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THE INTERNATIONAL FLEET MAGAZINE FOR TOP DECISION MAKERS
SPECIAL EDITION
www.fleeteurope.com
The international Fleet magazine for top decision makers
MMM BUSINESS MEDIA - SPECIAL EDITION OF FLEET EUROPE • January 2012 - English publication - Deposit office Luxembourg-Gare
How to turn your Fleet Management green & sustainable
FLEET EUROPE AWARDS 2011 Case studies of Pfizer, 3M Europe, Novo Nordisk & Nalco Europe
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FLEET MANAGEMENT The 2012 concerns from international fleet managers
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INTERVIEW NEW ALPHABET Aiming for the top 3
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EDITORIAL & CONTENTS
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A common responsibility 08 he Fleet Europe team wishes you a dynamic and successful 2012! A year when we hope that you can and will drive your fleet business in a higher green gear. For several years now the big European Motor Shows have been focusing on the theme of Sustainability and Green Cars. Car manufacturers have developed and continuously are developing modified technologies and powertrains to further decrease the overall environmental impact of individual mobility. And other fleet suppliers too are investing in services to minimize the ecological footprint of their companies’ and their clients’ fleets. What about the fleet customer? Well he has already turned his corporate fleet policy into a green-oriented policy where CO2-reduction and driver behavior control are key. All the nominees and winners at the latest Fleet Europe Awards have shown proof of a clear fleet strategy where green has become the predominant colour. Several fleets have already introduced a number of electric vehicles and hybrid technology seems to be becoming a genuine alternative for the combustion engine. Despite the great progress already made in greening the fleet, the road is still long and difficult, and has to be driven in a higher gear. Oil reserves are limited, population and global mobility needs are growing fast, while the economic and political situation in several regions remains unstable. So it is likely that fuel prices will further increase and natural resources will become less available and more expensive. The search for environmentally friendly technologies has therefore to be rapidly changed into a cost-efficient implementation of low and zeroemission mobility solutions. To do so, everyone has to play his part. Governments urgently have to harmonize their vision on green taxation and stimulate green economies by investing in well thought-out infrastructure. Fleet suppliers have to facilitate the use and the administrative reporting of these new environmentally friendly technologies on a broader scale, and the fleet customer has to create an attractive business environment where employees are triggered to choose fuel efficient vehicles and intelligent mobility solutions. Only then can the road to a greener, cleaner and more sustainable future be driven in higher gear, only then will the road to the future be fun and affordable to drive.
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FLEET EUROPE FORUM & AWARDS
FLEET EUROPE FORUM 2011 Picture gallery FLEET EUROPE FORUM 2011 Opening debate: fleet business needs a new dimension FLEET EUROPE FORUM 2011 New trends ask for a different approach INTERNATIONAL FLEET MANAGERS INSTITUTE Expert Session on international fleet procurement FLEET EUROPE AWARDS 2011 The winners, the pictures FLEET EUROPE AWARDS 2011 Case study – Pfizer: Ivor Johnson is the International Fleet Manager of the Year STRATEGY Fleet Managers ask for transparency and honesty in 2012
INDUSTRY
“ The search for environmentally friendly technologies has to be rapidly changed into a cost-efficient implementation of zero-emission mobility solutions. ”
NEW AUTOMOTIVE TECHNOLOGIES Image drives succes of electric vehicles CAR POLICY Do’s & don’ts of the green fleet policy RESIDUAL VALUES The difficult prediction of the price of technology CAR POLICY 7 Steps to create an “ecofficient” policy TAXATION Company cars as a care for the European deficit TECHNOLOGY Overview of emissions and pollutants STRATEGY The green fleet strategy of car manufacturers CO2-EMISSION PERFORMANCES The road to Objective 95 GREEN CARS IN 2012 Overview of new models STRATEGY The innovation strategy of car manufacturers CASE STUDY – 3M EUROPE Winner International Fleet Green & International Fleet Mobility Award 2011 CASE STUDY – NOVO NORDISK Second prize International Fleet Green Award 2011 CASE STUDY – NALCO EUROPE Winner International Fleet Safety Award 2011
EVENT
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GREEN FLEET MANAGEMENT
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FLEET PARTNER
INTERVIEWS Pascal Serres, ALD Automotive João Cardoso, Bosch Service Janola Gustafsson, Renault N. van den Eijnden & E. Frederiks, New Alphabet Simon Dransfield, Jaguar Land Rover G. Tommaso & C.U. Jun, Kia Motors Europe
Steven SCHOEFS, Chief Editor
MMM BUSINESS MEDIA sa/nv Complexe Arrobas Parc Artisanal 11-13 4671 BLEGNY-Barchon (Belgium) Phone: 00 32 (0)4 387 87 87 Fax: 00 32 (0)4 387 90 87 info@mmm.be www.mmm-businessmedia.com
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Europe
Renault opens electric vehicle test centre
New milestone for TomTom
Renault has opened a first European test centre for electric zvehicles in Boulogne-Billancourt. The centre comprises a showroom for Renault’s expanding range of electric vehicles, along with a test track. Since January, members of the public along with Renault staff from across the network, journalists and others are able to reserve a test drive, either by internet, phone, I or directly with the centre itself.
TomTom Business Solutions has reported that it has passed a new milestone in the use of its ‘Webfleet’ fleet management system. Webfleet is now being used by 15,000 clients, and is thus installed in some 175,000 vehicles. This means that Webfleet use has increased by around 30% during the course of 2011. TomTom reports that Webfleet is now Europe’s largest integrated legacy-free I fleet management system.
DriveNow: quick car-sharing
Renault gives the opportunity to reserve a test drive of their electric vehicles.
Electric Nissan delivery vehicles for FedEx Following Nissan’s winning of a contract to supply New York City with NV200 vehicles to be used as taxis, these vehicles are now set to be seen in another major capital. FedEx is to use these electric vehicles as delivery vans in London, as part of its own drive towards better sustainability. The NV 200 is powered by the same unit as Nissan’s award-winning Leaf saloon car. The vehicles can be fully recharged overnight, or take a 30 minute quick charge, which powers the battery back up to 80% of its total capacity. The trial is scheduled to last for two months. I FedEx is to use electric NV 200 vehicles as delivery vans in London.
The objective of Autolib’ is to see the number of privately owned cars within Paris diminish by around 15,000 over time.
Mobility in Munich and Berlin has become much more flexible and ecologically sound thanks to a car-on-demand solution called DriveNow. The idea was developed and implemented by BMW Group and the car rental experts at Sixt AG. Anyone needing a car can use one of the MINIs or BMW1s parked around the inner cities bearing the clearly visible DriveNow logo. They can be located by logging onto a dedicated website or using a smartphone app. A chip on the driver’s permit serves as a key. After the one-time admission fee of €29 is paid the cars cost €0,29 per minute, I with a €14,90 ceiling for MINIs.
Special edition Fleet Europe Magazine
Autolib' hits the road
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The Paris car-sharing scheme Autolib’ has got off to a flying start. Its officialopening to the Paris public a few days ago immediately resulted in 2,500 subscriptions. There are currently 250 cars across 250 stations, the former figure scheduled to rise to 3,000 by the end of 2012. The objective of the Paris authorities is to see the number of privately owned cars within the city diminish by around 15,000 over time. This will be achieved by joint initiatives including Autlib’, its successful bicycle equivalent Velib’, and I improved public transport facilities. The objective of Autolib’ is to see the number of privately owned cars within Paris diminish by around 15,000 over time.
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FLEET PEOPLE
Coca Cola opts for TCOPlus Coca Cola Enterprises (CCE) has elected to use the TCOPlus carbon emissions and tax analysis tool to reduce both its emissions and its costs. This tool, developed by Hans Damen (founder of FleetVision), on the right in the photo, and Bart Vanham, author of the International Fleet Taxation Guide, will be used to monitor the improvements CCE is looking for across some 4,600 vehicles, most of them in the UK, France, Belgium, the Netherlands, Sweden and Norway. CCE has calculated that if it can reduce average emissions to 130 grams per km, it will achieve
Olivier Deutschmann
Bart Vanham and Hans Damen have launched the analysis tool TCOPlus allowing a fleet to reduce carbon emissions.
cost savings of just over 4 million Euros and emit 3.6 kilo tonnes less CO2, during the 4-year lifecycle of its I fleet.
François-Xavier Castille
eCall takes first political step in Europe The members of the European Parliament’s transport committee have approved a proposal by European Commissioner Neelie Kroes involving the compulsory fitting of the eCall system in all cars and LUV’s sold in Europe. The eCall system gives an automatic alert in the case of an accident, linked as it is to the common emergency number 112. According to surveys, this move would lead to more rapid intervention by the emergency services and decrease mortality rates by 4%. The parliamentarians also I recommended that the system be installed on trucks and buses. Thomas Araman
Scooter leasing from Yamaha and ALD In a further demonstration of how company mobility is no longer restricted exclusively to cars, ALD Automotive has come to an agreement with the French structure of motor cycle manufacturer Yamaha – Yamaha Motor France. The latter is to make available a range of nine two-wheel vehicles for companies and independent professionals. For its part, and as it already does with certain other manufacturers, ALD is making this service available under the name of the client – in this case ’Yamaha I Lease Pro’.
Vincent van der Meijden
ALD Automotive is offering its clients Yamaha’s two-wheel vehicles.
Renault Belgium Luxembourg has appointed a new Sales Director. He is Olivier Deutschmann, who thus succeeds Jean-François Maréchal. Olivier Deutschmann (41) has worked for Renault in Austria, the Netherlands and France, as well as Belgium and Luxembourg.
Arval has further strengthened its subsidiary, Arval France, with a new appointment. FrançoisXavier Castille (44) becomes General Manager, reporting to Arval CEO Philippe Bismut. Castille joined Arval in 2000 following posts with Barclays Bank and Maaf Insurances. In 2002 he took charge of the Strategic Accounts department and Dexia full service leasing, after which he headed the subsidiaries in Portugal and then Spain.
Fleet Management company CPM has appointed Thomas Araman (44) to the position of Head of the Car Professional Fleet Management and Advisory business. He thus replaces Raiko Chabrowski, who has overseen the company’s development in this area for the past eight years, and who is now moving on to the Personal Advice branch. Araman has some twenty years of experience in the fleet management and leasing industry, most recently with ALD Automotive.
Business Lease Hungary has appointed a new managing Director. This is Vincent van der Meijden, who has already been with the company for several years. Vincent van der Meijden replaces Sven Lundquist who has overseen the growth of Business Lease to a top 5 player in the Central European marketplace, and who is now returning to his native Czech Republic.
Special edition Fleet Europe Magazine
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Europe
Peugeot 3008 Hybrid Swiss Green Car of the Year The Peugeot 3008 HYbrid4 has been voted ‘Greenest Car Switzerland 2012’. It was the second time German language Swiss magazine ‘Schweitzer Illustrierte’ has organised car of the year awards, in collaboration with four other Swiss publications. The Peugeot 3008 HYbrid4 is the world’s first hybrid to ally an electric motor to a diesel engine. Total power output is 200 bhp, and emissions of CO2 are 99 grams when both power sources are in use, with fuel conThe Peugeot 3008 Hybrid4 is the sumption of 3.8 litres first hybrid to ally an electric I per 100 km. motor to a diesel engine.
Electric vehicles for Bosch fleet Bosch France, which is heavily involved in the design and manufacture of parts for electric vehicles, has introduced five such cars (different models) to its own fleet. They will be used for car-sharing in its Saint-Ouen headquarters in the north of France, south of Calais. The vehicles are being leased for a period of 3 years from ALD Automotive, and are equipped with Carbox management technology. Carbox is the leading supplier in the domain of intra-company carsharing, and this brings to 30 the number of electric vehicles in its fleet of 300. Commenting on the decision to introduce electric vehicles to its fleet, Bosch France electro-mobility head Stéphane Evanno said that it was intended that these vehicles would be self-financing through the savings they would generate in other areas, and through being I rented to company personnel at the weekend.
Arval sells fuel card business in the UK SEAT enters electric mobility with two models SEAT has presented an electric version of the Altea XL Ecomotive, along with a Leon TwinDrive Ecomotive plug-in hybrid which it plans to start producing from 2015. Over the coming months SEAT is to undertake real time testing of these models by making them available to governmental institutions I in the Spain's two major cities – Madrid and Barcelona.
Arval has sold its ‘Allstar’ product in the UK to FleetCor Technologies. FleetCor is an independent fleet card provider, and thus adds Arval’s fuel card business to its portfolio. Bart Beckers, General Manager of Arval UK, comments: “We believe that this sale is a very positive move for AllStar employees, partners and customers. FleetCor provides global expertise, scale, best practises and experience in the fuel card market.
Arval has sold its fuel card business to FleetCor.
By working with them over the coming years, we expect our fuel management products and services to be enhanced further which will benefit our customers.” I
Extra power for electric cars
SEAT has entered the domain of electric cars.
Special edition Fleet Europe Magazine
New eco-driving initiative from Peugeot
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Peugeot Professional has launched a new eco-driving programme with its partner Mobigreen. Under the name of Peugeot Green Connect, this programme is designed for users of vehicles operated under long term rental contracts. The objective is to make drivers aware of the reductions in fuel consumption and CO2 emissions which can be achieved by adopting more ecologically friendly driving behaviour. The first part of the course is delivered by computer on a dedicated website, and there is follow-up practical training on the road with a speI cialised monitor.
An innovative mini-trailer which can both serve its useful purpose of providing extra stowage space when needed, and recharge the batteries of an electric car, is to be presented at the forthcoming Geneva Motor Show. The trailer can be fitted with a number of different carrying packs, and once docked onto the electric host car any model, its onboard power pack (battery, fuel cell or combustion engine), drives the freewheeling second axle of the car, recharging the on-board battery and removing the
The ‘Dock+Go’ unit named Vario-Hybrid can recharge the batteries of an electric car.
‘range’ problem from the electric car. The ‘Dock+Go’ unit named Vario-Hybrid, is the brainchild of Swiss automotive inventor Frank Rinderknecht. When not in use, it can be recharged itself using solar power. I
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Green Fleet Management
New Automotive Technologies
Image drives success of electric veh i There have been a number of interesting developments in the areas of green fleet management and new automotive technologies during 2011 that will no doubt continue to make fleets across Europe cleaner and safer in 2012. Jens-Uwe BERG
reen fleet” initiatives will continue to increase in 2012, especially in the likes of the UK, France, Germany, Scandinavia and Benelux, where either geographical advantages or improvements in infrastructure will boost the introduction of electric vehicles and hybrids within fleets. However, on a bigger European scale many fleet managers will be looking to first put initiatives in place that reduce the carbon footprint of their current fleet.
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and coaching sessions to reduce the cost and ‘downtime’ caused by accidents in their fleet. This usually results in a more environmentally friendly driving style that is not only safer, but also generates significant savings on the companies’ fuel costs every month. Industry experts are estimating this savings potential in running cost to be up to 20% of the total fleet operating cost – an amount that cannot be achieved by regulatory measures and tight tender management alone.
Fleet management 2012 and beyond
EV registrations in Europe
Not only does this have an environmental and reputational benefit, but it also has a significant cost reduction advantage in many markets. At the moment many countries have CO2-based tax regimes which usually penalises high CO2 emissions not only for the company on vehicle tax, but also the driver for benefit-inkind taxation. So currently there is not only a push, but also an increasing pull situation to reduce the taxation burden on both the company and driver. A lot of fleets are now operating a bonus system to encourage their drivers to choose an environmentally friendly vehicle. And since the introduction of the CO2 emission label bands by the European Union, many fleets are adopting the classifications by only allowing A to C classed vehicles in their fleets. From a driver’s perspective, this isn’t too shocking as similar banding methods are already used in a number of other areas such as household appliances and buildings. As well as legislation, initiatives to inspire behavioural change are also on the increase. Some companies have introduced accident reduction programmes
More and more manufacturers are introducing electric vehicles (EVs) in Europe with fleet customers in mind as well as consumer. Significant progress has been made in a short amount of time as many manufacturers are already hitting their 2012 targets. Some are doing deals with large leasing companies (e.g. Opel selling 1,000 Ampera models to LeasePlan to introduce them to their fleet customers), others target government organisations (e.g. Peugeot winning a deal for iOn with the French Post Office) or selling to multinational companies (e.g. Citroen C-ZERO to Airbus Industries). In fact, nearly 76% of EVs registered in Europe between January and September 2011 were for business customers. However, there is a long way to go before EVs become mainstream as registrations in Europe (business and consumer) for the first 6 months of 2011 remained well below 1% of total car registrations, with the exception of Norway. Despite a variety of subsidy programmes EV sales remain mostly unresponsive to
financial incentives. The JATO EV 2011 analysis finds that the incentive schemes vary widely across Europe and show a lack of correlation to EV sales. With incentives ranging from thousands of Euros to nothing, there were only 5,222 EV registrations in the first half of 2011 and in markets with considerable incentives (e.g. Denmark) the numbers were lower
Electric Vehicles Incentives Accros Europe
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h icles “ Despite a variety of subsidy programmes, sales of electric vehicles remain mostly unresponsive to financial incentives. ”
charges also have an impact. All of which seem to exert a greater influence than point of purchase incentives. Many early adopters of EVs in European fleets are also driven primarily by image rather than efficiency or cost as having a ‘greener fleet’ adds to a company’s CSR efforts and gives the impression of taking an interest in sustainability and environ-
mental issues. This will continue to be a motivating factor until the business case for EVs in fleets is stronger. For the moment, and only if governments, manufacturers and leasing companies jointly promote them (and potentially share risks as well), will the operation of these vehicles become realistically financially viable.
Internal combustion engines & accident prevention The established petrol and diesel propulsion technology, which will remain the first choice for drivers in fleets for years to come, is also making leaps forward to save fuel and reduce emissions. Recuperation and start/stop technology has been introduced by a number of brands to make their vehicles more attractive to both retail and fleet customers, for example. In conjunction, accident-prevention systems (e.g. city safety break assist), are being introduced in more and more fleets. 2012 will continue to see fleets getting “greener” as well as safer while fleet managers prepare for the next generation of hybrid technology (diesel hybrid may prove quite interesting) and EVs with larger ranges of zero emission and better predictability of running cost and long-term reliability. Rising fuel costs may add to make alternative propulsion technology even more attractive not only at the company level, but also for drivers themselves. I
Jens-Uwe Berg, Market Development Manager Global Leasing at JATO Dynamics
Special edition Fleet Europe Magazine
than in markets offering hardly any incentive at all (e.g. Sweden). It is therefore reasonable to believe that sales are more affected by other factors such as the degree of urban landscape, market maturity and charging infrastructure. Local factors such as the ability to use bus lanes or free city-centre parking as well as exemption from congestion
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Green Fleet Management
Car Policy
Do’s & don’ts of the green fleet pol i Almost every discussion about cars and car fleets now involves the ‘green’ aspect. For fleet managers, this represents a further challenge as they implement international policies. We take a look at how some of the more prominent fleet professionals, and in particular the winner of the International Fleet Green Award 2011, tackle this relatively new phenomenon. Tim HARRUP
he beginnings of professional international fleet management came from a desire within companies to streamline fleet activities and obtain cost savings. These savings could generally be achieved through international buying agreements – with leasing companies or car manufacturers for example – and through a reduction in fleet management staff. But now, the big push is not just on reducing costs, but on reducing CO2 emissions too. Companies and organisations wish to be more ecologically-friendly and to be seen to be more ecologically-friendly. The vehicle fleet is seen as an obvious target, one that everybody understands. And just in case
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some companies haven’t understood that it is necessary to reduce CO2 emissions, governments across Europe are there to give them a friendly reminder, by slapping ever heftier taxes on the most polluting cars and rewarding the use of the least polluting models such as electric cars. The international fleet manager’s job, however, isn’t so simple.
Some of the do’s… Ivor Johnson is EMEA Regional Fleet Director at Pfizer, and the International Fleet Manager of the Year 2011. His fleet policy identifies a clear link between ‘green’ and ‘safe’ and thus highlights the advisability of including eco-driving
courses into policies, for green, safety and economic reasons: eco-drivers are safer drivers drivers can improve their fuel economy by up to 30% through better driving and vehicle maintenance At 3M Europe, Holger Wiegand, Sourcing Operations Manager Europe was handed the ‘International Fleet Green Award’ at the Fleet Europe Awards 2011. In terms of his company’s green policy, he has some very clear recommendations: Build a comprehensive and challenging plan with CO2 reduction targets Use one common Company CO2 footprint, building in ‘caps’ per job category,
Special edition Fleet Europe Magazine
“Car choices impact directly on emissions”, says Kimmo Kunnas of Nokia Siemens Networks, “so taking green values as one selection criterion within TCO is an efficient way of decreasing the carbon footprint.”
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Kimmo Kunnas, Head of Travel and Fleet at Nokia Siemens Networks, and a former Fleet Europe Awards’ winner, brings the question of the link between green and TCO into the question, explaining how his company has achieved excellent results: “Car choices impact directly on emissions, so taking green values as one selection criterion within TCO is an efficient way of decreasing the carbon footprint. As a result of this we have reduced our average emissions by over 30 grams per km”.
… and the don’ts The Novo Nordisk policy suggests that while setting targets internationally is clearly a good way of proceeding, it may not be possible to simply impose them from the top. Novo Nordisk’s Anya Kiss, Lead Negotiator Corporate Sourcing and the second prize winner in the Fleet Europe ‘Green Award’ category, explained that her company set the parameters through a pilot project with the eight largest affiliates and headquarters, in order to ensure that the baseline could be affiliated across the organisation. But the reduction target is set locally, not as a blanket figure. With vehicle selection too,
the decision is made locally, not imposed from the top, but this policy has translated into affiliates applying the principle of ‘green fleet’ in their vehicle selection, thus diminishing CO2 emissions. And because CO2 reductions are automatically accompanied by fuel cost reductions, there is the question of what to do with the money saved. Take it away from the affiliates and put it all in HQ coffers? Not in the case of Novo Nordisk, which allows affiliates to use these savings as they see fit, even returning them to drivers in one form or another. Holger Wiegand and 3M have two very clear ‘don’ts’ which highlight and respond to two major areas of consideration. Do not limit CO2 reduction efforts to one or two levels in the organisation. It needs to be a ‘company’ strategy. Do not impose similar car models in all countries, but listen to local opinion, allowing models to be selected that are benchmarks in local markets, but which fit into the CO2 caps outlined in the car policy. Kimmo Kunnas is quite about taking the green topic seriously, and he expresses a major ‘don’t’ in this respect: “Don’t just settle for ‘greenwash’ but take it seriously and integrate it into strategy and sustainability targets”. Although we do not specifically consider the topic of electric cars in this article,
do: “All we really know is the upfront cost of the electric vehicle, the interest cost for the finance, and the current subsidies and incentives (which could be very temporary)”.
Keys for success To summarise what may eventually lead to a successful international green fleet policy, we turn once again to Holger Wiegand and 3M: Get top down support from all stakeholders Measure & monitor the CO2 footprints at regional and country level Share results with all stake-holders on a regular basis Communicate individual CO2 footprints to individual drivers and keep on giving advice for decreasing fuel consumption. Share best practises between the different countries and identify replication possibilities Share company targets on CO2 reduction with selected OEM's and get regular updates on new car models available on the market which fit into the targeted company CO2 footprint Work together with selected leasing providers to measure the CO2 footprints of individual drivers and identify further opportunities for improvement.
“ Today, the big fleet push is not just on reducing costs, but on reducing CO 2 emissions too. ” they are clearly going to play an increasing role in green fleet policies at some point in the future, and to a degree, right now. So the thoughts of industry expert Professor Peter Cooke of the University of Buckingham, speaking at the Fleet Europe Powertrains & New Technology seminar, are highly relevant here. When considering the ‘TCO’ impact of making the fleet greener, his words in brackets may be taken as a warning of what not to
It is therefore clear that a great deal of professional expertise has gone into the question of how to make fleets greener, and this question will undoubtedly continue to evolve over he coming years. EU legislation is likely to have a significant impact, and manufacturers will continue to put an enormous amount of effort into producing cleaner and more fuel efficient cars. I
Special edition Fleet Europe Magazine
showing that efforts are expected at all levels of the organisation. List recommended car models per job level that fit into the recommended CO2 footprint in each local policy Recommend preferred fuel type in the policy; any local deviation needs to be justified and get prior approval from top management Mandate fuel cards to allow further monitoring of fuel consumption Clearly list the ‘mandatory’ equipment and list which equipment is not allowed as it may impact on fuel consumption and safety requirements Promote eco-driving behaviour in the policy – for example specify that the employee is responsible for checking tyre pressures in accordance with the manufacturer's directions at regular intervals.
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Green Fleet Management
Residual Values
The difficult prediction of the price o European fleet operators need some guidance when forming their green vehicle strategies, so Fleet Europe asked leading experts for their views on hybrid and electric vehicle residual values. We also asked them what advice they can give fleet managers. Martyn MOORE
here’s a hybrid vehicle on almost every street and electric vehicle (EV) charging points are popping up all over the place as green technology gains a foothold in the professional fleet market. But the technology is disruptive and nowhere is it causing more uncertainty than in the residual value of vehicles. Everybody with an interest in the depreciation of cars and vans (so, everybody reading this) is keeping a keen eye on the market to see what happens as used hybrids come up for sale but there isn’t a single strong indicator of how it’s all going to pan out.
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The battery equation
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Battery life is critical to the appeal of a used hybrid and with an EV the battery is almost all that matters. Current estimates suggest batteries might lose as much as 50 per cent of their efficiency in three years. That makes used buyers nervous. EVs are really expensive, too, when compared to similar combustion engine vehicles. They seem to have most to lose. Jeff Knight edits CAP Monitor, one of the UK’s most trusted residual value guides, and he has this to say: “CAP believes the plug-in hybrid provides one of the main ways forward for low-emission cars in particular, with pure electric seeming to have hit the buffers in Britain and elsewhere in Europe so far. Even Holland, where there is a much more
highly developed supporting infrastructure for EVs, has only seen around 200 registered this year. “Hybrids, plug-in hybrids and 'range extenders' such as the Opel Ampera, offer all of the benefits of low emission electrics while avoiding the problems of few charging stations and limited range. This is not to say there is no future for pure electric vehicles but our current view is that they will be initially more successful as vans, where local multi-drop work is needed, especially in cities with pollution-related tolls.” Dieter Fess from German forecaster Bähr & Fess agrees: “Chevrolet Volt and Opel Ampera will combine the best of both worlds. Fossil energy gives safety with regard to the range and the e-engine reduces the emissions and the consumption significantly. If it hits the used car market in three to four years, it will be the only alternative as a range-
Steffen Schick, Manager Director Global Services Division at EurotaxGlass’s : “It’s important to link the right usage pattern to the corresponding powertrain type to improve TCO competitiveness.”
extender and will be able to compete with three- and four-year-old premium combustion cars. There will be a large number of used car buyers who would prefer the range-extender.” If this is true, could new technology affect the values of old technology? If buyers go green with confidence, could residuals on combustion engine vehicles suffer?
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e of new technology Professor Peter Cooke, KPMG Professor of Automotive Management at the University of Buckingham doesn’t think so. Well, not yet. “It will be a long time before EVs and hybrids have an impact on used values for conventional power,” says Professor Cooke. “They represent a small percentage of new vehicle sales and will take three to four years to reach the used car market. The used car market is three to four times the size of the new car market so the impact will be small for some years to come.” But he says that fleet operators must follow the market. “The critical point will come when there is a serious penetration of the new car market by hybrids and EVs - but that is still a long way off.”
Steffen Schick at EurotaxGlass’s points out that hybrids have 30 per cent higher residual values compared to their petrol variants. “Hybridisation is a known concept and hybrid vehicles carry a premium versus conventional powertrains,” says Steffen Schick. “The situation is different for battery electric vehicles. The battery drives both high list prices and customer uncertainty. Consequently, the challenge for battery EVs is the high depreciation during the initial years of the ownership cycle. Residual values of vehicles will only increase if vehicle manufacturers reduce customer uncertainty, for example by providing extended warranties and more transparency around battery replacement costs, or leasing batteries.” In the short term it would seem that hybrids are a safer bet than pure EVs, and range extender vehicles will help to bridge the confidence gap. I
Dieter Fess, Managing Partner at Bähr & Fess Forecasts, believes in the range-extender technology, as fossil energy gives safety with regard to the range and the e-engine reduces the emissions and the consumption significantly.
What do you have to know as a fleet manager? STEFFEN SCHICK, EUROTAXGLASS’S: “Fleet managers can change fleet drivers’ perspective on new technologies and ought to avoid residual value risk altogether, either by leasing vehicles or agreeing buy back arrangements with vehicle manufacturers. In a buy scenario, again fleet managers can reduce the TCO by extending the holding period. Link the right usage pattern to the corresponding powertrain type to improve TCO competitiveness. A battery EV is suited to 15,00020,000 km of short-distance driving. Extending the holding period from three to four or even five years as the TCO challenge is particularly evident during the first three years of the vehicle’s life.” DIETER FESS, BÄHR & FESS FORECASTS: “Buy some EVs to show that the company lives in the real world and is prepared for the future. Gain your own experience with the handling of the cars. Increase the number of hybrids, especially the ones like the Peugeot 3008 Hybrid, which comes with a great diesel engine that helps saving fuel and is pretty powerful at the same time. But increase only those whose prices are not too high compared with the nonhybrid base car. You should have some range-extenders on stock. Reduce eight- and bigger six-cylinder engines to the absolute minimum and start reducing the diesel cars.”
“ Battery life is critical to the appeal of a used hybrid and with an EV the battery is almost all that matters. ”
Special edition Fleet Europe Magazine
Customer certainty needed
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Green Fleet Management
Car Policy
7 steps to create a driver efficient, c Creating a smart “Ecofficient” fleet policy starts with Senior Management commitment to sustainability completed by a clear policy explaining to drivers how their actions contribute to the cost, safety and environmental impact of the entire company. Far from a one-off initiative, an “Ecoeffcient” policy must be(come) an intrinsic part of a Corporate Responsibility-centric company culture.
Filip VAN MULLEM
1
SENIOR SUPPORT
Senior management must clearly endorse an “Ecofficient” fleet policy simultaneously linked to Corporate Responsibility goals and emphasizing the impact on bottom-line savings. The “Ecofficient” programme elements must be simple, easy to explain and persistently be pushed through the organization with pride.
VEHICLE CHOICE
2
GRADUALLY IMPLEMENT NEW TECHNOLOGY - To improve the fleets’ “eco-efficiency”, select wherever possible energy efficient vehicles contributing to substantial reduction in CO2 emissions. Implement CO2 emission reduction objectives, measure, monitor and follow through. RIGHT-SIZE - Match where appropriate duty requirements of staff to the
smallest possible vehicle for the task. Substitute smaller vehicles for larger vehicles by phasing them in as vehicles are renewed.
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VEHICLE USE
CAR SHARING - With proper planning, staff can nowadays share vehicles for all or part of a trip where dedicated management software helps eliminate underutilized vehicles, optimize fleet vehicle routes, reduce capital expenses and consequently achieve large reductions in fuel use and CO2 emissions.
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FUEL ECONOMY - As fuel efficiency is directly linked to driving performance, make sure drivers receive training and coaching to improve their habits. Create incentives for efficient driving. Good eco-friendly habits can realize between 20 and 40 % reduction in on-road fuel economy.
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TYRE OPTIMIZATION - Select low rolling resistance tyres and have drivers
regularly check tyre pressure to achieve fuel savings of 2 to 10 %. DEVICES - Technology devices help measure and report key driver
behavior, including rapid acceleration, hard stops, and speeding events through driver-installable devices. The results of a fleet’s safer and less-aggressive driving drastically reduce fuel costs, restrict corporate greenhouse gas production and influence insurance premiums. Gain driver buy-in and trust by reassuring the devices are not a punitive measure and installed only to make them successful.
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cost conscious fleet policy 4
© ARVAL
Increase the accountability in the hands of the drivers. Ask drivers to make a limited number of straightforward changes and reward good responsible driving. Develop incentive programs and award-winning initiatives linked to employee eco-driving efforts. Make it fun and keep it visible. Inaddition to creating eco-conscious drivers and cutting fuel consumption, these initiatives also lead to better fleet safety records and vehicle maintenance. Driver behaviour change goals should be realistic and continuously measured. Constant monitoring is a good tool to influence driver behavior change and keep drivers in line with policy.
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DRIVER BEHAVIOUR
COMMUNICATE
CONNECTIVITY versus MOBILITY
Reduce driving where possible: use transit, bike, walk, or telecommute. Is it necessary to drive to the meeting? More and more the answer is no. Fleet vehicle usage can be substantially decreased if employees use other modes of travel such as train, bus, bicycle, or walking will suffice. Employees can be provided with multimodal mobility cards. Another option, increasingly adopted, is to avoid travel altogether by using teleconference, videoconference and webinar tools.
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Ideally launch an “Ecofficient” policy or programme via a dedicated announcement from senior management or other credible leaders within the organization. Use the company intranet site to deliver messages, reminders and relevant facts. Regularly communicate “tipsof-the day” and post blogs where colleagues report on changes in their driving habits and their positive impact. Install repetition to foster a culture in which good driving habits are endorsed and exposed.
MONITOR
7
Tracking fleet data is critical to complete regular reporting of progress toward financial, energy-reduction and carbon-emission targets. Make sure drivers know that results are monitored on the originally announced pre-determined basis. Be persistent. Be clear on what is measured and provide meaningful feedback and reward all drivers who achieve and sustain significant results. Benchmark individual driver previous results and improvements made after training. Don’t change the rules too soon or too often. Remain consistent.
Special edition Fleet Europe Magazine
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Green Fleet Management
Taxation
Let's help the European deficit When the going gets though, the car taxation gets going. The car has proven an indispensible milk cow in the past and with CO2-emissions, politicians have found a politically correct way of increasing taxes. In many countries company cars are subject to tax increases, increasing the Total Cost of Ownership (TCO) of international fleets. Including taxes and the effect of taxes in your strategy pays more than ever. Bart VANHAM
fter another though year, many look at 2012 as a year where things should settle again providing a stable atmosphere for good life and work. Nevertheless, the Euro and the banking crisis has left big deficits and all of us will need to contribute to get this budget in balance again. Through our company car, we will contribute a bit more in most of the countries. Driven by a social and environmental objective, company cars, higher end cars and polluting cars will contribute the most. Many countries have increased its VAT rate with 1%, mostly 2%. For those countries that block the VAT deduction on car cost, this adds immediately to the TCO of fleet. Greece (+2% to 23%, no VAT recovery), Ireland (+2% to 23%, no (or partial) VAT recovery), Italy (+2% to 23%, in principle 40% VAT deduction), Spain (+2% to 18%, in principle 50% VAT deduction), UK (+2.5% to 20% temporarily, in principle 50% VAT deduction) are just some examples. There is not a lot you can do to lower this extra burden besides lowering your consumption, or making sure that all expenses that could be kept out of the taxable basis for VAT are indeed excluded. Examples are insurance premiums, registration and annual road taxes, fines…
A
Special edition Fleet Europe Magazine
Lower CO2-bands
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Most countries, having based their car taxation to the CO2-emissions of the car, are increasing the taxes by lowering the CO2-emission bands. Due to the changing buying behavior and the increased production of low CO2-emission cars, governments saw tax income decreasing. France with increased TVS ((tax on company cars)), Ireland, UK, ….
are some examples where existing taxes will increase. Further changing buying behavior and introducing best in class vehicles when it comes to CO2-emissions can limit the extra cost. This will take some time although for “gas guzzlers” it could be worth to look at the cost/benefit of early replacement. Some countries have introduced new mechanisms for taxing cars. Greece has introduced in 2011 some car taxes based on CO2-emisions; Belgium will introduce a benefit in kind taxation based on catalogue price varying with the CO2-emission of the company cars and an increase of the non-tax deductible cost with the employers. Understanding the dynamics of these new ways of taxing is detrimental for your local car policy. As a conclusion we could state that the changes in taxes relating to company cars were never as important as in 2012. Getting insight in the increase in cost will help the international fleet manager to set proper objectives based on a correct base line. Getting insight in the dynamics of these car taxes will allow to set an effective strategy. Taking into account the current economic environment, only few companies will allow increased spending in car fleet. We all will need to downsize in cost and/or CO2-emissions and sustainability will be part of any fleet strategy; sustainability in terms of environment but also in terms of proper use of the company car in order to make sure that no unnecessary costs are to be born. To cut one’s coat according to one’s cloth will be applicable for all of us…. And on the positive, no one ever died from that before. I
Through our company car, we will contribute to get the budget of European countries in balance again.
Bart Vanham Car taxation specialist Bart.vanham@bvhconsulting.eu
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Green Fleet Management
Technology
Step on the gas, top to bottom Of course cars emit more than just CO2, but what exactly are we ejecting with every prod of the loud pedal? We throttle back to find out. Dirk STEYVERS
asically carbon dioxide, better known as CO2, is a harmless gas that is part of the natural cycle. So why all this recent fuss and focus on a harmless gas? The problems comes from disturbing the existing natural balance by emission of this gas through the burning of fossil fuels and by deforestation. Too much CO2 and the harmless gas becomes a greenhouse one boosting global warming. As such the focus on CO2 could be seen as deserved and well calculated, especially if we take into account that the transport sector is the fastest growing source of greenhouse gases, but the bigger picture looks quite different. By burning fossil fuels many of our means of transport emit quite a bit more than just CO2. Carbon monoxide, hydrocarbons such as methane, particulate matter, nitrogen oxides… our tailpipes throw them all into the mix. Time for an alphabetical overview.
B
oxide (N2O) on the other hand contributes directly to global warming.
Particulates – PM Impurity in the fuel, incomplete combustion, the burning of lubrification oil, but also a reaction between different gases after contact with air can result in a black smoke of small particles. And by small we mean really, really small: between 10 and 2.5 micron (one micron being one thousandth of a millimetre) or small enough to penetrate deep into our longs. According to a 2004 report by the World Health Organisation no concentration of airborne micro-sized particulate matter is not hazardous to human health. To counter the fact that mainly diesel engines emit particulates, car manufacturers followed the example set by producers of non-road machines and started introducing diesel particulate filters from the mid 1980s onwards.
Ozone – O3
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Carbon Monoxide – CO
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This gas is actually a ‘side effect’ of the burning process meaning that badly calibrated engines are big CO-emitters. In itself CO might only to a small degree contribute to global warming, but it is know to be deleterious to human health because after respiration it combines with haemoglobin in the blood. This combination reduces our ability to take up oxygen. Bad news for heart and respiratory diseases.
Nitrogen Oxides – Nox The different nitrogen oxides all contribute to acid deposition. One of them, nitrogen dioxide (NO2), is pretty toxic en aggravates respiratory diseases. Nitrous
First we have to differentiate the stratospheric ozone, which absorbs ultraviolet light, and tropospheric ozone which is the result of a chemical reaction in the atmosphere between Nox and VOCs (see below) under the influence of sunlight. This means tropospheric ozone is no direct result waste gas of burning fossil fuel, but it doesn’t mean it is a harmless gas either. On the contrary, it strengthens global warming, can affect respiratory, heart and vascular diseases and high concentrations (ozone veil) can lead to far-reaching damage to our agricultural and natural environment.
Volatile Organic Compounds – VOCs Again a collective term covering quite a
large amount of chemicals such as hydrocarbons that are released during the entire process fossil fuels undergo before being burnt in a combustion engine. The most notorious of them all is benzene: very volatile, easily inhaled and very carcinogenic. Luckily open air doesn’t contain an alarming amount of benzene. Methane, another well known VOC, is a pure greenhouse gas released during the production and combustion of petroleum. As said above, VOCs, are co-responsible for the production of toxic O3. On the basis of this list we can definitely conclude that the emissions of a car should not be minimized into a single
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“ Today governments and corporates are focusing on CO 2 , but we should not forget the health
figure measuring CO2. Yes the atmospheric concentration of carbon dioxide is increasing alarmingly, yes almost 75% of the human emission of CO2 is due to the burn of fossil fuels and yes this makes our planet heat up uncomfortably. But we should not dismiss the direct and indirect health consequences of the other above mentioned emissions that almost beg to be included. It would most certainly balance out the often crooked fiscal advantages low CO2-cars are receiving. I
Special edition Fleet Europe Magazine
consequences of other emissions and pollutants. �
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Green Fleet Management
Strategy Car Manufacturers
Plug in & Drive the future There is much talk – and quite a lot of action – where manufacturers’ green and sustainable strategies are concerned. We asked a number of the major brands to tell us what they are doing. Broadly speaking, the manufacturers’ strategies can be considered under two main headings – internal combustion engines and electric vehicles – with hybrids bridging the two. Tim HARRUP & Steven SCHOEFS
ll of the major carmakers are involved in the policy of making motoring more environmentallyfriendly. At Fiat, the Fiat brand had the lowest weighted average emissions in 2010 (123.1g CO2/km) among the top selling brands in Europe (figures from JATO Dynamics). The brand’s strategy is to maintain this position. Fiat is also quite clear that no single solution will meet all needs, and is therefore working on a combination of conventional and alternative technologies to respond to the economic, geographic and fuel requirements in each market. This includes optimising the ecological performance of conventional engines, increasing the use of alternative fuels and developing non-conventional propulsion systems.
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Improving current technology Volkswagen is also ensuring that current technology is improved as far as possible.
The key to greater efficiency and lower emissions, it believes, will remain the pure combustion engine, especially over longer distances. This is a field in which all Volkswagen group brands are working together to generate further efficiency potential. In the medium term, fuel consumption is set to be reduced by a further
the market and offering the best emissions to power ratio in its class. This unit has been fitted to Scénic and Grand Scénic since May 2011, it will reduce CO2 emissions by 20% compared with the previous generation. Renault is also planning to go further in this direction, with the new Energy TCe 115 petrol engine and a trans-
“ Most manufacturers are either already involved in or actively considering, the electric route. ” 15 percent. With downsizing, turbocharging and its dual-clutch gearbox, the group says it has increased efficiency by around 25% in the last ten years. Renault is also working on improved efficiency for internal combustion engines. The company points to its new 1.6 engine – ‘Energy dCi 130’ – which it says is the most powerful engine of its category on
formation of the existing 1.5 dCi diesel, which will be known as the Energy dCi 110. Kia’s mid-term strategy is also to continue developing technologies that meet the highest technological standards for cars. An example of this is the new Kia Rio, which has CO2 emissions from just 85 g/km, placing it among the lowest emitting cars on sale. The Korean manufacturer Every car manufacturer looks at optimising the ecological performance of conventional diesel and petrol engines. Here the Renault Grand Scénic with the new 1.6 engine ‘Energy dCi 130’.
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recognises that efficiency is hugely important for fleet buyers in particular, and one key area of focus for the brand now and in the future is the optimisation of conventional powertrain technologies. Efficiency improvements will be made through engine downsizing and greater use of gasoline turbo engines. PSA Peugeot Citroën has been following a course of CO2 reductions, having set itself the target of being below 128 grams per km on average by the end of 2011. With the launch of the Peugeot 208, the Citroën C3 and its class leading low emissions, the French group expects this to fall significantly in 2012. Diesel electric Hybrid4 products, starting with the Peugeot 3008 HYbrid 4 and CITROËN DS5 Hybrid 4, will further aid in the reduction of the average CO2 emissions for the PSA range. At Mazda, the strategy is under the umbrella of SKYACTIV technology, and involves a multiple approach. The objective is to deliver major fuel savings and emission reductions for fleets, with no compromise in driving dynamics. Developments focus on new generation petrol and diesel engines, improved model aerodynamics, vehicle weight reduction, new chassis and transmission innovations.
including launches under new model names and launches of remodelled products. The 11 launches will comprise 7 completely new models and four model changes. This policy began with the launch of the all-new Lexus CT200h, and the other new hybrid models in store include a compact model that will consume 2.5 litres per 100 km. Toyota does not yet provide specific information about model names or launch dates in advance. Toyota is also to launch a Prius-based plug-in hybrid by early 2012 in Japan, North America, and Europe.
Hybrids
Premium brands
Toyota has carved out a strong position for itself as a pioneer of hybrids, and this strategy is set to continue. The company is planning to bolster its line of hybrid vehicles greatly by the end of 2012. This will consist of 11 model launches,
The premium brands have also being making enormous strides in supplying environmentally-friendly vehicles in what used to be seen as a high-polluting segment. Mercedes-Benz follows an integrated strategy which has led to innovative technologies. With their BlueEFFICIENCY models and their hybrid and electric vehicles, Mercedes-Benz will continue to play a significant role in the development of alternative powertrains in the future. The manufacturer’s internal calculations show that the B 180 CDI BlueEFFICIENCY now runs on 4.4 litres per 100 km and emits just 114 g/km with automatic transmission. The petrol-engine variants B 180 BlueEFFICIENCY and B 200 BlueEFFICIENCY now consume 5.9 litres per 100 km (137 and 138 g CO2/km respectively). Thanks to the "Energy Space" modular concept, the new B Class is already configured for alternative drive systems: appropriate interfaces in the bodyshell allow modification of the main floor assembly and a partial double floor provides space for the alternative energy storage devices.
Some key thoughts “Sustainability and reduced consumption are playing an ever increasing role in our business as a car manufacturer and fleet supplier.” Mercedes-Benz “Satisfying the growing demand for mobility, while reducing the environmental and social impact of vehicles throughout their life cycle, is a strategic necessity for us.” Fiat Group “The key to creating a low-carbon society is eliminating reliance on oil, and using electricity will be an effective means of doing this.” Toyota “Our ambition to make sustainable mobility accessible to all.” Renault
While independent research shows that the Opel Ampera’s pure battery driving range is sufficient to meet the daily needs of 80 percent of European drivers, it also provides a total driving range of more than 500 kilometers thanks to its range-extending gasoline engine.
The BMW group’s sustainability strategy is built around ‘EfficientDynamics’. The company is set to bring more models into this domain, and with even lower CO2 emissions levels, such as the 320d EDE 109 g, 520d EDE 119g,…). On top of this, BMW is scheduling more ActiveHybrid models. Following the ActiveHybrid 7 (mild hybrid) and the ActiveHybrid X6 (full hybrid), in 2012 BMW will launch its first 6 cylinders full hybrid in the ActiveHybrid5 and then the ActiveHybrid 3 (3 cylinders) later in the year. And at the luxury end of the SUV market, the new Range Rover Evoque has CO2 emissions from just 129 grams, and will help reduce average emissions from the brand. Alongside this, the company is developing an Intelligent Power Management System, using lightweight components and refining existing technologies.
Alternative mobility Peugeot offers Mu Pro, a programme which enables drivers to rent a car, scooter, electric vehicle, van, pedal bike, van, or accessory. Along with this, Peugeot has launched a new mobility offer for employees who drive a company car. Upon delivery of their Peugeot car they will be provided with details of their individual Mu by Peugeot account which will be credited with a Welcome Credit to be spent in the Mu by Peugeot network. Peugeot also offers the new generation Stop&Start and 100% electric vehicles for urban mobility with Peugeot iOn.
Going electric Most manufacturers are either already involved in or actively considering, the electric route, and no article about sustainable strategy can neglect this point.
Special edition Fleet Europe Magazine
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Green Fleet Management
A little advice for fleet customers “In order to select the best sustainable car manufacturer, it is better to look at the whole process not only at the car. We take care of sustainability not only by producing less emitting and consuming cars, but also by settings standards from our suppliers up to recycling and production.” BMW “We believe that international fleet customers should take into consideration the full range of power-train options, and consider which combination suits their own business needs. It is likely in the future that their needs will not be met by a single mobility solution.” Mazda
Special edition Fleet Europe Magazine
“Ensure your vehicle supplier has an environmental management system which is a guarantee that the supplier has implemented a structured, longterm and comprehensive set of activities to reduce environmental impacts and increase awareness among its employees.” Volvo
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At Volvo, the company’s aim is to achieve environmental leadership within the premium segment. The Swedish brand will continue to launch DRIVe products with class-leading fuel efficiency. In longer term the brand aims to reach a top position through groundbreaking initiatives which include smart electrification, downsizing and the launch of energy efficient technologies. In the purely electric field, deliveries of the C30 Electric started during 2011. This car has an all-electric range of up to 120-150 km with zero tailpipe emissions. And Volvo is to launch the world’s first plug-in diesel hybrid, the V60 later in 2012, with an electric-only range of 50 km. At Mercedes-Benz the A–Class E-CELL, the smart fortwo electric drive, the Mercedes-Benz Vito E-CELL as well as the B-Class F-CELL with fuel cell technology are for everyday use, production models currently driving on the world's roads just like hybrid vehicles. MercedesBenz already has four electric vehicles on the market. By the end of 2011, the brand had more than 3,000 electric vehicles on the road.
The goal of Volvo is to become the environmental leader within the premium segment. Volvo’s first plug-in diesel hybrid, the V60, has an electric-only range of 50 km.
For its part, Nissan says that it is committed to EV leadership for the long-term, and that it is the only manufacturer with a mass marketed, 100% EV on sale today in 3 regions, including Europe. By 2013 the manufacturer plans to have a global Nissan LEAF capacity of 250K units as part of a global Renault-Nissan Alliance capacity of 500K units. The Alliance has invested 4 billion Euros in its zero emission programme. Nissan has already committed to expanding its EV range – an LCV based on the NV200, a 2-seater urban cruiser and an Infiniti sedan. The strategy of Opel in this domain is three-pronged: battery-powered cars for short distances; the Ampera (an electric car with a small petrol engine which automatically cuts in when battery power falls too low, extending the range by 500 km), for everyday use, and fuel cell as a solution for emission-free mobility. It is too early to talk in much detail about fuel cells, but other manufacturers (Mercedes-Benz in particular) are also looking at this longer term renewable energy solution. And Toyota is planning to launch a fuel-cell hybrid around 2015 in Japan, North America and Europe, as the supply infrastructure begins to take shape.
Major contribution BMW is introducing the BMW i3 for mega cities. This car is not only an electric car but also includes the recycling and sustainability elements in the factory where it is built, with the Leipzig factory using green power and reducing water needs. Renault has launched its Fluence Z.E.
sedan and Kangoo Z.E., attacking two segments other than the ‘city-car’ segment. PSA Peugeot Citroën also has a strategy of extending the offering. The group has recently brought four full electric models to market: the Peugeot i0n, the Peugeot Partner Origin, the Citroën C-ZERO and the Citroën Berlingo First. Clearly, electric mobility for LUV drivers is seen as a worthwhile investment by the major French manufacturers! The Volkswagen group too recognises that the electric car will make a major contribution to shaping individual mobility in the future. For Volkswagen, 2013 is set to be a key year for electrical mobility. That is when the up! Blue-eMotion enters series production, to be followed shortly afterwards by the Golf Blue-e-Motion, both helping to bring in the age of electric vehicles at the German group. As an innovative mobility solution Daimler AG has developed car2go, a short-term car-sharing programme. The customer does not need to bring the car2go back to where he started the rental. He can finish the rental in any available public parking space within the car2go business area. And the customer may use the vehicle as long as required without committing to a specific return time. So far the car2go mobility service has been rolled out to seven cities worldwide. This year more cities will follow. The start of car2go in Lyon , Düsseldorf, Stuttgart and Washington D.C. have been announced. I
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Green Fleet Management
Automotive CO2-emission performances
The Road to Objective 95 The least we can say is that the European Union has always been very clear about the emission objectives for the near and not so near future: an average CO2-emission of 130 g/km by 2015 and no more than 95 g/km by 2020. Time to investigate who achieved what over the recent years. Dirk STEYVERS
he emission limits issued by the EU in 2007 (and even before that) were not ‘warmly welcomed’ by most car manufacturers. On the contrary, their initial reaction was a big wave of complaints. Luckily the EU showed some mercy while the car brands changed tactics quite rapidly and started introducing technologies that allow new cars to consume less fossil fuel and thus emit less CO2. Of course this radical change of direction is too recent to draw any final conclusion yet. We are, after all, living the dawn of a new approach on mobility. Some will think of this new age as less exciting to the extent that we will have to do with “less” (cubic inches, cylinders and kilograms), but it is just as fascinating on a more technical level
T
since none of the car makers was or is happy to scale down on the values they acquired over recent history.
Toyota and PSA already on 2015 target Somewhat unexpectedly, the current interim result is a rather positive one proving that 80% of all 2010 registra-
regulations. But even these three can not rest on their laurels if they are to meet the 2020 EU-target average of 95 gr CO2 per km. The same goes for the best CO2performer so far, Fiat Group Automobiles, who can take pride in a group average of only 125 g/km, a 5 gram improvement compared to 2009. The biggest improver
“ Car manufacturers are facing challenging times when it comes to meeting the EU regulations. ” tions in Europe already complied to the 2012 target of 130 gr CO2 per km, and that some manufacturers (Toyota, Peugeot and Citroën) are on the verge of meeting the even more stringent 2015
year-on-year is Volvo with 17 grams, from an average of 173 grams to 156 grams in 2010. Next come Volkswagen, SEAT, Skoda and Audi (would there be link?), the last of which performs on par with
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Source: European Environment Agency (EEA), 2011
Special edition Fleet Europe Magazine
Distance to 2012 target by individual manufacturers in 2010 (only manufacturers registering > 100 000 vehicles in Europe)
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Overview of the CO2-averages par brand AVERAGE EMISSION 2009 g CO2/km
AVERAGE EMISSION 2010 g CO2/km
EXPECTED AVERAGE EMISSION 2011 g CO2/km
EXPECTED AVERAGE EMISSION 2012 g CO2/km
Source: Manufacturer
Source: Manufacturer
Source: EEA
Source: EEA
FIAT
130
125
TOYOTA
132
129
PEUGEOT
134
131
128
SEAT
140
131
cfr VW
CITROËN
138
131
RENAULT
138
134
HYUNDAI
138
134
FORD
140
137
SKODA
148
139
OPEL
148
140
VOLKSWAGEN
151
140
KIA
146
143
HONDA
147
144
DACIA
152
145
BMW
151
146
no comment
no comment
NISSAN
154
147
139,8
138,3
MAZDA
149
149
129,6
127,1
AUDI
160
152
cfr VW
VOLVO
173
156
152
DAIMLER
167
160
150
Opel (an improvement of 8 gram). Of course these absolute figures don’t tell the whole story as the unrivalled 9.83% increase for Volvo is followed by a 7.28% gain for Volkswagen and a 6.43% improvement for Škoda.
137
cfr VW 144 (current average VW Group)
At the more worrying end of this scale we find Mazda ‘status quoing’ from 2009 to 2010, while good students like Peugeot and Toyota recently only reached an average year-on-year improvement of respectively 2.25 and 2.27%.
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The conclusion can therefore be as short as it is clear. All car makers face challenging times when it comes to meeting the EU regulations as well as the buyer’s expectations. I
Special edition Fleet Europe Magazine
Source: European Environment Agency (EEA), 2011
Distance to 2015 target by individual manufacturers in 2010 (only manufacturers registering > 100 000 vehicles in Europe)
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Green Fleet Management
Green cars in 2012
A wide mix of sustainable solutions All car manufacturers concentrate their immediate technology efforts on powertrains because they are easily adopted, often used in a wide variety of models and as such contribute on a large scale to the CO2-reduction of a complete brand or group. The specific measurements undertaken go from downsizing in size and cylinders to general efficiency improvements via updates or more fundamental reviews of existing engines. Dirk STEYVERS & Steven SCHOEFS
ut the different car makers admit to some degree that they are involved in interesting projects such as alternative propulsion systems (hybrids, plugin hybrids, range extenders, electrification, hydrogen,‌), structural weight reduction, new chassis and transmissions, journey optimalisation and/or recycling programmes. They all require careful long-term planning though, so the first
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results are only starting to emerge. Promising times are ahead. So many brands, so many strategies. Electric vehicles seem to be the final solution to all of today’s emission related questions. The way in which this predicted electrification will take place is an all together different issue on which the different car manufacturers do not tend to agree. Even their respective timings
(for similar solutions) show great discrepancies, as you can see in the overview. This overview is based on the answers from the car manufacturers themselves on a Fleet Europe questionnaire sent out in the beginning of December 2011. I
"Also in 2012 most car manufacturers continue the development and the launch of low-emission vehicles."
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New models for 2012
AUDI
FIAT
PEUGEOT
SEAT RENAULT
SKODA VOLKSWAGEN
KIA
BMW
MAZDA
VOLVO MERCEDES-BENZ
TOYOTA
LEXUS
CO2
FLEET POTENTIAL
MODEL
TIMING
TECHNOLOGY
A1 Sportback
Beginning 2012
Petrol & diesel
A4
Beginning 2012
Petrol & diesel
A6 Hybrid
Beginning 2012
Petrol & electric
A8 Hybrid
Mid 2012
Petrol & electric
New Panda
02/2012
Petrol, diesel & bifuel
Punto 2012
1 quarter 2012
Petrol, diesel & LPG
From 90 g/km
From 87 g/km
st
208
03/2012
Petrol & diesel
3008 Hybrid 4
Already available for order
Diesel + electric
508 RXH Hybrid 4
Beginning 2012
Diesel + electric
508 Hybrid 4 saloon
Spring 2012
Diesel + electric
Mii Ecomotive Twingo Phase II
01/2012
Petrol & CNG
From 86 g/km
Petrol & diesel
From 85 g/km
Engine family Energy
Petrol & diesel
Twizy
Electric
0 g/km
ZOE
Mid 2012
Electric
0 g/km
Citigo
1st half 2012
Petrol
From 97 g/km
Passat Alltrack
Early 2012
Petrol & diesel
From 150 g/km
Passat CC
Early 2012
Petrol & diesel
Up!
Spring 2012
Petrol & diesel
Up! CNG
Mid 2012
CNG
Golf
End 2012
Petrol & diesel
New Optima
01/2012
2.0 petrol
From 128 g/km
New Optima
01/2012
1.7 diesel
From 128 g/km
New Optima Hybrid
01/2012
Petrol + electric
129 g/km
116d EfficientDynamics
03/2012
2.0 diesel
99 g/km
320d EfficientDyanmics
02/2012
2.0 diesel
109 g/km
ActiveHybrid 5
03/2012
Petrol + electric
ActiveHybrid 3
Fall 2012
Petrol + electric
CX-5
05/2012
From 119 g/km
Mazda3
Early 2012
From 115 g/km
V60 Plug-In Hybrid
Early 2012
SL
A-Class
GL-Class
E-Class 300 BlueTEC Hybrid
CLS Shooting Brake
GLK facelift
G-Class facelift
New Avensis
01/2012
Petrol & Diesel
Diesel <120 g/km
New Prius Plug-in Hybrid
Summer 2012
Petrol + electric
CO2 target = 49g/km
Prius+ (7 seater)
Summer 2012
Petrol + electric
CO2 target = 49g/km
Yaris Hybrid
Summer 2012
Petrol + electric
New GS 450h
Mid 2012
Petrol + electric
137g/km
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NEW MODELS FOR 2012
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Green Fleet Management
Innovation Strategy
Manufacturers prepare the road ah Before the models are produced for fleet managers to choose, there is an enormous thinking process, a new approach to innovation, within the manufacturers. Many of them told us of their philosophies, which will shape the fleet models in the future. Tim HARRUP
n addition to reducing tailpipe emissions of its vehicles, Kia is building a clean production system, raising the resource recovery rate, designing vehicles with the disposal phase in mind, increasing energy efficiency, and adopting low-carbon fuels. The company states that it is committed to finding solutions to cut energy consumption and combat climate change, and thus assist fleet managers
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in reducing their own companies’ environmental impact. The approach of Fiat is described as acting with responsibility – where active concern for the environment and society are fully integrated with economic objectives. The group’s sustainability management system is aligned with the new ISO 26000 standard which defines international best practice in social responsibility. Fiat believes the quality of results is a direct function of how they are achieved and that development in harmony with the environment and people is not only more responsible, but also essential for long-
term growth. At the upper end of the range, it is the strategy of Jaguar Land Rover to partner with leading technology organisations for the quickest route to incorporation in vehicles. These include specialist companies in the supply chain, and academic and research organisations. And this is scheduled to lead to ‘city-car’ environmental performance from a luxury car the group is developing.
End of life-cycle Mercedes-Benz believes that innovations are the key to the efficient use of resources and the most
On the wide open road to the future, several car manufacturers, like Volkswagen, do not believe it is necessary to use all the cylinders of the car all the time.
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ead try has to make ‘drastic changes’ Renault states that it prefers to see these as an opportunity rather than a constraint. And the French brand is also conscious of the importance of the public at large understanding the stakes. It is therefore involved in the consumer awareness of environmental performance for sustainable mobility.
Looking beyond the car Volvo sees one of the main challenges as balancing the environmental demands from many different markets. Safeguarding the environment, the company believes, means working with a global perspective. Sustainable mobility continues to be a key issue irrespective of whether the centre of economic gravity is in the west or east, climate change and sustainable mobility are vital issues facing society and industry. But beyond philosophy and models, Volvo is also planning to offer on-demand service solutions enabling customers to have upgrades and information directly delivered to the vehicle, without spending unnecessary transport and time in the service location. Toyota too looks beyond ‘just the car’. The key to creating a low-carbon society, the company emphasises, is eliminating reliance on oil, and using electricity will
“ Irrespective of whether the centre of economic gravity is in the west or the east, climate change and sustainable mobility are vital issues. ” key environmental issues to contend with: energy and global warming related issues, promoting resource recycling, cleaner emissions and environmental management. Moving on to another form of alternative fuel, as well as researching fuel cells and hydrogen, Opel offers both CNG and LPG models ex-works. The company has been a working with CNG since 2001 and during this time nearly 60,000 CNG vehicles have been built. Acknowledging that the automotive indus-
be an effective means of doing this. When marketing products (to gain market acceptance), both the motor vehicle technologies and the development of infrastructure, such as charging and fuelling facilities, will be important elements. Peugeot has already been developing different services that optimise green fleet driving and aid mobility. With Peugeot Mobility Audits for example, Peugeot aims at providing an analysis of the mobility use of each employee in a company with the involvement of HR, Health and Security,
No going back There can be no doubt that the automotive industry is taking its responsibilities seriously. It can be stated that without exception, the manufacturers talk of reduced environmental impact, lower fuel consumption, decreased CO2 emissions. All of this is the result of a growing concern for the environment. There is no going back to the old days: whenever there is talk of a model being ‘quicker off the mark and faster’, this is always accompanied by the explanation that this performance is ‘despite lower fuel consumption and emissions’. The thinking we outline above is now embedded and will result in ever more environmentally-friendly motoring.
and Purchasing departments, in association with the Fleet Manager. Another service is Peugeot Eco Consulting, a service launched in 2011 that focuses on CO2 measurement, Eco Driver training and the fleet management tool ‘Peugeot Connect Fleet’ to measure the CO2 reduction.
Downsizing on the move One of the most radical developments within the field of internal combustion engines is set to come from the Volkswagen group. ‘Cylinder deactivation’ quite simply means that when less power is needed, the engine automatically shuts down half its cylinders. Depending on the traffic situation, the driver can make fuel savings of around 25 percent, the company says, simply by driving with a gentle foot, and he won't even notice it. When spontaneous power development is needed, all cylinders are reactivated within a fraction of a second to provide seamless traction. This particular development can be seen as a form of ‘flexible downsizing’. Put in simple terms, it equates to saying ‘why use a two litre engine to drive at 20 km/h in town, when one litre will do?’ I
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environmentally sound mobility that can be achieved. In concrete terms, this means that environmentally responsible product development begins with the selection of suitable raw materials and ends with recycling-friendly design and production processes. These make it possible to reuse or recycle used components. Thanks to efficient disassembly and recycling concepts, Daimler thus disposes of fewer and fewer parts of cars and commercial vehicles at the end of their life cycle. Wherever possible, high-quality secondary (recycled) raw materials are used in place of primary resources. In the plastic sector, the company gives preference to recycled raw materials or recyclable materials. Nissan is another manufacturer which talks of recycling. It says that the rising population and developing economies mainly in emerging markets are arousing concerns about energy and resource supply. The brand is therefore focusing on reducing the environmental impact of corporate activities and pursuing harmony between resource consumption and ecology. This is achieved by promoting and widening the application of green technologies and contributing to a recycling-based society. And at Mazda, the thinking also embraces the joint challenges of energy security and global warming. Mazda has identified four
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Green Fleet Management
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The podium of the International Fleet Green Award 2011 with Caroline Thonnon (Fleet Europe), Philippe Bottequin (Fleet Logistics), winner Holger Wiegand from 3M Europe, Stéphane Chesnel (Citroën) and Anya Kiss of Novo Nordisk and winner of the second prize.
3M
Successfully combining green and mobility
World famous for its tape products among others, 3M has a fleet of almost 5,000 cars in Europe. Looking after such a large organisation is Holger Wiegand, Sourcing Operations Manager Europe. He was called up onto the stage at the Fleet Europe Awards in October to be handed the International Fleet Green Award and the International Fleet Mobility Award 2011. In the light of this prestigious and high ranking success, we take a look at some of the elements of his fleet policy which convinced the jury. Tim HARRUP
he current EMEA fleet policy first took shape in 2008, when a central fleet management role was created involving relationships with both leasing companies and OEM’s. A brief look at the way the 3M fleet strategy is organised will provide a meaningful backdrop to the success of the fleet management team and Holger Wiegand in the two specific areas of green and mobility. The exclusive sourcing model is to lease cars through full service leasing and where local market conditions and size of
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the fleet allow, 3M uses a dualsource leasing model. Operational fleet management activities are broadly outsourced and handled by full service leasing companies directly or handled by external fleet management service provider. An EMEA Guideline has been developed and approved by the European Fleet Steering team, funded and sponsored by executive management. It has to be applied when establishing local car policies, and every local car policy deviation has to be validated by the EMEA fleet
manager and is subject to approval by the EMEA HR Director as it contains many aspects affecting compensation and salary rules. 3M uses a corporate framework to write local car policies. This requires a subsidiary to regulate several aspects according to corporate guidelines. The fleet strategy is designed to be balanced and to be a key and very visible element of corporate sustainability efforts balancing economic success, environmental stewardship and social responsi-
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), e.
Aggressive green policy The ‘green’ element of the 3M car policy is quite clearly defined. It is based on two measures: firstly, setting CO2 limits per cars in a multi-year evolution plan and impacting on driving behaviour through information, training and liability measures. In 2009 a 4 year plan was introduced by 3M to reduce CO2 emissions on the total active EMEA Fleet from over 160g/km down to 130g/km in 2013. This is more aggressive than legislation currently in force and required reductions
at all levels of the organisation. A common set of limits per year was established for all EMEA countries. This plan will be expanded and it schedules further reductions up to 2015. Details of this expansion to the plan are still to be determined. All countries have established safe and efficient driving programs ranging from information only to behind the wheel training courses. Germany, for example, communicates actual CO2 emissions and fuel consumption to each individual driver, comparing it to the respective car norms on a monthly basis using fuel card information incorporated into automatic email notifications.
Pilots It is not possible to talk of green fleets without invoking alternative power trains, and this is another element 3M has taken on board. Around 95% of the fleet is currently diesel. But the company has started with multiple pilot projects in several countries, which include selected hybrid vehicles (Toyota, Lexus, Honda) and will consider diesel hybrids which are now being introduced to the market. There is also a bio-ethanol pilot in the Netherlands, while in Germany 3M has also introduced a first pilot with 4 full electric vehicles as part of the central car pool. 3M is testing the inte-
gration of these vehicles with renewable energy solutions provided by some of its customers, and on the basis of its own products.
Three areas If all of this seems quite naturally to form part of a mobility plan, 3M is not content to just leave it at that however. Mobility as a concept is transversal in the company. Mobility issues are addressed in three different areas: travel policy, fleet policy and what may be described as meetings policy. Once again, there are a number of local country projects running, sharing best practises and with the objective of enabling all the various countries to work out the best mix for their country on the basis of lowest possible cost. Some examples of this policy can be seen in each of the three areas. In fleet for instance, the above-mentioned reorganisation of car-pool portfolio including introduction of EV’s in Germany which started in May 2011, was also designed to serve as a model for replication in other countries. A 3M employee contest in the Belgium plant has been organised with recognition for best performers. And the concept is not limited to cars. In France, rail subscriptions are offered to targeted employees.
Christiane Decleyre, European Sourcing Coordinator, and Holger Wiegand, Sourcing Operations Manager, have successfully guided the fleet management policy of 3M Europe in line with the CSR policy of the company.
Special edition Fleet Europe Magazine
bility. 3M wishes to drive operational excellence and cost effectiveness into all of its areas of operation, which in case of car fleet mutually benefits all sustainability dimensions. The multi-year focus on reducing CO2 emissions year on year through OEM limitation, car model selection, and controls on driver behaviour are central to this approach. This involvement of OEM selection in driving down CO2 emissions is important to 3M, as Holger Wiegand explains: “Our approach is to work only with car OEMs who actively manage ‘green’ into their portfolio. We’ve signed a selected range of OEM contracts and request that out of this basket each 3M country organisation selects a maximum of 3 OEMs.”
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Green Fleet Management
Where the travel policy is concerned: a 5 step mobility plan as an EMEA guideline has been established. This involves: travelling only when necessary; when you have to travel, choose the best option; if you use a company car, use the right one; if you drive, drive conscientiously; finally, think about CO2 output. Along with all this, 3M has made a CO2 calculator available on its EMEA online booking portal for rail and air travel. In encouraging the use of rail rather than car or air, 3M has defined a maximum travel time of three hours when travelling in countries such as France . 3M negotiates deals on the most frequently used routes. The company is also taking a keen interest in the announced extensions to the high speed international rail network, particularly as these would appear to bring Germany and Italy more into the picture. In terms of the meeting policy, a pilot was started the Benelux to implement a meeting policy/approval process and work with preferred suppliers. The objective is to replicate to other countries after a successful pilot. This move towards a more integrated meetings policy also involves tele-conferencing and web-conferencing. Facilities are being implemented for all employees and are being extensively used. Alongside this, flex-time and home-based working are now common practice at 3M.
conferencing, including for home offices, has also been found to lead to increased productivity and employee satisfaction. As is the case for many companies, the fleet policy (in the case of 3M the fleet and mobility policy) is part of a wider philosophy. Calculations show that the 3M focus on green fleet in recent years has revitalized and promoted its overall efforts in terms of a sustainability strategy. Moving on to real cost, the programme is delivering substantial cost savings. Fleet TCO is monitored on an international basis. Internal Financial & Spend Reports are prepared on a quarterly and annual basis and monthly fleet statistics from leasing partners and external fleet management companies are provided. Holger Wiegand and 3M are not intending to stop there, however. Committing to restricting CO2 emissions is to continue to be central to the policy, and there is set to be an increase in the degree of externally sourced fleet services. A further push on improving driver behaviour through encouraging eco-driving and safe driving should produce results in all areas. I
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3M is the company behind many products we all use in our daily lives : Scotch-Brite, Post-it, Scotch Guardâ&#x20AC;Ś. 3M is also active in telecommunications, electricals , health care, industrial , automotive and other sectors. The company was incorporated in 1929 in Delaware (USA), having stated operations in 1902 in Minnesota as Minnesota Mining and Manufacturing. It now turns over some 27 billion dollars, employing around 80,000 in some 65 countries. Its products are sold in almost 200 countries.
The 3M fleet TOTAL CARS WESTERN EUROPE 3,600 TOTAL CARS CENTRAL AND EASTERN EUROPE 1,100 TOTAL CARS MIDDLE EAST/AFRICA 300 TOTAL CARS REST OF WORLD 4,000 PREFERRED FUNDING METHOD Full service leasing
At the Fleet Europe Awards ceremony in Madrid, Holger Wiegand and 3M Europe were not only rewarded with the International Fleet Green Award, but also with the International Fleet Mobility Award and the second place in the International Fleet Manager of the Year Award. On the picture: Mr Wiegand with Sarah Lomas from Athlon Car Lease, sponsor of the second prize in the category International Fleet Manager of the Year.
Increased mobility, increased productivity As well as providing more flexibility and efficiency, the 3M green and mobility policies are also designed to achieve cost savings for the company. Average ticket prices of rail travel compared to air travel, are reported, for instance. And within the fleet itself, the reduction in fuel consumption is main cost benefit element. Where meetings are concerned, the policy leads to improved efficiency in location and date selection. Improved planning and leverage spend will be the main contributors to further cost reduction in this area. And of course a mobility project such as that instigated at 3M also contributes to the overall efficiency of employees and this too is a source of financial gain via increased productivity. A 3M survey of rail users showed that this travel mode increases productivity, enabling employees to work during the trip and benefit from ease of access (no check-in times compared to air travel). Efficient tools in place for phone
About 3M
With the support of:
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Green Fleet Management
Novo Nordisk
When local decisions make the fleet Healthcare company Novo Nordisk has a total of around 7,500 cars across the globe. The company’s determination to make its fleet operations as green as possible led to Lead Negotiator, Travel Management Services, Anya Kiss, picking up the second prize in the category International Fleet Green Award 2011. It is therefore well worth taking a look at what makes the company’s fleet management stand out in terms of environmental friendliness. Tim HARRUP
ooking firstly at the overall fleet picture, fleet management is carried out locally, predominantly by the local finance organisation. Supplier evaluation for Europe is conducted within a European Sourcing Group with representatives for all European business areas. International contract negotiations are either concluded directly with the country or regionally. The Green Fleet programme forms a part of the global company car guideline, which is owned by Travel Management Services (Corporate Sourcing) located at the Novo Nordisk headquarters in Denmark. The guideline stipulates a registration and reduction programme requirement for all affiliates. The objective of the fleet programme is to provide value to customers, which in fleet terms means enabling members of the sales force to perform their tasks. The fleet programme is also designed to support the hiring of talent through, amongst other things, a good benefits package. Novo Nordisk operates under a triple bottom line principle under which the company reports and sets targets for its CO2 emissions. The establishment of a global company car guideline supports the overall company climate strategy which aims to reduce CO2 emissions.
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Partnerships
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In terms of the involvement of fleet partners, this is clearly an important factor within the Novo Nordisk fleet operation. The fleet supply strategy is set up as a partnership with small number of large suppliers with wide geographical reach and advisory capabilities. As fleet management within affiliates is predominantly carried out by finance department staff as one of a number of tasks, Novo Nordisk
suppliers are charged with analysing local fleets and presenting proposals for optimising the operation. Emissions from company cars are even integrated into the annual report from fiscal year 2011.
Compliance In order to have been so well thought of by the Fleet Europe Awards international jury, it is of course clear that the specific ‘green’ elements of the Novo Nordisk car policy are robust and effective. The green fleet program is implemented globally through the global company car guideline. This company car guideline is a mandatory minimum requirement for all affiliates, which means that the level of compliance is expected to be 100%. With regard to controlling this compliance, The Green Fleet program is controlled
through Novo Nordisk’s online Standard Operating Procedures governance administration system, which has been set up to ensure that the relevant policy is read and understood by all country general managers. In addition to this, Travel Management carries out random checks on compliance with the policy, and General Managers must sign off within the system that they have read and understand the policy and will work in compliance with it. In order to ensure that the baseline could be implemented across the whole of the organisation the Green Fleet program was validated through a pilot project with the largest eight affiliates and with Headquarters. It is always necessary to take account of local differences, and to integrate this aspect, the CO2 reduction target was decided locally. Affiliates are also encouraged to
Due to a strict car policy with respect for local input, Novo Nordisk has realized important CO2 savings. In the home country Denmark Novo Nordisk has seen a drop in average CO2 emissions, from 182 g/km in 2009 to 137 g/km for new cars in 2011.
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About Novo Nordisk
t greener Vehicle choices One of the starting points for making a fleet greener and reducing CO2 emissions is, logically, the choice of vehicle. In this respect, Anya Kiss is able to point to some very concrete examples. Vehicle selection is a local matter, but experience so far has shown that affiliates are applying the principles of the Green Fleet policy in their vehicle selection and thereby lowering CO2 emissions. For example, in Japan the operation has introduced the Honda Insight as a sales force vehicle,
while France has reduced the engine size on its sales force vehicles. In Spain they are introducing the Toyota Prius into their fleet while the UK and Denmark are promoting vehicles with low fuel consumption through a bonus system. In the USA, SUV’s are traditionally popular, but even in this domain the local company is replacing large engine models with smaller engine versions. Italy has introduced smaller engine sizes on sales force vehicles.
Alternative power Going beyond the measures mentioned above, Novo Nordisk is keen to test and help promote new transportation technologies, for example electric vehicles. There is already an infrastructure in place in greater Copenhagen to support EV’s. To validate its vision in this respect, Novo Nordisk has leased six electric vehicles within the area of business transportation as part of a pilot project. To support this pilot, the company has also installed charging stations on four of its five office sites in greater Copenhagen.
Cost benefits The reduction of CO2 emissions achieved within the programme so far has meant sizeable fuel cost decreases. And once again, Novo Nordisk has allowed a degree of flexibility in deciding how these savings should
CO2 reductions Following implementation of the global company car policy in 2011 Novo Nordisk has a CO2 baseline for all affiliates which becomes operational in the first quarter of 2012. Affiliates must implement their own CO2 emissions reduction plan with set targets by the second quarter of 2012. Results from the pilot countries show that significant reductions can be achieved within a short timeframe. For example, home country Denmark has seen a spectacular drop in average CO2 emissions, from 182 g/km in 2009 to 137 g/km for new cars in 2011. Italy has decreased from 173 g/km average in 2009 to 156 g/km in 2011, and Japan from 137 g/km in 2009 to 119 g/km for new cars in 2011.
be used. Different countries have therefore decided to use these savings in various ways. Some, the Headquarters operation for example, have decided to give the savings back to the drivers in the form of an expanded leasing framework. Japan has elected to adjust the budget, which in effect means that the savings filter through to the bottom line. I
“ Novo Nordisk suppliers are charged with analysing local fleets and presenting proposals for optimising the operation. ” Anya Kiss, Lead Negotiator, Travel Management Services at Novo Nordisk was more than a little surprised with the second place in the International Fleet Green Award.
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follow best practises from other affiliates, and these are published on a global intranet site.
Novo Nordisk is a global healthcare company with 88 years of innovation and leadership in diabetes care. The company also has leading positions within haemophilia care, growth hormone therapy and hormone replacement therapy. Denmark-based healthcare Novo Nordisk employs around 32,500 people in many parts of the world, of which some 14,000 are in its home country.
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Green Fleet Management
Nalco Europe
Safety is the number one priority The least you can say is that sustainability company Nalco takes the safety of its drivers very seriously. The fleet policy has a large section dedicated to just this aspect, and so impressed was the Fleet Europe Awards 2011 jury that they awarded the International Fleet Safety Award to Nalco Europe and its Senior Procurement Manager, Indirects and Services, EAME, Cedric Millet. Tim HARRUP
he loss of two lives within the company in 2010 persuaded Nalco to make the issue of safety in general and as part of this, behind the wheel, a major priority. Cedric Millet explains: “Safety is one of our core values and remains Nalco’s number one priority. The impact of the two lives lost (not related to Nalco’s Fleet, but operation at customer site) in 2010 served to redouble our efforts to make safety personal and continue to focus on zero-zero accidents, zero injuries and zero fatalities”.
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Risk profile Nalco is very aware that safety has to be a major focus not only on its own premises, but when at client sites too. To improve contractor and overall safety the company has identified site safety leaders for all accounts to ensure clear accountability at sites where multiple Nalco or contract personnel routinely work. This builds on Nalco’s existing District Manager and Safety Champion networks. In addition customer site safety tools including a risk profile tool, risk assessment templates
and site audit tools have been developed. The company expects these steps to combine with an improved contractor selection process and new training to improve performance. It was clear that compliance with company guidelines where vehicles are concerned has to start at the most basic level – wearing a seatbelt. So Nalco conducted a seat belt use communications campaign with the theme “Everybody, Everywhere, Every time” including newsletters and posters to restate this long standing policy. A Pareto analysis of injury incidents sustained in 2009 was used to identify the three key behaviour elements which, if eliminated, would have contributed an 85 % reduction in incidents. This analysis and three key behaviour elements – eyes on your path and task, preplanning and wearing the appropriate PPE (personal protective equipment) – have been widely shared and used in safety coaching. Nalco continues to engage employees in identifying and reporting unsafe acts and conditions. The company regularly com-
municates ‘Safety Alerts’ and ‘Safety Lessons Learned’ based on this reporting.
Measurement The company is very well aware that safety in fleet terms is part of an overall safety culture, which includes all areas of operation. In order to ensure that the message is getting across and translating into real improvements in the field of safety, Nalco produces a monthly global safety dashboard – a combination of leading and lagging safety metrics to measure performance. The leading metrics track training in a number of key areas including driving, risk assessment (to guide
Cedric Millet, Senior Procurement Manager, Indirects and Services, EAME at Nalco deserved to win the International Fleet Safety Award 2011 because of the enormous efforts the company has delivered to improve the safety and the comfort of the employees.
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About Nalco
skid devices, rear parking aids, and a tyre pressure monitor also appear on the list of equipment. For added comfort (and therefore safety) drivers’ seats have to be height adjustable and include lumbar support.
Audit first
Incentives
Moving more specifically to fleet safety, Nalco started by identifying the current situation. This revealed that driving represented the greatest safety risk, in particular as some 290 million kilometres are driven by company personnel each year. Around 700 vehicle accidents occur, accounting for approximately a quarter of all recorded work-related injuries. To address this issue, Nalco therefore instigated a safety policy which includes a number of key elements: the use of mobile phones and a specific driver safety policy, along with both practical behind the wheel training and remedial on-line training. Nalco also periodically produces videos and brochures involving driver safety.
Nalco has been rolling out its policy of installing driver performance monitors in all of its cars over the past two years or so. This involves the use of a chip called ‘Drive Right’. This tool records driving behaviour in a number of key areas, including the top speed during the trip, and the amount of time the driver spent over the speed limit. It also includes reporting on the incidence of hard braking. Drivers who have installed this device and who have met certain key performance indicators, are rewarded by being able to select a car of a higher grade when the next lease change comes around. Where these conditions are not met, the driver loses the right to upgrades, including upgrades he may have been willing to pay for himself.
Safety equipment The use of some of the latest on-board safety technologies does not just form a part of the Nalco safety strategy, but its effectiveness has been precisely calculated. For example, the use of navigation systems has been proved to reduce accidents by 12% and damage costs by 5%. One of the reasons for this, Nalco has identified, is because the navigation systems make drivers feel more in control less distressed. There are other benefits too: driving time is down by 18% and kilometres driven by 16% when navigation systems are used. Navigation systems are not the only way in which Nalco uses technology to improve safety. Driver and passenger airbags, with front lateral and curtain airbags, and rear lateral airbags, are just some of the mandatory standard equipment for vehicles. ESP and anti-
Results Lagging indicators are the way in which Nalco records its performance in the field of fleet safety. It is a gauge of actual performance. Using this, the Total Vehicle Accident Rate (TVAR) which measures accidents per million miles driven, has dropped 30% from 2009 representing 155 fewer accidents. The rate has fallen 45% over the past five years. At 2.3, the TVAR in 2010 was better than Nalco’s stated objective of 3.3. The Severe Vehicle Accident Rate (SVAR) measures driving accidents resulting in death, bodily injury, disabling or rolling over a vehicle. The SVAR in 2010 improved 20% to 0.24, also below target for the year. In conclusion, it is clear that Nalco has a stringent set of objectives in terms of safety, with a stringent set of requirements and action points to go with this. Personnel safety is a concern throughout the company, and fleet safety forms a logical part of this, not an isolated policy in its own right. I
Safety Policy of Nalco Europe Nalco has implemented a variety of safety programs for its fleet of company cars in Europe. These programs include: Implementation of monitoring devices in all cars to provide instant driving coaching, Selection of cars for the fleet based on safety, Best in class standard mandatory equipment in company vehicles such as electronic stability control, antiblind spot mirrors and rear parking sensors, A car policy that encourages safe driving by enabling free upgrade to a premium vehicle, Proven safety culture in practice including no cell phone use while driving, Mandatory behind the wheel and defensive driver training
The Nalco fleet TOTAL EUROPE MIDDLE EAST / AFRICA ASIA PACIFIC AMERICA
FLEET / CARS 1,067
FLEET / LCV 131
165 488 2,763
20 60 339
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identification, evaluation and control of workplace hazards) and SOS or Safety On Site (which includes confined space, fall protection and other core elements) as well as near misses and safety audits.
Nalco Company is the world’s largest sustainability services company focused on industrial water, energy and air applications. Its objectives are to help its customers reduce energy, water and other natural resource consumption, minimizing environmental releases while boosting the bottom line. Nalco has a sales, service, research and marketing team of more than 7,000 technically trained experts, and serves almost 50,000 customer locations in over 150 countries. Founded in 1928, Nalco has recently been acquired by Ecolab. The company turns over some 4 billion dollars worldwide, employing around 12,000.
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Fleet Management During the Fleet Europe Forum 2011 in Madrid, fleet professionals gathered together to listen how international fleet management will evolve towards the integration of mobility management and how globalization can affect our industry.
Fleet Europe Forum 2011
When 550 International Fleet p meet, learn and network The Fleet Europe Forum 2011, held in Madrid, broke records. Firstly, more than 550 fleet professionals, including over 200 international fleet managers, took the time to travel to the Spanish capital to listen how to prepare to new trends in international fleet management and to exchange ideas and best practices with their peers. And secondly, this year the attendants came from no less than 23 countries.
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Steven SCHOEFS
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For the fourth time in a row the attendees could visit product presentations of different suppliers in the morning. On the picture Jean-NoĂŤl Gouillou, General Purchasing Manager of REXEL Group.
Also Tony Keen, Sourcing Support Leader at General Electric and one of the nominees at the Fleet Europe Awards 2011, was an attentive participant during the morning presentations of the fleet suppliers.
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Who wanted could also gather together at the Fleet Europe VIP Village where partners and sponsors presented new services and tools. Some of them were fun!
Like the previous years, it was presenter Toby Harper who opened the Fleet Europe Forum 2011 with a joke and a smile.
Bruce MacLaren, Senior Category Manager at Microsoft, explained his fleet visions as the International Fleet Manager of the Year 2010.
t professionals Although the fleet business is still a manâ&#x20AC;&#x2122;s world, more and more women are attending the Fleet Europe Forum.
Others, like Andrezej Sacha, Global Fleet Solutions Manager at Nestle, and Bart Jacobs, Director Business Development of Autorola, discussed serious business before entering the congress room of the Fleet Europe Forum. Also Jean Thomas, CEO of MACADAM Europe, and Johan Verbois, General Manager Fleet Operations of Toyota Motor Europe, found some time to talk about their future fleet business.
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Corrado Simontacchi, Manager Corporate Purchasing EAME of Huntsman, talked about the key elements and necessary conditions to implement a corporate mobility management policy.
After the break there were two more sessions. This year’s panel discussion about new international fleet trends counted 6 experienced fleet professionals. One of the 6 panel members was Fred Turco, Senior Director Global Fleet at Pfizer, who explained the key differences between fleet management in Europe and the US.
During the break the attendees found once again the time to network. On the left Wim Buzzi, Category Manager Fleet at Coca-Cola Enterprises.
The last item was a double presentation with Raphaël Goué, Managing Director Greater China and East Asia at Europraxis, and Stéphane Renie, Sales & Business Development Director of ALD International, about the new emerging world economy called China.
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Also Serge Ruytjens, Regional Sourcing Manager at Ericsson and a nominee at the Fleet Europe Awards 2011, shared best practices with fleet peers.
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Elena Delgado, Head of Fleet Sales & Remarketing at SEAT, listens to her Volkswagen Group colleague Axel Just, Manager International Fleet Sales at Audi.
With the support of:
This 9th edition of The Fleet Europe Forum was a success and received many positive feedback, for example from Rob Custers and Norbert Wiedmann, both in charge of fleet management at Siemens, and from Dr Nancy Storp, Head of Marketing & Business Development at Alphabet. This year, on November 22nd, we will celebrate the 10th anniversary of the Fleet Europe Forum in France. Stay informed by visiting our website www.fleeteurope.com.
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Opening Debate Fleet Europe Forum 2011
Fleet business needs a new dimensi o When so many top placed executives from all parts of Europe and beyond, get together at the Fleet Europe Forum to discuss where this industry is going, a stimulating opening debate is the best way to start. Tim HARRUP
he Fleet Europe Forum 2011 opened with a debate involving two major figures from different ‘sides’ of the fleet industry, but both a the highest level. Vahid Daemi, CEO and Chairman of the Board at LeasePlan Corporation, opened the debate on the hot topic of ‘Moving to the new International Fleet Dimension’. He believes that the whole fleet management situation has indeed changed, especially as capital resources become rarer in these crisis-hit times. Companies are
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Miguel Fonseca (Toyota Motor Europe) and Vahid Daemi (LeasePlan Corporation) provided a lively opening for the Fleet Europe Forum 2011.
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more and more concentrating on their core business, he confirmed, outsourcing other elements including fleet. And within all of this, striking the right balance between all aspects - driver satisfaction (a key element in staff retention), CO2 emissions, costs, mobility needs and safety… meant that fleet was now most certainly moving into a new dimension.
Lack of clarity Miguel Fonseca, Vice President Sales of Toyota Motor Europe, is extremely well
placed to give the manufacturers’ point of view. He agrees that there is a growing focus on Corporate Social Responsibility. But there are many challenges facing the fleet industry as it moves towards the next dimension. These are not helped by the administrative situation, where he points to a lack of visibility in areas such as regulation, taxation and the environmental question. He believes that because of this, the industry is currently finding itself too often in a situation where it has to react to
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i on audience of fleet managers and others. Vahid Daemi: “Don’t panic, and find a business partner who can keep you fully updated on all the best practices in all areas of the business, as these evolve”. Miguel Fonseca has a very similar message: “The whole industry needs to work together because we need to be able to read the whole of the situation as it evolves – the legal framework, tax issues…”
Remaining informed If one thing was becoming very clear from the thoughts of these two industry heavyweights: the increasing amount of regulation and the need for all players in the industry to stay informed of these regulations, is becoming increasingly vital. Along with this mass of new
Vahid Daemi, CEO and Chairman of the Board at LeasePlan Corporation: “It is important to find a business partner who can keep you fully updated.”
Miguel Fonseca, Vice President Sales of Toyota Motor Europe: “The whole industry needs to work closer together.”
administrative requirements is a lack of harmonisation, a lack of clarity, which is not of help to anybody. Both sides of the industry (or both of the sides of the industry involved in this debate) are to some degree relying on each other to move in the right direction.
Moving on Toyota is very well known for its commitment to hybrid cars as the way forward, and its Prius model has become something of a reference point in this domain. But Miguel Fonseca also made it quite clear that other forms of propulsion, including electric vehicles, have not been ruled out in favour of hybrids alone, and that his company would continue to explore and develop all potential avenues. This particular element introduces the theme of smart mobility, which is in many ways the definition of ‘the next dimension’ – the gradual move from pure ‘fleet management’ to mobility management. Having been introduced by Vahid Daemi and Miguel Fonseca, the topic then tended to make an appearance throughout many of the presentations of this year’s Fleet Europe Forum. The speakers were all realistic enough and humble enough to admit that at the moment, no-one knew exactly what the future would bring. For this reason, nothing should yet be ruled out, all avenues should be explored, and there would almost certainly not be one single, all-embracing solution to what is, after all, the objective of all this: providing optimal mobility solutions for company personnel. Many times in the past, fleet managers have come to realise that when designing fleet policies, when deciding which cars can be selected by employees, ‘one size fits all’ is never going to work. If this is true for a relatively well defined and well understood domain such as fleet management, how much truer it certainly is for the still emerging and comparatively hazy notion of mobility management. I
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emerging situations, rather than being able to plan confidently ahead. He also states that the partnership between his side of the industry (manufacturer) and that of his co-speaker Vahid Daemi (leasing companies) is increasingly important because leasing companies can inform manufacturers of exactly what it is that customers are looking for. Telematics are believed to be key in driving down costs and emissions he said. Returning to customers, Vahid Daemi says that leasing companies have been moving from their traditional role as supplier managers to that of customer managers. And after further enlightening words including the Toyota philosophy of having ‘the right car in the right place at the right time’, each speaker was asked to give one vital piece of advice to the
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Fleet Management
Fleet Europe Forum 2011
New trends ask for a different approach
Edward Gibbs, Growth Consulting Director EMEA at Frost & Sullivan, explained why and how future fleet management will turn more and more into an intelligent mobility management approach.
The importance of getting international fleet management right was amply demonstrated by the figures from the 2011 Fleet Europe Forum. Despite the difficult economic situation, with companies of every type trying to cut costs, some 550 international fleet professionals felt it vital to make the trip to Madrid to learn more about upcoming industry trends and meet their peers. Tim HARRUP
he Fleet Europe Forum 2011 edition did not disappoint them. We take a look at some of the points made by the speakers. As Manager Corporate Purchasing, Corrado Simontacchi of Huntsman said that the major need for business was to look at the way you provide services – and mobility is a service – to your employees. This therefore included travel, the fleet, IT… Traditional solutions may not necessarily be the best for your company now, he warned. In his role as Growth Consulting Director EMEA, Automotive & Transportation, Frost & Sullivan, Edward Gibbs has taken a very close look at the way the world’s population has evolved in terms of where it lives. The current trend, he explained, is for cars and other transport modes to be designed around cities, rather than the other way around, as used to be the case. A note of caution for the many car manufacturers in the audience came in the form of another statistic: over the past five years or so, new car registrations in the 18 to 25 year old age range has dropped by some 20% - and these are the manufacturers’ next customers… Each car in a car sharing scheme could replace 2 to 3 private
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cars, he went on, and on top of this, competition for manufacturers is likely to come from outside the automotive industry, as the Y generation was looking for its ‘Facebook on wheels’!
Electric cars… one day A lively panel discussion broached a number of subjects, and electric vehicles was inevitably one of them. With top level panel members from all sides of the industry, opinions were not identical, but what can be stated without hesitation is that it may take a long time yet, but electric cars will undoubtedly be part of our motoring future, and everyone, from whichever segment of the fleet business, is taking them very seriously and getting ready for this new future. Martin Jahn, Managing Director of Volkswagen Group Fleet Division, for example, pointed out that everybody says the market share for EV’s will be between 10 and 20% in 2020, but no-one can tell you how many EV’s are going to be sold next year!
Best practices Bruce MacLaren of Microsoft was elected International Fleet Manager of the Year in 2010, and his co-presenter Kimmo Kunnas
of the Nokia Siemens Network, won the International Green Fleet Award 2010. Kimmo Kunnas started by saying that it was important to take into account the role of the car as an attractive benefit in the total rewards package. Bruce MacLaren was able to give this point even more importance, saying that the CEO of Microsoft had stated that his number one KPI was the ability of the company to attract, retain and motivate top talent.
China… the place to be The last of the formal presentations at the Fleet Europe Forum was on the country everyone is talking about...China. Raphaël Goué of Europraxis started by saying that in 1990 only 50,000 cars were sold in China, but that this year the figure would have risen to over 18 million! Yearly growth is expected to remain at around the 10% level. Stéphane Renie of ALD International, described his company’s ‘long and difficult road’ in China. Regulations can be nightmare, and can vary from one city district to another. Meticulous preparation of every aspect of a proposed business venture is therefore a must. I
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International Fleet Managers Institute
Not one fleet procurement fits all On October 16th 2011, 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 International Fleet Procurement Strategies. No less than 26 fleet decision makers from companies including Accenture, Procter & Gamble, Pfizer, Coco-Cola Enterprises, Philips, Eli Lilly, Bayer attended this IFMI Expert Session. Steven SCHOEFS
ccording to Bernard Gracia, Director of the European Institute of Purchasing Management, too many corporates focus too heavily on the price and cost element and don’t pay enough attention to the value contribution from procurement. The purpose has to be to go from buying a product for a certain price to buying a complete service for a certain value. The value contribution can be measured as the customer satisfaction divided by the cost of the service or product and has to be positive.
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The group picture shows all IFMI participants and partners after the successful expert session on fleet procurement in Madrid.
When creating client satisfaction, think about the external and the internal client. To create an efficient customer relationship management, for both internal and external clients, a client satisfaction survey, sent out regularly can be very useful. To internal clients it is vital to know what they want, to avoid dissatisfaction with unsatisfied needs and over-satisfaction with useless features. To external clients, you have to keep up your attractiveness as a partner.
Do’s & Don’ts of fleet procurement But even when your relationships are well developed and strong, you still have to make fundamental decisions in terms of fleet procurement. Three international fleet managers – Lutz Hansen (Bayer), Paul Herremans (Philips) and Robert Patrick (Merck & Co) explained how they have dealt with crucial elements like ‘bundling or unbundling of services’, ‘multi or sole suppliers ‘ and ‘do’s & don’ts of fleet procurement’. Within fleet management there
are different areas regarding funding and management that can be sourced on a single or a multiple source basis. A single source strategy gives the highest negotiating power and the best discount possibilities, low process complexity, high transparency but less flexibility, more supplier dependency and less internal client satisfaction than a multiple sourcing procurement strategy. A balance between negotiating power and complexity therefore has to be achieved in order to get best results. When looking at bundled or unbundled fleet services, you first have to understand the breakdown of the components in the TCO of your fleet. This TCO is influenced by elements like the price of the car, the discount level, the residual value, the insurance fee, the fuel consumption and maintenance & repair costs. When going for outsourced bundling services you eliminate certain risks such as the residual value risk and you don’t have the burden of organizing in-house management
services. On the other hand unbundling will enable you to manage and optimize individual cost components. According to the IFMI audience, when you bundle you have to do so with the necessary transparency and visibility to give you valuable insight for strategic and commercial negotiations. This means that bundling combined with managed competition looks like the best value for efforts solution. As a conclusion we can say that there is no one size fits all approach. For each fleet type and each corporate strategy there is a right sourcing approach to balance the interests of company stakeholders. But when going through a new procurement strategy, a clear plan and strong organization, with the full support of the board is needed to achieve the required changes. Do not attempt to move too far, too fast, but understand the speed the company is willing to move. Because as fleet management is no exact science, there will be subsequent phases for future improvement. I
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To keep all clients happy
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Fleet Europe Awards 2011
The winners, the pictures The Fleet Europe Awards 2011 were once again very well received. This fifth edition rewarded prizes in seven categories and saw more than 500 professionals from the fleet, automotive & leasing world come together at the wonderful La Quinta del Jarama, an authentic spot a little outside the Spanish capital Madrid.
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Steven SCHOEFS
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More than 500 fleet professional attended the Fleet Europe Awards 2011 ceremony. In total 64 dinner tables were dressed in style to celebrate the best practices of the European fleet community.
But as always at a Fleet Europe event, networking deserves its time. In the middle of the picture we recognize Pascal Serres, Deputy CEO of ALD Automotive. (see also page 59)
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Let the show begin!
All winners, sponsors and presenters of the successful Fleet Europe Awards 2011 gathered together in a group picture at the end of the ceremony.
All nominees of the Fleet Europe Awards were introduced and had to come down the big stairs towards their seat. Here we see nominee Jost Dislich, Vice President Corporate Procurement at E.ON. The first Award of the evening was the election of the 2011 inductee to the Fleet Europe Hall of Fame. More than 2,000 visitors of the website of Fleet Europe made their choice and voted Gianluca Soma, Chairman of ALD International, as the winner. On the picture : Gianluca Soma, Chairman of ALD International and Elena Delgado, Head of Fleet Sales & Remarketing at SEAT.
The employees of Athlon Car Lease were dressed in style: men in tuxedo, women in black evening dresses.
The International Fleet Industry Award is the only award exclusively dedicated to a fleet supplier for the development of an innovative service or tool. This year Mobileye was the big winner. On the picture: Eran Perzelan of Mobileye, winner of the second prize Kenan Aksular of Athlon Car Lease, Javier Vazquez, Director of International Major Accounts at Volvo Car Corporation, and winner of the third prize Ashley Sowerby of Chevin Fleet Solutions.
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Norbert van den Eijnden, co-CEO of Alphabet enjoys a fleet discussion with a colleague. (see also page 62)
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Ralph Ruckgaber, Manager EMEA Lead Cars & Car Lease at IBM, was rewarded the International Fleet Innovation Award for the internally developed cost reporting and RFP tools. On the picture: Ralph Ruckgaber together with Pierre Garnier from Peugeot.
Before unveiling the winners in the category International Fleet Manager of the Year, two international fleet managers got a particular attention. Paul Herremans of Philips and Werner Berger, ex-Nestle and former International Fleet Manager of the Year, were thanked for their contribution to the development of international fleet management and for their support to the Fleet Europe platform.
Nalco Europe was rewarded the International Fleet Safety Award. On the picture : Oliver Lajara, Deputy General Manager European Fleet & Remarketing for Hyundai, winner Cedric Millet, Sr Procurement Manager Indirects & Services EAME at Nalco Europe, Ivor Johnson, EMEA Regional Fleet Director for Pfizer and winner of the second prize, and Isaac Litman, CEO of Mobileye. (see also page 38)
Special edition Fleet Europe Magazine
3M Europe won two awards at the Fleet Europe Awards 2011. The first one was the International Fleet Mobility Award. On the picture: Holger Wiegand, Sourcing Operations Manager at 3M Europe and Martin Jahn, Managing Director of Volkswagen Group Fleet International. (see also page 32)
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The second award that went to 3M Europe was once again a sustainability award, the International Fleet Green Award. On the picture: Philippe Bottequin, Business Development Director at Fleet Logistics, winner Holger Wiegand of 3M Europe, Stéphane Chesnel, Director Citroën Business International, and winner of the second prize Anya Kiss, Lead Negotiator Corporate Sourcing at Novo Nordisk. (see also page 36)
With the support of:
And then…the moment supreme. It was Hans-Georg Lutz, Senior Manager International Corporate Sales at Mercedes-Benz Cars, who announced with his well known enthusiasm the new International Fleet Manager of the Year : “And the winner in the category International Fleet Manager of the Year is”…
…Ivor Johnson, Regional Director EMEA Global Procurement at Pfizer! Mr Johnson thanked his colleagues at Pfizer for their support and their great help in developing the fleet management policy of the company to a higher dimension. (see also page 54)
On the picture of the International Fleet Manager of the Year 2011 Award: Bruce MacLaren of Microsoft who was International Fleet Manager of the Year 2010, Sarah Lomas, General Manager International Sales & Account Management at Athlon Car Lease, Hans-Georg Lutz, Senior Manager International Corporate Sales at Mercedes-Benz Cars, winner of the second prize Holger Wiegand, Sourcing Operations Manager of 3M Europe and winner of the third prize Ralph Ruckgaber, Manager EMEA Lead Cars & Car Lease at IBM, and Caroline Thonnon of Fleet Europe.
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Ivor Johnson, Pfizer - The New International Fleet
A complete and modern fleet management of exemplary quality Winning the International Fleet Manager of the Year Award is a great honour and brings prestige both to the person concerned and the company. Following on from such worthy recipients as Werner Berger (Nestlé) and Bruce MacLaren (Microsoft), now it was the turn of Ivor Johnson, EMEA Regional Fleet Director at Pfizer, to be called onto the stage and receive the biggest prize of the evening at the Fleet Europe Awards 2011. Tim HARRUP
o convince the jury that your international fleet management is better than any of the other candidates, many aspects have to be of exemplary quality. We take a look at what Ivor Johnson and Pfizer have been doing to merit such distinction. Firstly, there is a degree of centralisation in the data system, which was introduced in September 2008. This involves, fleet performance and management systems, principles, standard operating procedures and governance. In addition the internal resource and supplier strategy is centrally developed and regionally directed. The basic objective was to aid and develop a consistent strategy that addresses the core objectives of safety, environment, cost and employee satisfaction.
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Looking at the fleet strategy in a little more detail, Pfizer Global Fleet is structured as a Centre of Excellence (COE) based in New York with four Regions – Latin America, North America, Asia Pacific and Europe Middle East & Africa. Within each region are a number of Sub-Regions. For example, the EMEA region is split in to 3 sub-regions: North, South, Central & Eastern Europe. The sub-regions are managed by a team of three people. Fleet has an integrated strategy to
balance internal/external resources, consolidate fleet management/leasing and OEM’s in a cluster or sub-regional manner to transparently maximize operations in line with or above market competitiveness norms. This strategy is designed to optimise resource effectiveness and performance management relative to Pfizer’s value areas. These include service, spend management, safety and the environmental footprint, and are measured through a series of KPI’s, with quantified performance improvement.
It was Hans-Georg Lutz, Senior Manager international Corporate Sales at Mercedes-Benz Cars, who handed over the International Fleet Manager of the Year Award 2011 to Ivor Johnson.
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Manager of the Year
Clear supply strategy
Ivor Johnson, EMEA Regional Fleet Director at Pfizer, is the new International Fleet Manager of the Year because he showed prove of a complete fleet management approach that combines an efficient TCO control with respect for green and safety elements and driver satisfaction, which is embedded in a global company strategy.
Key to any successful fleet policy is a clear supply-side objective. The Pfizer strategy is to consolidate both OEM and fleet management companies to optimise cost, service delivery and supply relationship management. This strategy complements Pfizer’s overall strategy of forming balanced business relationships that deliver mutual benefit and enable leverage from the company’s global presence and size.
Governance is key It is also true of course that a fleet policy is not an end in itself, but is designed to enhance the company’s objectives within its core business. In the case of Pfizer, the fleet strategy is thus developed to meet the business needs and is reviewed in line with the evolving nature of the business to ensure it continues to provide employees with effective and efficient mobility solutions. The consistent outcomes are effective resource deployment, continually improved performance and maximized commercial competitiveness. Pfizer’s principles relative to asset, resource, performance management stay the same. The strategy evolves relative to internal and external market and regional maturity. One of the most visible parts of a fleet policy is the car selector lists, and in particular the impact this has on the Total Cost of Ownership (TCO). Pfizer has developed two global documents that govern its fleet internationally – Pfizer Operating Standards and Pfizer Policy Review Procedure. These two documents provide a framework of the operation and evolution of the policy and are aligned with core objectives. These operating standard and the policy review documents have enabled Pfizer to establish a clear governance role coupled with a consistent approach to the provision of fleet benefits and the opera-
tion of the fleet. This in turn has delivered significant benefits by way of TCO reduction, CO2 reduction and an improving safety record whilst maintaining a high level of employee satisfaction. This aligns internal business unit, HR and Finance stakeholders and establishes fleet as an endorser of country policy and the coordinating group for above market policy review and escalation as necessary. The operating standard covers all aspects of the fleet operation providing minimum performance criteria for 92 countries Pfizer operates a fleet in. The policy review document sets up a framework to align
organization roles and establish in country annual policy reviews against evolving standards and increased improvement objectives. ,
OEM bidding process There is a front line to all of this too. In the case of manufacturer selection, for Pfizer in Europe this involves having a tier supplier system, with one supplier accounting for around two thirds of the business, and 2-4 second tier suppliers taking care of much of the rest. A bidding process identifies suppliers able to compete in these tiers, and thus which are awarded the business. A further tier is possible in exceptional cases. According to Ivor Johnson, the International Fleet Manager of the Year Award is not just a recognition for the work already done, but it will enable the fleet management project of Pfizer to evolve to the next level with even greater professionalism.
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What the boss thinks…
Incorporated Green & Safety vision
The Pfizer car fleet TOTAL CARS WESTERN EUROPE MIDDLE EAST/AFRICA ASIA PACIFIC AMERICA TOTAL
16,500 1,800 5,800 9,500 34,600
About Pfizer Global Fleet Procurement and Operations Sr. Director Fred Turco was clearly proud of the award won by Ivor Johnson, and commented: “I was delighted for Ivor and the entire Pfizer Fleet team to receive this well deserved credit. This external recognition from a highly credible group enables internal recognition and validates what we believe is a very strong and sustainable Fleet program.”
Implementation and conflict resolution With truly international fleet policies being a relatively new concept, companies of the size of Pfizer have to put in place systems to ensure implementation and resolve issues arising from this. The local input is always important, and guidance from Pfizer’s centralised organisation for local policies includes: outlining the entitlement to a company car, (grading and corresponding category TCO entitlement limit) along with the usage, responsibilities and accountabilities of both the company and the driver. Insurance details including
Founded in the middle of the nineteenth century in America, Pfizer is one of the world’s largest pharmaceutical companies. It currently operates in around 150 countries and turns over some 70 billion dollars. The headquarters are now in New York, and Pfizer employs around 80,000 across the world. Its products treat a large number of illnesses and conditions, including cancer, high blood pressure, cholesterol and various mental anomalies.
levels of over 90%, and is helped by organisationally recognized role and governance document, quarterly reports against KPI’s through online system and in-market assessments. Pfizer therefore prides itself on a fully integrated and continually improving management system.
Efficient measurement There is clearly an overriding need to define and measure TCO in any fleet programme. At Pfizer, there is an on-line TCO data-base that measures all applicable elements of direct cost, and compares period over period performance and
“ The fleet function has overall governance for policy
Special edition Fleet Europe Magazine
and is required to sign-off all policies within the regions. ”
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advice on carriage of goods and personal property is also set out. More detailed guidelines involve the ordering process, reallocation process and CO2 limit by category. The fleet function has overall governance for policy and is required to sign off all policies within the regions before the policy is approved. In the event of a conflict, although this could theoretically escalate right up to Group HR, in reality most challenges to the policy are brought to a mutually satisfactory conclusion. All of this has led to compliance
trends. The online database is secure with managed access to suppliers, country fleet, regional and central reporting. International TCO measurement also involves an internal online database and reporting system for all markets that can be reported by market, business unit, region or globally. This database captures TCO, CO2 and safety normalised KPI’s and reports are against established targets. Data is captured quarterly for all large and medium size countries and annually for small markets (<10% of Pfizer’s fleet).
No company in the modern era can even consider implementing a fleet policy which does not have a specific focus on both the green element and safety. Where ‘green’ is concerned, Pfizer looks at areas including the personal use of the car, and the possibility of obtaining similar or higher power from smaller engines (the manufacturers take the lead in implementing this). Eco-driving courses have been shown to improve fuel consumption by up to 30%, with driver consumption monitored via fuel cards, and visits to service stations are shown to be considerably down. Pfizer also operates more than 4,000 flex-fuel vehicles worldwide. In addition, 200 hybrid vehicles are being tested in the USA, and the Japanese fleet of around 2,200 vehicles has become entirely hybrid. Over the past three years, Pfizer has reduced CO2 emissions from its fleet by 27% per vehicle from a 2008 baseline Having identified driving a vehicle as representing a significant risk compared to other elements of work, Pfizer has set about improving safety in many ways. Primarily Pfizer has implemented an aggressive fleet safety program that is centrally developed/managed and customized per country implantation. 80% of Pfizer fleet will have implemented a fleet safety program by the end of 2011. The program assesses colleague risk based on multiple factors and then assigns risk management performance action and training relative to assessed risk. Pfizer is actively reporting program performance to key senior leader program sponsors to ensure a continued focus on collision reduction, which will lead to improved driver safety, increased productivity and savings. In addition, Pfizer mandates minimum safety equipment for new vehicles. A comprehensive policy covering all aspects of fleet strategy, in short, and with a necessary degree of realism which enables the inevitable deviations from the required strategy to be dealt with in the most appropriate manner. I With the support of:
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The Fleet Year 2012
Fleet Managers ask for transparency and honesty A new year brings expectations and forecasts, hopes and fears, in every industry. To see what the fleet industry believes 2012 will bring, we ‘took the pulse’ by asking a number of leading professionals for their views. Steven SCHOEFS & Tim HARRUP
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the near future. In more concrete terms, however, the macro-economic situation may have a negative effect on overall leasing costs, with the recession-generated pressure experienced by national central banks rippling down to other banks, including those with leasing companies in their portfolios. Any upward evolution in global leasing costs may have the effect of causing fleet managers to review contract durations. The major areas of cost
increase within the overall TCO package are likely to be in the fuel and the whole insurance-related domains.
Fleet size Along with the need o keep an eye on costs, fleet managers are also faced with a more fundamental question, whether to increase, decrease or make no change in, the size of their fleets. Amongst those companies which are either planning mergers and acquisitions, or which have other growth projects, the effect is forecast to be an increase in fleet size, as more employees are ‘on the road’. Increases in sales
International fleet managers look with confidence to the year 2012, but they hope that the international fleet business will further professionalize and meet their requirements in the search for strong and open partnerships.
Special edition Fleet Europe Magazine
ne aspect of the fleet industry in terms of leasing will continue to be very much in evidence: cost. The general view is that competition will again be strong, with leasing companies trying to increase volume where they can. This is likely to lead to little or no change in fixed leasing costs, although the dependence of a number of leasing companies on their parent company banks will make 2012 what one respondent referred to as ‘an interesting year’. This is in particular the case as it does not appear that the worldwide economic recession has is likely to evaporate in
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Fleet Management
Fleet managers have recognized the influence drivers can have on the Total Cost of Ownership. No wonder that managing driver behaviour and improving communication with the driver will stay on the fleet manager's agenda in 2012.
forces in order to combat the recession will have a direct upwards impact in this respect. And in all cases, our fleet professionals indicated that fleet budgets would be adjusted to fit the new situation. This means, in simple terms, that budgets for those companies planning to grow in one way or another, will rise.
Special edition Fleet Europe Magazine
Challenges
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If the above scenario seems relatively straightforward, this does not mean hide the fact that fleet managers are going to face considerable challenges in 2012. Increasing demand for the services of sometimes small and centralised fleet management teams, will lead to a review of priorities, and to improving internal fleet administrative procedures. Within this context, the level of outsourced services (to leasing or fleet management companies) will also be put in the spotlight. Where such outsourcing takes place, it will have to be executed in an optimal manner, with regional and global fleet tools developed which help the fleet manager control costs. On top of this, good communications with drivers, and ensuring that a company’s fleet decisions deliver what drivers and the company are looking for, will continue to be a challenge. A reduction in the number of global OEM’s included in the international policy, along with further ‘green’ measures and a focus on driver safety, were also mentioned as representing challenges for 2012. Over the past couple of years or so, the impact that drivers have on the performance of fleets in both economic and ecological terms, has
come to be recognised. Continuing to influence driver behaviour – especially in terms of the twin elements of reducing fuel consumption and therefore CO2 emissions – will further occupy the minds of fleet managers in 2012. Eco-driving also has a direct effect on safety, and this is another element which will take on increasing importance. Telematics, of course, will have a growing role to play in this area.
Could do better… Fleet managers are particularly dependent on two types of external supplier in order to achieve their goals – car manufacturers and leasing companies. So what evolution would they like to see from these companies? Where manufacturers are concerned, paying further attention to the remarketing position of their vehicles is felt to be important. Remarketing is now seen as a vital element of the whole leasing equation.
dable delays are experienced (such as was the case with the Japanese tsunami), keeping customers advised of the real situation would help. This plea for transparency also applies to leasing companies. Honesty and transparency was mentioned. One fleet professional spoke of a lack of credibility within the leasing industry, with ‘hidden pockets’ of profitability for the leasing companies still in existence, but which will be discovered and dismantled by purchasing departments if the leasing companies do not make this move themselves. Leasing companies also need to define and deliver quality, not wait for clients to do this for them. Quality can be a USP and can be recognised by clients.
Make a difference Where other fleet suppliers are concerned, they may also have a role to play, but once again, transparency and honesty are vital, and these have to be
“ Fleet suppliers need to define and deliver quality. ” The private car market (which absorbs most end of contract vehicles, but which also represents a substantial proportion of new car sales) has clearly been affected by the economic recession, and the expected continuation of this will keep manufacturers focused on the fleet market. And further simplification of the OEM-customer relationship would be appreciated – a single point of contact at regional and even at global level. On a very practical level, when unavoi-
clearly communicated from the very first meeting with the client. It is also vital that other fleet suppliers know exactly what they are offering and how this can help a fleet client meet his objectives. And again, ensuring that the client understands how this offering will help him, is a prerequisite for playing a role in the industry. Merely proposing competitive pricing is not enough to carve out a position in this complex marketplace. I
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Fleet partner
Pascal Serres, ALD Automotive
900,000 x Service =our core business A couple of months ago ALD Automotive reached the target of 900,000 vehicles in fleet. We considered this milestone as an immediate cause for an interview with Deputy CEO Pascal Serres on the priorities for 2012 and the future of the leasing industry.
There is no crisis for ALD Automotive then? P. Serres: No because our business tends to be contra-cyclical and, size being a competitive advantage, ALD should continue to reinforce its position. Our geo-
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graphical diversification and multi-brand position also is an element of protection. Consequently, even if it is more pleasant to compete in a favourable environment, the economic difficulties that we can foresee in the near future should not affect ALD’s business. We will continue to invest to improve the quality of our service and our productivity. Finally, we do not expect losses on residual values for the future as our book is built with the contracts that we wrote from 2008 onwards with relatively conservative residuals.
What does your company consider being key for the future? P.Serres: We consider that we are in the service business where quality and relationship is a priority for customer retention. We obviously need to work in good relationship with manufacturers and their distribution network to get the utmost quality in terms of deliveries, warranties
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“ The leasing sector is gaining momentum with new challenges and new opportunities. But service remains our focus. ” I Are BRIC countries ready for company cars ? P. Serres: In these countries we still need to create the market and ensure that our customers give value to the service. Large international companies already know that leasing contracts offer a more accurate control of costs and better TCO and they rely on international lessors like ALD to improve efficiency and savings. We inspire
and repairs. We also require large amount of financing and need to ensure long term liquidity. This achieved, our priority will be the driver and the quality of the communication with him. We have to invest in new technology to provide flexibility and savings. For that reason ALD is the only lessor in Europe that considers fleet management as a core business. Caroline THONNON
PASCAL SERRES ON MOBILITY MANAGEMENT: “A lessor is fundamentally a provider of mobility. This means we have a role to play when it comes to mobility management with clear-cut initiatives like car-sharing and in the cooperation with our partners.” THE FUTURE OF THE COMPANY CAR: “It’s crucial to listen to our customers. The business model on leasing cars will still be operational over the next 3 to 5 years. Customers and drivers are starting to formulate new desires and it is our task to offer them the correct solutions. Every month we organise a ‘G8 meeting’ on strategy and development.” E-MOBILITY: “The electric car is coming. In France we expect some 20,000 EV in 2012, mostly in the public sector. But also telematic solutions are gaining importance. As a leasing company we have to integrate this too.”
Special edition Fleet Europe Magazine
Just as with all industries the leasing world is facing turbulent times. What is ALD Automotive’s position in Europe today? Pascal Serres: In 2011, our portfolio has grown organically by 10% and we have consolidated our leadership by reaching this important milestone of 900.000 contracts. We are very happy with it. For the near future we plan continuous growth when considering our order book and all the contracts signed recently. For the longer term, our geographical presence in the 4 BRIC countries and emerging markets in general will contribute to boost our growth. In Western Europe, our partnerships with car makers like Renault, Ford, Volvo and Opel under white label schemes, together with the recent signature of Kia and Hyundai will support growth in the SME segment. So, globally ALD is on a very favourable competitive position.
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confidence because we provide detailed information, benchmarks and products which are very much similar to the one we offer in mature countries. So at present, we are growing our portfolios almost only with top rated companies, strengthening our existing position in Western Europe or in the United States where we have a strategic partnership with Wheels.
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Fleet partner
João Cardoso, Bosch Service
“Service for all brands within one network” Bosch is one of the leading technology and services companies in the world. In 2004 Bosch marched down the fleet management road by offering to service fleets vehicles throughout their international workshop Network. According to Joao Cardoso, Worldwide Key Account Manager of Bosch Service, the goal is to become a leading fleet servicing supplier. here’s a huge chance that the vehicle you’re driving is equipped with several Bosch technologies and components”, says João Cardoso of Bosch Service. “For instance diesel and gasoline injections systems, alternators and starters, lithiumion batteries, electric drive systems and so on. But also safety systems like ABS, airbag, ESP and traction control system. Moreover Bosch produces brake discs and pads, wiper systems, steering systems, radio navigation systems. In 2010 Bosch published 3,800 high tendered patents, or 15 a day, so Bosch is working closely with the manufacturers to make
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the cars more economical, safer and more fun to drive.” The Bosch Service network is the world’s largest independent chain of repair shops with some 15,000 franchises globally, 7,500 in Europe. Bosch plans to grow worldwide to over 20,000 workshops in 2016. I When we look at the fleet business, which services do you deliver through the aftermarket? J. Cardoso: “Well, service means for a fleet about 25% of the total cost of ownership, so cost savings on the service side means a high potential point of improvement for the fleet profitability.
Special edition Fleet Europe Magazine
Bosch is ready for the EV revolution
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“Bosch will invest about 400 million Euros in e-powertrains a year. In 2013 Bosch will have 20 projects on e-vehicles with 12 different OEMs. With Samsung, Bosch has a joint venture on the development of lithium-ion batteries and with Mercedes we have a joint venture for the development of electric engines. We are also preparing our workshops on this matter. Today in Germany, Switzerland and Austria some 50 Service centers already organize the servicing for My Way in Switzerland and Move About in Germany. The e-scooters from Govex are serviced by 200 selected Bosch Service centers in Italy, Germany, Switzerland and Austria. So this e-servicing is already a reality today at Bosch Service.”
The Bosch Service Network offers many solutions for quality multi brand vehicle servicing with significant cost reduction. Fleet vehicles from all brands can be serviced without losing the car manufacturer’s warranty because our service network respect the OEM repair instructions which are included in the compulsory Bosch software ESItronic and uses OE-equivalent quality parts, being Bosch branded of course preferred. Outside the manufacturer’s warranty the Bosch Service network is prepared to do complete “bumper-to-bumper” service. A smaller number of shops are additionally specialized in accident and smart repair.” I What are the advantages for fleets? J. Cardoso: “The fleet managers profit from relevant cost savings because of the excellent service on all possible vehicles. The fleets using the Bosch Service centers confirm that they realize 2 digit cost savings compared with the previous service provider. The Bosch Service have a competitive package of labor rates, parts and service prices and are able to offer special fleet rates. Service for all brands can be organized within one network, so as a fleet manager you have less service contacts and fewer garages to manage. This leads in many cases to a reduced vehicle downtime for fleets which saves costs and optimizes customer satisfaction.”
Don’t you fear that your relationship with OEMs could be negatively affected by the growing success of your servicing business? J. Cardoso: “The OEMs are really important partners of Bosch, but we have decided to be present also in the free aftermarket, so we deal with this with neutrality and let the healthy competition rule.
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Fleet partner
Janola Gustafson, Renault
“The Twizy can be the new Renault icon” As are all volume car producers in Europe, Renault is entering 2012 with some prudence, although the French car manufacturer believes that the fleet client is ready to adopt the electric vehicle offer. Janola Gustafson, who was appointed Director Corporate Sales for Europe in August this year and thus succeeds Robert Boscari, who has moved to a new function at strategic group level, sees the future of Renault as a professional challenge. enault is one of the leaders in the volume production of cars in Europe and we are the absolute leader when it comes to commercial vehicles. As our competitors and the market are continuously challenging us, we have to challenge ourselves within Renault to do always better and to remain a leader. But this is a good thing, for Renault, for the market and for our customers.”
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Can we expect fleet growth opportunities for Europe in 2012? J. Gustafson: “It all depends on the definition of Europe. All indications tell us that the so called ‘old’ European market will decrease this year. If we can obtain the sales level of 2011, we can speak of a good fleet year.”
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What ambitions do you have as new Corporate Sales Director of Renault Group? J. Gustafson: “The fleet business is a people business where strong relations are necessary to achieve successful results over a period of time. I’m leading a team of some 10 International Key Account Managers who are working first of all with our international accounts. Along with this they are supporting the local fleet growth in the countries as they give advice to the more than 100 local Key Account Managers. This is a second important element to obtain global fleet success.”
J. Gustafson: “EVs are the challenge but also an asset for the future of Renault. Urban air pollution is one of the biggest subjects on the political agenda in many countries. Pure EVs are responding to ecological demands and today cover between 80 and 90 % of every person’s mobility needs. So it is clear that the electrification of our range is strategically important for our Group. We are investing an enormous amount of money (4 billion euros total investment for Alliance) in the development and mass production of pure EVs. For example, in our Maubeuge factory you will see the production of Kangoo’s with combustion engines and the electric Kangoo Z.E. side by side. So electrification is already completely integrated into our mass production chain.”
I Renault Group aims to put 1,5 million electric vehicles in the streets by 2016. Isn’t that too optimistic and can the EV segment really be an important sales segment in the future? J. Gustafson : “The younger generation already sees mobility in a different way than the previous generation. They look at mobility as a flexible service to cover transportation needs instead of owning one fixed car that stands at night in front of a garage. This evolution will lead to a mixed offer of mobility solutions.”
I Do you believe that the TCO of an EV will one day be competitive with the TCO of a combustion engine vehicle? J. Gustafson : “This is our goal. The most difficult area is the cost of the battery. This is why we are offering the battery through a lease solution, which means that the cost of our EVs is today similar to the cost of combustion engine cars. By protecting the customer from the ownership of the battery we also reassure the customer because he can be certain to always have a battery that works according to the latest specifications.”
Steven SCHOEFS
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“I’m Swedish and perhaps I look a little different at cars, but for me the Renault 4 is the iconic car. This car was created in the beginning of the ’60 and was a huge success because of its unique design and its polyvalence as it was launched as a family car but also as a commercial vehicle and so it has had an influence on the start of fleet business. Today I’m really looking forward to the Renault Twizy, as it is a practical mix of an urban scooter and a electric car at a reasonable price that answers the mobility needs of many youngsters.”
Special edition Fleet Europe Magazine
I Renault is at the forefront of automotive electrification. How do you see the future of EVs in fleet business?
The Renault 4 & Twizy
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Fleet partner
Norbert Van den Eijnden & Ed Frederiks, Alphabet
The New Alphabet is aiming for the top t On 30 September 2011, Alphabet International completed the acquisition of ING Car Lease. The new Alphabet now has more than 460,000 cars under management and operates in 18 countries. One of Alphabet's key strategies will be to offer flexible mobility solutions, say co-CEOs Norbert van den Eijnden and Ed Frederiks. In the following interview, they spoke about the leasing market and its future, and about the acquisition.
Special edition Fleet Europe Magazine
Ed Frederiks: "The discussions about the takeover actually went quite smoothly, particularly with regards to the intentions. It's an intense process and takes much more time than the first round of discussions. The two companies complement each other very well, so the takeover was seen as a perfect fit between both ING Car Lease and Alphabet. That helped us come to an agreement quite quickly." Norbert van den Eijnden: â&#x20AC;&#x153;Let me point out that economic developments were one of the basic reasons for the takeover. We noticed that banks are no longer the
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Co-CEOs Norbert van den Eijnden en Ed Frederiks want to guide the New Alphabet into the European leasing top 3 on the mid-term.
most logical owners of a car leasing company. We believe firmly that several banks are ready to step out of this business, and that was one reason why we initiated contacts with the idea of a takeover." I So you believe that a bank is no longer the ideal shareholder of a modern leasing company? Norbert van den Eijnden: "Precisely. I, personally, think that banks will be getting out of this particular line of business.â&#x20AC;?
Ed Frederiks: "We are convinced that a period of consolidation is about to begin, because financial institutions will have to concentrate more on their core business." Norbert van den Eijnden: "Our hypothesis is that there will be four large international leasing players as of 2020. They will control more than 50 % of the European market. Of course there are some local parties, but the big game is being played by a declining number of parties." I The new Alphabet will be present in 18 countries, up from 16 countries. The merger has not produced exponential growth with regard to new markets. What is your strategy with regard to new markets? Norbert van den Eijnden: "Our strategy is to provide excellent service to the top eight European countries. It's here that 80% of all leasing business is done. The next step will be to enlarge our
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op three
How will the integration proceed? Norbert van den Eijnden: "Different countries, different requirements, different speeds. In the Netherlands we have a large and a small player, so we expect integration to proceed quickly from a technical point of view. In countries where the two companies each have a portfolio of a similar size, the situation is naturally more complex. We are keeping up the pace to achieve rapid integration." Ed Frederiks: "Our customers are our number one concern. For this reason, none of the account management teams have been changed. They are excellent anyway, but it is important that every
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Sharing the driver’s seat NORBERT VAN DEN EIJNDEN, RESPONSIBLE FOR BACK OFFICE OPERATIONS, AND ED FREDERIKS, RESPONSIBLE FOR FRONT OFFICE BUSINESS, BOTH HAVE THE TITLE OF CO-CEO. BUT WHO HAS THE LAST WORD IN CASE OF A BUSINESS DILEMMA? NORBERT VAN DEN EIJNDEN: "Neither one of us, because we are jointly responsible. There is a split between the 'market and following the market'. That means that only a consensus will lead to results. Each of us can block the other, but then neither one of us would make progress." ED FREDERIKS: "We both have a strong history in leasing, we know each other and we understand each other. Our mission is to move forward and so it would make no sense whatsoever to take the wind out of each other's sails."
customer continue to receive the same service from the same contact person.” I What about employees? Will there be any change on that level? Norbert van den Eijnden: "We have communicated the new management structure to all of the employees. It is important for everyone to know that the background of this takeover is not efficiency, but rather growth, which means that we want to keep all our employees. There are no plans for redundancies. As a large enterprise, we are capable of relocating people and management functions if necessary."
I As you know, not every reorganisation runs smoothly. Aren't you afraid that some of your current customers will switch over to a competitor that is not engaged in an integration phase?
Could you be more specific about what this means? Ed Frederiks: "People's identification with possessing a vehicle actually erodes in the long term. This means that you elaborate a different model of car use. Car sharing, carpooling and a combination of various transport modes are becoming more interesting to many drivers these days. We believe that we can play an important role in providing adapted mobility, and we can do it in line with the plans of our stakeholders. We are not only talking about things like e-mobility, but also about service and financing.” Norbert van den Eijnden: "We want to make flexible use of cars and mobility concepts possible. With the introduction of electrical vehicles, such flexibility will become a must. So right now, we are busy developing software and other IT and telecom applications that will enable our customers to use
“ Our hypothesis is that there will be four large international leasing players as of 2020. ” Ed Frederiks: "Well, as I said already, our current customers must continue to receive the best possible service. Plus, we are continuing to run the business, which means that demand from customers will develop quickly, because all of our thinking is customer-oriented. Our slogan at Alphabet is 'Keep your hands on the wheel and your eyes on the road', and that says it all." Norbert van den Eijnden: "If you take a look at our industry, you will see that most mergers were successful. This is due to the fact that we are dealing with the same, easily identifiable product. By the way, most of the large companies in our market are the result of integrations, takeovers or synergies." I The new Alphabet is aiming for a pioneering role in the area of mobility.
their fleets quite differently than before.” I What is the medium-term ambition, say by 2014? Ed Frederiks: "Let me put it simply: We are aiming for the top five in Europe within two years, and the way to achieve that goal will be through excellent coverage and service. Leasing is our great strength, and customers, partners, employees and potential customers as well will be taking notice. The competition, too, since we will be benchmarking the industry. Our goal after that is to be in the top three."
Steven SCHOEFS
Special edition Fleet Europe Magazine
footprint and reinforce our positions in countries where we don't have such a presence. We want to make sure that we can provide optimal service to all our customers in Europe, and that is currently the case."
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Fleet partner
Simon Dransfield, Jaguar Land Rover
The focus on new business Last year Simon Dransfield became General Manager Corporate Sales Europe at the prestigious brands Jaguar Land Rover. One of his main objectives this year is to strengthen the dealer competence for fleet business and ensuring a transparent communication to the market.
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How important is fleet sales for Jaguar & Land Rover actually? S. Dransfield : “Corporate sales currently account for approximately 40% of our current performance. 2011 has seen the rebirth of our activity in the corporate sales sector since the withdrawal of the Jaguar X Type. Whilst in the UK our
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What do you expect from 2012? S. Dransfield: “We have given the Jaguar XF 2.2 a facelift and also introduced the new Range Rover Evoque, both of these vehicles are well-suited to fleet requirements. With these, as well as future planned models, the investment we are
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“ The new Range Rover Evoque has given us an ideal platform for fleet growth. ” fleet focus was retained, in continental Europe we concentrated on building our proposition for retail and small business owners. Now we have a team in each NSC establishing the structure and strategy for success in fleet in their local
The Jaguar XJ13 & Land Rover Defender 1970 “My favourite Jaguar would be the Jaguar XJ-13. Only one was made and it is considered to capture the essence of Jaguar. Our founder William Lyons once stated that "The car is the closest thing we will ever create to something that is alive." Whilst we live with RVs, TCO, CO2 and all of the issues associated with fleet management, we should never lose the passion generated by cars such as the XJ-13. My favourite Land Rover is without a doubt the Land Rover Defender 1970. Not many car manufacturers can claim to be the custodians of a real automotive icon as the unique Defender.
making in our teams across Europe, and the segment opportunity, our expectation is that we will see a significant improvement over the next 12 months. Also in 2012, we will continue building the dealer competence and offer for fleet and developing our relationships in the market, ensuring that the competitive cost of ownership related to Jaguar and Land Rover products is clearly communicated.” What new developments in terms of fleet policy can we expect from your company? S. Dransfield: “We might be a relatively small player in a very big market, but we are developing strategies that will embrace technology and provide a reach and consistency in our offer. On the back of some recent, successful product launches, we will be launching more new products that are aligned to fleets. The Evoque launch was incredibly successful, with 80% of sales coming from new customers. We will be looking to build on this success and continue to engage many new fleet customers, who had not considered a Land Rover vehicle before. The Evoque and the 2.2l diesel have given us a platform for growth and we will use this as we continue to focus on new business.” Steven SCHOEFS
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Special edition Fleet Europe Magazine
y role in Jaguar Land Rover is to lead the corporate sales strategy and activity in our European markets, for both brands. Whilst my role excludes the UK market, I work closely with the UK team to offer a coordinated approach when developing international accounts. Primarily we work through our National Sales Companies (NSCs) and dealer network to increase our corporate sales performance. Centrally, we liaise with International Accounts, preferred long- and short-term rental partners and residual value influencers. Finally, we provide the central knowledge bank of fleet trends and opportunities, ensuring that this is then represented in the product and marketing development.”
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market. We have invested in developing a corporate sales team across our European NSCs in France, Germany, Italy, Spain / Portugal, BeNeLux. This investment shows a dedication to fleet sales and making sure the infrastructure is in place to support our customers. ”
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Fleet partner
Giuseppe Tommaso & Chan Uk Jun, Kia Motors Europe
New Optima has to establish Kia in European fleet business “The launch of the new Kia Optima in the important fleet D-segment means not only the further growth of our model portfolio but also a shift of our brand image”, says Chan Uk Jun, Fleet & Remarketing Manager at Kia Motors Europe. “The Kia Optima shows that Kia is really a design oriented brand and it is the best proof of our confidence in the future. Although it’s not our ambition to become a premium brand, it’s a compliment when people are saying that our new models are integrating premium elements. ” t is no wonder that Kia expects to make a breakthrough in fleet with Kia Optima. “The D-segment is one of the toughest segments”, admits Chan Uk Jun to Fleet Europe. “All important brands are present with well known cars and it’s not so easy for a newcomer to convince the public with a completely new product, especially as companies are working with closed car policies and car lists. So we
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will start our fleet offensive in this segment with some companies that are already showing interest in the car or that are already Kia customer with other models. This will create a signal effect and it will be necessary to streamline this commercial strategy with the fleet strategy and approach of our dealers.”
Up to 30% growth Kia Motors Europe has seen sales growth of 14% last year. Although automotive specialists agree that new European sales will slow down in 2012 and the fleet market may be negatively impacted by economic problems in the Eurozone, Chan Uk Jun remains optimistic: “We will once again grow, bucking the general market trend. A growth rate of 25 to 30% is even realistic. The production capacity of our Zilina plant in Slovakia will therefore be increased from 220,000 to 300,000 units. In fleet we believe that we can grow more than in private sales, as we now have the Kia Optima and the cee’d will also be renewed during 2012 and have its world premiere at this year’s Geneva Motor If, following the launch of the Optima, we can successfully launch the new cee’d, Kia will be well on the way to becoming the successful fleet brand we want to be.”
Special edition Fleet Europe Magazine
Kia's fleet tandem Giuseppe Tommaso and Chan Uk Jun are convinced that Kia can become the most loved brand in automotive business.
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Young but experienced Also Giuseppe Tommaso, General Manager Business Development at Kia Motors Europe, sees huge fleet possibilities for his brand. “The first Kia was launched in 1974. So we are still a young automotive brand in comparison with major ones, and until today there has always been some hesitancy towards young challenging brands, certainly in fleet. Here at Kia we are convinced that fleet business is core and the Kia Optima can be our new flagship for fleets. In the past years we have learned that one good fleet model is just not enough to be really successful. With the new Kia Optima we can now offer a full range of quality cars and that range has an average CO2-emission of 118 g/km, which is below the magical fleet limit of 120 g/km. Furthermore the economic situation has been tough for almost everybody the last two years. But Kia has improved its sales figures, so it is possible to realize growth, despite a general economic dip. We have new products, we are well known for our quality, we have dynamic people and we are going to improve our dealer network and our relationships with lease companies, which all will contribute to a new successful 2012 were we aim to create a better balance between private and fleet sales.” SS
Differentiation is key Kia belongs to Hyundai Group. Priority has been the integration of the two challenging brands to bring important synergies on technology and platform side, however now the clear goal is to keep Kia and Hyundai separated as two different automotive brands. Giuseppe Tommaso added: “The differentiation of the brands is essential to be able to propose the unique qualities of both brands, to guarantee strong product ranges and to reach two different customer groups” he says. “Kia has the strong desire and the firm belief to become the most loved brand in automotive, we don’t want to be the biggest brand as such. You are right that collaboration would create some synergies and that fleet clients could have one single point of contact, but every fleet professional knows that in the end a straight forward personal contact is still key. So today and tomorrow Kia is the best place to be.”
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