EDITORIAL
Welcome to the innovators uccessful fleet managers need to be confident innovators. Having just clear goals and the support of the
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company’s board is good, but not enough to stay ahead in terms of efficient entrepreneurship. In today's rapidly changing business environment, people who are able to anticipate upcoming trends in management,
technology and cost-efficient developments will have the best chance to successfully handle new situations. In the
international fleet business this is no different. The use of IT software and reporting tools will not only optimize overall fleet management but also positively impact on total fleet costs. Fleet suppliers are permanently improving the software applications for their customers. Real time data gathering, benchmarking solutions and mobility cost calculation are leading fleet managers to a more cost-effective process and on towards innovative and intelligent fleet management. This innovative fleet management approach is also apparent when reading the dossiers of the candidates for this year’s Fleet Europe Awards. For the fifth year in a row pan-European and international fleet managers demonstrate their ability to guide their companies’ fleets towards a cost-efficient and harmonized management policy in a complex business environment. They can do this because they embrace change instead of shying away from it. The 2011 winners in the various categories - International Fleet Manager of the Year, International Fleet Green Award, International Fleet Mobility Award, International Fleet Safety Award, International Fleet Innovation Award, International Fleet Industry Award and the new member of the Fleet Europe Hall of Fame - will be unveiled at the Fleet Europe Awards ceremony in Madrid, on October 27th. If you want to be there and applaud with us this year’s winners, please visit our website www.fleeteurope.com/awards . Be there!
“ Successful fleet decision makers have to be confident innovators, who embrace change instead of shying away from it. ” Steven SCHOEFS, Chief Editor
EDITORIAL TEAM Editor in chief: Steven Schoefs (sschoefs@mmm.be) Team: Caroline Thonnon, Tim Harrup, Martyn Moore, Stijn Phlix, Julie Widart (Final Editor) Experts: Professor Peter Cooke (University of Buckingham), Bart Vanham (Fleet&DriverCare) SALES & MARKETING TEAM Sales Director: Marleen Neukermans (mneukermans@mmm.be) Sales Manager: David Baudeweyns (dbaudeweyns@mmm.be) Sales assistants: Patricia Lavergne (plavergne@mmm.be), Romina De Gregorio (rdegregorio@mmm.be) Marketing: Kathleen Hubert (khubert@mmm.be) PRODUCTION Head: Sonia Counet
EDITOR Development Director: Caroline Thonnon Managing Director: Thierry Degives Editor/CEO: Jean-Marie Becker
SUBSCRIPTIONS www.fleeteurope.com/shop Price: 105 EUR - 1 year Parc Artisanal 11-13 - 4671 BLEGNY-Barchon (Belgium) Phone: 00 32 (0)4 387 88 18 Sophie Demeny (sdemeny@mmm.be) © Reproduction rights (texts, advertisements, pictures) reserved for all countries. Received documents will not be returned. By submitting them, the author implicitly authorizes their publication.
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Fleet Management Software & Telematics 12 14 16 22 24
IT & Software: fleet Management software proves its value Business Intelligence: cloud-based real-time reporting Fleet reporting: the ideal IT solution is out there On-board telematics: real-time info, all the time Intelligent telematics: is big brother watching you?
INDUSTRY
STRATEGY MANAGEMENT
FLEET PARTNER
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Alphabet to acquire ING Car Lease
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New car acquisition: think remarketing
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Remarketing trends: international within Europe
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Remarketing in emerging markets: between new opportunities and old risks IFMI: the do’s & don’ts of the new international car policy
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Technology & New powertrains event 2011: the alternative road is long and wide open
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Governments play crucial role in introduction Electric Vehicles
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Fleet Europe Awards 2011: join the best practices in fleet management
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Interview: Oliver Lajara Hyundai Motor Europe
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Interview: Paul Verkinderen Chevin Fleet Solutions
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Interview: Harm Nijlunsing - Business Lease
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Interview: N. Pumilia & R. Honorati – Fiat
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Interview: Elena Delgado, SEAT and Rainer Melke, Škoda
TRENDS 62
Car sharing & lease companies: all aboard for car sharing
CASE STUDY
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UCB: the ecological choice can be the economic solution
New Car Acquisition
Car taxation in the EU
As remarketing is the key to successful cost effective car fleet management, Professor Peter Cooke highlights the role of fleet operators, leasing companies and vehicle importers in developing used car markets, with a focus on emerging countries. (page 30 & page 37)
Bart Vanham analyses the latest data for the penetration of electric vehicles, with a focus on the regulating role of governments. (page 52)
CONTENTS
FOCUS
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DIGEST Europe
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car2go in Germany
Range-extended Ampera for Europcar
The first ‘car2go’ electric vehicle rental scheme is being launched by Daimler in Germany. The city of Ulm is thus to see electric smartfortwo models on its streets. Users reserve one of the cars using smartphones, and can also check the vehicle status and reserve a charging point, reports cars21.com. The vehicle has a range of around 135 km between charges. Once a rental is completed, the car is recharged, a process which also involves connecting the battery to the electricity grid as a storage device. There are currently five charging stations in Ulm, but this number is scheduled to be increased to twenty four over the summer. The electricity source is entirely renewable.
Opel and Europcar have announced a joint project involving electric cars. This will see Europe’s largest rental company offering the German manufacturer’s Ampera model for rent across the whole of Europe.
COTW to resume offering Spanish cars
Athlon Car Lease opens first Athlon Flex Centre
The quality of cars service problems which had led to online used vehicle auction company CarsOnTheWeb ceasing to offer cars originating from Spain, have been resolved. The company is therefore to resume auctioning Spanish vehicles for the first time since the end of 2009. Spanish ex-lease cars will be offered for dale on a weekly basis. CarsOnTheWeb has spent the past few months setting up a reliable inspection process with a professional partner in Spain. Traders will therefore have maximum information about the car before making an online bid. All cars offered will be from the area north of Barcelona, making onward transport to other parts of Europe easier.
The Opel Ampera is set to be launched onto the European market at the end of 2011. It will make its entry into the Europcar fleet first in Germany, followed by Belgium and the Netherlands. France, Italy, Portugal, Spain
and the UK will follow at the beginning of 2012. With its range extender, the 4-door Opel Ampera sedan offers greater distances than other electric vehicles on the market.
Customers ordering the car from Europcar will be provided with information regarding the battery, etc.
Extending its product and service portfolio as a sustainable mobility solutions provider and meeting its customers’ full-fledged mobility needs, Athlon Car Lease will open its first Athlon Flex centre in Schiphol in the Netherlands in September. In line with the first step of Athlon Car Lease’s 5 step sustainable mobility plan which encourages its customers to ask themselves the question whether travelling is truly necessary, the Athlon Flex Centre provides an alternative meeting, working and conferencing location for all of Athlon’s customers, lease car drivers and other employees. Its new, modern facilities, state-of-the art equipment and full office services available provide extra flexibility for our customers’ employees when planning their working days in the most efficient manner. For more information on the Athlon Flex Centre, please visit www.athlonflexcentre.nl or www.athloncarlease.com.
Athlon Car Lease and Tesla Motors announce electric vehicle leasing program in Europe Germany, France, Italy, Spain, Belgium and the Netherlands. The leasing program covers Tesla’s current models, the Tesla Roadster and Roadster Sport. The companies intend to extend this agreement to include the Tesla Model S sedan, which
is expected to be delivered to European customers starting in late 2012. Hans Blink, president of Athlon Car Lease: “Being aware of the changing mobility needs of our customers, we are continuously trying to extend our CSR and innovation net-
works throughout the industry. We are therefore very proud to have won Tesla Motors as a partner for Athlon Car Lease to bring EV solutions closer to our customers.”
Change of ownership at Avis Avis Budget has just announced that it is to take over Avis Europe. The price to be paid is around 723 million Euros. In pounds sterling, this represents £ 3.15 per share, some 60% above the previous stock market valuation. This news immediately caused Avis Europe shares to rocket by 58%.The objective behind this move is to give Avis Budget improved presence in emerging markets such as India and China. Currently, Belgian car dealership d’Ieteren holds almost 60% of Avis Europe, which operates in the EMEA region and Asia. D’Ieteren will thus be able to reduce its consolidated net debt levels.
FLEET PEOPLE
Michael Masterson
Michael Masterson becomes Chief Executive Officer of ALD International and Head of the Operational Vehicle Leasing and Fleet Management business line. He succeeds Gianluca Soma in this position. Gianluca Soma himself moves to the post of Chairman of ALD International.
Nissan announced that Paul Willcox is appointed Senior Vice President, Sales and Marketing for Nissan in Europe.
Parcours changes hands Long term rental company Parcours has been bought by investment company Wendel. Some 95% of the capital of the company has thus changed hands, at a cost of around 107 million Euros. Parcours was founded in 1989 and turned over 247 million Euros in 2010, registering profits of almost 15 million Euros. It is
predicting a further growth in turnover this year, by more than 10%. Parcours currently has over 41,000 vehicles under management spread across 2,500 clients in home market France and elsewhere. It has doubled its market share in the long term rental market in France over the past 5 years.
Paul Willcox
Cars On The Web has appointed a new Business Development Manager for Europe. He is Alain Van Munster, a Belgian with 19 years of experience in the automotive industry.
Alain Van Munster
Use data to save fuel Software provider Mycompanyfleet believes that fleet managers could do more to reduce fuel costs by using data which is already generated. Fuel and maintenance cards, for example, already produce data which shows vehicle fuel consumption. With high fuel prices here to stay in the eyes of Mycompanyfleet, company finances can no longer afford to ignore these potential savings. With the data available, it remains for fleet managers to use it to take appropriate remedial action.
Grégoire Lacombe
Goodyear celebrates partnerships In collaboration with LeasePlan, Goodyear has recently celebrated its partnership with eleven of its distributors in Luxembourg. Each of them received a MINI Cooper bearing the logos of the two companies Goodyear and Dunlop. The handover took place at the Goodyear Innovation Center Luxembourg, at Colmar-Berg. During the event, distributors were able to test drive their new MINI's on the Goodyear test track, before enjoying a dinner.
Jean-François Soulisse
Mazda Europe has appointed Grégoire Lacombe to the position of Manager, Residual Values, TCO and Remarketing. He replaces Nicola Murphy who returns to Mazda UK. The appointment is intended to make sure that the Mazda model line-up is attractive to fleet managers.
Peugeot has announced that it has appointed a new director for its ‘Peugeot Professional’ service in its home country of France. This is JeanFrançois Soulisse (49) who has been with the brand since 1987, occupying positions including most recently, director of branches and used vehicles, France. Simon Thomas (51) has been appointed Managing Director of Volkswagen Group UK effective September 1, 2011. He succeeds Robin Woolcock (63), who will be taking up a new assignment within the Volkswagen Group.
News updated daily on The cars will be used as courtesy cars and will help to advertise the brands.
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Simon Thomas
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DIGEST Europe
Alphabet Fleet Car Showroom on-line Fleet management provider Alphabet has launched a new on-line tool entitled ‘Fleet Car Showroom’ which provided fleet managers with relevant data about car models. This means that information about engines, CO2 emissions, power etc. for different models from different manufacturers, can all be found on one site. Photos and films are also available. Commenting, Nancy Storp, Head of International Sales and Marketing, said: “Our customers are getting the very best from our years of expertise. The Fleet Car Showroom displays everything they need to know at a glance and has emotional appeal as well.”
GreenRoad partnership cuts accident rates
The application is suitable for use on iPads and smartphones too.
DFS enters India Daimler Financial Services has entered the Indian market with headquarters in Chennai. The new company is operating under the name of Daimler Financial Services India Pvt. Ltd. The mother company has invested around 50 million US dollars in the start-up, and the new entity is offering financial and insurance services for clients and
dealers. The company has set itself a target of 500 million dollars of business within 5 years. Daimler Financial Services India head Klaus Entenmann points out that 40% of all Mercedes-Benz passenger cars worldwide, and a quarter of commercial vehicles, are financed or leased through DFS.
LeasePlan profits up LeasePlan has announced net profits of € 136 million for the first half of 2011. This is up from € 90 million during the same period in 2010, an increase of around 50%. The number of vehicles under contract (1.3 million) was virtually unchanged, signalling a halt to the declines of the past two years. CEO Vahid Daemi praised his company’s strength in being able to produce these figures in a world economy which he still describes as ‘continuing to present challenges’. The results reflect a move towards higher value products, with an increase in full service leasing. LeasePlan expects
Turkish member joins Leaseurope
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Leaseurope has a new member, Tokkder, the Turkish Short and Long Term Automotive Rental Association. Based in
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The Turkish association becomes the 45th member of Leaseurope.
Brussels, Leaseurope represents the entire European leasing industry, for vehicles and other types of equipment. The Turkish association becomes the 45th member of Leaseurope. Coming at a time when the transport domain is undergoing considerable change in Europe, particularly in terms of increasing mobility and removing internal barriers, the inclusion of a new member enhances Leaseurope’s capabilities, in the eyes of its Chairman Jukka Salonen. The organisation wishes to ensure that European legislation is coherent and not overly complex, he added.
GreenRoad has announced a partnership with insurance broker Towergate Underwriting. The agreement will see Towergate offer GreenRoad’s driver safety service to its clients. The objective of this is to help clients reduce accidents and be able to negotiate more favourable insurance rates. The broker also gains further knowledge of risk and safety management by associating itself with GreenRoad. Some seven of Towergate’s customers have already signed up for this service. Some of these have already reported improvements in accident rates.
Dealers happy with ALD remarketing An independent survey has shown that vehicle dealers are satisfied with the remarketing processes of ALD Automotive. Some 500 dealers were questioned, and the survey revealed that 93% of them expressed satisfaction with the overall remarketing service provision of the Hamburg based leasing company. Around 96% said they were happy with the sales and sales development domain. The condition of cars offered for sale was also praised by 93%, who said this met with customer expectations. ALD head Karsten Rösel said that his company was always looking to work together with dealers in a fair way, and offered a number of different sales channels including weekly on-line auctions.
FOCUS Fleet Management Software & Telematics
On the way to real time compatibility An efficient business in today's competitive markets needs to be transparent and innovative. The streamlining of business processes is crucial to achieve this and one of the key ingredients here is the use of software management systems. It’s no secret that when managing a fleet of vehicles it is important that it is as good, as fast and as cheap as possible. We can say that fleet management software has arrived at a satisfying degree of maturity that allows its users to not only collect data but also to benchmark and to compare fleet costs. Fleet suppliers have even developed customer applications which enable the fleet client to analyze fleet issues in real time. The next big challenge is the compatibility of the data and the systems. In the ideal world fleet software will allow to gather IT & SOFTWARE different data from different management systems. Fleet Management software Not enough fleet suppliers are there yet, but with a proves its value 12 bit of a push they will get there. Over the following BUSINESS INTELLIGENCE pages we will describe the evolution in fleet Cloud-based real-time reporting 14 management software systems, as well as fleet industry developments. FLEET REPORTING The ideal IT solution is out there, you just have to find it
ON-BOARD TELEMATICS Real-time info, all the time
INTELLIGENT TELEMATICS Is big brother watching you
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Fleet suppliers realize the importance of management services and IT software has been improved over recent years. Now the compatibility question has to be resolved.
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Steven SCHOEFS
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IT & Software
At last, fleet management software proves its value IT and software are important in everything. They manage virtually every aspect of our work and leisure, from the machines we use to make things, via the payment of our salaries into the banks, to the way we spend that money on a holiday booked and paid for online. Fleet management is no different.
Martyn MOORE
how me a business that is not increasingly reliant on IT and I will show you a business that is going nowhere. IT makes it easier to do everything faster and cheaper. If you manage a fleet of vehicles on the roads of Europe, you will want to do it faster, cheaper and more easily. Managing a fleet is all about collecting, understanding and analyzing data. Software is brilliant at doing those things. It used to be enough to keep a record of the significant costs. There was the cost
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of the purchase or lease of the vehicle; that was simple enough. Then there was the cost of its servicing and repair; again, not too difficult for somebody who like to write lots of little numbers in neat columns. And of course, there was the ever-increasing fuel bill. We all watched in disbelief as the cost of diesel and petrol exceeded our wildest dreams and then doubled again. Then one day the world woke up and realized that all these little numbers in neat columns weren’t little numbers at all, they were huge numbers. And something had to be done to bring them down.
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Like many other business, the automotive & fleet business is increasingly reliant on IT and software applications.
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The war on data Fleet management in straitened times became a very difficult job indeed. How can we take control of all these costs? How can we better understand what makes up all the costs? How can we reduce the costs? Most of the answers are being provided by fleet management software. IT has come to our rescue. Technology is only as good as the data that is fed into it, so over the last few years technology providers and consultants have been hard at work helping the fleet industry to understand what it needs to do to keep business in Europe on the road. Car manufacturers have worked miracles to build engines that sip fuel and cars with electric motive power. They have brought down service and maintenance costs and made cars safer. Leasing companies have had to become more transparent with their charges (although some will say they need to do more) and have dedicated teams of people to helping their customers save money. And consultants, often with their own bespoke systems, have turned cost/benefit analysis in a kind of art. And they’re all using software. If you’re not using fleet management software, then you’ve either got a fleet so small that you can get both vehicles under one apple tree, or you’re paying out too much money. n
FOCUS Fleet Management Software & Telematics
Business intelligence
The new challenge of cloud-based realWhen it comes to identifying what fleet operators need to know, most of the work has been done. It’s all about identifying costs and inefficiencies. Now the emphasis has shifted to getting the best quality information into the system as quickly as possible so that the right decisions can be made at the right time to save money.
Martyn MOORE
he IT industry learns fast. Not that long ago, fleet management software was just a repository for data – a fancy spreadsheet, if you like, and not much more use than a big, dusty ledger used to record the fleet facts of history. Then when the consultants got hold of it they started to turn it into something amazing. Amazingly complicated and unwieldy. The consultants promised fleet operators reports on every aspect of vehicle micro-management, right down to the replacement and cost of a tyre valve cap. Reports started coming in of fleet managers drowning in data, crushed by
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toppling piles of reports and bursting into tears when asked by the finance director how much was spent on de-icer last year. Fleet management software has finally come of age. Wrestled from the grip of developers who only cared about showing us “how much” it could do, it has been refined by fleet experts to provide only the really useful information, intelligent analysis and clear guidance as to what needs to be done to solve a problem or reduce a cost. It could be argued that a downside to this super
refinement is that even a finance director could manage a fleet of vehicles.
Benchmarking The exciting new ingredient in fleet management software is benchmarking. The old systems were good at telling you how much something was costing you; the new improved versions will also tell you how much something should be costing you. This has been made possible through greater transparency from suppliers giving access to more data (not just our own internal data, which we have always had), our greater understanding of
time reporting
Standardization The best new software systems talk to each other. There was a time when a program from Lotus would not communicate with one from Oracle, a Mac would turn its back on a Windows PC and the English had a fairly cool relationship with the French. So try to get a payroll program to “interface” with a mileage reconciliation form and it would be like me asking for escargots with my seafood paella. Now your friendly fleet software saleswoman will tell you about how her program is designed to import and export the full range of recognized database formats natively and interface with the coffee machine in reception. The range of data is being standardized into conventional fields and it will become much easier to move relevant information around a business. The old barriers to switching that were built by developers in the past, designed to lock you into their system forever, are being eroded. If you’re buying from that saleswoman, make sure her claims are supported by other customers who have faced compatibility issues similar to yours.
Compatibility Software doesn’t just interface with internal systems. It should also pull in data from external systems. Any software that can respond to information updates
The new ingredient in fleet management software is benchmarking. The old systems were good at telling you how much something was costing you; the new versions will also tell you how much something should be costing you.
from suppliers, such as pricing, stock availability and lead times, will be much more useful than a system that relies on manual inputting or the arrival of a disc in the post. Which brings us to the fairly new concept of software-as-a-service (SAAS). SAAS is paid for on subscription rather than bought outright. The software lives on the supplier’s servers, rather than your own and passes information over the internet, rather than across your network. This seems to be the way all business software is set to go: accounting, ordering, bought ledger, human resources, payroll, sales and invoicing, stock control. Its benefits include greater security for your data, reduced dependency on high specification desktop computers and networks and instant updates to the latest versions of the programs. Software-as-a-service is also known as ‘cloud computing’ and we think it’s so important, we’ve given it its own little panel, just over there.
Cloud-computing You’ll have heard of the cloud. You’re probably using it already. YouTube videos, they’re in the cloud, and all your direct messages on LinkedIn; Google Docs are stored in the cloud and most of the features of Windows Live, they’re pretty ‘cloudy’. The idea is based around the fact that it’s no longer a good idea to store all your data and run all your applications on your own network of computers. It’s a much better idea to do everything on somebody else’s network of computers. You’ll pay to do this, of course, but your data should be more secure, your applications more up to date and you’ll be able to access everything via a username and password from any internet-enabled computer, tablet and smartphone anywhere in the world. Cloud computing should also make it easier for the many types of business systems to interact. After all, if an old man like me can update his Facebook status via Twitter, anything is possible.
Real-time metrics A lot can happen in an hour: a service interval can be missed, an unnecessary journey can be made, fuel can go up ten cents a litre and a business opportunity in Greece can disappear. The faster you know about something, the sooner you can manage its impact on your business. Telematics can either be installed in a car as OEM or fitted as an aftermarket service. A car that can tell its driver/owner/operator that it’s ready for its service, needs a new part or is about to be driven down a heavily congested road can save its driver/owner/operator a lot of time and money. Black box devices can alert fleet operators to badlydriven vehicles so appropriate action can be taken. Fleet management software can interface with lease company and fuel card systems, giving up-to-the-minute data on costs and transactions. This is all available from a number of suppliers – real-time, right now. n
Real-time metrics, or the faster you know about something, the sooner you can manage its impact on your business.
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that data and the effects of adopting best practice. It says: “Your drivers and vehicles did this last year and it cost you this; if you carry on doing this next year it will eventually cost you that. But if you do this instead, you could save this.” Quite clever, really.
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Fleet Reporting
The ideal solution is out there, you just Having a view of the market and understanding the differences between the providers are key to making the right buying decision. By asking the right questions you can be sure that the fleet management software you choose is the right one for your business. Martyn MOORE & Tim HARRUP
LEET operators have a wide choice when it comes to fleet management software providers. Some software has been developed by fleet consultants who have used their knowledge of fleet operations to develop their own software to provide reporting and
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Fleet operators have a wide choice of online fleet management tools to keep them fully informed, even while on the move.
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analysis. Other software has been created by IT specialists who saw an opportunity in the fleet market and then worked with fleet experts to tailor the system to the needs of fleet operators. The third area of development is at the leasing company. All major leasing companies
offer fleet management reporting tools designed to help you monitor and improve the efficiency of your fleet. These tools might have been developed in conjunction with either of the previously mentioned groups, or using the leasing company’s internal IT development team. One
have to find it Beyond the contract cost Peter Hennion is the general manager of EuroFleeting, based in Belgium. He says, “Looking at the current available tools, most of the international fleets are relying on fleet reporting that is offered by the leasing companies. Taking into account most of the fleets have no single supplier across Europe, the consolidation of the information is mainly done with standard office tools such as Excel. “EuroFleeting offers reporting features that consolidate data across all different suppliers across the different countries. Sources of the data for this online reporting are different depending on the
Questions to ask suppliers before making your decision TELL ME ABOUT DATA INPUT. What systems does your software talk to?
management structure in the different countries. In countries where the data is managed by EuroFleeting, information in the dashboard is based on supplier invoices that are integrated in our management system. For these countries, the level of detail is very high and provides a real overview of the TCO, not just the contractual costs.” GE Capital claims it was the first leasing provider to launch a pan-European online fleet management dashboard to help fleet managers monitor and optimise their fleet’s performance. “iManage went live in September 2006 and, since then, the rate of adoption has significantly exceeded our planning expectations. With nearly two million data fields updated each and every night, 250,000 vehicles loaded onto the system, and in excess of 800 user log-ins each week, iManage really does stand us apart from our competitors,” says Arthur Mathysen Gerst, managing director of panEuropean fleet, GE Capital EMEA.
Consolidating data TELL ME ABOUT OUR OLD DATA. Can your system import our historical data?
TELL ME ABOUT MANAGING CHANGE. How easy will it be for us to adopt your system and what support do you offer to help us?
TELL ME ABOUT DATA OUTPUT. What systems and formats are compatible?
TELL ME ABOUT TOTAL COST OF OPERATION. How much detail and analysis does your system provide?
TELL ME ABOUT BENCHMARKING. Can you tell me how well we are doing and how we can do better?
LeasePlan international’s new on-line tool is called International FleetReporting, and the company states that this effectively supports international fleet managers in a number of areas: implementing a balanced fleet management approach (cost, environment and safety), managing fleet policy implementation and compliance, assessing the effectiveness of policy changes and proactively communicating relevant fleet developments internally. Alphabet, for its part, also points out that information needs to be reported at different levels, and that a ‘one size fits all’ approach will not work: ‘The customer will be able to access Alphabet’s Online Reporting tool where available, a web based application, which is part of our Reporting Services and aims to facilitate the management of our customer’s fleet locally and internationally. The comprehensive reporting tool has the capability to consolidate data across all countries, creating international reports, giving insight into fleet details and supporting
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possible drawback with using a leasing company’s system, according to some of the independent consultants, is that in order to be able to provide an accurate picture of the total cost of operating a vehicle, all aspects of the leasing company’s charges need to be factored in. The lease company needs to be totally transparent with its figures. Lease companies dismiss these claims, as you might expect, and say that there is a wealth of information available to allow customers to benchmark the financial performance of their fleet operations and make informed choices. The discussions will no doubt rumble on.
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cost saving initiatives and operations by providing valuable information.’ In cases where this approach may not work, however, Alphabet is able to vary the methodology: ‘Local reporting is accessible, where detailed country data can be displayed and downloaded. In countries were the online tool is not available, an offline tool is offered, where similar reports will be send regularly by mail. The content of the data and the frequency will be according to the wishes of the fleet manager.’
Spotting the abnormal No doubt these companies have many satisfied customers but it’s not just about
Monitoring driver behaviour is one of the new reporting requirements.
scale, it’s about detail and spotting discrepancies. Arval’s Grégoire Chové describes the benefits of his company’s fleet manager portal: “‘Exception management’ is a synthesis of all the gaps between the contract and the actual situation; this means transforming the information coming from the reporting into concrete fleet management actions, for example, contract adjustment, vehicle maintenance and excess fuel consumption. The fleet managers are able to make the best decision on a real time basis. “Arval Analytics provides decision makers with the evolution of strategic fleet KPIs over four years. In addition they have access to market and bench-
mark information, provided by Arval to continuously optimize their fleet TCO.” Fleet Logistics also sets out the changing requirements, and the uses to which these new reporting possibilities can be put: ‘While companies are looking for global reporting solutions, they also want to be able to drill down to individual driver costs and one area of increased focus is that of driver performance. One consequence resulting from the last economic crisis is that companies are tending to transfer more responsibility to the driver and, in cases of misbehaviour, to ask the driver to contribute financially to the cost of certain events. The main challenge for this is to establish a unique identifier which can link costs to vehicles and drivers.’ To provide fleet managers with this type of information, Fleet Logistics therefore provides detailed reporting at a national level throughout Europe which monitors the costs associated to an individual vehicle and driver and which allows the monitoring of driver behaviour. Detailed information is available on items such as frequency and cost of accidents, fuel spend, number of tyres changed, congestion fines and any other expenditure, within set time frames. The fleet operator may use this data to charge specific costs to drivers, for example, based on extraordinary high refurbishment costs when returning the vehicle, fines, speeding tickets, or accident costs.
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Using the information
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Bynx is a global supplier to the fleet management and automotive leasing industry and provides electronic fleet reporting tools from the suite of bynxFLEET applications on a multi-market basis. The company has put in a lot work to ensure that the data output from its systems can be handled properly. “With bynxFLEET we cover the whole life cycle, and associate relationships of a vehicle, a driver and a fleet across many fleet operator types,” says Gary Jefferies, sales and marketing director at Bynx. “We have seen an increasing interest in reporting requirements over the last 12 months as fleets are put under even more pressure to turn information into actionable outputs. The bynxNET customer portal is becoming very popular as a simplified way of distributing information. It can be pre-populated with either standard or customer bespoke dash-
Looking ahead LeasePlan International has spent a lot of time developing its International FleetReporting. It reports exceptions and flags up areas of concern for clients. Because of LeasePlan’s size, it is developing ways to allow the benchmarking of companies with other organisations in the same industry or sector. It will also provide cross-border analyses, giving sector-by-sector comparisons from country to country. The company is clearly thinking ahead. “Fleet management tools such as International FleetReporting will continue to evolve as the market and client requirements evolve. Highly innovative existing technology will play a huge role in this evolvement as well resulting in continuous improvement of e-tools in the market. Within LeasePlan the development of smartphone and iPad applications have resulted in the availability of e-tools on these devices, supporting increased mobility of our clients’ drivers,” says John Houtsma, global coordination director at LeasePlan International. Ashley Sowerby runs Chevin, one of the world’s biggest fleet software developers, is also excited about the new ways his company can deliver information to its clients. He says, “Information gathered into a central webbased database, like FleetWave, can be delivered to users automatically using event engines. This means that reports no longer have to be requested, collated and sent, they just arrive in a customer’s inbox at a predefined date and time. “The standard data such as how much an asset costs to run or maintain per month is no longer the primary reporting criteria. One of the next milestones will be the extensive use of ‘black box’ data direct from an asset without the need for any manual user intervention. It’s the
unknowns that will drive electronic reporting – such as where is the asset, who has it, what’s it doing, how is it performing – in order to help drive down costs and excess waste. The use of integrated reporting tools for cost consolidation and control is paramount. In ten years’ time electronic fleet reporting will be automated, clean, simple, but with capabilities to drill down through data and even direct to an asset or employee on the road – two-way reporting.” Chevin claims some of its customers have seen 15 to 20 per cent cost savings since buying into its systems. This can equate to a return on investment within six to 12 months. There is clearly an overlap between simple information from telematics and other sources, and ‘reporting’ in its own right. But at the end of the day, the required results are the same, and the targeted benefits in terms of increased efficiency, as stated by
TomTom in its literature, are the same as those from a compiled electronically generated report. ‘Log onto TomTom WEBFLEET® and you can see at a glance if a vehicle’s moving or standing still. How many miles it’s travelled. How well it’s being driven. In short, all the information you need to analyse how your vehicles are being used and where you could make changes to improve efficiency. A good place to start in your hunt for the best fleet performance reporting is the Fleet Europe website at Fleeteurope.com. Click on Directory in the top right and follow links to Consultancy. n
Down the drain It is quite clear that having the information is only the start point, and that the fleet manager needs to use it correctly to modify either journey planning or, as is becoming increasingly the case, driver behaviour. This is where the intelligent use of telematics and the reports they are able to generate to show how driver is actually driving his vehicle, becomes so important. Harsh acceleration followed by harsh braking is, it may be useful to point out to some over-enthusiastic drivers, the same as pouring fuel from the tank straight down the drain…
Some benefits in their own words ALPHABET:
LEASEPLAN:
• Time savings – the fleet manager does not have to deal with a high amount of data, but will be advised by the leasing company
• Fleet Insight – including overviews and detailed reports on fleets by country, fleet growth
• Cost savings – by using the analysis made by the Alphabet account manager, an efficient and swift adaptation of, for example, mileage deviations can be made; another example is damage management of fuel consumption • Internal target management – a strong analysis of management data will support the fleet manager to reach the targets such as CO2 emissions or brand mix.
• Cost Insight – providing overviews and extensive detailed TCO reports including trend analyses and KPI’s • OEM Insight – reports detailing, among others, current fleet and planned renewals per OEM • Environmental Insight – CO2 emissions reports including fuel consumption analyses • Risk Insight – providing vehicle damage overviews, including causes and related trend information • Exception Insight – exception reporting on fuel and mileage deviations
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boards, which again give actionable data. The reporting tool capabilities are also offered in the shape of a ‘reporting layer’ providing open access to the customer so they can interact with the most popular end user reporting tools. We see end user reporting tools such as Oracle Business Intelligence Reporting and Hyperion, Business Objects, Crystal and many others. And of course we still support the most basic form of output using ODBC drivers for direct connection to applications such as MS Excel.”
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FOCUS Fleet Management Software & Telematics
Car manufacturers & telematics
Real-time information, all the time As reducing operating expenses have emerged as the biggest challenge for fleet owners and as they increasingly see the value of real-time feedback, telematics applications find ever greater market penetration. How will these technological changes impact fleet management in the coming years? And what impact will the increasing use of on-board telematics have on manufacturers? Julie WIDART
n today’s challenging business climate, fleets are more and more turning to telematics solutions to enhance fleet efficiency, recognising the essential role technology can play in cutting operating costs. This goes hand in hand with the emergence of a new generation of young fleet drivers more willing to use technological supports in their dayto-day work environment. These in-car applications allow fleet managers to set parameters for vehicle use and also report on indicators, such as the number
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Car manufacturers are the best positioned to integrate the necessary hardware with existing electronics at the production line. (Source: BMW ConnectedDrive)
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of kilometres driven by the car and the numbers of trips taken, thus allowing these fleet managers to identify those that don’t follow normal patterns. It also produces reports allowing managers to identify drivers with the heaviest feet. Additionally, mechanical and safety alerts can be reported by e-mail to the fleet manager, so they can optimise their maintenance costs. As driver behaviour and employee productivity continue to be the cornerstone of fleet management, observers foresee
an increased use of on-board data to modify drivers’ habits in terms of safer driving and becoming more fuel efficient. On top of this, most experts forecasts that there will be continued development of sophisticated analytics with more complex predictive analysis.
Increasingly smarter cars Everyone agrees that vehicles will continue to get ‘smarter’ over the coming years, with the integration by OEM’s of more and more on-board technology in
New way to communicate Another step toward an OEM-telematics scenario is being taken by new mobility concepts based on key technologies such as RFID, GPS and mobile communications devices such as smartphones. In-car technology experts say that the growing demand for vehicle infotainment and the proliferation of ‘smartphones’ is pushing carmakers to further integrate personal and mobile technologies. Within this context, most manufacturers are taking steps to expand their offering in terms of on-board communications or of Ă la carte mobility services. This is for example true for General Motors (Onstar), BMW (with Connected Drive), Chrysler (Uconnect), and Ford (SYNC.), which has developed a partnership with Microsoft to implement its telematics offering. And since April 2011, Toyota Motor Corporation (TMC) has also had an agreement with Microsoft for developing a worldwide platform for telematics services based on Windows Azur. These services include GPS, energy
management, telecommunications and multi-media services. While the most popular applications with drivers remain those allied to traffic and navigation, smartphones and mobile internet applications are attracting a growing number of players. Amongst these are the manufacturers, for whom the move towards mobile internet may play a not to be underestimated role in client loyalty, and also in fleet management. A challenge for manufacturers faced with more widespread legislation banning, for example, the use of telephones behind the wheel.
Integration will be the key for success However, with this predicted widespread integration of telematics, navigation, smartphones, and in-vehicle electronics, the upcoming challenge is to better connect these disparate devices to each other. In this context, Daimler, General Motors, Honda, Hyundai, Toyota and Volkswagen have recently joined Nokia, Samsung and others as founder members of the Car Connectivity Consortium, with the aim of developing common standards for connectivity between handsets and vehicles. Through this new consortium, mobile devices are expected to integrate tightly with future cars. And yet just a few months after its launch, this consortium has already come up against a serious stumbling block: while mobile internet is seeing an increase in its user numbers, applications dedicated to the car are having difficulty finding their place. One of the major evolutions to take place during the move towards vehicle internet will be strengthening terminal security. If vehicle technology constitutes a way forward, a real revolution for the sector, it is very much at its early stages. In the coming years, advanced telematics solutions will continuously feed information from a vehicle and be turned into usable data essential for good management within companies. In just the same way, most observers are convinced that
More in-vehicle data will be available within upcoming models, such as enhanced remote diagnostics capabilities. (Source: General Motors).
telematics will impact more and more on employee productivity, maintenance, fleet management systems over the coming years... This is the future of fleet technology: real-time information, all the time. n
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future vehicles. More in-vehicle data will be available within upcoming models, such as enhanced remote diagnostics capabilities. In addition, in-vehicle monitoring technologies will also offer earlier detection and alerts for potential failures, alerting fleet managers and thus leading to better vehicle maintenance. Another future perspective is that OEMinstalled on-board technology will have real-time connection with fleet management systems, allowing for a more thorough integration of information for clients. Within this perspective, many specialists envisage that technology will also play a central role in employee productivity management and scheduling is the most significant example of the use of on-board vehicle equipment to increase employee productivity. In the same domain, with the ever more extensive use of on-board GPS by drivers, the future would seem to point to more integration between on-board telematics and fuel applications.
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FOCUS Fleet Management Software & Telematics
Intelligent Telematics
Is Big Brother watching you ? The intelligent use of telematics in vehicles is becoming a vital tool for fleet managers. We look at what is happening in the market, and we talk to a supplier of ancillary equipment which may come to play a substantial role.
Tim HARRUP
here are two aspects to intelligent telematics. One is the use of intelligent devices themselves, which gather and transmit certain types of data, and the other is the intelligent use of this data by the fleet manager.
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Safety is key
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A concrete example of how an in-car camera and a telematics system work together, and how this can genuinely be used to improve safety, is demonstrated by a collaboration between an industry leader in telematics, MiX Telematics, and in-car surveillance equipment supplier Mobileye. The two companies have collaborated to boost driver safety through integrating their complementary solutions. Inside the vehicle, a small display unit coupled with audible alerts are used to warn drivers if motorbikes or pedestrians are detected in their paths and if they are deviating from their lane or driving too closely to the vehicle in front of them. The fleet manager or other person using this information can also see this same event data, combined with other driver and vehicle performance data to provide a comprehensive range of information and enabling them to manage exceptions and identify poor driving trends. This in turn enables fleet or HSE managers to make more informed decisions and tailor driver improvement programmes and remedial action for unsafe drivers.
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efficiency. TomTom, known for its navigation systems, offers companies and drivers the opportunity, via intelligent telematics, to provide their clients with enhanced performance in these areas. It has solutions which enable personnel to be aware of and avoid traffic jams, and thus remain productive for longer periods… not to mention arriving at a client’s office on time. Staying in this domain, such telematics also allow for messages between ‘head office’ and the travelling personnel to be sent, perhaps modifying schedules as up to date information is received. As a complement to this, fleet managers or others (such as sales managers perhaps) can be kept informed of the activities of
Client service For telematics to be really intelligent and of use to a fleet manager and his company’s business and profits, two other elements are clearly vital. One is fuel consumption, and the other is journey
Various different types of hazard are identified and indicated by icons.
personnel and vehicles. The journey history can be shown, and trip schedules adjusted accordingly.
Wasted fuel Another facet of TomTom solutions enables not just real time fuel consumption for each vehicle in the fleet to be calculated, but also the fuel wasted during engine idling to be identified. Fuel consumption can be posted up on the vehicle dashboard either as a list, or on a map. The fuel performance of different vehicles and drivers can thus be compared, by trip, by period, by vehicle… The actual fuel wasted during the time an engine is idling can be shown.
Surveillance Eran Perzelan, Director of Business Development of Mobileye, spoke to us about evolution in this field, and did not duck the ‘privacy’ question. What are the latest developments in intelligent telematics for car fleets? E. Perzelan: “We make driver assistance systems which in effects means an intelligent camera installed in the car. Our input/warnings are displayed to the driver and supplied to a telematics device and provided to the fleet manager online. What happens is that our system can be installed as a stand alone device giving information on accidents and collisions etc., but you have no control. Once it is allied to a telematics device it becomes a very powerful tool because then you have control over the driver. This means that if the driver is not using turn signals, or driving too close to the car in front, you will know. You will know if he is braking very late or constantly getting into potential accident situations. When you have a telematics device and our system together, the telematics might tell you the driver has braked really hard, but our system will show that, for example, the braking was at the same time as a pedestrian collision warning, so you will know he didn’t brake for nothing.” n
What about the eternal ‘privacy’ question? E.P.: “This is becoming more topical,
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especially in France at the moment. We are finding that unions are more likely to accept the device being installed in the car because it is there to protect their member. Where they have a problem is when the information is recorded on line. They have no problem in France, for example, installing our system as a standalone, because then the driver can turn it off. This is an issue in some countries but not others. Using Israël as an exam-
in just a few months. We had a six month trial with a major drinks company based in Greece. They recorded fewer accidents across the whole fleet, zero accidents in fact, and very substantial fuel savings. Not just accident types that our system directly prevents (forward collision, lane departure, pedestrian detection) but other accidents because drivers become more defensive. One cannot forget that the major concerns in the
“ Travelling personnel can arrive at a client’s office on time. ” ple, there has just been a legal ruling which says that during regular working hours the driver can be monitored. What fleet management systems are doing in order not to fall foul of privacy issues, is not giving exact location information. The situation can be compared to mobile phones – if someone really wants to know where you are they can find out by using your mobile phone data. There are of course all the other intelligent applications for telematics in cars, such as telling you that the car needs to go in for a service.” n Return on investment comes from fuel savings and fewer accidents? E.P.: “That is exactly right. In Eastern Europe where accident rates have always tended to be high, our system has been able to turn aggressive drivers into defensive drivers. The ROI is therefore achieved
corporate world today is “Corporate social responsibility”. I see no bigger responsibility than the life of company drivers, and the welfare of the community they drive in. Of course an additional consideration is that a branded company car involved in an accident is not good for their image!” There is clearly much innovation in the field of intelligent telematics. Over recent times, the role of the driver has come to be seen as vital in many areas – not the least of which is fuel economy. It seems clear that telematics will be used even more in the future to control driver behaviour: how far this will go, and how much drivers themselves will accept, remains to be seen. n
The in-car camera identifies potential accident situations and helps the driver to avoid them.
“The buzz word at the moment is telematics, and there are a lot of telematics companies out there. But the next buzz word is driver assistance systems, and there will have to be a connection between driver assistance systems, telematics and maybe in-car video recording. Once insurance companies pick up on this, this will be a very powerful tool.” (Eran Perzelan, Director of Business Development of Mobileye)
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Driver guidance
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STRATEGY Leasing
European market
Alphabet to acquire ING Car Lease Dutch bank ING has recently announced that it is to sell its car leasing business – ING Car Lease – to BMW Group fleet management division Alphabet. ING Car Lease is active in 8 European countries and manages a fleet of 240,000 vehicles. Alphabet manages more than 300,000 company car contracts and is today represented in 14 countries. Caroline THONNON
lphabet, the international multibrand fleet management division of BMW Group, will further strengthen its European market position through the acquisition of ING Car Lease, a division of ING Group N.V. The purchase price amounts to EUR 637 million. The transaction is expected to close in the fourth quarter of 2011, subject to regulatory approvals.
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A perfect fit Norbert van den Eijnden, head of Alphabet, commented:
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“ING Car Lease is the perfect fit to complement the activities of Alphabet”, says Norbert van den Eijnden, head of Alphabet.
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“In the growing European fleet management market, ING Car Lease is the perfect fit to complement the activities of Alphabet. Alphabet will increase the number of company car contracts under management to approximately 540,000 and thus consolidate its competitive lead in
rent initiatives in order to be prepared for future demands. Alphabet is one of the fastest growing international fleet management suppliers. Established in 1997 in the UK, the company today has a financed car volume of approximately 200,000 vehicles of
“ The acquisition of ING Car Lease by Alphabet would be a major step to become the leading provider of mobility services. ” the European fleet management market. Through the acquisition Alphabet will be able to provide its corporate customers with broadened services in now 16 European countries. The strengthening of the fleet management business is in line with the BMW Group Strategy to be the leading provider of premium products and premium services for individual mobility. There is an increasing demand for flexible mobility and usage solutions. Alphabet is concentrating on the growing full-service fleet management sector and is developing products and services for sustainable and efficient corporate mobility management.” Alphabet states that Corporate Car Sharing within the fleet management is one of the company’s cur-
all makes and manages in total more than 300,000 company car contracts for over 12,000 customers.
ING to strengthen European Bank position On 8th of July, ING announced that it had reached an agreement to sell ING Car Lease to BMW Group’s fleet management division Alphabet. “The sale of ING Car Lease illustrates ING’s continued actions to streamline our business and simplify the company”, said Jan Hommen, CEO of ING Group. “Going forward ING will continue to build on its leadership position as a predominantly European Bank with a strong international network focused on providing its customers consistent high-quality services.” Expected total proceeds of EUR 700 million at closing will include the purchase price of EUR 637 million based on 2010 year end book value and estimated 2011 earnings until closing. The sale of ING Car Lease will result in a net transaction result of approximately EUR 335 million and a capital release of around EUR 530 million. The transaction is expected to have a positive impact on ING Bank’s core Tier 1 ratio of 17 basis
The European map of Alphabet and ING Car Lease COUNTRY
TOTAL
Australia
5,980
Austria
5,421
Belgium
7,196
Denmark France Germany Italy
11,892 3,089
Norway+Sweden
3,024
Poland
UK Other
33,286
27,435
44,786
836
186,681
Netherlands
Switzerland
5,421 26,090
836 17,351
Luxemburg
Spain
5,980
7,868
186,681 12,206
24,098
1,421
1,421
82,877
85,966 3,024
8,975
8,975
29,195
37,063
49,819
93,766
238,018
539,302
4,469 43,947
4,469
3,530 301,284
Norway
Sweden
3,530
Source : Fleet Europe n°54, June 2011 (Figures of end December 2010)
Denmark
points, based on the core Tier 1 ratio of 10.01% per 31 March 2011. ING Car Lease is a leading operational car leasing and fleet management business in Europe with 240,000 vehicles and top 10 positions across the eight countries in which it operates. ING Car Lease started its operations in 1977 and became part of ING Group in 1985. It has a total workforce of around 1,200 employees per 31 December 2010. ING Car Lease balance sheet total was EUR 3.5 billion per 31 December 2010.
U.K. Netherlands
Germany Poland
Belgium Luxemburg
France Switzerland
Austria
Spain
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Italy
Alphabet is currently represented in 14 countries (incl. co-operation markets Czech Republic and Slovakia) totalising a fleet of around 300,000 vehicles. If the deal is accepted by the European Commission, Alphabet would jump to the 4th position within the European car leasing companies’ ranking. ING Car Lease is active in 8 European countries and manages a fleet of 240,000 vehicles.
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Alphabet’s new position in Europe
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STRATEGY Leasing
Most important facts in the history of 2 lessors This timeline shows the important events, expansions and takeovers in the history of Alphabet, founded in 1997 and ING Car Lease, founded as CW Lease in 1977.
Acquisition of ING Car Lease (subject to regulatory approvals).
Acquired by Alphabet (if deal is accepted by the European Commission).
Entering the Czech Republic and Slovakia through cooperation with UniCredit Fleet Management.
Aquisition of Universal Lease Iberia (Spain)
Opening of subsidiary in Denmark. Acquisition of LHS/DSL in Germany. Worldwide fleet of 250,000 vehicles.
150,000 vehicles
The Netherlands, Spain, Sweden and Norway get branches.
Branches are set up in France, Belgium.
The acquisition marks a significant expansion of ING’s Spanish car leasing operation. This takeover almost doubles the ING Car Lease fleet in Spain by appromimately 14,500 vehicles to over 30,500, and positions the company from the number 10 to the number 7 largest fleet operator in the Spanish car lease market. Agreement with Jardine Motors Group and Barclays Mercantile Business Finance Limited to purchase the UK-based car lease company Appleyard Vehicle Contracts. Appleyard adds 27,000 units to ING Car Lease’s UK fleet, positioning it amongst the top ten fleet operators of the country, with over 43,000 vehicles. ING Car Lease starts a co-operation with Deutsche Leasing in Germany.
Opening of subsidiary in Austria and Italy.
Acquisition Ets Garcia SA (100%) including about 9,000 LTR cars and a short term activity, thus doubling the size of the car lease France activity with a total fleet of 20,069 vehicles.
Switzerland becomes the 3rd country.
Acquisition and integration of both Locabel Auto (2001) and TOP Lease (Fortis) in the Benelux.
CW Lease changes into ING Car Lease. Alphabet opens a branch in Germany.
Alphabet is established in the UK as part of the BMW Group.
The company has a fleet of over 100,000 cars in The Netherlands, Belgium, Luxemburg, France, Germany, UK, Spain and Italy. Opening in Poland. Start of ING Car Lease Italy.
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Start of ING Car Lease Spain.
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Opening of CW Lease Luxembourg.
Opening of CW Lease Belgium. Creation of CW (Centraal Wagenparkbeheer) Lease by the Dutchman Cees Bekkers.
STRATEGY Management
Remarketing Business
Think before you act Planning incremental and replacement vehicles is an interesting part of every International Fleet Executive’s role; perhaps the biggest caveat is that every new vehicle will one day be a used vehicle and will have to be sold for the best possible price.
Professor Peter N C COOKE
n good economic times when both the new and used car markets are buoyant less attention may have been focused on used car disposal – or remarketing as it is now branded – than the activity realistically justified. It is all too easy to waste the benefits of a tightly managed vehicle operating life if the new vehicle specification was wrong, the method of used vehicle disposal was
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incorrect, or the best price available was not achieved. Equally important, what are the hidden costs of disposal – or remarketing?
Used Car Supply Chain There is a saying in some markets that ‘the role of the new car operator is to create used cars for the market’ – in virtually every European country the used car
Figure 1: Used car supply chain
market is larger than the new car market – up to three times as large in some cases. The chart in Figure 1 illustrates the Used Car Supply Chain and woe betide any fleet operator who forgets that simple model. (See figure 01: Used car supply chain). The challenge for the fleet operator is to specify the new fleet car for the time when it will come back to market as a used vehicle in perhaps three years’ time.
Planning the New Fleet for Used There are a number of basic issues the fleet operator needs to remember when planning the new car fleet for its later disposal. Consider some of them.
• New car profit • Part-exchange profit • Finance & insurance
• Used Car profit • Part-exchange profit • Finance & insurance
• Used Car profit • Part-exchange profit • Finance & insurance
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• Private Sale
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Source: Buckingham for illustrative purposes
• Product brand; what is popular as a new car is usually popular as a used product. However, this may be mitigated if the model is close to the end of its product life cycle and a radically new model is expected. • Vehicle specification and colour; new car buyers look for specific items in a car – air conditioning perhaps, or automatic transmission – but what do used car buyers want? Vehicle colour and metallic paint may also be important. • Quality of the product; there is probably no such thing as a poor quality new car on offer in Europe – but what is the perception of three year old vehicles – especially if driving conditions are hard. • In car technology; a difficult area to predict as in car systems change so rapidly; what may be today’s technology may be totally out of date in three years – and in any case, will the used car buyer be willing to pay for items they do not want?
The Special Case of Power Trains Perhaps the biggest specification decision the fleet operator has to make is that of powertrain – petrol, diesel, hybrid, electric or some form of gas power. Once again we are in the realms of local preferences – what is most popular in the marketplace for used cars? Normally the decision is linked to fuel prices and relative power train prices. But with fuel prices escalating, it is important that one takes a view regarding fuel price trends – how might they have moved over the next few years and, more important, will the relationships have changed by the time the cars come back to market? With regard to hybrids, the technology would appear to be holding well – at least on more recent units – is the local market accepting hybrids – if not – how might they be treated in three years rime? Electric cars are probably not yet a serious element for fleets, even with subsidies, so any decisions regarding their fleet operation needs to be based on non economic issues such as corporate image.
Hidden Transaction Costs A series of remarketing costs which are too often ignored are the so called ‘transaction costs’ – Figure 2 illustrates some examples (See Figure 2: Used Vehicle Transaction/Disposal Costs). Not all of these costs will occur in every market but they can be relatively expensive and change the method of disposal and even the age at which a unit might be replaced. Some of these costs may be eliminated by good forward planning; others may be linked to specific features of the individual vehicles offered for disposal. The challenge for the fleet operator is to factor in all of these issues as well as those associated with the initial specification of the new vehicle and the popularity of that product range in the marketplace now and in three years time – and that is before one starts to consider the methods of used vehicle disposal or
Figure 2: Used Vehicle Transaction/Disposal Costs Used Car Pricing
Security
Payment Terms
Inventory costs
Documentation
Vehicle
Vehicle movements
Administration
Storage & space costs
Fraud risk
Inspections
Damage in transit
Transaction taxes
Insurance
Commissions
Conditions of sale
Licence recovery
Ongoing depreciation
Refurbishment
For illustrative purposes only – not comprehensive & vary between markets.
whether a single method should be used for the while fleet.
What Choice? For the fleet operator the range of alternatives for disposal is probably wider than it has ever been and the range of options will vary not only between mar-
auctions of various types – physical auctions where vehicles can be seen by potential buyers who will then have to bid for them. On the other hand, to minimise movement costs electronic auctions are becoming more popular; such auctions can appeal to a wider potential buyer group as they can bid from their offices
“ The role of the new car operator is to create used cars for the market”, is a saying that can count for more than one country market in Europe. ” kets but also the fleet operator may have the option of moving certain used vehicles across borders to achieve better remarketing values. One caveat for every fleet operator examining alternative methods of used vehicle disposals is that the prices achieved may vary between methods but the key issue is to keep the remarketing chain as short as possible because every middleman will want a percentage between their acquisition and disposal so do try to keep the chain as short as possible. An early question is whether any degree of refurbishment beyond a simple valet is justified. Even valeting costs a few Euros but it does help present the vehicle in a better light! Should the fleet operator seek to have minor repair work done or should that be left for the intermediary to handle as they will be organised to do it – but will have an assumed cost for adding value? Used cars may be traded against replacement vehicles – a simple transaction with few movement costs. Equally, the fleet operator may seek to remarket through
and not have to attend the auction. Vehicles could similarly be sold by electronic auction without leaving the fleet operators premises. The range and scope of remarketing methods may vary between countries; equally, it may be beneficial to seek advice to establish if there are preferred auctions or disposal methods for different types of vehicles. The picture is evolving all the time and may change over quite a short period. Acquiring new vehicles for the fleet is the easy part of the exercise; everybody wants to sell you cars; the challenge is to be able to specify those products against future demand for used vehicle, deliver the vehicle in an appropriate condition and mileage when it comes to disposal – and select the most effective method of disposal. Good luck! n
Professor Peter N C Cooke University of Buckingham
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It is important for the fleet operator to keep in touch with local market sentiment with regard to the popularity of used car models in individual markets. I stress individual markets because what is popular in one market may not necessarily be popular in every country
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STRATEGY Management
Remarketing Trends
International within Europe Efficient remarketing is more than selling used vehicles at the best possible price. It has to be done in a reliable way and through a transparent process, taking into account lead time, service quality and process costs. Remarketing has become an expertise which can save or cost a lot of money.
Steven SCHOEFS
successful remarketing process involves bringing the vehicle to its contract termination at the right time and with a correct mileage. You don’t have to be Einstein to understand that a 4 year old car with 130.000 km is more interesting to sell than a 7 year old car with 230.000 km. Your lease company is well placed to advise you on the possible durations and mileages. A second very important issue is that the
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company cars are still in good condition, with limited damage, no smoking smell etc , because the condition of the end of contract car has a direct impact on the real second hand value. But unfortunately there are more than just these elements to look at to speak of a successful remarketing process. According to the remarketing specialists process efficiency and transparency are vital. The fleet-owner and/or lease company
deserve the fastest and most cost efficient solution. BCA Group Europe’s MD Paul Bradbury puts the situation like this: “Vehicle remarketing is a relatively new discipline in many European marketplaces so getting effective processes in place which can then be used to develop the potential is critical. The most recent developments are multi-sales channelling and inventory management for defleeting and sales channel definition.
“ There is an imbalance between new car registrations and the demand for used cars. ”
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Johan Meyssen, CarsOnTheWeb : “As Europe is becoming bigger and bigger and the Eastern and Central European countries are becoming more developed, the sales towards these countries will increase.
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Transparency at all levels of the defleeting and remarketing process is key for most of our vendors and buyers.” “Transparency is crucial”, agrees Steve Newton, General Manager at Autorola International. “You have to know exactly what you’re selling and you have to share this with the prospective buyers, so that you avoid any disappointment from the buyer’s side.” When we speak about damage inspection, taking pictures of all damage is a good starting point and will give confidence. A second element is the process. In fact the remarketing flow starts when the fleet manager of a company decides to end the use of a company car. “A good supply chain management system is needed. Such a system integrates the appointment for the inspection, the inspection with the driver, the transport order, the administration and damage billing and the connexion to multiple sales channels to sell the car” declare Joep Weijden and Bertrand Durand of MACADAM Europe. Johan Meyssen, CEO at
Internationalization demands IT Remarketing is an evolving process that is influenced by various elements. Taxation and legislation play a more determining role in the sellers’ and buyers’ attitudes, as taxation can have a strong influence on the residual value of a car. “In the Netherlands we see that the hybrid cars are popular due to interesting taxation”, says Joep Weijden of MACADAM Europe. “So thinking that you are selling a unique and interesting low mileage hybrid car might be true locally but internationally this does not count. Sellers will have to look over the border before even selling a car. But international buyers are also very much influenced by taxation as they will always look for the best place to buy a certain car.” Although remarketers, buyers and sellers are looking for the best opportunity taking into account local preferences, we can’t deny the internationalization of
For at least the next decade to come emerging markets like China, Brazil or India are less important for our remarketing, because the distance to Europe is too far and expensive in terms of transportation.
Their added value AUTOROLA: Autorola has close to 70,000 registered trade buyers and dedicated teams in branches in 17 countries. Autorola offers and implements cross-border remarketing solutions for fleet-owners, OEMs, leasing and rental companies, coordinated by the Autorola International Office based in Frankfurt. On top of this Autorola provides assistance on all remarketing related aspects such as reception, assessment, storage, invoicing and transportation. SGS AUTOMOTIVE: SGS works internationally, which means that an international customer can have one standard throughout Europe and even worldwide. SGS has a unique way of carrying out remarketing inspections, which are handled within a short period. It is possible to have an electronic report on the website of the customer, along with all repair estimates and pictures to go with these. BCA GROUP EUROPE: Key to maximising vehicle residual values and thus helping to minimise fleet costs is selling via the most appropriate channel or combination of channels. Some vehicles may achieve the best price in a physical auction, where others may be more suitable for online selling, or indeed vehicles may be offered for sale in more than one sales channel simultaneously. Buying power can therefore be maximised by bringing together “physical” buyers such as those in an auction hall, with those online. CARSONTHEWEB: CarsOnTheWeb has a high level of export expertise and is present in the major European sourcing markets with a large and increasing pan-European buyer base. CarsOnTheWeb offers a one-stop-shopping solution and takes away all administrative, operational and after-sales work from the selling parties. MACADAM: MACADAM is active in 6 countries with over 150 inspectors on the payroll and is specialized in remote inspections for all kind of vehicles. MACADAM’s aim is to make all relevant information transparent with pictures and consistency in respecting short lead times.
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CarsOnTheWeb, also confirms that efficient handling and logistic processes are absolute conditions for efficient remarketing : “This guarantees efficiency in logistics and administrative flows.” The third element is the market situation. Not every market is as mature as the UK or the Netherlands. Not every market has high level company cars like Belgium or Germany and not every market is as interested in selling second hand vehicles. The pricing of the end of use car has to be adapted to the vehicle condition, the market and economic development and the interest of the buyers. So as a fleet manager don’t expect to get the same price for the same car in every country. The last element influencing the remarketing success is the remarketing policy within the company. We may be living in one big European Union, but as there are cultural and economic differences between countries you have to understand these differences. So as an international fleet manager you can perfectly well decide centrally on the overall remarketing strategy and procedures, but use the local levels to complete the work.
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STRATEGY Management
the remarketing industry. “Vehicles are sold abroad”, says Peter Bevelander, Sales Manager Benelux at SGS, “and they will continue to be sold internationally. In order to do this successfully, IT is everything. Websites must be able to display a vehicle at distance.” A statement confirmed by Johan Meyssen from CarsOnTheWeb: “As Europe is becoming bigger and bigger and the Eastern and Central European countries are becoming more developed, sales towards these countries will increase. These countries will create a new demand. On the other hand there will be an increased offer of quality used vehicles being sourced in Central Europe and being presented to buyers all over Europe. It’s logical that with internationalization, internet sales will increase and become more important than physical sales. But to do this in the right way, you need to have a structured and efficient back-office tool.” BCA too highlights the need for effective IT systems, as Paul Bradbury says: “BCA Fleet Control Monitor offers web-based inventory management with a multiple access information hub that allows fleets to
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Joep Weijden, MACADAM Europe: “The market shows unexpected tendencies influenced by past market decisions. Scrappage schemes and the push of low CO2 emission vehicles have artificially changed new car registrations since 2008.”
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manage and monitor all processes in the remarketing chain, including de-fleeting, logistics, document handling, inspection and valuation and sales channel selection.”
Shortage of cars? When looking forward, IT will become more and more important. For Peter Bevelander of SGS Benelux all fleet vehicles will be sold online in the near future. “The whole process will be digital and
lot of costs are hidden and not taken into account in the right way. It’s clear that taking the full picture into account is vital. When you have many hundreds or thousands of vehicles around the globe these hidden costs can clearly become substantial numbers. Price-wise there could be a high degree of volatility on the way. Joep Weijden of MACADAM Europe: “The market is displaying unexpected trends influenced by past market decisions. Scrappage
“ Sellers will have to look over the border before even selling a car. ” anyone who is involved in the remarketing chain will be sitting behind a desktop screen, doing the business they are used to doing.” The IT (r)evolution demands a solid IT backbone and IT system, so that safety is always guaranteed and processes can go on at any time. But as remarketing is becoming more international and goes via IT, differentiation can be done by process harmonization and stronger customer services. “There will be the need for an increased focus on process quality and efficiency” says Steve Newton from Autorola, “and we also believe that the need for integrated solutions will increase.” Along with this he hopes that OEMs and major operators will get increased awareness of the real cost of having an internal remarketing department, as a
schemes and the push of low CO2 emission vehicles have artificially changed new car registrations since 2008.” And that artificial situation seems today to be having a strange impact on the second hand market. “Hybrid vehicles are popular in new car registrations today, but they perform poorly on the second hand market, while SUV’s on the contrary have recovered rather well.” This proves that vehicle segments and vehicle technologies can develop differently or as Joep Weijden puts it : “There is an imbalance between new car registrations and the demand for used cars.” A last trend will be the impact of the new emerging markets. Most of the remarketing specialists agree on the enormous potential of the Russian market and in the short term Russia will have on impact on the remarketing business and the price level of second hand cars. Although everyone sees the potential there’s still the question of whether today the possible opportunities of being active on the Russian market are large enough to compensate for the risks in terms of security, volatility of the market, lead times, etc. For at least the next decade to come other emerging markets like China, Brazil or India are less important because they are not yet mature enough and too far from Europe, thus expensive in terms of transportation. So for the years to come, the remarketing story will still be a European one. n
STRATEGY Management
Remarketing in Emerging Markets
Between new opportunities and old risks ‘Remarketing is the key to successful cost effective car fleet management’ may be a grand claim but it’s probably not far from the truth. In an industry which is becoming even more competitive and cost conscious every stage needs to register the lowest possible costs for the delivery of an acceptable best practice service. Vehicle disposal or remarketing has to be high on the wants list.
esidual values are driven principally by supply and demand for the products on offer. While used vehicle supply is a given as it is created by the number of new cars being sold, the used car demand is more complicated and is a mix of macroeconomic and microeconomic issues.
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The following issues may be relevant: • Is the economy in a state such that potential buyers are willing and able to buy used cars? • Is there an acceptable used car product – model wise, pricewise and quality wise for the buyers to acquire? • Are there appropriate routes to market for ex fleet cars to follow cost efficiently and in appropriate volumes? Does the fleet operator and international leasing company as well as the vehicle importer have a role in developing used car markets in developing economies? The answer is yes.
• Is finance available to enable would be buyers to borrow against their planned acquisitions? Predicting residual values in the emerging European markets adds a further dimension to the equation; it’s difficult enough to predict residual values in the long established markets but, without a steady market which follows the basics noted above, residual values become ever harder to predict.
CEE: relative New Car Market Sizes Western European car markets have matured over the last few decades with moderately stable car parcs and relatively predictable changes in volume and values. The markets too have large vo-
lumes of new car sales each year which in turn feed the used car markets. However, the emerging European car markets have much smaller volumes of new cars and even a small fluctuation in volume could have a significant impact on residual values and remarketing opportunities. The chart in Figure 1 shows relative new car market size in 2010 in the emerging markets – significantly smaller numbers (Figure 1: New Car Sales in New EU Member States). Given that the numbers shown represent both fleet and private new car sales and that there may be different replacement patterns between the two groups, the immediate reason for a shortage of used car price data immediately becomes clear. In the chart in Figure 1, only Poland and the Czech Republic represented significant new car sales above 100,000 units, while Romania, the third player fell below 100,000 in 2010. To provide an industry comparison, a number of European leasing companies would individually acquire more units across the whole of Europe in a year than many of these total markets represent. The immediate implication from the Figure 1 is that in the emerging markets there simply is not sufficient volume of new cars going into the markets to justify a large and strong used car market. Given that these are markets which have been starved of new cars until relatively recently then many of the private new car buyers will be acquiring a car for the first time and many of those sales will e purely incremental – there will be no used
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Professor Peter N C COOKE
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STRATEGY Management
Impact of Small Volume Markets
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A consequence of the relatively small used car markets in the emerging markets is that the amount of data available on used car prices is much thinner than in the mature, volume markets. Such data is relatively expensive to collect and the key to reliable figures is to collect the data regularly and from a wide range of sources and to process and publish quickly. While every player in the new and used car sector in mature European markets complains about the figures produced, the integrity and objectiveness of the data is rarely challenged. It would appear to be a widely held ethos in the emerging market that ‘nobody sells a used car unless there is something wrong with it’ – perhaps due to the days when cars were in short supply and, once one had a new car, one kept it until it collapsed in a cloud of steam and rust. In addition to the almost sacrilegious act of selling a used car before its ‘collapse date’ there is an ongoing expectation among many used car buyers that the person seeking to sell them the shiny used car will try to cheat them and charge too much. Equally, the seller assumes that the would-be buyer us seeking to pay below the real value of the car. While healthy scepticism is no bad thing provided it is shared and a compromise is easily achieved, one is led to believe that in some emerging markets the stubbornness is approaching that of the US Senate. Such issues, it might be noted, are at the used car retailing end of the market rather than fleet – further down the line than the normal point where the fleet operator or leasing company might expect to be involved.
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A Practical Strategy? In purely qualitative terms the CEE markets should offer an excellent opportunity for developing used car sales. Indeed, when markets were opened a decade or
Figure 1: New Car Sales in New EU Member States; 2010 350
333.5
300 250 Thousands
car coming back as a result of the new car sale. On the fleet side too, many of those units will be incremental as more companies look to develop central European market opportunities. Within Central and Eastern Europe it is widely accepted that there is a significantly lower vehicle churn than in the mature markets. Churn is important to generate business volume.
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so ago, Germany and Austria went through a purple patch of exporting used cars into the emerging markets as those countries simply did not have sufficient to satisfy their rapidly developing markets and neither private buyers nor SMEs wanted to pay new car prices. There should be a used car demand within the CEE markets both for locally sourced used cars and also for imported used cars for private buyers and local fleets. The issue is how to develop such a market opportunity. A radical market opportunity may demand radical strategies. A number of steps might be considered, some of them are macroeconomic and may well be beyond the resources of single companies – bit nevertheless justify further development to accelerate the growth of the used car markets and ultimately acceptability of product and realistic prices. Consider the following possibilities: • Support used car price guides within the markets and seek to build confidence in their figures and the use of those figures. A medium term issue but a step towards the markets becoming more mature; • Positively encourage franchised dealers, particularly those undertaking fleet business, to develop highly professional, high profile used car operations. If necessary the vehicle importers need to be involved to provide the necessary training;
• Encourage, through an extended press and PR programme the concept that ‘used cars can represent excellent value for money’ and ‘the used car industry is becoming professional’. Such a task is an industry one but necessary. Certainly macroeconomic issues that will require cross industry support, but it may be necessary to accelerate the development of the used car market in the emerging markets. The question must be asked – does the fleet operator and international leasing company as well as the vehicle importer have a role in developing used car markets un developing economies? In the opinion of the current writer the answer is ‘yes’ – it is a strategic step in building the total vehicle supply chain. n
Professor Peter N C Cooke University of Buckingham
STRATEGY Case study
Geert Behets, UCB
The ecological choice can be the economic solution Geert Behets is Global Travel Management Director for Belgian-based pharmaceuticals company UCB. With installations in Atlanta (USA), Switzerland, Germany and the UK, as well as the company’s vast plant on the Brussels periphery and headquarters within Brussels, travel in the wider sense, and the car fleet in particular, are clearly a part of working life.
Tim HARRUP
As the Global Travel Management director Geert Behets manages many aspects of the UCB travel and fleet operations. He is convinced that going in a smarter management way can save money.
rom his background in the travel industry, Geert Behets is well placed to know what the industry can do, and what might be possible. He tells us how he is using his experience for UCB.
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n Firstly, let us broach the subject of cost. Is this a determining factor? Geert Behets: “What we want to do is make people aware that if you go about things in a smarter way you can also save money. You can even increase your comfort levels by doing this. One of the things is making sure that we all stay at the same type of hotels, so that we can negotiate good deals. And in fleet the same thing is true, bringing down the number of brands you work with and making sure you have optimal leasing conditions. All of this can result in people ending up in better fleet cars than they would have had if we hadn’t done anything. And this is important – we want to make sure our people realise that the effort made is not going to take away their comfort.”
Staying with cars, are there any moves on hybrids or electric cars? G.B. : “We have integrated hybrids in certain markets, particularly Belgium where there is a very good tax incentive for this. People see this in their own pockets, therefore. We launched a global fleet policy very recently, and this requires that we look at total estimated cost over four years rather than just looking at the monthly up front leasing cost, which people used to do in the past. When setting up this policy, it is still an estimated TCO – we won’t know the actual TCO until
“ In quite a number of countries engine size is often traditionally a criterion of choice. ”
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STRATEGY Case study
UCB UCB, Brussels, Belgium (www.ucb.com) is a global biopharmaceutical company focused on the discovery and development of innovative medicines and solutions to transform the lives of people living with severe diseases of the immune system or of the central nervous system. With more than 8,000 people in about 40 countries, the company generated revenue of EUR 3.1 billion in 2009. UCB is listed on Euronext Brussels (symbol: UCB).
2,000 cars in fleet TOTAL VEHICLES EUROPE: 2,000 NUMBER OF MANUFACTURERS: Now 5 (still have some legacy) NUMBER OF LEASING COMPANIES: Will be 2 worldwide (still have legacy) TOTAL ANNUAL SPEND ON FLEET: No disclosure on figures
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UCB Centre, the group’s headquarters in Anderlecht, Brussels, was opened just a few years ago.
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afterwards, especially as consumption can vary from one driver to another. It is still a little too early in our specific case to be thinking about electric cars. In a small country like Belgium we could probably get around for business purposes in an electric car, but our people can also use their cars for going on holiday, and for this electric cars are not yet a viable alternative. We have to think a little more deeply about how we are going to ask people to use an electric car and yet still have the mobility they need. We are reflecting on this, but we haven’t yet got a final solution. One of the first steps will probably be that depending on the time and resources we have available, we may set up charging points for electric cars later this year, here in our two sites in Belgium – Brussels and Braine l’Alleud. We would then make a number of cars available for use, principally for use when travelling between these two sites, which are around 30 km apart. Travel between these sites happens by employees who do not have company cars, and who therefore use their own and then claim back petrol etc. having these electric cars available will give them a good alternative. This will also help with the image of our company, show that we are thinking about the environment.” How is your international fleet organised – centrally, country by country – and what are the responsibilities of the people concerned?
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G.B. : “It is organised as a combination of each: we have a global fleet policy detailing how we want to approach fleet globally (for example, with a focus on safety and ecological friendliness, calculation of ECU – Estimated Cost of Use, how to organise a vehicle list,..) but then it is up to each individual country to propose the best way to fit this outline structure to local benchmarks.” n What criteria do you use for car selection – fixed lists, user-chooser with a budget…? G.B. : “It is strictly a list composed of safe, ecological vehicles of well reputed brands. The cars are well – but not necessarily lavishly – equipped with a specific focus on safety (ABS, airbags, EuroNcap results, specific packages with regards to safety,…).”
n What steps have you taken to make your fleet ‘greener’ - apart from the electric cars and hybrids you have already spoken about) G.B. : “The ECU I mentioned earlier is strongly influenced by fuel consumption, along with taxation or tax breaks. So by making this a criterion, you automatically make people aware of the greener possibilities. And additionally, we have introduced maximum CO2 emissions levels in negotiation with the different countries. This remains a sensitive issue in quite a number of countries where engine size is often traditionally a criterion of choice.”
n Do you have centralised agreements across Europe with leasing companies or manufacturers? G.B. : “Yes, we do have such agreements in place. Over time, we expect the number of leasing companies and manufacturers to further reduce, following on from the initial efforts that were put into optimizing these agreements. By working together with our suppliers, we expect to be enabled to maintain similar conditions for a longer time, allowing us to propose best in class models and services to our drivers without major impact on our costs.”
n Do you have any form of direct communication with drivers? G.B. : “We are planning to increase this. At the moment most of our communication is carried out via our outsourced service suppliers.”
n And what about eco-driving courses? G.B. : “Although the idea definitely has merit, starting them right now may not prove to be the most effective method. We are certainly evaluating this approach but additional focus will be added to the initiative by marketing it to the drivers. This should provide us with the return we would expect on this investment. In the future we believe that such a programme will be both requested and expected by the drivers themselves, and this will make it sustainable.” n
STRATEGY Management
International Fleet Managers Institute
The do’s & don’ts of the new international car policy Just before the summer Fleet Europe and its partners LeasePlan, PwC, Arval, Athlon Car Lease International, ALD Automotive International and Mercedes-Benz Cars, organized the IFMI Expert Session on the New International Car Policy regarding CSR, Safety, Green, Mobility and New Powertrains. No less than 26 fleet decision makers from international companies attended this session. Steven SCHOEFS
ichard Krueger, Team Security Communication at Mercedes-Benz Cars, explained that more and more safety assistant systems are and will be available in vehicles with the purpose of minimizing injuries. The ultimate purpose is injury free and even accident free driving. When fleet managers want to select safe vehicles it is advisable to look further than the Euro NCAP scores, because these scores are only the result of a safety test within certain European standards. Unfortunately up until now there is no single general standard where as an international fleet manager you can compare the safety degree of all models
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across the globe. The participants made the suggestion to the car industry that as a brand it would be not only good but even a competitive advantage to integrate all necessary safety features as standard in the car.
Taxation is a CSR Driver Renewing the international car policy according to CSR with a focus on Green and Safety is more and more on the agenda. When done appropriately the implementation of a CSR strategy will lead to cost savings. That was made clear by Bart Vanham, who described how taxation can be used as an element
to influence the car policy in order to attain CSR objectives. As already 19 of the 27 EU countries have car taxation regimes in which CO2 plays a role, it is possible as a fleet manager to use CO2directives as a key driver in order to lower emissions and to cut costs. When you do this it’s essential to have an overview of the current fleet and CO2-levels, so that you can create a consistent business case. The implementation of the CO2emission targets can be carried out in several ways, from CO2-capping to the use of a CO2 bonus-malus system, but always attempting to ensure a degree of local freedom when implementing.
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The fleet decision makers from companies like Proctor & Gamble, UCB, Astellas, Siemens and Johnson Controls attended the IFMI Expert Session on the New International Car Policy. Will you be a participant at our next session on October 26th in Madrid?
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STRATEGY Management
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The Mobility Mindset
Listening is key
Some companies that have CSR high on the agenda have already developed mobility initiatives. It demands a mobility mindset where top management and employees are enthusiastic about using mobility solutions that support their work. According to Pieter Waegenaer of Athlon Car Lease International a mobility policy can be effective and achieve substantial savings while increasing the motivation and productivity of the employees. The mobility policy is not set up around the fleet car but around the mobility needs of the individual. A mobility scheme that is already established is the so called cafeteria plan. The employee can use this for several mobility solutions in the most efficient way (company car, teleworking, public transport, car sharing solution,…). The impact on the ecological footprint is positive and the image of the company is enhanced. The only disadvantage today is that as an early adopter costs can be quit high and the control of each mobility solution is not always easy.
International Fleet Manager of the Year, Bruce MacLaren of Microsoft, explained how he had achieved the Microsoft international car policy. This car policy covers 60 countries but leaves a high degree of local input. Bruce MacLaren said that the set up of the goals and the strategy are really important and you have to take time to do so. In this phase listening to the stakeholders (globally, regionally and locally) is crucial because you’re worth nothing with a document that is not supported by every group of stakeholders. Another crucial point is that for each element that need to be changed, you have to highlight the positive impact of this step so that everybody stays motivated.
of fleet services, in product availability, in taxation and in the mentality towards CSR. When as a fleet manager you become responsible for (one of) these markets you cannot expect to manage them from your European desk. You have to go over there and feel the culture, the economy and the local habits. In brief, all that has to do with the fleet strategy and the fleet objectives can be done internationally. But all aspects that have to do with who gets a vehicle, which model with which specifications in terms of safety, CO2, fuel type, mileage and duration have to be managed locally. A one size fits all approach is not going to work. n
BRIC asks for local freedom The BRIC countries are often seen as the new emerging cluster. Mark Van Eck of ALD International described the impact of these markets on an international fleet approach. The key word is ‘carefully’, because there are still huge differences in maturity toward financing, in the degree
The next IFMI Session will be organised on October 26th in Madrid. The general theme will be: International Fleet Procurement Strategies. More information on : http://www.fleeteurope.com/ifmi/
STRATEGY Management
Technology & New Powertrains Event 2011
The alternative road is long and wide o In an attempt to bring clarity and reality to the world of ‘alternative powertrains’, Fleet Europe held the first Technology & New Powertrains seminar on the subject at the beginning of the summer. Speakers from various areas closely involved in new powertrains, set out their findings in the morning, and the afternoon was devoted to interactive workshops involving all of the speakers and delegates.
Tim HARRUP & Steven SCHOEFS
rishnasami Rajagopalan of analysts Frost & Sullivan was able to set out the findings of surveys carried out by his company into the current and future state of the automobile market. He identified 2018 as a crucial turning point year, saying that in the view of Frost & Sullivan, Volkswagen would have become the world’s largest car manufacturer by then. On the subject of alternative powertrains, all full hybrid cars would be plug-in hybrids, and 85% of cars manufactured would be equipped
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About 100 fleet professionals participated at the first edition of Fleet Europe’s Technology & New Powertrains Event.
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with stop&start. He also said that 50% of all cars would emit less than 50 grams of CO2 per km, and that there would be a significant market segment of ‘intelligent city cars’. Staying with emerging technologies, active steering and air suspension were likely to become a reality, and telematics would play a major role in stolen vehicle tracking. The various ‘assist systems’ now emerging would move into a higher proportion of cars. And electric cars? Still only 2-3% of the market by 2018.
Falling tax revenues Tax expert Bart Vanham pointed out some realities regarding the impact of new powertrains on government coffers. He explained that simply producing fuel efficient cars isn’t enough. Consumers have to be persuaded to buy them. And to do this, European governments used taxation and incentives as a policy instrument. In blunt terms, as Bart Vanham put it: “Taxing CO2 is acceptable, and it doesn’t cost votes”. Currently, 19 of the 27 EU member states have introduced
pen
More understanding needed on EV’s There is a great deal of talk – and some action – surrounding electric cars. But what is actually happening? Professor
Joeri Van Mierlo of Brussels Free University set out to shed some light on the subject. Both large and small OEM’s, he said, were investing in developing electric vehicles. The result is mainly (though not exclusively) small city cars, along with small inner city delivery vans, popular with public authorities. Over the next three years, developments would be mostly for dedicated customers, but looking much further ahead, the picture would change radically. Joeri Van Mierlo predicted that by 2050, 50% of all car sales would be electric or plug-in hybrids. Learning more about the technology – and what this technology is likely to cost – would be the key to the next ten years. He believed that 95% of recharging, given current knowledge, would continue to be ‘overnight’, with just 5% in quick charging. But inductive charging – without wires and via roadside charging posts – should become a reality.
“Managing and introducing new technologies will call for a skill set from fleet managers and their companies, probably never before required in the sector”, declares Professor Peter Cooke from the University of Buckingham.
“Over the next few years, hybrids will be the segment to capture most new market share”, says Joao Cardoso of Bosch.
According to Joeri Van Mierlo from Brussels Free University, battery costs will halve from their current prohibitive levels by 2020.
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some form of CO2-related taxes, which makes it easier for manufacturers to form international policies. Although CO2 would continue to dominate the ‘pollutions’ domain, there are other elements such as NOx, and these may eventually have an impact. Bart Vanham also indicated a downward spiral which CO2based taxation would cause. If people buy more ecologically-friendly vehicles, and therefore need to buy less fuel, government revenues decline. So the CO2 tax thresholds will have to be lowered. And if the electric car market really takes off, even less highly taxed fossil fuel will be purchased. Governments, Bart Vanham pointed out, need money to carry out their business, to run their countries.
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STRATEGY Management
A lot of in-certainties
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Peter Cooke, Professor of Automotive Management at the University of Buckingham, turned to another aspect of the evolution towards alternative powertrains. Total Cost of Ownership (or Operation). TCO models, he said, would have to be updated in order to take account of new technologies. If companies are to take full benefit of these technologies, theses technologies would have to pay their way. Total Cost of Ownership, he pointed out, was the cost under known conditions. For internal combustion engines and the whole domain surrounding them, these conditions are indeed known. But for some of the new technologies, especially electric vehicles, they are not. We simply don’t know about some of those elements we take for granted today, said Peter Cooke. We don’t know what the residual values will be, we don’t know anything about the maintenance costs for electric vehicles – we don’t even know whether we can obtain the ‘fuel’ for them easily, or how the tax picture will evolve, or what the insurance companies will think. And taking one of these points, even if maintenance costs turn out to be
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as low as some people claim, do we have the technicians to carry out the work? Then there is the question of how reliable these new technologies are, and even of whether electricity really is a green and sustainable fuel.
of the driver in the whole TCO equation was made clear, and Jaap Groot said that drivers had to be involved in the whole cost cutting process if companies are to succeed.
Sufficient range Telematics In any discussion on the evolving the car landscape, it isn’t long before a subject which hadn’t even been invented a few years ago, makes an appearance: telematics. Jaap Groot of MiX Telematics gave delegates an insight into the latest developments. Firstly, he pointed out that ‘pay as you drive’ insurance was becoming more commonplace, and this of course can only be made possible by telematics. But telematics also lead to improved fuel efficiency and lowered costs, because they indicate distances driven, fuel consumed, speeds, harsh braking manoeuvres… The corrective action which can be taken with this knowledge also leads to fewer accidents, which is a cost saving as well. Actual results obtained by certain of the clients of MiX Telematics include a 15% fuel saving, 31% less km driven, and a 10% reduction in idling times. The importance
Returning to the subject of electric vehicles, Joao Cardoso of Bosch, which manufactures some of the hardware needed in this field, said that his company believed there would be a market share of 3% for EV’s by 2020. Hybrid-electric models would have captured 6% of the market by then. He also said that development work was continuing into improving battery technology, to enable improved ranges on a single charge, even when the use of equipment such as air conditioning is taken into account. Keeping to this subject of driving range, which is the most often cited reason why electric cars are not currently believed to be really viable, Joao Cardoso said that statistically, 90% of people drove less than 80 km per day. And an electric car can easily mange 80 km before needing a charge… The average daily drive, in fact, is only 40 km. n
From a 1.6 diesel to fuel cells
The Asian revolution
In the afternoon, every delegate participated in each of the four workshops, with one of the presenters facilitating. With so many high level fleet experts, there were naturally a great deal of points of view. But just a few of the conclusions were that in terms of fleet choices, engine downsizing would bring financial benefits to both the company and the driver. There would be no single engine choice, but a compact 1.6 litre diesel sedan/estate was likely to be much in favour over the next few years. The subject of alternative company vehicles was broached, with the question of ‘transferable’ company cars being raised. A monovolume is generally only needed for the weekend, and a smaller car during the week. So car-sharing mobility solutions are likely to become more commonplace. On safety, the consensus was that this is a vital question and all safety improvements are welcome. But if some safety features are critical, why don’t manufacturers fit them to their basic models? During the workshop on fuels, fuel cells made an appearance, and it was revealed that there will be different models over the next few years. But just as with electric cars, the refuelling infrastructure is still a major issue.
According to Frost & Sullivan, by 2018 there will be ten major OEM’s in China, including some partnerships. Two Chinese and one Indian OEM will be in the global top five OEM’s. After 2020 the Chinese will be dominant in the sales market. By 2016 half of all petrol engines will be under 1.5 litres, and half of diesels in the 1.5 to 1.9 litre range. And over the next 6-7 years, there are expected to be around 170 hybrid models on the market.
STRATEGY Management
Taxation
Governments play crucial role in introd In the next coming months, Electric Vehicles (EV’s) will become available for the mass market. The unstable economic situation and low consumer confidence are not setting an optimal scene for the introduction of the EV’s. Governments are playing their regulating role by incentivizing the purchase and use of EV’s and, by means of their public sector, are envisaging the use of EV’s for their public services. Bart VANHAM
V’s are on the radar screen for quite some time now. They have had quite some attention from press and many opinions, from hard criticism “limited use and electricity is not clean to produce” to happy welcome “fun drive, eco-friendly, car of the future, ….” , have risen in regard with the use of EV’s. For the moment some facts are not to be interpreted: there is a price premium to be paid and the range of use is limited to, on average, 150 kilometers before a recharge. The price premium is quite significant: a Nissan Leaf for example will be available for about 35K EUR, were an equivalent fuel propelled car will be yours for almost half of that. Although the running costs are significantly lower, it will take some years to have compensated this price differential. Taxation, or better non-taxa-
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tion or less taxation, will have its biggest challenge in shaping the market for EV’s. In the EU about 15 Member States have already introduced tax incentives for EV’s, ranging from a tax deduction of 9,000 EUR in Belgium to a waiving of registration taxes up to 180% of the purchase price in Denmark. In Belgium, this will lower the purchase price, for private consumers, for a Nissan Leaf to about 27K EUR, the price of a very well equipped equivalent combustion engine car.
Incentives to shape the market The remarks in terms of tax incentives are twofold: will these incentives be sufficient to convince consumers to overcome their perception of limited use? And OEM’s have concerns that these subsidies are time limited and may expire
Electric vehicles will harm countries’ fuel tax take in the long-term Scenarios 1: 1% EVs by 2020 2: 5% EVs by 2020 3: 10% EVs by 2020
Potential EU* fuel tax loss 2011 - 2020 (€ millions) €0 - € 200 € 400 - € 600 - € 800 - € 1.000 - € 1.200
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20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20
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- € 1.400
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* selection limited to countries where data available Source: PWC Autofactsanalysis
before OEM’s have effected significant price reduction resulting from benefits of scale. Fleets will play an important role in getting drivers acquainted with the use of EV’s in their daily life. Corporate fleets are looking ahead to introduce the EV’s to their fleets to reach set CSR objectives. But will it be more than just a showcase of environmental consciousness? Will EV’s be pushed at higher scale? Most probably other schemes will need to be introduced to convince drivers to choose the EV as a company car. Examples of which could be the availability of another car if the EV is not fit for purpose, like long distance driving on holiday, or a long business journey, etc… Or the use of “non full EV’s”, adapted to be as close as possible to the usage of combustion engines: EV’s with range extender and Plug-in hybrid vehicles may well play a crucial role in the EV evolution. The EV market is projected between 5 en 10% of the total car market by 2020. PwC Autofacts estimates that if EV’s achieve a 10% penetration by 2020, European governments may lose about 1.3 billion EUR in fuel taxes and the figure will steadily increase each year as more vehicles are replaced by EV’s (see graph). It’s clear that tax incentives will be limited in time due to the rather high cost of it and the rather high effect on tax losses, fuel taxes being one of the main income streams from vehicles for governments. The combination of CO2-related vehicle taxation leading to tax income losses, additional tax incentives for EV’s and the loss of high fuel taxes income is likely to impact too heavily on state budgets within the next coming years.
uction Electric Vehicles
exercise of all market players involved. Most governments in West-Europe are taking up their role to stimulate demand supporting the OEMs in a successful mass market launch of their EV products. Let’s wait and see if indeed the consumer is willing to bite….. n
According to Bart Vanham the possible penetration of EV's will lead to new ways of automotive taxation.
Bart Vanham Specialist Indirect and Car Taxation in Europe
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Therefore, penetration of EV’s will lead to new ways of taxation; a kilometer charge being the most dynamic and most suited as policy instrument to steer mobility but also most challenging from a technological perspective. Looking at it from distance, we could conclude that we are at the breach of a new era in terms of mobility. This evolution will require some significant changes, from mindset of consumers to income securitization for governments with new ways of vehicle taxation to high speed development of better EV technology by OEMs, disregarding for now the impact on the services industry developed around vehicles. The economic circumstances in which this evolution has started is not best and will require an even bigger challenging and balancing
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STRATEGY Awards
Fleet Europe Awards 2011
Join the best practices in fleet management This year’s edition of the Fleet Europe Awards is just around the corner. On October 27th, the international fleet community will gather in Madrid to reward the achievements their peers. The event will reward the best case studies throughout Europe in front of the “crème de la crème” of the international fleet community. Julie WIDART
he Fleet Europe Awards, organised by the magazine Fleet Europe, are back for the fifth year. This annual trophy was launched for the first time in 2007 within the framework of the Fleet Europe Forum. The Fleet Europe Awards represent the highest opportunity for professionals within the automotive fleet industry to get the recognition they deserve for the solutions for improvements they are bringing to the market. The Award ceremony will be organized in Madrid on October 27th
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and will once again close the Fleet Europe Forum.
This year’s categories Some prestigious companies such as 3M, Orange, E.On, KCI, Norgine, Novo Nordisk, Hilti, Nalco, IBM, Ericsson, UCB have been nominated and are now competing in one of the five awards categories. One of them will be the successor of Bruce MacLaren (Microsoft) as International Fleet Manager of the Year 2011, but there are many other Awards
categories where the jury will reward best practices. Following the success of the 2010 edition, which took place at the Brussels Stock Exchange, we are obviously retaining the successful prize categories from previous years:
The International Fleet Manager of the Year Award • Previous winners: Raphaëlle Jeanneret, Novartis (2007) - Claus-Peter Krüger, Shell (2008) - Werner Berger, Nestlé (2009) Bruce Maclaren, Microsoft (2010).
• Previous winners: Akzo Nobel (2007) - Hewlett-Packard (2008) - Bayer (2009) - Nokia Siemens Network (2010).
The International Fleet Safety Award • Previous winners: Shell (2008) BP (2009) - Coca-Cola Hellenic (2010).
The International Fleet Mobility Award • Previous winners: Barilla (2009) Accenture (2010).
The International Fleet Innovation Award • Previous winner: Vodafone (2010). The jury of international fleet managers, lessors, car manufacturers, fleet specialists and people from Fleet Europe will nominate the finalists. The companies that have been selected to take part in the final round of the Fleet Europe Awards 2011 will be invited to defend their fleet management policy in front of the jury on October 6 & 7th in Munich. During this final round the jury will focus on all aspects of today’s fleet management : Car Policy, TCO, Sustainable Development, HR, Safety, CSR, IT & Reporting,…
The members of the jury will then gather to thoroughly analyse all the dossiers, their strengths and weaknesses, and deliberate. And for the second time, Fleet Europe will also award a special prize for the innovative efforts of the Fleet Industry Suppliers: the International Fleet Industry Award. This is a unique international Award designed to highlight innovative approaches, tools, products or services offered by international fleet suppliers. Last year, the specific jury composed of fleet managers decided to reward lease company Arval for their project ‘Arval Analytics’. And last but not least, during the ceremony in Madrid the fleet community will also for the second time discover the name of a fleet pioneer that will enter the Fleet Europe Hall of Fame. This award recognizes fleet industry pioneers who have significantly contributed to the international fleet management profession. So in 2011, a notable fleet pioneer is set to join 2010 winner Tony Elliottt in the Fleet Europe Hall of Fame. If you want to join the Fleet Europe Awards' ceremony and the Fleet Europe Forum 2011, please register at www.fleeteurope.com/awards n
Jury for International Fleet Industry Award Alexandra Melville – Accenture Michael Zammit – Astellas Pharma Europe
Panagiotis Anastasiou – Procter & Gamble Ronny Van den Driesch – Carglass
Lutz Hansen – Bayer
Corrado Simontacchi – Huntsman
Paul Herremans – Philips
Giovanni Tortorici – Barilla
Bruce MacLaren – Microsoft
Ghislain Vanfraechem – Ernst & Young
Jury for Awards for International Fleet Managers INTERNATIONAL FLEET MANAGERS: Bruce MacLaren - Microsoft Alain Duez - Accenture Janos Kis - Coca-Cola Hellenic Lutz Hansen - Bayer Paul Herremans - Philips Kimmo Kunnas - Nokia Siemens Networks Werner Berger - International Fleet Manager of the Year 2009
LEASE SUPPLIERS: Sarah Lomas - Athlon Car Lease International José Luis Criado - LeasePlan International Nancy Storp – Alphabet International Stéphane Renie - ALD International
CAR MANUFACTURERS: Oliver Lajara - Hyundai Motor Europe Hans-Georg Lutz - Mercedes-Benz Cars Martin Jahn - Volkswagen Group Fleet International Pierre Garnier - Peugeot Professional International Uwe Hocheschurtz - Renault Ian Hucker - Opel
FLEET SPECIALIST: Philippe Bottequin - Fleet Logistics
FLEET EUROPE: Caroline Thonnon - MMM Business Media Steven Schoefs - Fleet Europe Annick Nemetz - MMM Business Media FleetEurope Magazine 55
The International Fleet Green Award
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INDUSTRY Partner
Oliver Lajara, Hyundai Motor Europe
The world is not enough South Korea is today the 15th largest economy in the world. Just like the rest of the developed world, the 50 million South Koreans felt the effects of the financial crisis, but this technology-driven and ambitious nation recovered more rapidly than Europe or the United States. Why? They had already learned their lesson in 1997, when they had an enormous bank crisis. Secondly, the Koreans are able to work together towards a common goal and that’s exactly what they will be doing in the years to come.
n 2010 Hyundai Motor Company sold 3,6 million vehicles worldwide, taking 5% share of the global market and contributing to Hyundai Motor Group’s top 5 position in the world automaker rankings. Since the first Pony sold in Europe in 1977, Hyundai has sold more than 5 million vehicles on the continent. An important part of the company’s future success in Europe will be driven by fleet business. To help in this, the all-new i40 has been unveiled as a new European flagship for Hyundai. “The launch of the i40 marks the beginning of a new chapter for us in Europe. It’s a very competitive, high-quality car for the D-segment,” says Oliver Lajara, Deputy General Manager Fleet & Remarketing.
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For Europe “Over the past few years Hyundai has built up an enviable reputation for quality. In addition, steps have been taken to increase desirability, design and residual values. We have prioritised these aspects on the i40. At the same time we’ve rolled out our new corporate identity and showroom identity, creating a modern place for customers to experience the Hyundai brand. And we’ve introduced some unique services, in our mission to become number one for customer satisfaction. Five Year Triple Care is a great example of our dedication to customer care – it’s an unbeatable package, offering five years unlimited warranty, five years roadside
assistance and five years of vehicle health checks. Today we have 129 Fleet Business Centres in Europe, but this will increase to almost 500 by the end of next year. All of this is to help in the company’s desire to capture not only the large account fleet business, but also the important SME business. Our ambition is high: we want to sell 60.000 units of i40 in Europe during 2012 – its first full year on sale. Our fleet sales in Europe currently represent 35% of our total volume, and we are targeting a shift to 45%. In terms of consumer profiles, we are aiming at the well educated middle-aged family man and the social climber.” I You have first launched the i40 Wagon. Why? O. Lajara : “In the D-segment the wagon body style is more popular than the sedan, certainly in fleet. As more than 60% of new car sales in Europe’s Dsegment are to fleets, we have chosen to launch the wagon first. But no worries for those fleet drivers who prefer a sedan, as we will introduce such a variant at the end of this year.”
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The Hyundai Veloster targets younger buyers
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Later this year, Hyundai will bring to market the Veloster – a compact coupé targeting younger buyers. Hyundai is keen to attract these styleconscious youngsters who want to combine design with sportiness and high-tech features. According to Hyundai, the Veloster combines the style of a coupé with the practicality of a hatchback, thanks to the unique 1+2 door configuration. The model will compete with image makers such as the MINI, the Fiat 500 or Volkswagen Scirocco. Veloster is expected to bring new customers to the brand.
Paul VERKINDEREN, Chevin Fleet Solutions
“Transparency leads to benefits” How do you see the future of Hyundai geographically? O. Lajara : “Hyundai is a global player, with a healthy balance between sales in each region. Our global production footprint enables us to work flexibly and efficiently, building the right cars in the right locations at the right time. We have recently broken ground for our third plant in China, we’ll soon start a third shift at our Czech plant in Europe, and in January this year production began at our new plant in Russia. We also have facilities in India and the United States, with a Brazil factory under construction.”
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I One of the biggest challenges is the race to sustainability. O. Lajara : “Hyundai is already offering sustainable cars with our Blue Drive subbrand, and we’re investing heavily in researching new technologies. In fact, approximately 5% of annual revenue is invested yearly in R&D. Today it’s still not clear which technology will become dominant, so we don’t want to put all our money on one technology. Instead we are developing low-emission combustion engine cars; we are launching hybrid models; and we are examining fuel cell technology. We’re part of a pioneering program that is running a test fleet of Hyundai fuel cell electric vehicles in Scandinavia, demonstrating our competitiveness in this field.”
Paul Verkinderen was active on the Benelux leasing market for more than 16 years. Today he is the Sales Director at Chevin Fleet Solutions for Benelux, Germany and France. hevin Fleet Solutions is an independent company that develops and provides fleet management software compatible with HR and ERP software systems”, says Paul Verkinderen. “Alongside this we enable fleet management efficiency at international level by delivering fleet operating information on demand. But we do not negotiate tenders or organize multibidding with suppliers like other management companies. Chevin Fleet Solutions was founded in 1989 in the UK and has today also subsidiaries in the United States and Australia. Since this year we are also active on the European continent.”
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would a fleet manager choose to work with a fleet management software company? P. Verkinderen : “To smooth his fleet management and to cut costs. With our FleetWave Management System a company can optimize its fleet management and save between 5 and 10% of management costs. Many companies still focus on lease prices, while there are so many other costs, often hidden costs, that can be reduced by integrating the right system at the right place. We offer that global solution in the most transparent way.” Steven SCHOEFS
I What is the added value of Chevin Fleet Solutions? P. Verkinderen : “We believe in the absolute transparency of the data and of fleet management follow-up. We therefore put a lot of effort into the flexibility level of our web based management software systems. It can’t be the customer that has to adapt his operations or processes to our systems, but our job to adapt the system so that the customer has a solution that fits his processes.”
“Many companies still focus on lease prices, while there are so many other costs, often hidden costs, that can be reduced”, says Paul Verkinderen of Chevin Fleet Solutions.
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Steven SCHOEFS
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INDUSTRY Partner
Harm Nijlunsing, CEO Business Lease Group
“Service and quality first” Business Lease was established in 1989 as a lease provider for the Dutch market. After becoming part of the international car distribution group AutoBinck Holding in 1995, Business Lease extended its development plan beyond the borders of the Netherlands. Today the company is also active in the Czech Republic, Slovakia, Hungary and Poland in addition to its home country.
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I How would you describe Business Lease as a lessor? H. Nijlunsing: “We stand for quality and optimised services. In every country where we are present, we guarantee a quality operational process with a high degree of flexibility and transparency. We have the same organisational structure everywhere; this is an enormous advantage to our clients, since we always work within the same service platform. After our clients, our staff are our greatest asset. They are the force behind our success especially focussing on SMEs, although we also work with the larger international fleets. Finally, we repre-
sent certain major leasing companies in Central Europe, and in addition to the multibrand activities of Business Lease we also organise captive activities for several brands. The latter are an extension of the activities of AutoBinck as well other non related brands.” I How does Business Lease stand today? H. Nijlunsing: “We have a total fleet of around 40,000 cars. Of those, 2/3 are in the Netherlands and 1/3 in Central Europe. The fact that we are such a large presence on our home market has much to do with the takeover of Masterlease’s portfolio in 2009. I remain modest as regards growth, and we certainly wish to reach the average market growth, but as I look at our results in recent years, this should not be a problem.”
What about electric vehicles? H. Nijlunsing: “In the Netherlands we belong to numerous working groups and we have more than 100 electric vehicles in our fleet. The electric approach is a good one, but it is not moving as fast as the early adopters would like it to. The technology is relatively speaking fairly expensive, making subsidies essential if this venture is to succeed. In addition, comfort is not optimal, with limited autonomy and a long recharging time. Moreover, the manufacturers have succeeded in making conventional engines increasingly economical and cheaper in terms of TCO, so that the electric car is having a difficult time. But if a customer asks for one, we have everything it takes to meet that request.”
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I Your website says that you are a mobility service provider. Can you explain what that entails? H. Nijlunsing: “Ten years ago we were
Steven SCHOEFS
Service as a measure of value “Service will play a crucial role in the future success of the leasing product. Technological change and the drive to intelligent mobility create an environment in which service provision is a positive trend for me, for Business Lease and for the sector as a whole.” Well prepared for the crisis “We were well prepared because we had already completed a thorough reorganisation in 2005-2006, in which we developed our current vision and began automating our processes. Because we monitored this very closely, we were able to switch over more quickly when the crisis broke out. One proof of this is the takeover of Masterlease’s activities in the Netherlands in 2008.”
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e plan to continue growing, both in the Benelux and in Central Europe”, confirms Harm Nijlunsing, CEO of Business Lease Group, “but I don’t want to set a timetable. The recent financial crisis has somewhat tempered the expansionary drive in our firm as well, although we have withstood the crisis remarkably well. In the past 6 years we even doubled our balance sheet results.”
already working on bike leases, we offer short term leasing formulas, we have a policy for carpooling vehicles and the combination of automobile and train has been available at Business Lease for some time. Our strategic vision focuses on providing the appropriate service to allow a person to get from point A to point B as quickly as possible. This brings us closer to the cafeteria model, which uses a mobility budget.
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INDUSTRY Partner
N. Pumilia & R. Honorati, Corporate Fleet Solutions, FIAT
“FIAT wants to increase fleet sales by 15%” On the occasion of the international fleet presentation of the Fiat Freemont in Gavi (Italy), we discussed FGA’s ambitions in the B2B market and its collaboration with Chrysler with Nicola Pumilia, Fleet Sales Manager for Europe and Ranieri Honorati, Marketing Director. What are the implications of your collaboration with Chrysler? This collaboration is a great opportunity for both our companies to share industrial experience, process knowledge and customer management expertise. We exchange best practices, but also information and databases. It will also bring benefits to the fleet customer, as we are now able to offer them one single point of contact in Europe and the US. And this includes a unique range of vehicles.
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I FGA Corporate Fleet Solutions, the international coordination unit, has been reinforced with a new organization. Could you elaborate? First off, we have a strong network in every European country, with a total of about 100 international Key Account Managers (national and international) across the continent. These KAMs offer products and support to our clients in the distribution process and via after sales. This structure is in the department “Corporate Fleet Solutions”, coordinated at European level by Nicola Pumilia. In our new structure, we offer our international
clients one single point of contact for all the levels of fleet management, from the acquisition, the management, the services to the after sales. We have already signed global agreements with big corporations, comprising the US and Latin America. I It seems like the FIAT Group is again prioritizing its fleet customers? Absolutely! We want to strengthen and develop the B2B sector. Like any other sales channel, fleet is an important tool for FIAT to reach its strategic targets, and ambitions for growth. Furthermore, we have a complete product range, both in light commercial vehicles and passengers cars, for the B2B market.
I What are your fleet sales objectives? We want to increase our fleet sales by 15% this year, as compared to 2010. But more importantly, we want to expand on the relationship with our customers. We want to do this by providing more than the normal range of products and services. We want to assume the role of consultants, helping them to optimise fleet management.
I What kind of services do you provide? Last year in Italy, we started with a user chooser program for the driver. We are concentrating on helping organizations to have a better green fleet management. For example, our eco:Drive, a programme that improves your driving experience, saving fuel, CO2 and thus money. We are now working on a second-generation version, which will send info straight to your smartphone. Client feedback is extremely good, as customers are realizing savings of 10% to 15% on fuel costs. Until now, eco:Drive has only been available on Fiat vehicles, but we will also implement it progressively for the other brands. Another example of a unique service is the personalized stickering that we offer our clients. We have developed this service in close collaboration with the designers of FGA in order to integrate the client’s corporate identity into the design of the car.
I For many years, car manufacturers have been trying to regain direct contact with the fleet customer. Is eco:Drive a strategic choice for you, in this perspective? With eco:Drive we maintain this contact throughout the entire lifecycle of the car and indeed, it is important that we can offer a good proposal for the replacement of the vehicle. But it also gives us the opportunity to be a real partner for the client. Eco:Drive is truly the telematics application that makes a difference to the client and it will be the central tool from which we will develop other services.
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Caroline THONNON
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This success is a result of the new models we have introduced such as the new Ibiza ST and the New Alhambra and also because SEAT is becoming a fleet manufacturer of choice among customers with all our range including Exeo, Ibiza and Leon.
Elena Delgado, SEAT and Rainer Mielke, Škoda
SEAT and Škoda growing strongly
How are Škoda and SEAT doing in fleet sales in 2011, compared to 2010? R. Mielke: For Škoda so far it is a big success, our fleet sales in the first half of the year 2011 have increased by more than 28% compared to same period in 2010. Our vehicles have become more and more popular among the fleet customers, starting with the Fabia and Octavia and going on with the Yeti and finally the Superb, this last one becoming a significantly more sought-after vehicle. We are in particular improving in the small and medium fleet segment. E. Delgado : For SEAT the beginning of 2011 was also a huge success; corporate registrations (excluding rent a car) recorded an increase of 34% up to June compared to 2010. This success is a result of the new models we have introduced such as the new Ibiza ST and the New Alhambra and also because SEAT is becoming a fleet manufacturer of choice
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Rainer Mielke of Škoda and Elena Delgado of SEAT transformed their brand into well developed fleet brands with high future potential.
among customers with all our range including Exeo, Ibiza and Leon. I What progress have your brands made in terms of fleet sales and fleet structure since you have been in charge of the fleet organization? R. Mielke: Over the last few months we have been working proactively to create and define a framework for our SME fleet business. This framework is based upon the combined know-how of Škoda market experts and people with functional expertise. We have put the focus on Sales competence on the importers and dealers side, Sales processes such as KPI, Reporting and Lead and Client management and various product and tools packages for our SME program. Our SME framework is called Fit For Fleet and is supported by a specific Toolbox, which is already helping implementation in the first 5 countries and will very soon be applied in a second wave of countries. E. Delgado: At SEAT we have been working during the last two years in reinforcing our fleet structure, and therefore we today offer a professional team of fleet consultants in the major markets at importer level and also at the dealer level where we have established a network of specialised fleet dealers to provide professional and customised solutions to our customers. Another element of progress has been the change of philosophy with regards to residual values, we have taken many measures to ensure the best residual values of our products and we can now say that all the different areas of SEAT from Design to Service take this into account.
What are the key values of your brand in terms of fleet assets? R. Mielke: Our main assets are tailor made solutions for our client needs I
globally, and as you know of course our Simply Clever solution reflects all of our brand values. We can guarantee that in our products you will find extraordinary roominess, clever details, reliable quality and safety. In addition our brand is as well family oriented, always close to the customers, really and confident but not arrogant. To sum up it we have clever engineering with the human touch. E. Delgado: A successful brand in the fleet business must have both rational and emotional attributes and SEAT strives to deliver this perfect combination of superior technology and pure enjoyment. As member of VW Group we deliver quality, reliability, top technology and engineering. To this have to be added the emotional attributes coming from Spain: design, a young spirit and the most enjoyable driving experience. We are thus technologists with passion, we create technology to enjoy. This idea corresponds to an attitude that we call "Enjoyneering". What new models will you launch from September 2011 until mid 2012? R.Mielke: All I can tell you is that Škoda will be launching one new model per half year in the future. E. Delgado : We will be launching a small urban car by the end of 2011 and from mid 2012 we are preparing a firework display of new products.
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Which model would you like to sell from the brand and range of your colleague and why? R. Mielke: I like all SEAT vehicles - they fully reflect the dynamics and emotion of what the customer wants. I would personally go for Leon Cupra as I’m a big fan of its power and design. E. Delgado : Of course a Škoda Yeti, that would complete our range. The Yeti is a well-designed road-going car, safe, with top technology and good value for money.
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Steven SCHOEFS
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No-one can fail to have noticed the growing numbers of SEAT and Škoda vehicles on European roads in general, and in company car parks in particular. We asked Elena Delgado of SEAT and Rainer Mielke of Škoda, what their plans are for the future.
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INDUSTRY Trends
Car Sharing & Lease Companies
All aboard for car sharing One item has risen to the top of the To Do-list of managers and directors everywhere: smarter staff mobility. In an attempt to cash in on this trend, car lease companies are offering mobility solutions that are as sustainable as they are innovative.
Stijn PHLIX
y far the most popular solution: so-called mobility budgets, which provide the lease driver with the option of choosing alternative means of transport, by train, tram or bicycle. Car sharing is another solution, but it is steadily gaining ground. As is shown by the solutions offered by the following lease companies:
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ALD Sharing ALD Automotive launched ALD Sharing, its car-sharing project, in September of last year. The service, provided in cooperation with Carbox, a French carshare organisation, is developed by an internal team of consultants, that analyse the mobility requirements of interested companies. ALD Sharing then puts cars at the disposal of these companies. Subject to online reservation and return after use, staff can utilise these vehicles to travel around. Duration and mileage is confirmed by email after having returned
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Car sharing is steadily gaining ground as a viable mobility option, also within the service portfolio of lease suppliers.
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the vehicle. A trial project is currently under way at Société Générale, based in the Paris business district of La Défense. Company staff are provided the use of four energy-saving cars: a Toyota Prius, a Fiat 500, a Citroën DS3 and a Citroën C3.
Alphacity Since the end of last year, Alphabet International now also offers companies the car-sharing programme Alphacity. As with ALD Sharing, this programme also allows customers to use cars for set periods (limited to 5 hours). Alphacity is designed for both lease drivers and employees without company cars. First and foremost, it is a solution for short distances in and around the city, Alphabet International states. Alphacity enjoys the support of carshare company Mobizen, and has already been tested successfully by Accenture in Paris.
Arval AutoPartage Still in France, Arval recently kicked off AutoPartage par Arval, a car-sharing project at elevator manufacturer KONE. The product launch came only after Arval thoroughly tried out the product on its own fleet. The cars provided to KONE have been equipped with on-board electronics by partner company Masternaut. This will allow drivers to book their reservation quickly and easily - and to report any damage when returning the vehicle.
ING Car Sharing ING Car Lease is also offering carsharing to corporations, with its brand new product called ING Car Sharing. A trial project consisting of around 30 vehicles has started in France this April. ING Car Lease emphasises the savings this scheme may provide to companies: car sharing reduces the need for taxis or replacement vehicles. Since ING Car Lease operates under a common IT platform, the roll-out to other countries could happen sooner rather than later.
Athlon Carpool Online Athlon Car Lease is joining the lease companies offering car-share solutions, opting for the context of its Sustainable Mobility Plan to do it in. The company is already offering Dutch companies the option of carpooling. Employers and employees alike can consult www.athloncarpoolonline.nl to check for coworkers sharing the same routes to and from work, allowing for arrangements to be made to carpool. Companies can also ask the lease company for their own Carpool Online program, including CO2 emission reduction reports. n