is far more efficient than carrying it in several smaller vehicles. Making a straight fuel consumption comparison between trucks and cars can be misleading without factoring in the weight.

in association with

debate...

Dodgy dealers Ross Durkin, Managing Editor, Fleet World Group The relationship between motor manufacturers and their franchised dealers has a chequered history. I know one motor manufacturer executive who said that dealers were the single biggest obstacle between the manufacturer and customers. Others, meanwhile, have roundly praised the work their dealers have done in bringing the two together.

I am generally supportive of manufacturers who endeavour to raise dealer standards in order to improve the service they provide to their customers – many of whom are company car drivers.

When I worked in Peterborough, UK, there was one local dealer whose reputation for servicing cars was so poor that people living in the area would choose another brand rather than subject themselves to the local dealer’s appalling standard of work.

So if manufacturers occasionally exert a little extra pressure on their dealers in an attempt to raise service standards, they get my support...

A fleet manager replied...

Hear hear! It has not been unusual in my experience for potential repeat model new car orders to be lost due to the awful experience of four years’ poor service on the current one – unkept promises, no car to go home in and no notice of this, rudeness and sometimes incompetence. One ‘who shall not be named’ manufacturer lost four cars in this way through one dealer’s abominable performance. At least they were consistently awful and left no doubt in one’s mind what the next experience of a repair or service would be like...

Conversely a great dealer will pull in more new sales, sometimes not for themselves due to contract hire company choice of dealer, but will get the servicing business thereafter. If I or our fleet drivers find one like this, I always recommend them.

So yes, manufacturers please look at your dealers – I suggest mystery shopping rather than possibly manipulated surveys!

Meet the experts...

Will Murray, Research Director, Interactive Driving Systems Interactive Driving Systems helps clients and channel partners with compliance and CSR as well as cutting collisions and costs. 1,000,000+ drivers are registered on its Virtual Risk Manager program for driver risk assessment, monitoring and management across all types of organisations in 70+ countries and 35 languages globally.

As well as working with some of the world’s best known brands, and government agencies on several continents, Will is also a Visiting Fellow at Loughborough University in the UK and a long time Trustee of the road safety charity Brake.

Dan Gilkes, Editor, Van Fleet World Dan trained and worked as a construction and transport engineer and a transport coordinator, before moving into b2b journalism in 1988. With more than 25 years' experience across many titles in the transport, LCV and construction markets, he has car, motorcycle and Class 1 HGV licences and has driven every van, and many of the heavy trucks, launched in the last three decades.

Dan joined Fleet World Group in 2013 as Editor of Van Fleet World, also contributing to other Group titles and websites.

David Rawlings, Director, BCF Wessex David has been involved in the fleet industry for over 25 years. Before setting up his own business car consultancy practice, he led the car consultancy team for Deloitte in the UK, where he designed fleet solutions for some of the industry’s biggest names.

internationalfleetworld.com / 49

fleet in figures

Mixed fortunes in Europe Markets rise, but the economy is weak in South America and Eastern Europe is unsettled, reports John Kendall.

Tata Motors Tata Motors saw revenues rise 23%, mainly due to a record performance from Jaguar Land Rover.

Europe appears stable with positive outlook Data from the European Automobile Manufacturers Association (ACEA) for May 2014 showed that demand for new cars in the European Union rose for the ninth consecutive month. Compared with May 2013, registrations for the month rose 4.5% to 1,093,448. Among the larger markets, only Italy saw registrations fall – by -3.8% to 131,602. Austria, Belgium, Bulgaria, Estonia and Finland also saw slight reductions in May, while the Netherlands, which has struggled in recent months because of its overheated property market, saw May

50 / internationalfleetworld.com

registrations rise by 3.4% compared with 2013 to 31,092.

The January to May year-to-date data shows an overall increase in registrations for the EU of 6.9% to 5,431,921.

The Netherlands, Austria and Belgium were the only markets to register a decrease for the period, with the Netherlands down -5.3% to 166,634.

Austria and Belgium are showing small YtD decreases of less than -2.0%.

LMC Automotive notes that the seasonally adjusted annualised sales rate for Western Europe slipped back from the previous month. LMC noted that UK registrations rose for the 27th consecutive month, with positive factors includ-

ing improving consumer confidence, low interest rates, and solid economic growth helping the market. The governor of the Bank of England, the UK’s central bank, has warned that interest rates could rise in the UK earlier than many are expecting, which may help to fuel demand in the meantime.

Incentives fuel Germany and Spain LMC suggests that heavy incentives in Germany are helping to fuel the market increase this year. That is also true of Spain, where scrappage incentivisation is helping to fuel demand, with the market up 16.3% for the YtD to 364,784. “Spain was eas-

ily the best year-on-year performer,” says LMC, “The PIVE scrappage scheme remains a major support for the market and we continue to expect further extensions to the scheme to help support the industry. The Italian market slipped back in year-on-year terms in May though the selling rate continued to head in the right direction, standing at 1.4m units/year last month. The same could not be said for the French selling rate though, it slipped back to a disappointing 1.7m units/year.”

LMC believes that the Western European car market will remain positive for 2014, “The region’s selling rate stood at 11.8m units/year, a little weaker than the April result of 12.1m units/year, suggesting that there clearly remain headwinds to the market’s recovery. We continue to forecast that the West European car market will reach 12m units for the 2014 full year as economic growth and consumer confidence continue to head in the right direction, but the road to recovery remains a bumpy one.”

Economic problems affect South America The global market for new light vehicles continues to grow with sales up 4.4% for the January to May period to 36,464,615. Eastern Europe, Brazil and Argentina are the only regions declining, with sales down -5.9% in Eastern Europe YtD to 1,803,356. And down -9.2% in Brazil and Argentina to 1,642,361. May data suggests that the economic problems are not improving in either of these regions with sales down -12.9% in Eastern Europe to 363,589 and down -14.2% in Argentina and Brazil to 331,761.

LMC notes that, “In Brazil, the May selling rate of 3.4m units/year was slightly

higher than expected, but June and July are expected to see a marked slowdown, as consumers will be busy watching the World Cup soccer games. In lation has continued to rise which, along with high interest rates, should continue to constrain spending on new vehicles this year.

“In Argentina, sales plunged by over -35% year-on-year for the third consecutive month in May along with a deteriorating economy. Rampant inflation, a weakening job market, and the rising prospect of a financial crisis continue to depress consumer confidence and vehicle sales.”

US market highest for six years The market remains buoyant in North America, with US light vehicle sales up 4.4% to 36,464,615 for the January to May period and Canada up 3.1% to 734,039. Carlos Gomes at Scotiabank expects a record year for Canadian sales, “Car and light truck sales climbed 5.7% above a year earlier in May to a record-setting annual rate of 1.89m. Last month’s performance surpasses the previous peak of 1.88m set in January 2008 and, when combined with the recent launch of ‘employee pricing’ by General Motors, virtually guarantees that full-year 2014 sales will climb to record highs. April through June are the industry’s highest volume months, accounting for more than 30% of overall annual volumes.”

Gomes also notes that US sales have reached a level not seen for some time, “We estimate purchases climbed to an annualized 16.7m units — the highest level in more than seven years, and well above consensus estimates of 16.1m.

The robust performance was driven by the extended post-Memorial day week of sales and reflects strengthening eco-

nomic conditions. In particular, the pace of job creation — the key driver for new vehicle sales — is currently advancing at the fastest pace in two years.”

China double digit expansion China has also been posting record sales, with the selling rate reaching a record high of 23.9m units/year, according to LMC. Data from the company shows China sales up 10.3% in the January to May period to 9,881,158. “Sales are continuing to be boosted by ‘panic buying’ on the expectation that an increasing number of major cities will impose purchasing restrictions to reduce air pollution,” reckons LMC. Sales in Japan have risen by 13.5% in the January to May period to 2,498,189, while the May figure also reflects the recent consumption tax rise, with sales down 0.6% compared with May 2013 to 356,103. LMC doubts that the pace of growth in Japan is sustainable as the company says that income growth is lagging behind rising inflation.

Tata Motors revenues rise on JLR sales Moody’s notes that Tata Motors 2014 financial year, which ended on 31 March was a strong performance for the company, but this was due solely to a record performance from Jaguar Land Rover. The company saw revenue rise 23% and EBITDA rise by 45%. This contrasted with the Indian business where revenues fell by -23% and EBITDA posting a loss.

Moody’s expects revenue growth for JLR in this financial year to be restricted because of capacity constraints, but expects single digit growth in vehicle sales.

internationalfleetworld.com / 51

Listen Understand Support It’s numbers that count – and that’s true today more than ever, with decision makers having to keep a close eye on the outlay for company vehicles and fleet management. That’s why Alphabet’s tailor-made Business Mobility solutions are highly efficient and significantly reduce company fleet costs. And everything Alphabet does is based on comprehensive consulting and providing dedicated service. You couldn’t be in better hands.

Business Mobility. Tailor-made for you at www.alphabet.com