Fleet Europe Magazine °90 Special Smart Mobility Management by Nexus Communication

FOR INTERNATIONAL FLEET & MOBILITY LEADERS

#90 05/2017

Nexus Communication - Fleet Europe #90 - Periodic magazine - May 2017 - Deposit Office Liège X

DOSSIER 20 PAGES • The road map for corporate car-sharing • The corporate cyclist • The impact of city restrictions • Start-up cities for smarter mobility • Mobility in practice: ABN Amro

ANALYSIS Will Private Lease dominate instead of Full Service Lease

FACE TO FACE Arnaud Willing-Salleron (Veolia) / Patrick Martinoli (Orange)

20 YEARS OF FLEET EUROPE The Internationalisation of Fleet Management

p.48

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SEAT FOR BUSINESS Average fuel consumption from 4.1 to 7.2 l/100 km. Average CO2 mass emissions 96 to 164 g/km.

WIRELESS CHARGER

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CONTENT GLOCAL, ALSO FOR MOBILITY

5-32

Today’s fleet industry buzzword is mobility. Both corporate customers and suppliers are actively pursuing mobility solutions to increase efficiency and attract business. In this issue, we devote our Dossier to this allimportant trend. But the focus on mobility should not detract from the company car – still a central and essential component of the corporate strategy, both as a tool and a benefit. And that will remain the case for the foreseeable future. So, the future will be mobility-oriented. But how exactly? Multinationals need to design an international mobility strategy. But, as shown by a number of testimonials in this issue, the implementation is highly dependent on local circumstances: legal environment, infrastructure, type of activity and employee culture. Car-sharing may be an excellent solution in market A, but fail completely in market B, for example. And corporate biking can be a nice alternative for country C. So, the old adage still holds: Think global, act local. That principle will be top of mind on 5 and 6 December 2017 in Estoril (Portugal) at the Fleet Europe Summit, which will also host the Fleet Europe Awards – including a Smart Mobility Management Award. More info at forum.fleeteurope.com. See you there!

DOSSIER How to make corporate mobility smart

Time to get smart & connected.....6–7 The road map to corporate car-sharing.................................................. 11-14 Be ready for the rise of the corporate cyclist.................................... 16-17 The new boundaries for urban fleet management.............. 18-20

46 BUSINESS Becoming the number one reference in B2C, Gilles Bellemere, ALD International

Europe’s thriving start-up cities...................................................................... 22-23 Welcome to the digital automotive ecosystem............................24-25 ABN Amro's plan to go carbon-neutral with mobility..... 27-28 Corporate mobility in practice ..... 31-32

48 20 YEARS OF FLEET EUROPE

52 EXPERT

Open Cars for Safe, The Internationalisation Modern, Diverse Fleets, Dr Lothar of Fleet Management Determann

FACE TO FACE

Veolia vs Orange: “Reducing the vehicle fleet will be inevitable”……………… 36-41

INNOVATION

WLTP, reshuffling the fuel consumption cards…………………………………………………………… 43-44

BUSINESS

News from the industry………………………………………………………………………………………………………………………………………… 47 Steven SCHOEFS Chief Editor, Fleet Europe

REMARKETING

The world is ready for B2C remarketing………………………………………………………………………………… 54-55 No bad news effect on diesel RVs……………………………………………………………………………………………………… 57-59

ANALYSIS

Private leasing powers ahead………………………………………………………………………………………………………………… 61-64

5&6 DECEMBER

2017 FLEET EUROPE SUMMIT Estoril

MANAGEMENT

Forum 2017 : Uncovering the fleet and mobility professions' DNA……………………66

WHAT IS IT ABOUT THE NEW OCTAVIA?

IS IT THE TCO?

IS IT THE SAFETY?

IS IT THE RELIABILITY?

Low total cost of ownership is necessary for your company. But when it comes combined with reliability and safety, it becomes an incredible asset to your car fleet. So it isn’t that nobody knows exactly what it is about the New OCTAVIA. It is that when it comes to benefits, it’s almost impossible to pick just one.

skoda-auto.com

Combined fuel consumption and CO 2 emissions according to the legislation of the concerned country

SMART MOBILITY DOSSIER

HOW TO MAKE SHARING SUCCESSFUL STEVEN SCHOEFS Chief Editor @StevenSchoefs

Born between 1980 and 2000, the Millennials are increasingly setting the trends. This year, expect a boom in the ‘sharing economy’, as different Millennial attitudes towards ownership filter through to their purchasing decisions. New trends are forcing companies across all sectors to rethink their business model – or invent new ones, like Uber, Airbnb and other tech-driven disruptors. Shared mobility is one way to stay relevant in the new economy. Car-sharing is expected to grow at an annual rate of 26%, hitting 18 million users by 2020. Ride-sharing in Europe is projected to grow from 36 million users now to 65 million by 2020. Another interesting mobility option, especially in cities with the right infrastructure and countries with the right fiscal incentives: the bicycle. Corporate cyclists could soon be kings of the road in cities like Copenhagen, Berlin and Amsterdam; or countries like Belgium, France and the Netherlands. Which solutions will be successful? In the end, that depends on fleet and mobility managers like you, and the choices you make. So – how will you align the mobility needs of your employees with the bewildering variety of solutions available in the market?

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SMART MOBILITY

Time to get smart & connected Dieter Quartier @DieterQuartier

Everything we drive is an effervescent source of data. 5G, IoT and selflearning software are about to make mobility management a manysplendored thing.

Trying to map the possibilities of connected technology in the mobility space is tremendously challenging. Figuratively speaking, we can only see a few hundred metres ahead, to the edge of our car’s LED headlights’ bundle, but nobody knows what awaits us further down the road – let alone beyond the horizon: technology evolves at a pace unimaginable twenty years ago. What is certain, however, is that it will transform the way we move and how companies provide mobility to their employees. The industry is bracing for a shake-up, from OEM to car dealer, from lessor to end user. There is serious doubt as to whether companies will still lease their vehicles and attribute every one of them to a single user ten years from now. Perhaps an individually used company car (re) becomes the privilege of few.

Automated driving could enable people to make better use of some 100 hours of their time each year.

THIRD LIVING SPACE Shared or personal, venues like Mobile World Congress in Barcelona indicate that ‘driving’ is bound to become ‘riding along’, opening up a cornucopia of online services which make our car an extension of our home and our office. Or, as engineering company Bosch calls it, a third living space. Self-driving cars – or at least highly automated ones – will make each journey safer and more comfortable. But there is more: many technology companies see cars becoming personal assistants, saving their user valuable time. According to Bosch’s ‘Connected car effect 2025’ study, automated driving could enable people who drive a lot to make better use of some 100 hours of their time each year. As the car is an active part of the Internet of Things (IoT), users can continue their digital lives when they step aboard, sending e-mails to the office, video conferencing with colleagues and customers, et cetera. INCREASED SAFETY AND ACCURACY Today, it takes a long time before vital information is transmitted to drivers. Cloudbased systems will drastically speed up the spread of crucial warnings. Imagine your car’s stability control detects a slippery road surface on a certain location. Would it not be great that this (anonymized) information is shared immediately with other drivers through the internet? Likewise, cars can report available parking spots, avoiding millions of kilometres in driving distance, not to mention congestion and time loss, by guiding drivers directly to them.

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IoT increases the speed and accuracy of information, enhancing safety and efficiency.

Another noteworthy application is the one under development by Qualcomm Technologies and TomTom. Different vehicle sensors are collected and analysed, supporting cars to determine their location, monitor and learn driving patterns, perceive their surroundings and share this ‘visual’ information with the rest of the world. The new allows vast numbers of connected cars to see and interpret their environment, supporting real-time input for map and road condition updates.

SAVINGS POTENTIAL Apart from better time utilization whist on the go and safer motoring altogether, connected cars offer plenty of perks to the fleet manager, too. Think about usagebased insurance, remote vehicle diagnostics, predictive maintenance, automated logging of business versus private journeys, instant mileage registration and – if necessary – contract adaptation, et cetera. The cost and red tape savings potential is impressive, to say the very least.

Finally, connected cars could open up the road to easy ride-sharing amongst colleagues and hence reduce costs. Knowing how, where and when your vehicles are used, means you could avoid people travelling from and to the same location in different cars. Or you could organise switch-overs along the way. Also, connectivity could reduce the need for pool cars. The possibilities are endless. The repercussions tantalising.

ADVERTORIAL

The move to a world of smart mobility Telematics is evolving. Once we may have talked about ‘tracked’ vehicles but now we should be focusing on connected ones. Emphasis is shifting from fleet management to smarter mobility, empowered by an explosion in connected driver applications. FLEET EUROPE #90

TomTom CURFER app with BP add-on

The evolution of smart mobility is also reflected in the changes at TomTom Telematics. Already known as Europe’s largest fleet management service provider, the company is widening its scope. Now, the TomTom Telematics Service Platform is also being used for the innovation of game-changing apps. Using this proven technology, it is possible to build new user interfaces for fleet managers of cars and vans, like leasing and rental companies, with huge potential benefits in efficiency and asset management. Driver applications are helping to transform mobility for end users, providing real-time insight into vehicle health and

driving behavior, and helping connect them to other car service providers. One of the most recent examples is the launch of the TomTom CURFER app with integration to BP Fuelcard data. In a world where convenience is key, these apps provide the kind of rich functionality that will increasingly become an expectation rather than a luxury.

FOR MORE INFO telematics.tomtom.com/connectedcar

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5 / 6 december 2017

estoril PORTUGAL

Register now Register by October 20 to take advantage of early bird rate at forum.fleeteurope.com Uncovering the DNA of the fleet & mobility professions of tomorrow We have chosen the Estoril Congress Center, 25 km away from Lisbon airport and right next to the famous Casino with its surrounding gardens and sea view, to host this yearâ&#x20AC;&#x2122;s Fleet Europe Forum & Awards. A location that will capture your imagination and that fits our festive aspiration to celebrate the 20th anniversary of Fleet Europe. This festive edition of the Fleet Europe Forum & Awards will offer a number of events, 5 & 6 December, which bring added value to your fleet management profession.

INTERNATIONAL FLEET MANAGERS INSTITUTE (IFMI) > 5 December A full-day training session on several hot topics of crucial interest, exclusively for international fleet clients.

REMARKETING FORUM > 5 December

THE FLEET EUROPE FORUM & VILLAGE > 6 December

A convention which will zoom in on remarketing topics that make the sector tick. With the added benefit of previous experience, sector feedback and the guidance of an Advisory Board composed of industry experts.

A dedicated meeting place which will offer delegates a professional but informal setting in which to learn and interact with car fleet suppliers and fleet clients. Without a doubt, itâ&#x20AC;&#x2122;s a place that year in year out, is buzzing with chatter.

Learn, network and be inspired, be in Estoril ! For more information, please visit forum.fleeteurope.com

THE FLEET EUROPE AWARDS > 6 December A fitting tribute to the finest best practices in our community that will attribute awards to fleet managers and fleet suppliers. This ceremony will be followed by an appetizing Gala dinner and a memorable Fleet Europe birthday celebration.

SMART MOBILITY

The road map to corporate car-sharing Frank Jacob & Michel Willems, Managing Director of Mobilitas

Our company cars are a semi-private space as well as a status symbol. So why should we share them with others? There are many good reasons, which is why corporate car-sharing is taking off. But the formula requires a change in attitude.

What’s in a name? Car-sharing is one name for a number of very different solutions. It can be offered by a public agency, by a specialised private company or by an ad-hoc group as a P2P service. It can be station-based, free-floating or intra-corporate. Whatever shape corporate car-sharing takes, if it involves switching employees out of their salary cars, it will be a tough task – and fleet managers should be prepared for that. They have to stand up and spell out: “I know this is new for you and you’re not happy about it, but in the end, it will benefit both the company and yourself”. BUSINESS MODELS The market today basically offers two business models. The first is to use sharing technology to convert part of your existing fleet. A range of solutions is available – from very basic to very advanced. They consist of software, hardware and telecoms components. Some suppliers, Ubeeqo among them, offer all requirements in one package. The second is to get on board with public car-sharing programmes run in large urban centres by recognised operators – for instance DriveNow or Car2go. Some of these operators allow customers to book special hourly slots, overnight vehicles or outof-area travel, or even to rent out vehicles exclusively for corporate use. Much depends on the specific needs of the client company – and on its location. OPTIMAL BALANCE Medium-sized to very large corporate fleets are where most car-sharing implementations are being carried out today. In these

FLEET EUROPE #90

instances, car-sharing is often viewed initially as an improved form of pool car management, and its primary goal is to achieve efficiency gains via an automated intra-corporate reservations system and keyless vehicle access. Another trend: adjoining companies in industrial or business zones sharing vehicles in a multi-corporate car-sharing setup. The key question here is: How many vehicles do I need to achieve an optimal balance between maximum availability and maximum usage? In other words: How to avoid gaps in availability? Because cars can be needed at a moment’s notice. This requires a lot more advance travel planning. VEHICLE PARAMETERS Ideally, a shared car can replace up to eight non-shared cars. The flipside: car-sharing involves a lot of additional processing and associated costs. In some cases, an extra front office employee has to be designated for the task, and the formula will also entail more HR and tax work for the back office. However, this should be offset against the cost of a classic – stationary – company car. That cost can be measured: currently available software solutions can monitor a huge number of vehicle parameters. In fact, the continuous flow of data produced by car-sharing fleets can result in a self-optimisation process. One example is the growing trend of using electric vehicles for car-sharing – a result of the monitorability of the vehicles involved. A pioneer in this field was Flinkster car-sharing by Deutsche Bahn.

Companies often adopt electric vehicles for their car-sharing project.

Both car manufacturers and rental and lease companies are increasingly interested in these solutions, and as a consequence, vehicles are being better prepared for sharing software from the factory stage onwards. THREE STEPS Fleet managers wanting to implement an intra-corporate car-sharing solution should proceed following these three steps:

Explain to the drivers why your company is opting for car-sharing. Reasons can include: the environment, to free up money for other transport needs, to make travel between different sites more efficient, or to limit fleet expansion (because of limited parking space, for example). Set up an awareness campaign, introduce a single shared car as a demo, visit a company already using car-sharing: all means to generate a healthy interest in the formula. Consult with your fellow employees. Shared cars are just one of the many mobility modes offered by a company.

Consult with HR and Tax departments on how to involve user data in payroll calculation. Often, different fiscal rules apply to shared cars. Provide incentives to overcome employee aversion to the sharing formula. For example by also providing those who opt for car-sharing with a mobility budget or a company bike. Before enacting car-sharing, discuss the changes that need to be made to the car policy.

Communicate the practicalities of car-sharing, and practise them with the future users – for each of the steps of the car-sharing process:

2 121

• Before: How to sign in, make a reservation, check for delays.

• At

the start: inspect for damage, lost items, cleanliness. Check fuel gauge, tire pressure and presence of fuel card and other required documents. Start vehicle and inpute required data. Make sure there is enough time to refuel if required.

• Returning the vehicle: Remove personal items and close according to the correct procedure. Report damage, if relevant. Make sure vehicle is parked in fine- or fee-free zone.

• Special issues: Some vehicle types require some getting used to, which could affect road safety. Pairing smartphones to shared cars could be a problem. And delays should be communicated, so the next user is aware of them. TO BE CONVINCED Corporate car-sharing is a solution that can be tailor-made to fit the needs of any company or group of companies. In future, technological advances will further automate its processes. Nevertheless, corporate car-sharing is not a substitute for the classic company car, if only because of the different expectations regarding cleanliness of the vehicle – and the fact that you cannot leave your personal items in the car. This requires a serious change of attitude of the drivers involved in the change. Younger employees are open to the idea of car-sharing, especially if linked to the right incentives. But – as shown by a recent market survey by CSA for Arval – it is the fleet managers themselves that need to be convinced... FLEET EUROPE #90

CAR-SHARING AT EDF EVEN A SINGLE SHARED CAR CAN MAKE A BIG DIFFERENCE Even a single shared car can make a noticeable difference – both in money saved and increased ease of travel. So says Ludovic Lavarde, who manages a team of Key Account Managers for EDF based at La Défense, on the western outskirts of Paris. Three years ago, he organised a shared car via Sodetrel, EDF's electric mobility subsidiary. LOGICAL SOLUTION “When any of our KAMs need to be near the Gare de Lyon, of course it makes more sense to take the metro. But when they need to make multiple stops in the centre of Paris, or have a meeting at a place hard to reach via RER (Paris's overground rail network), a car is the logical solution”.

“I don't want to manage cars, let alone electric batteries”,

So Ludovic struck a deal with Sodetrel. His team now disposes of a Peugeot Ion. “A small car – ideal for parking in the city”. Why an electric car? “Because it fits with the overall objective of the EDF Group. And because it is not only good for our image and the environment, but also for our budget”. UNDER-USED Even if the car is relatively under-used: “Our KAMs have business all over France, and beyond – in Belgium, the UK, etcetera. They don't need to be in Paris all the time, and when they do, the metro sometimes is an easier alternative, as mentioned. So our shared car is booked for about only 20% of the time. Even so, we have calculated that it saves us a couple of hundred euros each month in taxi fares and metro fees. Overall, and taking into account the cost of the contract itself, it saves us around €2,000 per year”.

says Ludovic Lavarde

Everybody loves its smooth, dynamic driving. And it's an automatic, which makes driving in traffic jams a lot easier”. MEETING ROOM So, does Mr. Lavarde have any tips for other fleet managers considering a shared car? “Well, I am not a fleet manager. I don't want to manage cars, let alone electric batteries. My advice: make sure your contract with your provider takes as much of the management of the car out of your hands. Also: make sure there is a tool to book the car as easily as a meeting room”.

Electric cars have potential disadvantages, but none that Mr. Lavarde or his team have ever experienced: “The car can be charged here at its location at La Défense. Its range is limited to 150 km, and that is more than enough to cover Paris and environs.

FLEET EUROPE #90

CAR-SHARING AT ENDESA THE AIM: ONE MILLION SHARED KILOMETERS BY 2021 In March 2016, Endesa – the largest electric utility company in Spain – implemented a car-sharing programme developed with Alphabet under its AlphaCity car-sharing toolbox. The tailor-made solution was called Car e-Sharing, in reference to the electric cars that would be used and to the company´s name.

“Our main aim was to introduce e-mobility in a very visible and friendly way”, says Noelia Castro Paredes

CORE BUSINESS “That of course also is a reference to our own core business”, says Noelia Castro Paredes at Endesa. “The first aim was to provide our employees with shared cars for meetings and other work duties in an urban environment. But our main aim was to introduce e-mobility in a very visible and friendly way, in order to push the change to EVs in our workforce. Our charging hubs are at the Endesa headquarters in Madrid, Barcelona, Sevilla, Zaragoza, Palma de Mallorca and on the Canary Islands”. The scheme was not introduced without due diligence: “As per our company policy, we wrote a tender for the car-sharing service, which was won by Alphabet”. A pilot project was then completed successfully

before the scheme itself was introduced, in one region after another – each time accompanied by an information and demonstration campaign, supported by Alphabet. FLEXIBLE FORMAT “The flexibility of the format, including the ease of reserving the vehicles through the platform, were important factors in the success, both of the pilot scheme and of the current system. We now have about 1,200 registered users for our EVs, which by now have travelled more than 145,000 km. By 2021, we hope to reach the one-million km milestone”, she says. So, what are the Do's and Don'ts for other fleet managers to consider when thinking about introducing a car-sharing scheme? EXTRACTING INFORMATION “From my experience, I can say the flexibility and reliability of the sharing platform is a very important point. It is also interesting that we have the option of extracting information from our project that may be relevant to improving our fleet management; although we have yet to implement this option ourselves”.

Want to develop a car-sharing programme in your company? All the suppliers providing car-sharing solutions gathered in one place:

www.globalfleetdirectory.com 4 141

FLEET EUROPE #90

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SMART MOBILITY

Be ready for the rise of the corporate cyclist Frank Jacobs @FrankJacobs

500,000

EMPLOYEES IN 13 EU COUNTRIES SWITCHED FROM CARS TO BICYCLES

THEY CYCLED

145 = 21,000

MILLION KM

TONS OF CO2 SAVED

BELGIUM:

OF CORPORATE BIKERS USE E-BIKE

CYCLE COMMUTING ANNUAL AVERAGE:

944 KM TO 1,045 KM FROM IN 2011

IN 2016 16

The recently-concluded Bike2work programme convinced half a million commuters across 13 EU countries to switch from cars to bicycles, resulting in a total of 145 million km cycled, and almost 21,000 tons of CO2 saved in 2015 alone. And that is just one example of the popularity of corporate (e-)biking, growing because it benefits not just employees and the environment, but also company themselves. If you're a petrolhead, the bicycle seems like a step down in terms of mobility. Actually, cycling makes more sense than driving in certain settings: densely populated urban and suburban areas where distances are relatively short, and can take longer by car because of endemic congestion. DIVERSIFY MOBILITY See for example the proliferation of shared bicycle schemes throughout hundreds of European city centres. While those are not specifically aimed at the corporate sector, initiatives aimed specifically at companies are multiplying – offered by more and more lease companies and other providers, stimulated by fiscal measures designed by various governments, and last but not least, propelled by the interest of companies looking to diversify the mobility offers to their employees. Corporate biking and e-biking (i.e. using electric bicycles) is taking off especially in more mature mobility markets such as France, Germany, the UK and the Netherlands; but especially in Belgium, where urban density and fiscal stimuli have conspired to make the country a front-runner in cycling to, from and for work.

DEDUCTIBLE BIKES Belgian employees who cycle to work can deduct the purchase and maintenance of their bikes from their tax bill. They also receive a mileage allowance from their companies, who in their turn can deduct this cost. In 2015, about 406,000 Belgians benefited from the arrangement, at a cost of €93 million to the government. Back in 2011, the number of beneficiaries was 30% lower, at 314,000 employees. Cyclists are commuting ever greater distances. In 2011 the annual average was 944 km, last year it was 1,045 km. The average mileage allowance has correspondingly increased from €198 to €230 per employee per year. FINANCIAL LEASING Bikes offered free of charge to employees are not considered a benefit in kind if they are used to commute to and from work. The fiscally advantageous setup has led to a marked increase in the number of bike and e-bike schemes offered by lease companies, and in the number of bikes they offer.

FLEET EUROPE #90

STANDALONE PRODUCT As part of its multi-mobility offer, Belgian lease company KBC Autolease has deve-loped Fietslease (“bicycle lease”), allowing employees can choose the folding bike, city bike or electric bike they prefer. The formula also has resulted in more than 1,000 leased bicycles. A number of lease companies offer bicycles, either as a standalone product of in combination with a car. There are however also several specialist suppliers who focus solely on two-wheel solutions. Like for example C-Tec Leasing, which offers bikes and light electric vehicles, initially in combination with a subscription to the public bus service – and more recently also for Athlon, as an expansion of the offer to their customers. E-BIKE SCOPE The e-bike, a bicycle fitted with an electric engine, is currently a minority option: 16% of Belgians commuting by bike use a bicycle with electric support, and 2% a so-called speedpedelec, which can reach speeds of up to 45 km/h. But both formulas have increased the number of people biking to work, and the average commuting distance. No less than 85% of those currently ebiking to work used their car before doing so. And the scope for increased popularity of e-bikes is huge: only 15% of commuters bike to work, while 82% live within 30 km from their place of work, a distance easily covered by e-bike. COMPLETE ECOSYSTEM For corporate cycling to become a paradigma-shifting success, what is required is a complete ecosystem geared towards enabling employees to use their bikes efficiently. Fiscal measures, corporate interest and a varied range of suppliers are essential elements. But more can be done. FLEET EUROPE #90

ALD Automotive, for example, now leases out more than 1,000 bicycles in Belgium via its Companybike scheme, a financial leasing formula that can be tailor-made to fit the needs of individual cyclists, and comes with a service package that includes roadside assistance.

Corporate biking and e-biking (i.e. using electric bicycles) is taking off in more mature mobility markets such as France, Germany, the UK, Denmark and the Netherlands; but especially in Belgium.

Take Olympus Mobility, for example: this mobility platform was set up by the Belgian rail company. Via an app, customers of the three biggest leasing companies of the country (ALD, Belfius, KBC) can optimise their multimodal travel, when combining bike rides with train trips or shared car drives. FISCAL RECOMMENDATIONS Belgium may be ahead of the pack, but it is not alone in racing towards a future where bikes and e-bikes feature more prominently in the corporate mobility mix. In its final report on the Bike2work programme, the European Cyclists’ Federation singles out a number of recommendations for fiscal measures that can take corporate cycling to the next level:

• Abolish

hidden tax breaks for cars. Company cars in the EU are undertaxed to the tune of €54 billion per year, according to a recent Danish study. Taxation should only encourage companies to provide cars for their employees if it is necessary for business rather than commuting.

• Make

fiscal incentives mode-neutral. Currently, tax measures heavily favour cars over other modes of transport. At the very least, fiscal stimulus for mobility should be neutral, allowing alternatives to cars a chance – like mobility budgets.

• Combine

tax breaks. By combining tax breaks for cycling with those for

using public transport, sustainable intermodal mobility is stimulated.

• Incentivise active modes of transport. Cycling and walking are beneficial to employee health. Fiscal measures could be designed to provide incentives for these modes of transport. After Belgium, France now also has introduced a reimbursement system for commuting by bike.

BICYCLES NOW MAJORITY IN COPENHAGEN If Belgium is ahead in corporate cycling, Denmark is the pioneer in cycling per se. 'Copenhagenisation' has become the term for cities around the world introducing bicycle-friendly measures. The Danish capital's efforts to introduce separate bike 'highways' are not only inspiring, they are also effective. Bike usage has increased by 68% over the last two decades. Last year, just under 266,000 bicycles were used regularly in the city. For the first time, that is more than the number of local cars – just under 253,000. At present, 41% of all trips in Copenhagen are done by bike. The target is 50% by 2025.

SMART MOBILITY

The new boundaries for urban fleet management

Lukas Neckermann

Lukas Neckermann is Managing Director at Neckermann Strategic Advisors, a consultancy with a focus on emerging new mobility trends and their strategic impact. He is the author of “The Mobility Revolution” (Matador Business Press 2015) and “Corporate Mobility Breakthrough 2020” – now available online and courtesy of the Corporate Vehicle Observatory. His third book “Smart Cities, Smart Mobility” will be released in 2017.

Mayors across Europe are dramatically escalating efforts toward promoting air quality and public road safety. Corporate fleet managers must increasingly view urban access as a key criteria, and actively make plans for alternative forms of transport for both goods and staff. We have already seen numerous tolls and restrictions introduced to create disincentives for the use of diesel vehicles within city centres. The next step, in some cases only just around the corner, is complete driving bans in city centres, impacting both logistics and staff mobility. If that sounds far-fetched or too distant, then let’s consider the evidence. The Paris low emission zone (LEZ) was only introduced on July 2015, but already this is seen as insufficient to reducing air pollution and promoting urban quality of life. Mayor Anne Hidalgo of Paris intends to remove diesel vehicles from Paris streets entirely by 2025, and from July 2017 is taking first steps to doing so: the LEZ will penalise the driver of any diesel car registered before 2001 €68 a day; diesel HGVs older than 2006 will cost €135. London’s LEZ has been around since January 2012, but from April 2019, London will add an Ultra Low Emissions Zone (ULEZ). All diesel cars, vans and trucks will have to meet the stringent Euro 6 diesel standard (petrol still only have to comply with Euro 4). Any LGVs that don’t comply will be charged £12.50 (ca. €15), and heavy duty vehicles will be fined £100. The London borough of Islington has gone further and called for a "blanket ban" on all diesel cars in London, citing the “dramatic

impact on air quality”. Their position is understandable – even modern diesel engines produce three to four times more nitrogen dioxide pollution (NO2) and over 20 times more particulate matter than a comparable petrol engine. Madrid, Mexico City and Athens have also announced plans to ban diesel vehicles. Collectively, these current or planned restrictions have already dramatically reduced the appeal of diesels. After years of upwards trajectory – in the UK the diesel vehicle share rose rapidly from 14% to 50.6% between 2000 and 2011 – in 2016 its share fell for the second consecutive year, down to 47.7%. In the same year, alternatively fuelled vehicles (AFVs) rose to a 3.3% market share – still modest, but growing quickly. In fact, PWC’s Autofacts projects that European passenger-car and light-duty diesel vehicle registrations will essentially “fall off a cliff” by the end of this decade. Forward-looking OEMs have all but ceased development of smalldisplacement diesel engines. While Dieselgate and an increased attention to NOx and particulate emissions has made this (previously feted) engine choice an easy target, traffic congestion is increasingly seen as an attack on the public and economic health of a city. According to the European Environment Agency, air FLEET EUROPE #90

Already more than 200 cities in Europe have low-emission zones in place.

pollution causes 467,000 premature deaths each year, with significant costs to healthcare and productivity. Hence, progressive policy makers across Europe are keen to curb all private vehicle use, no matter what fuels it. Over 200 different urban access regulations are already in place across Europe – variably addressing air quality, resident safety, traffic noise, or traffic congestion issues. Just as access to city centres is becoming increasingly restricted, roadspace is being reduced – replaced by pedestrian zones, cycling infrastructure, and improved public transport. This year, London’s first ever Walking and Cycling Commissioner started in post. Backed by an impressive budget of £770 million, Will Norman will work closely with the Mayor, Deputy Mayor for Transport, and TfL to “make healthy, active, non-polluting travel easier in London”. BYE BYE ROAD INFRASTRUCTURE Another notable trend is to remove road traffic infrastructure altogether – in an effort to reduce congestion. What FLEET EUROPE #90

sounds counter-intuitive has actually been demonstrated by research, tested in numerous cities, and will be replicated in many more in the coming decade. In 2016, Paris closed a key thoroughfare – the right bank of the Seine – to traffic. The result? “Half of the cars that used to use the now-closed road have disappeared,” according to Fast Company Magazine. In Barcelona, initial so-called “superblocks” have been implemented, calming residential areas from road traffic, and forcing goods transport to one-third the available road infrastructure, and a more circuitous route. People are being nudged toward other forms of transport. Crucially, this is all happening at a city authority level, with little control or involvement of national governments. Mayors are proving themselves to be more nimble, radical, and fleet-of-foot than their national counterparts. They have no rural constituents to appease, and have very real and pressing health and infrastructure issues to deal with. Urban versions of the UN are cropping up. The global Compact of Mayors was launched in 2014 by former

New York City mayor Michael Bloomberg and Ban Ki-moon; it recently merged with the Covenant of Mayors and now represents over 400 global cities. There’s also the Global Parliament of Mayors, formed in September 2016 by Benjamin Barber, author of If Mayors Ruled the World.

LESSONS FOR FLEET MANAGERS • Diesel bans are driving the death of diesel in urban environments • Furthermore, Europe has over 200 different urban access regulations • Electrification and selfdriving vehicles are seen as solutions for air quality, traffic congestion and urban mobility challenges • Look to city regulations – not national governments – for guidance on future mobility

City governments are trying to make their centres more attractive to live, with improved air quality, additional greenery, walking and cycling spaces. And their efforts are working. Eurostat reports an increasing share of people living in some of the EU’s largest cities are already choosing not to own a car. Large residential developments are now appearing with few, if any, car parking spaces. The Lewisham Gateway project in central London currently being built by Muse Developments, will have over 385 apartments, none of which will have a car parking space – every unit however does come with a fold up bike. In partnership with strategic consultancy Progenium, we developed an electric vehicle adoption index across 20 European cities. Our projections though 2024 showed that city entry restrictions and urban infrastructure to have among the greatest influence on electric vehicle adoption rates. Within this time, autonomous vehicles will also begin to appear on city streets. Research in the UK by the Transport Systems Catapult, finds that 39% of travellers would consider driverless cars if they were available today. The race to launch the first wide-scale autonomous ridehailing network is being fought by the likes of Daimler, Audi, Uber, Google, Baidu and (perhaps) Apple. Many other startups are being actively supported by governments; just in the UK, driverless vehicles are already being trialled in Bristol, Greenwich, Coventry and Milton Keynes.

way, however, life may become easier for fleet-managers, because the direction of travel – pardon the pun – is the same for cities everywhere. Current city LEVs and ULEVs have in common that electric vehicles are excluded – if your vehicle making multiple city stops is electric, then you will not be charged a single cent. Still, even those switching to entirely electric urban fleets will be presented with additional challenges as major city roads begin to close or are replaced with cycle lanes. From January 2018, all French companies with at least 100 employees on a single site will be obliged to have a mobility plan. The measure is aimed at charting the mobility patterns of all employees, enabling companies to choose the right modes of transport for each pattern and employee. The French government believes this will bring about a transition to a more sustainable mobility approach, in turn demonstrating the viability of a multimodal cocktail of electric mobility, carsharing, ridehailing and ridesharing. Given a clear focus on TCO, I believe that corporates can even be at the forefront of implementing new mobility options. Old vehicle and logistics processes will simply be priced out. Fleet managers, who have gone on a journey from managing grey fleets, perk cars and commercial vehicles, to outsourcing and leasing, will likely end up overseeing carsharing, mixed mode mobility for staff, and even managing self-driving delivery robots and shared autonomous fleets. They will become mobility managers.

THE IMPACT ON FLEET MANAGEMENT Urban access restrictions, changing infrastructure and diesel bans may seem to make fleet management more challenging, and costly (a single, undesirable vehicle could quickly rack up hundreds of Euros in fines in a week). Seen another

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FLEET EUROPE #90

SMART MOBILITY

Europe’s thriving start-up cities Dieter Quartier @DieterQuartier

San Francisco may have its Silicon Valley and Israel is putting Tel Aviv on the hi tech map, but Europe, too, is home to metropoles with ecosystems in which start-ups prosper.

BERLIN The German capital has evolved into one of the world’s most important start-up hotspots, rivalling competitors both in the EU and elsewhere in the world. Every year, 44,000 new companies are founded in Berlin. Its unique ecosystem and openness attracts investments and international talent alike, while boasting an extraordinary network connecting all related sectors. In terms of available venture capital, new jobs in start-up businesses, co-working spaces and tech events, the ‘Bear city’ is

clearly evolving in a way that promises a proliferation of innovation, not least in the mobility field. It is not without reason that Volkswagen Group chose Berlin as the hub for Moia, an independent 50-employee company investigating new shapes of mobility in large urban areas. And there are other examples galore. PARKTAG: THE SOCIAL PARKING APP A fleet-relevant time, money and frustration saving mobility innovation comes from the Berlin-based predict.io, a start-up founded in 2014 with the mission to turn smartphones into parking sensors. Their so-called social parking app ParkTag allows users to find on-street parking spaces thanks to the community. Users share their departure location when they are about to leave. Their space is displayed in a map interface to the other app users. This can help reduce urban traffic up to 30 percent and save users 15 minutes of time every day. HIGH MOBILITY: CONNECTED CAR SOFTWARE Founded in 2013, High Mobility directly and securely connects cars with applications around them, allowing a multitude of applications such as keyless access and communicating with infrastructure such as charging poles or payment machines in car parks. What makes it different from other solutions is that it does not require an internet connection. This means that services can be offered in areas with limited network coverage. For car makers, the platform makes for flexible, fast innovations in the shape of apps.

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the city, uniting every aspect that influences the lives of its inhabitants on a single platform. Onto this basic layer, intelligent urban services can be added. In this context, it is important to attract new start-ups to the city to invent and develop these new smart services.

BARCELONA That the Catalan capital leads the way in terms of digital endeavour, is demonstrated by the fact that it hosts the annual Mobile World Congress, the planet’s largest gathering for the mobile industry. In recent years, automotive suppliers and car manufacturers too are showcasing new developments at MWC, as connected services and infotainment have become key decisive factors for customers. With the worst of the economic crisis over, Barcelona is regaining entrepreneurial support for start-ups and is home to several leading accelerators, such as Wayra, Startupbootcamp, Seedrocket and

Conector. Moreover, the city prides itself on its commitment to entrepreneurship, with initiatives such as Barcinno, an English online resource dedicated to strengthen the community within the city. Barcelona may not have the status of London or Berlin yet, but chances are it will climb up the ladder with Spanish fury. CITYOS: THE SMARTEST CITY IN THE WORLD A metropolis in which all forms of mobility are perfectly connected and where resources are used efficiently: that is what CityOS is about. American consultancy Accenture, French power supplier Engie and Spanish telecom company Cellnex are developing a smart Operating System for

METROPOLIS: LAB BARCELONA, MOBILITY RESEARCH Spanish VW subsidiary SEAT has inaugurated a research lab in Pier01, the heart of Barcelona City Tech, allowing the carmaker to interact with the city’s innovative ecosystem. 25 engineers, developers and data scientists are working on mobility service software based on information provided by cars, Barcelona as a Smart City and pedestrian movements, with the goal to enhance the relationship between man and vehicle in urbanised areas. At the same time, the lab’s employees are using electric eMii cars to promote a car sharing pilot project.

LONDON According to innovation foundation Nesta and the European Digital Forum, the British capital remains the best city in Europe for digital entrepreneurs. It ranks first in the European Digital City Index thanks to its access to capital, entrepreneurial culture and the availability of a skilled workforce. London allegedly also boats the highest number of start-ups turned into successful international businesses. Particularly interesting is East London Tech City, also known as Silicon Roundabout, the third-largest technology start-up cluster after San Francisco and New York City. Companies like Cisco, Intel and McKinsey & Co have invested in the area. Many of Tech City’s projects get academic support from local universities. Moreover, Google’s London Campus is home to two of the four biggest incubators, Seedcamp and Oxygen. INMOTION VENTURES: MOVING THE CITY Powered by Jaguar Land Rover, InMotion Ventures invests in the future of mobility and intelligent transportation. It funds FLEET EUROPE #90

start-ups in various stages (up to Series B) and boasts an Accelerator programme in London, focusing on pre-seeds and supporting ten to fifteen early stage pioneers per year. At the same time, it works together with its parent company to create innovative products and services in the mobility and transportation space. CITYMAPPER: MAKING CITIES USABLE A prime example of a London-based mobility start up grown into a million-dollar company is Citymapper. Making use of

mobile and open transport data, its handy app for city commuters calculates the best intra-urban routes in real time with live updates, taking multimodality to the next level and making it much more feasible to combine buses, underground, taxis, bikes, and so on. Citymapper has partnerships with Google, Apple, OpenStreetMaps, Foursquare, Uber, Hailo, Car2Go and Autolib.

SMART MOBILITY

The new digital automotive ecosystem Dieter Quartier @DieterQuartier

Innovative new technologies are set to disrupt the automotive finance sector as they link lenders and customers together in a new “digital ecosystem”.

Change is now happening ten times faster and with 3,000 times the impact of the industrial revolution, reports consultancy firm McKinsey. The explosion in innovation in recent years has had a profound impact on the way we interact with each other, and on how businesses build and maintain relationships with their customers. We are surrounded by a whole range of new innovative products and services that link together to make up a digital ‘ecosystem’. That is the essence of the 2017 Global Technology Report by White Clark Group, a provider of end-to-end automotive and asset finance software for retail, fleet and wholesale. In this comprehensive report, the UK-based company identities four distinct developments that are coming together and interacting: a changing customer base, transformational technology, data security and regulatory requirements, and business model disruption. Interesting trends that might impact the fleet business as we know it and therefore deserve a closer look. THE CHANGING NATURE OF THE CUSTOMER BASE Millennials (those born between 1981 and 1995) and Generation Z (those born after 1995, who have never known a world without instant online access) will make up 60 percent of the global population by 2020. Both these generations share a love of being online, however they are very different in the way they interact with technology and need to be treated as such.

An omni-channel approach is essential. As both generations live their life online, companies need to look at segmenting their digital experience to match customer demand. The issue is not just about accommodating the particular device the individual chooses to use, but about creating a personalized experience. With an average attention span for a Millennial assessed at eight seconds, dropping to under three for Generation Z, there is little time in which to attract a potential customer. Consumers now want “one digital life”, seeing the same levels of services across all their touchpoints with a particular company, and expecting that service to be tailored to match their preferences. TRANSFORMATIONAL TECHNOLOGY The transformational nature of technologies like Artificial Intelligence (AI), which lies at the heart of the latest innovations such as self-driving-cars, voice recognition, and chatbot technology, are being used to create virtual assistants online to help with customer queries and support tasks. In the automotive market, General Motors (GM) has announced a partnership with IBM to create OnStar Go, billed as the auto industry’s first cognitive mobility platform. With the customer’s consent, Watson will learn the driver’s preferences, apply machine learning and sift through data to recognize patterns in their decisions and habits. This information will allow brand and marketing professionals working with FLEET EUROPE #90

Technology and Artificial Intelligence will drive major change in the automotive finance industry. For example, startups can enter a market that was once reserved for banks and investment firms.

IBM and OnStar to deliver individualized location-based interactions that directly impact their target audiences. Also, Tesla, one of the pioneers in autonomous vehicles, announced in 2016 that all its models will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver. Moreover, driverless cars are set to change the business model for companies like Uber and Lyft, who are likely to own fleets of autonomous vehicles and monitor their operation, which would reduce the overhead of making payments to their drivers. The report delves deeper into transformational technology for the auto finance sector, from refinements in credit scoring, to the development of new customer service channels and the move towards mobility services. Artificial Intelligence is moving into cars themselves, as vehicles are fitted with sensors, telematics and dashboard systems, which can all transmit and receive information. Handling that data is a major challenge, but also an opportunity. The connected car is becoming a data source on wheels, and that data is commercially valuable. DATA SECURITY AND REGULATORY REQUIREMENTS Keeping data secure and meeting increasingly stringent regulatory requirements make up the third element of the new ecosystem. Digital signing systems, for example, automate the sales process FLEET EUROPE #90

end-to-end from scanning customer ID through providing a secure vault for all the documentation. Blockchain technology – a method of creating a single, digital ledger of transactions, agreements and contracts – is exciting a lot of interest amongst the pioneers in the auto finance world as a means of ensuring instant access to up to the minute records.

of services across all their touchpoints with a particular company, and expecting that service to be tailored to match their preferences. In order to be successful and remain in the driving seat, vehicle finance companies need to be quick in understanding technology and be quick to adapt and innovate.

BUSINESS MODEL DISRUPTION Technology has become the lens through which customers experience a company. The relentless pace of innovation is driving the fourth stage of the digital ecosystem: the disruption of business models as traditional models collapse and new ones emerge.

GLOBAL TECHNOLOGY REPORT 2017

There are countless examples where leading companies in their field failed to respond to a change in consumer buying behaviour and as a result lost their place in the market. For example, Borders bookshops, a $100 million international chain in 2005, lost its business once Amazon arrived and was bankrupt by 2011.

To find out more about the key developments and trends, and to gain insight into how innovation is shaping the future of vehicle finance, you can download White Clarke Group’s Global Technology Report 2017 on whiteclarkegroup.com.

The vehicle finance Industry is already facing challenges from the likes of Apple’s CarPlay and Google’s Android Auto, which provide a familiar, easy to use way for drivers to interact with entertainment, navigation and a whole lot of other services, potentially including financial offerings. Technology is driving major change in the finance industry as consumers look for “one digital life”, seeing the same levels

FLEET EUROPE #90

SMART MOBILITY

ABN Amro's plan to go carbon-neutral Frank Jacobs @FrankJacobs

ABN Amro, the thirdlargest bank in the Netherlands, aims to be carbon-neutral by 2020. That is no small feat for an organisation with a fleet of 2,400 vehicles – among the 20 biggest in the country. But a new, multimodal mobility plan is already delivering results.

“These managers report directly to the Board of Directors. That direct line to top management was important for this project”, Van Silfhout told the Dutch magazine Fleet & Mobility, which in November reported extensively on ABN Amro's new mobility plan.

Lysbeth Van Sillfhout, change management specialist, supports ABN Amro in creating a carbon-neutral mobility plan.

The bank's ambition to eliminate CO2 emissions by 2020 is in line with the Paris Agreement (2015), at which 195 countries committed to reduce global warming. MOBILITY MIX Since two-thirds of the company's emissions are related to mobility, it was clear that a radically different mobility plan would be necessary. To that end, ABN Amro set up a steering committee called Mobiliteitsmix (Mobility Mix), facilitated by Lysbeth van Silfhout, an external expert in change management, and composed of managers from the departments responsible for facilities, sustainability, purchasing, commerce and benefits. FLEET EUROPE #90

APK After almost a year of study and preparation, that plan was approved by the Board of Directors. Its recommendations will take effect in a number of steps over time. The three over-arching goals of the comprehensive plan are: Sustainability, Transparency and Flexibility. On the ground, those lofty targets translate into concrete actions in three fields, summarised by the acronym APK. A stands for Autokilometers – reducing the overall mileage of ABN Amro's fleet. P is for Parkeerplaatsen: reducing the number of parking spots at ABN offices. And K stands for Keuzemogelijkheden, offering employees a range of mobility choices. REWARDING EMPLOYEES Van Silfhout stresses the importance of the K field, as this is how the company aims to reward employees for the sacrifices they will have to make in the first A and P fields. For example: a reduction in parking places at a certain office could be compensated by a company-sponsored park & ride solution, allowing employees to carry out most of their commute via public transport instead of a car.

CAR-SHARING VIA AMBER MOBILITY APP In a pilot project executed together with Athlon, start-up Amber Mobility will provide the Eindhoven branch of ABN Amro with BMW i3 cars to ensure its employees are mobile when necessary. The Amber app will help determine when and where the shared cars need to be available. In the run-up to the introduction of the app, bank employees have had their business mobility tracked via GPS to provide the historical data needed for the launch of the app. The aim for Amber is that every new customer joins a mobility hub, in which companies share a growing fleet of eco-friendly pool vehicles. Eventually, Amber will replace the BMWs with its own electric vehicles. If the pilot is able to guarantee mobility to its employees, ABN Amro may scale it up to other locations and eventually introduce it as a Mobility as a Service (MaaS) concept.

ABN Amro offices usually are located close to train stations, which facilitates the switch to the park & ride option. Which is why the Amsterdam HQ will be reducing its parking permits – 100 per year from 2016 to 2020. SUBSCRIPTION OR ALLOWANCE But the first and foremost part of the new plan is mileage reduction. All new employees now get a subscription to public transport – which they can waive in exchange for a travel allowance of €0.19/km, capped at €270/ month (i.e. about 40 km/day; the average ABN Amro employee lives 33 km from their office). About two-thirds of new employees keep the subscription, and over 30% of total staff uses public transport to commute. ABN Amro has a total of 18,000 employees in the Netherlands, of whom about 5,000 at HQ in Amsterdam. Two-thirds of the 2,400 company vehicles are benefit cars, the remainder are required for the job. The new mobility plan is expected to reduce the overall size of the fleet. MOBILITY BUDGET Benefit cars are reserved for managers and specialists in the highest echelons. However, they are offered a mobility budget rather than a car. They can use that budget (from €777 to €860) to choose a car from a range of vehicles across all brands – but capped at a certain CO2 emissions level (116 g/km for petrol cars, 106 g/km for diesels, to be revised downward in future); or they can spend that budget on other means of transport. For employees who need their vehicles in the pursuit of their job, the choice is now limited to five selected car models: the Lexus CT 200h automatic, Opel Astra Tourer 1.0T Business+, Peugeot 308 SW 1.2 Puretech Bluelease Executive, Seat Leon ST Style connected 1.0 Eco TSI, and the Toyota Auris Touring 1.8 Hybrid Business Pro automatic. For its fleet management, ABN Amro for the past five years has relied on ROI Fleet. Lease suppliers are LeasePlan, Arval and Alphabet.

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NOT TOO EXPENSIVE All lease drivers can also apply for a public transport subscription, but can only use it on one strict condition: “If the employees use public transport, their company vehicle cannot be used simultaneously. For example, the partner using the company car while the employee takes the train into work”, says Van Silfhout. A lot of companies think combining the lease option with a public transport offer is too expensive, but that need not be so: “We have calculated that public transport use is almost equally expensive as the variable cost of using a car. Which means the cost of either option remains the same, as long as the lease car is not used by third parties”. ELECTRIC CARS Electric cars are another carbon-friendly transport option, one that has been taken up by 50 employees so far – Tesla is the most popular option, followed by BMW i3, Mercedes-Benz B-Class and (one) Renault Zoé. ABN Amro has increased the number of charging stations at the corporate offices. EV or PHEV drivers also get a charging station at home. But the strong recommendation for those wanting an electric vehicle nevertheless is that they can drive from home to work and back without recharging. ABN Amro also actively promotes a Fietsplan (bicycle plan), offering employees a budget of €800 for a bike and €1,200 for an e-bike, with dedicated space for parking and charging the bikes. If users buy the bikes, they get a tax benefit. If they lease, the bank pays the supplier an amount, which lowers the monthly lease fee for the users. EVALUATING PROGRESS Car-sharing is another way to reduce mileage: 30 leased vehicles across the country, with the aim of adding 10 per year. Working at home is the ultimate mileage reduction scheme, of course. Project Yello will roll out that option to all employees. The steering committee will continue to meet twice yearly to evaluate the progress and monitor the reduction of CO2 emission, and if necessary to adjust the course of all new mobility initiatives (see box).

FLEET EUROPE #90

THE NEW INSIGNIA

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opel.com Fuel consumption combined 11.2–3.6 l/100 km; CO2 emissions combined 197–105 g/km (according to R (EC) No. 715/2007). Picture shows optional equipment and Exclusive trim. Availability depends on local market offer.

FLEET EUROPE #90

SMART MOBILITY

Corporate mobility in practice Jonathan Manning, Tim Harrup, Eric Gibory and Rafael Künzle (AboutFLEET)

Major employers across Europe are seeking coordinated travel and transport solutions as an alternative to the traditional company car. Six companies in six countries with six corporate mobility approaches.

FLEET EUROPE #90

Environmental and economic reasons have led Gateshead Council in the UK to transform staff travel. The local authority has phased out company cars and replaced them with a car club, run by Co-Wheels. A fleet of 18 pool cars, including three electric vehicles and two hybrids, are available for work journeys, and can be used for private use out-of-hours by employees and the public. Between 2007-08 and 2015-16, Gateshead Council halved the number of staff using their own cars for work, from more than 500 to less than 250, and cut its annual grey fleet mileage by 800,000 miles, a 33% reduction. The council has also negotiated discounts for staff with public transport providers, and introduced a Cycle to Work scheme.

In Italy insurance company Aon has recently converted its old pool fleet into a car club, making the new Aon Cars available to any staff. The scheme aims to improve engagement with all employees. There are 12 Aon Cars in 11 different cities (Milan has two because the office has more employees), a mix of BMW 114d and Mini One D models, in white with a red Aon logo. Previously, the company’s pool cars could not be driven by staff in the evenings or at weekends. Now, staff simply select ‘business’ or ‘private’ when they reserve a car – the costs of business journeys pass directly to Aon, while employees have to pay for fuel and road tolls for private trips. The scheme is proving popular and growing.

The loss of 700 parking spaces, following the move to a new headquarters in 2014, prompted Zurich Insurance in Switzerland to implement a comprehensive mobility project for its 5,200 employees at head office. The ‘travel options’ open to staff include subsidies for public transport as well as lockers and training advice for workers who want to cycle or jog to work. The company has also added a dozen electric cars, the VW Golf GTE and Audi A3 e-tron, although it has withdrawn three electric scooters due to lack of use. The electric vehicles have priority parking spaces, can be booked online or via an app; and are unlocked with an employee badge. Drivers can even check the charge in the cars’ batteries via a smartphone or tablet.

Science and technology company Merck is exploring avenues to create a mobility solution for its staff in Germany. The initiative is being driven by employee demand for an alternative to car transport. The difficulty and cost of parking in city centres has made the car a less attractive option for some employees. Minimising the environmental impact of travel is a secondary concern, while potential cost savings are not a key objective. Merck runs a fleet of 800 cars in Germany, plus 10% of employees eligible for a company car opt instead for a cash alternative. The company envisages a ‘mobility budget’ to encompass public transport as well as car hire, but says no single supplier can yet provide a complete solution.

The consulting company is one of the first French companies to deploy a car-sharing service. Since 2010, Accenture offers its employees self-service vehicles. "At the time we wanted to be more virtuous in terms of mobility," explains Marc Thiollier, secretary general in France and Benelux. A company car is used for only 4 percent of the time, whereas a car-sharing car is employed much more. Another advantage for Accenture is that a car-sharing vehicle performs the same service as 5 to 6 units assigned to a single employee. With car-sharing, Accenture is reducing its carbon footprint, even more so as employees can come to work by using public transport and then use a shared vehicle for their external appointments. Since last year, Accenture allows personal use in the evenings and weekends, which is invoiced and thus makes it possible to amortise part of the service. The car-sharing service is not intended to replace taxis, but to reduce the perimeter of the company fleet of 400 units. "Our approach has no economic purpose," says Marc Thiollier. “Our commitment is to promote more environmentally friendly behaviour.” This strategy also involves the introduction of mobility credits that are now being tested in the Netherlands and Belgium and the ongoing deployment of a company travel plan (CTP).

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In Belgium, Beobank has introduced a mobility plan which includes a normal annual public transport subscription for employees, 100% paid for by the bank, for the home-work trip. Along with this it gives a compensation payment for those employees coming to work by bike. And the two can be combined: cycle to the station and then take the train… To further facilitate this programme, bicycle parking spaces have been made available in the company’s car park, in a secure area. Showers have also been provided for cyclists. Beobank is currently located on the inner periphery of Brussels, alongside a railway station. It is moving within a few years to a brand new building in the very centre of the city, and this choice is also mobility-friendly: a couple of minutes from North Station, one of Belgium’s principal transport hubs (train, tram, bus…). A ‘Villo’ bike-sharing point will also be alongside the building. Around half of the 550 persons working in one of the headquarters also principally use public transport to come to work, and the new building will make this easier.

FLEET EUROPE #90

FLEET EUROPE AWARDS 2017

Celebrating Excellence in Fleet Management Estoril, in Portugal, will this year be the European capital of fleet and mobility. On 6 December, the 2017 Fleet Europe Forum and Awards will take place. 2017, is also a vintage year for Fleet Europe, as we will celebrate our 20th anniversary. So, let nothing hold you back to benchmark your programme and developments and apply for the Fleet Europe Awards 2017.

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NEXT WINNER WANT TO APPLY?

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• Global Fleet Manager of the Year

European Fleet Manager of the Year International Fleet Safety Award International Fleet Innovation Award International Fleet Industry Award International Fleet Hall of Fame

> SMART MOBILITY MANAGEMENT • International Fleet Mobility Award • Start-Up of the Year

please visit our website forum.fleeteurope.com/awards or directly contact Virginie Emonts: vemonts@nexuscommunication.be

For more information, please visit forum.fleeteurope.com

FLEET EUROPE #90

Presenting: the best headhunter in town.

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FACE TO FACE

Reducing the vehicle fleet will be inevitable Steven Schoefs @StevenSchoefs

For the latest edition of our ‘Face to Face’ series, we brought together two French-based fleet managers with international influence. Arnaud Willing-Salleron of Veolia and Patrick Martinoli of Orange exchanged ideas on the future of company cars, mobility and much more. This meeting took place at ‘La Défense’ in Paris, the French capital’s own mini-Manhattan which has itself been highly visible in looking to the future as it tries to attract London-based companies post-Brexit. The La Défense advertisement in London featuring a giant photo of a frog with the slogan ‘Tired of the fog? Try the frogs!’ has caused quite a stir. Our fleet managers know what they want, too. In terms of international fleet management, they both advocate spreading best practice everywhere, and recognise that an entirely centrally-dictated vehicle fleet policy is not possible. They are also both cost-based in their approaches, as you would expect from two such large companies, but at the same time they invest in innovation and new mobility with the aim of creating a fleet that is fit for purpose.

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ARNAUD WILLING-SALLERON PATRICK MARTINOLI COMPANY Orange (Telecom) FUNCTION Fleet Management Director â&#x20AC;&#x201C; Facilities & Mobility Management NUMBER OF CARS (PC AND LCV) IN FLEET 33,000 (19,500 in France) NUMBER OF COUNTRIES 7 IN FLEET MANAGEMENT SINCE 2013 REPORTING TO Orange General Secretary MAIN FUNDING METHOD IN EUROPE Operational leasing DO YOU HAVE AN INTERNATIONAL CAR POLICY International Guidelines DO YOU HAVE AN INTERNATIONAL GREEN/ MOBILITY POLICY Yes

FLEET EUROPE #90

COMPANY Veolia (Water, Energy and Waste Management) FUNCTION Group Car Fleet Director NUMBER OF CARS (PC AND LCV) IN FLEET 30,000 NUMBER OF COUNTRIES 27 IN FLEET MANAGEMENT SINCE 2000 REPORTING TO Senior VP Global Procurement MAIN FUNDING METHOD IN EUROPE Operational leasing DO YOU HAVE AN INTERNATIONAL CAR POLICY Global Guidelines, Common tool to be deployed DO YOU HAVE AN INTERNATIONAL GREEN/ MOBILITY POLICY Being finalised

FACE TO FACE

STRATEGY

What is the most difficult challenge you have had in fleet management, and what are you proud of?

The current OEM and car lease company consolidation in Europe: is this good for you, or a danger?

ARNAUD WILLING-SALLERON Before going international, we first had to deploy a strategy in France which is by far the biggest fleet with 16,000 units. Due to our former historically decentralized organisation with over 600 subsidiaries, the biggest hurdle was to implement a unique car policy and drastically reduce our LCV fittings catalogue. Implementing a cost reduction program for Europe, starting with France and reorganising the central fleet management structure was quite a challenge. We overcame it by setting up a central team, and implementing a new fleet management tool. I am proud of having been able to implement new systems that generate both cost-savings – 17 Million in France between 2014 and 2017 - and stakeholder satisfaction.

P. M. I don’t think we’ve yet reached the stage where it is a danger. And we do authorize our countries to look to other suppliers if our preferred suppliers do not offer the right conditions. TCO is an important point because fiscal rules are different in the countries. This makes a single TCO almost impossible.

PATRICK MARTINOLI Saving money looks easy on paper, but it’s a complex exercise. On the one hand you are confronted with needs and habits from drivers and employees and on the other hand there is the corporate objective. On top of that we chose the cost-saving road via setting up and implementing a true and practicable car-sharing scheme, which is quite unique in our business. But we managed to do it, and I am very proud of what we’ve achieved.

Do you have global contracts with OEM’s or lease companies? A. W-S. We started with OEM’s some years ago, for global contracts. We are very attentive to OEM’s market shares. With leasing companies, we are just starting to build global contracts. Our countries are more and more encouraged to use these contracts as much as possible: some important savings can be made P. M. We don’t have global contracts, but corporate agreements, which the countries can use if they wish. But it is there choice. We actually found that some countries could buy cars cheaper than we could from France. So, we are looking at trying to enable the whole company to benefit from the lowest prices.

A. W-S. We are keeping an eye on things, and we don’t want to see consolidation go too far. We use more and more benchmarking, including for example TCO.

Do you analyze whether leasing remains the best acquisition option? P. M. Yes, we do look at this but I expect it to continue. A. W-S. Of Course, Veolia is currently running inventory and analysis on this topic. I am pretty confident that on the operational fleet management subject, leasing will remain the best option for us, but still the strategy will certainly differ from one company to another.

What is the most difficult part of TCO to manage? P. M. We manage what we call a ‘theoretical’ TCO, which includes all of the normal elements. Our car policy is defined around this TCO. We find that the real TCO often differs from this, so we are going to make adjustments so that the two come together. Residual values are the biggest headache. A. W-S. Impact of driver behaviour is a key indicator to follow up and will become easier to manage in the coming years. But the most challenging part for us is to adjust with better accuracy and reactivity the size of our fleet to our real needs.

FLEET EUROPE #90

FACE TO FACE

MOBILITY

What alternative mobility solutions are the best suited to offer to employees? P. M. We are beginning to offer car-sharing in Europe, which we would like to see develop in all countries. We have far too many vehicles which come to work in the morning and then do not move all day. This is expensive in terms of cars and of parking spaces. So, we have introduced a system, whereby cars are made available to others during the day, if the nominated drivers don’t need them. We believe that 6,000 vehicles in car-sharing will lead to savings of 15% – which more than pays for itself, obviously. We are also looking at mobility budgets instead of individual cars, which will be a real change of mind-set. We are even looking at a system where employees would, for example, go to Marseille for a weekend by plane or train and then be able to use an ‘Orange’ car there via our car-sharing scheme. A. W-S. We have the same ambitions even if we are not yet so advanced. Today we are testing a car sharing solutions at our new Headquarters in Aubervilliers with electric vehicles but also in some of our bu’s for operations. As we want to reduce our fleet size, it is mandatory that we have a better usage of our vehicles.

How do you see the future of company cars? A. W-S. Even if our employees are still very attached to the possession of their car, naturally and especially with new generations usage will take over possession and instead of “company car”, employees will soon be offered alternatives such as “mobility credit”. This is also true for car pooling and some utility vans. Like engines, there is not one good solution, but a combination of many as long as they economically make sense at short or mid-terms. As fleet managers we have to encourage new ways of thinking mobility. In my opinion it will progressively evolve in the coming years but it is very hard to give any prediction as it is a social, sociological and cultural change in generations. P. M. We are in the same boat where LCV’s are concerned. But we are trying to standardise the equipment so that these vehicles can be shared too, even if it’s complicated. But the advantage of having your LCV’s in a FLEET EUROPE #90

shared system is the digital support for follow-up, knowing what vehicle was used by whom at what time, etc.

Do you have green initiatives? P. M. We give eco-driving training, with the accent on anticipation. The more you anticipate, the safer you are and the less fuel you consume. We train 2,500 people a year, out of 40,000 drivers. The issue we have is that people are reluctant to give up a whole day for training. Many of them also think they drive perfectly anyway. Our training programme is not obligatory, but I would like it to be. We also want to double the number of electric vehicles every year. We have up to 300 right now. A. W-S. A single Car Policy of 4 class (incl COMEX) in France, Max Co² emission level per categories, Petrol and hybrid cars in all categories of the car Policy (Active), Car sharing deployment (Vans included) (Actually on test) Reduction of fleet size (>5% between 2014 & 2017). Closer monitoring of fuel consumption with fleet management tool, and we are planning on deploying telematics on Personal Cars but also to get the best adapted engine selected by our fleet management tool depending on driver’s mileage.

Do telematics and digital services help your job? P. M. I’m a telematics believer, as I’m very insistent on adhering to processes. Telematics makes our job more strategic and less operational. At Orange we have contracts with preferred suppliers and I want drivers to use these, not go somewhere else. I also want our drivers to know exactly what is required when they get a message via telematics. A. W-S. Digitalisation is a key subject that should allow us to gain between 3 and 6% on our TCO. Some savings are direct such as fine tuning market share management with our fleet management tool and some are indirect as digital is also a way of reducing administrative tasks of fleet managers. Veolia has embraced digitalization five years ago on the fleet subjects by deploying online e-procurement tool, telematics, smartphone application “MyVEGA” and is now engaging next step of this program : getting closer and closer to the driver to optimize his behavior : We aim for a direct connection between telematics, V2 of our smartphone app ‘MyVEGA’ and a direct integration with our global fleet management tool.

FACE TO FACE

TIPS & TRICKS PATRICK MARTINOLI

ARNAUD WILLING- SALLERON It’s important to federate colleagues towards a global project. Therefore you need to find the right balance between the global group strategy and local practices, and you need to be aware that it’s a step-by-step process.”

We are now in the mobility 2.0. Cars must not be attached to one person. The future is the right car for the right trip : electric in cities, gasoline or hybrid in suburbs, diesel for highways. A good energetic mix combined with a performant car sharing is the solution to optimize employee mobility.“

WHO’S WHO

Photographer.

IF YOU WEREN’T IN FLEET AND TRAVEL BUSINESS, WHAT WOULD YOU PROBABLY BE DOING PROFESSIONALLY?

Automotive journalist.

Deploying our fleet management tool in 3 new countries after France: Belgium, Italy and Spain.

WHAT IS THE FIRST THING ON YOUR TO DO LIST FOR THIS YEAR?

Deploy 1000 more shared cars in Orange fleet during this year.

Underestimating the need of communication around a project.

WHAT IS THE BIGGEST MISTAKE IN CAR FLEET MANAGEMENT YOU HAVE MADE?

Underestimate the conduct of change to overtake the old process.

WHAT IS YOUR PASSION OUTSIDE OF THE FLEET AND TRAVEL BUSINESS?

Car racing and classic car events.

No specific place, I love to discover new places.

WHAT IS YOUR FAVORITE HOLIDAY DESTINATION?

A place where there is a track to drive or compete on…

My grandfather’s Volkswagen Golf GTI in 1989.

WHAT IS THE FIRST CAR YOU HAD?

A Renault 16 before a long list of GTI models.

Travelling around the world.

FLEET EUROPE #90

FACE TO FACE

Arnaud Willing-Salleron and Patrick Martinoli have a common advice for the car leasing and fleet management industry: “It is high time they consider the software management companies as possible partners, instead of competitors. We really need them for making all the data simple to read and easy to use.”

Arnaud Willing-Salleron: “Even if our employees are still very much attached to the possession of their car, usage will take over.”

The cross-interview with Arnaud WillingSalleron and Patrick Martinoli took place in Paris, two weeks before Emmanual Macron was elected President of France.

“We need to have our own applications for managing our cars and our employee mobility, because we need a uniform system which is the same for all brands, and whatever lease company or supplier is used”, says Patrick Martinoli

Patrick Martinoli: “Benchmarking is very useful for discovering best practice in fines management. And ‘users clubs’ make benchmarking easier.”

FACE TO FACE EPISODE 7 Arnaud Willing-Salleron: “When new laws such as the ‘eco-disc’ in France come along, the media make it look worse than it is. And this makes our job of managing internal stress harder.”

#91

We'll meet up with Robert Satiri, Colacem Spa, and Luigi Fanizzo, Epson Italia Spa at Monza, Italy. Don't miss it in Fleet Europe's next issue.

Steven Schoefs | PICTURES: Benjamin Brolet PRODUCTION SUPPORT: Céline Gilson (organization)

FLEET EUROPE #90

ADVERTORIAL

CONCEDED EDITORIAL SPACE

VWFS: Turkey joins the network Volkswagen Financial Services has just added another key market to its portfolio. Via a joint venture with the Doğuş Group, it has created vdf Filo in Turkey. This means that Turkey becomes the 33rd European country serviced by VWFS, and joins over 18.4 million contracts worldwide.

vdf Filo was established in 2016 and has been active in Turkey since the beginning of this year. As part of the international network, existing clients of VWFS from other countries can therefore now receive a harmonized service in Turkey. Turkish clients benefit from the wide-ranging experience of the company across Europe. vdf filo has developed an efficient ERP for its customers in terms of making high quality service, flexible and fast responsive operations. The end to end ERP solution has modules such as : • A Customer module • A quotation / pricing module • An operations module • An accounting module • A Contract closing module. Within the framework of the accounting module and of specific interest to customers operating in Turkey, the vdf Filo invoicing model is fully integrated with the e-invoicing system of the Turkish government. The process is also totally secured.

“Through close cooperation with our customers, we are able to develop and offer innovative strategies and mobility solutions tailored to their specific needs and requirements”, says Ali Kemal Uluer, Fleet General Manager, vdf filo.

INVESTING IN SUCCESS While initially operating with the principal brands of the Volkswagen Group (Volkswagen, Audi, Seat, Skoda), vdf Filo also has a multi-brand capability, to service clients even further. The entire operation is supported by three district-based direct sales teams, so that local customers receive the local service they require, along with international expertise. vdf Filo is also making investments in its service quality and loyalty programs, and it expects to reach a renewal rate of a very healthy 75% in the near future. On top of this, the whole system is backed up by its own end to end ERP system locally in Turkey, with the collaboration of Doğuş Technology.

CONTACT Three district-based direct sales teams provide the local service that local customers require, along with international expertise.

www.vdffilo.com.tr +904449096 filo@vdf.com.tr

FLEET EUROPE #90

INNOVATION

WLTP reshuffling fuel consumption cards Dieter Quartier @DieterQuartier

Per September 1st, the Worldwide harmonized Light vehicles Test Procedure (WLTP) replaces the New European Driving Cycle (NEDC) as the mandatory type approval procedure for fuel consumption and CO2 emission figures. A fiscal disaster, or an opportunity in the making?

Fuel consumption and CO2 emission numbers currently published by manufacturers are based on the NEDC or New European Driving Cycle – the origins of which go back to the 1980s, when nearly all engines were classical combustion engines, roads were relatively empty and people used their vehicles in an entirely different way from today. The main purpose of NEDC was to ensure comparability of results: if every OEM uses the same method, results can be compared objectively. With cars and their drivers having changed considerably over the past decades, NEDC has become tremendously unrealistic, leading to considerable discrepancies between official and real-life fuel consumption. Moreover, the NEDC method does not

describe the testing method and parameters in detail, giving OEMs the freedom to use ‘dirty little tricks’ to save a few centilitres and grams – such as using special lubricants, disconnecting the alternator, etcetera. NEDC: AN OEM’S FRIEND Especially plug-in hybrids ‘benefit’ from NEDC because they can travel large portions of the test cycle on electricity alone. Carbon dioxide (CO2) is nothing but a function of fuel consumption, incidentally. As one litre of petrol weighs 750 grams and 87 percent of petrol consists of carbon (C), this volume corresponds to 652 grams. You need 1740 grams of oxygen (O) to burn this quantity, resulting in 2392 grams of CO2 per 100 kilometres, or nearly 24 grams per kilometre.

REAL DRIVING EMISSIONS

Consumer organisations and environmental stakeholders have been pushing for years for a more realistic way of measuring fuel consumption and CO2-emissions. The result is the Worldwide harmonized Light vehicles Test Procedure or WLTP. FLEET EUROPE #90

Also mandatory as from September 1st 2017 is the so-called RDE test. This should – for now – be seen as complementary to the WLTP, as RDE is only about emissions, not fuel consumption. As the name suggests, the Real Driving Emissions test means vehicles are tested on the road, using a device called PEMS (for Portable Emissions Measurement System) connected to the tailpipe. Its main goal is to determine the ‘official’ NOx emissions of a car (type approval), but the EU has plans to use RDE as the type approval method for fuel consumption, too. 43

INNOVATION

THE

95 TARGET

G CO2

If WLTP figures are higher than the NEDC ones, what does that mean for the 2021 average fleet CO2 target for OEMs of 95 g/km? Basically, this number will be multiplied by a factor to compensate for the change in the testing method. That doesn’t make the OEMs’ job any easier, though. First, they are a victim of their own success, in the sense that they are selling ever more (lucrative) SUVs. Second, customers are turning to petrol in the wake of Dieselgate, resulting in higher average CO2 emissions as well. The only solution resides in pushing hybrids and accelerating the launch of EVs.

OEMs have been developing their powertrains with this unrealistic NEDC in mind, with long 5th and 6th gears, startstop systems and so on, which make a car look good on paper, but not necessarily in real life. That is about to change. Consumer organisations and environmental stakeholders have been pushing for years for a more realistic way of measuring how much fuel a car uses. The result is WLTP.

That’s the good news. The bad news is that WLTP leads to higher CO2 levels and therefore higher taxation in countries applying an emission-based system – unless the tax bands are adapted. But what if they are not? “It is impossible to know what the difference between NEDC and WLTP figures will be, but the fiscal impact could be considerable”, says an Opel official in the European Fleet Team.

WLTP: A CONSUMER’S FRIEND WLTP, or Worldwide Harmonized LightDuty Vehicles Test Procedure, becomes the official EU type approval method in September 2017. It is still is a lab test – during which a vehicle is put on a dynamometer, to exclude as much variables as possible – but it takes into account higher average and maximum speeds, more realistic outside temperatures, faster acceleration and greater test distances. Last but not least, the influence of optional equipment is also measured.

His company is the first OEM to publish WLTP figures of its models ahead of the official implementation. “For companies with CO2-based car levels, or which use NEDC figures to calculate their carbon footprint, WLTP might bring about a shift towards smaller, lighter and more economical vehicles. Unless they adapt the internal CO2 thresholds to new WLTP measurements. That being said, the latest Insignia Grand Sport equipped with the 110 hp 1.6 diesel engine consumes 10 per cent less than the previous model, based on WLTP.”

The procedure has been developed using a multitude of real-life driving profiles from all over the globe, allowing to simulate an average car ride in a laboratory. The tests consist of four stages, each with a diffe-rent average speed: slow, medium, high and very high. During every phase, the car accelerates and decelerates many times according to a fixed scenario. The entire cycle takes about half an hour. The NEDC only lasts 20 minutes. BENEFICIAL TO FLEETS? WLTP allows fleets to better budget the amount of fuel their vehicles use.

Looking at the NEDC figures, the new Insignia is slightly less economical, indicating that Opel has already changed the development focus of its powertrains. In conclusion, WLTP might reshuffle the cards in OEM land, privileging those who develop cars that consume the least in real-world conditions rather than in manipulated lab set ups. It might also accelerate the development of electrified powertrains, evidently. Interesting times ahead, indeed.

THE TEST PROCEDURE: WLTP VERSUS NEDC

WLTP

NEDC

Starting temperature

14° C

20 - 30 °C

Duration of the cycle

30 min

20 min

Idling proportion

13%

25%

Distance of cycle

23 km

11 km

Avg: 46,6 km/h

Avg: 34 km/h

Max: 131 km/h

Max: 121 km/h

Taken into account (weight, power consumption, aerodynamics)

Not taken into account

Speed Influence of optional equipment 44

FLEET EUROPE #90

If you want to manage your fleet efficiently and transparently, you need to consider alternatives to traditional closed-end calculations. By unbundling the services in a pay as you go model, youâ&#x20AC;&#x2122;ll not only achieve targeted potential savings, but youâ&#x20AC;&#x2122;ll also capitalize on proactive services. What exactly does this mean to you? As a world leader in fleet management, ARI supports you in your ongoing operations, e.g. billing, remarketing, fuel cards, maintenance repair or damage claims. We will also meticulously optimize all processes based on big data concepts. And always, with transparency in the foreground, thanks to online access to all decision-relevant reports and with open accounting based on actual costs per month, vehicle and service module.

Discover a new dimension of fleet management. +49-711-6670-17100 | sales@arifleet.de

BUSINESS

Becoming the number one reference in B2C Steven Schoefs @StevenSchoefs

In March 2017 Gilles Bellemere succeeded Pascal Serres as Deputy CEO of ALD International. Following his background at both Société Générale and ALD Automotive France, and his strong affinity with retail business, Gilles Bellemere seems to be well placed to steer ALD International in a business environment wherein B2B, B2E and B2C are becoming, equally important. “For 2017 we intend to offer our clients the latest and best in terms of fleet and mobility management”, says Gilles Bellemere. “This will involve further developing initiatives like car-sharing, car-pooling, fines management… We are always trying to improve our product and service offering. Along with this, we are going to be more active in B2C as well as our traditional B2B, especially as the trend is moving from car ownership to car usage. The new generation of employees is looking to use a car or mobility mode when necessary of course, but will be looking for a supplier who can offer the most appropriate solution. So, we are looking to grow our fleet by around 8% in total by the end of this year.”

Where do you think ALD International could improve even more with regard to service development and customer care? Gilles Bellemere, Deputy CEO at ALD International: “Although new mobility initiatives are shaping our business, full service leasing will stay, but will be accompanied by other mobility concepts.”

“We are known for our dedicated fleet customer approach, being close to the customer is vital for our organisation. We are always looking to create offerings, in cooperation with our bank, which meet evolving customer expectations. Expectations that will go more and more in

terms of on demand and personalised mobility services. Moving towards private clients will be key, and that move is something of a cultural change for us. But we need to carefully develop our B2C and B2E strategy like we have successfully done in the past with our B2B business.”

Talking about new offerings, for example in the private consumer area: Will there be new initiatives this year, such as with BlaBlaCar recently? “Well, moves such as that one put us into the trend of evolving mobility offerings. With our heritage and our expertise in B2B we can, based on our traditional offering - which we know perfectly well - easily develop a new angle of attack. We can show private individuals solutions other than the traditional purchase of a car, and we will continuously develop this new business angle. We wish to become the number one reference in B2C for lease and mobility services.”

Do you see a specific form of mobility services taking a lead? “All depends on the digital world, with connected cars, big data in fleet management, and supplier management. It will all depend on service quality from these applications. Data handling will enable us to identify client needs such as car-sharing. New partnerships will become possible and relevant. The fleet and mobility manager’s environment will evolve too. We simply want to remain at the cutting edge of progress. Our capacity for innovation will help us achieve this, as will our geographical coverage. We will stay leader of the mobility paradigm of our clients.”

FLEET EUROPE #90

BUSINESS

In brief NEW SHORT DISTANCE SERVICE BLABLACAR BlablaCar has announced a new app and product under the name of BlaBlaLines. This involves short distance carpooling and daily commuting, enabling those sharing the car to leave their own car at home. UBEEQO HAS NEW CORPORATE OFFER Currently offering 150 shared cars at 70 locations in Paris, car-sharing start-up Ubeeqo aims to have a fleet of 200 vehicles at about 100 locations available for its customers in the French capital by the end of 2017. To convince more corporates

to car-share, Ubeeqo has created a special offer: making available one or more vehicles, of which only the use is invoiced to customers, without a subscription fee. Corporates don't pay anything for the vehicles if they are used by employees in their personal time, at night or in the weekends – in which case the employees pay the same rate, plus a subscription. BOSCH: 600 SHARED E-SCOOTERS IN PARIS Coup Mobility, a subsidiary of the Bosch Group, is to make 600 electric scooters in Paris by this summer, in a sharing formula similar to the one already operating in Berlin, where the company manages 1,000 electric scooters. Coup Mobility's shared

scooters can be located and reserved via app, and must be parked in a dedicated intervention zone after use.

ADVERTORIAL

In order to motivate employees, a lot of customer do offer company cars through applying lease budgets. The designated employee is free to choose and configure his vehicle accordingly to the budget. In general most

FLEET EUROPE #90

www.fleeteurope.com

policies by cutting down CO2 emission due to the fact the lower budget normally translates into a smaller engine.

E-bikes as corporate mobility solutions Recent studies show that in more mature markets in Europe the use of e-bikes as company mobility solution is gaining popularity.

MORE NEWS ON

Vinzenz Pflanz, CSO of Sixt Leasing: “In particular younger employees of our customers don´t want a high end car anymore. However, they´re looking for mobility that fits their needs in different situations. The ‘6-wheeler program’ of Sixt Leasing as well as other initiatives such as ‘Sixt Mobility as a Service’ outline Sixt´s unique position to offer mobility services along the whole time axe, from 1 minute up to 6 years.”

employees fully spend their budget even though they wouldn´t do so without having a budget. Therefore, Sixt Leasing recently launched the Sixt Wheel product. It offers employees of our clients the opportunity to use parts of their budgets for a bike or an e-bike. In addition to increasing employee motivation the so-called ‘6-wheeler program’ (car + e-bike = Six(t) Wheel) supports sustainable car

CONTACT If you are interested in more information, please contact us on product@sixt.com

FLEET EUROPE 20TH ANNIVERSARY: THANK YOU! In December 1997, Fleet Europe is born. The European Fleet magazine for top decision makers is published in six languages. Twenty years and 90 issues later, Fleet Europe has blossomed into a communications platform that also offers content on digital media, via training sessions and in the form of events. A remarkable transformation. Our heartfelt thanks goes out to all who helped make Fleet Europe into a success. But we would be nowhere if not for the trust that you, our readers and advertisers, have placed in us. Thank you for being our partners on this amazing journey. Fleet Europe's mission today is to be at the centre of our community of European fleet decision makers. For the past 10 years, Fleet Europe has provided this community with an annual meeting place, in the shape of the Fleet Europe Summit, which this year will be held in December in Estoril, Portugal. From now until then, each Fleet Europe magazine will offer you a four-page special exploring the past 20 years via selected themes. Not to be sentimental and nostalgic, but to offer an understanding of how our industry has evolved. Since launching Fleet Europe, we have also developed two additional platforms. Smart Mobility Management and Global Fleet. So at 20, we are still brimming with projects, energy and ideas. But our aim remains the same: to better understand, inform and support you on the journey to the future!

THEMA

Thierry Degives and Caroline Thonnon Publishers

INTERNATIONAL FLEET MANAGEMENT

STEVEN SCHOEFS On the cover of Fleet Europe magazine °1 in 1997: Michel Moonens, fleet manager of Digital. He had just set up a European fleet strategy with one major car manufacturer and two leasing companies. Twenty years ago, international fleet management was a great idea whose time had come. Up until then, multinationals managed their fleets on a country-by-country basis. But their search for economies of scale and harmonisation led to a fleet management revolution the effects of which still reverberate today. For already then, multinational companies like Federal Express, TNT, Johnson & Johnson, Xerox and Bristol Meyers Squibb were requesting internationally structured contracts, mostly for some bigger countries within Europe or to harmonise main European markets with the US national protocol. On the car leasing side, LeasePlan was early to embrace international business, not just by expanding operations into a dozen EU countries by the mid-1990s, but even by opening up shop in the Americas and Australasia. The company had a head start, but competitors like Arval, ALD and GE Capital (today part of

the Arval-Element Alliance) started catching up soon after 2000. On the OEM side, Renault, Volvo and Ford were early adopters of an international fleet approach. The internationalisation gathered speed in the new millennium. Fleet suppliers rapidly expanded their operations into new markets by establishing new subsidiaries, making targeted acquisitions – remember Alphabet with ING Car Lease or recently Daimler with Athlon - or building partnerships with local heroes. They moved into Eastern Europe and beyond. International fleet management expanded to cover Latin America, Asia-Pacific and the entire world – to become global fleet management. Today, LeasePlan is present in more than 30 countries, ALD has a presence in 42 markets, and the Arval-Element Alliance covers 50 markets. Right now, we are on the cusp of yet another revolution: technological progress is about to deliver huge strides forward in new mobility modes – from car-sharing to autonomous driving – great ideas whose time has now come. It's a future that feels as new and promising today as international fleet management must have felt back 20 years ago.

CELEBRATING

Fleet Europe's 20th Anniversary together with

FLEET EUROPE #90

2010

Smart mobility comes into its own, with the growing importance of connected, shared, autonomous and eco-friendly technologies.

20 00

1986 FLEET EUROPE #90

In the years after the start of the new millennium, international fleet management takes hold in Europe, with ALD and Arval among the challengers to LeasePlan's nearmonopoly. EU regulations and legal framework are set up, corporates set up dedicated teams at central and country level and deepen their relationships with suppliers.

1997

Fleet Europe is conceived as a magazine to serve the interests of multinational fleet managers. The first issue of the magazine presents a case study of the multinational fleet of Digital, a computer company acquired the next year by Compaq.

The fleet organisation and fleet offers transform from international with a strong focus on Europe into a truly global business. Multi-brand offers indicate the growing maturity of the business. Increased emphasis on used-car remarketing and data use, to optimise TCO.

2 0 05

In the second half of the first decade of the new century, professionalisation spreads throughout Europe, with dedicated fleet teams for the major car manufacturers and fleet management companies in all European markets – also in eastern Europe, a strong emphasis on international tenders and expansion into Russia and Turkey. First concerted forays into Asia and Latin America.

The re-launch of the Global Fleet online platform signals the fact that, as the internationalisation of fleet management continues, its focus widens from the mature markets of Europe and North America to become truly global.

201 5

Change in the fleet industry is gradual, but constant. In fact, it's very hard to pinpoint the start of the process – but we think we have a good candidate with the 1986 RFQ by Astra to Volvo. A firmer set of bookends are the relaunch of the Global Fleet web portal this year and the launch of Fleet Europe magazine exactly twenty years ago... although it feels a lot longer ago than 20 years!

2017

20 YEARS OF CONSTANT CHANGE

Swedish pharma company Astra – now part of AstraZeneca – puts in an RFQ (request for quotation) for its international fleet with fellow Swedish company Volvo, which complies by providing an answer that is equally multinational in nature.

Robert BOSCARI, GLOBAL FLEET EXPERT

“The process may have been started by U.S. companies, but Europe – and more specifically the European Union – currently is the main pillar of the ongoing internationalisation of fleet management, thanks to the continent-wide consistency of rules and variety of markets, coupled with the EU's openness to the world. This truly is an example of 'Think global, act local'”. “Conversely, the threat to the EU by anti-globalist and nationalist forces could be a risk to the process of continued Fleet Management internationalisation. On the other hand, the rise

of mobility will create more innovation and further accelerate the process. Just look at the digital economy, the flexibility it enables and the start-ups it creates. However, I do agree we need to be careful: we should measure progress only by successful experimentation, and by real-life implementation”. “And here we have an important task for Fleet Europe, as a dedicated communications platform between and for international companies in Europe: educating and providing a forum for all stakeholders to meet, interact and work together”.

“Rise of mobility will accelerate the process”

Joe CARREIRA,

EMEA FLEET MANAGER AT MERCK SHARP & DOHME “Our company moved from a regionbased fleet management approach to a global approach around 2010. For us, it was not just about cost optimisation. We looked at every aspect of fleet and tried to address them in a globalised way”.

“Internationalisation has its boundaries”

“The first thing we did was to recognise that in many parts of the world the fleet provision is actually a benefit. So, we mobilised with the benefits organisation to formulate a set of guiding principles. You can't dictate what to do throughout the world, because

the world is a very diverse place. But you can say globally that each component of fleet needs to be managed”. “That is in very simple terms what we did with our Global Guiding Principles: each component of fleet now has a standard associated with it”. “Of course, internationalisation has its boundaries – to be specific, the availability of suppliers. At the moment, there is no one who can give 100% coverage worldwide. So, you make use of the best options available”.

Pascal SERRES, GLOBAL FLEET EXPERT

“Fleet suppliers have rapidly expanded their international offers, but they still can't deliver on some client demands. In general, fleet customers are more international than fleet suppliers. Take for instance the fact that most European lease companies are not present in North America, and that U.S. lessors generally have not expanded beyond Canada and Mexico. As a result, the demand is more international than the supply”. “Most European international fleet customers have a multi-supplier approach – in the U.S., it's more a sole supplier environment. Most customers

would like to go to a sole supplier situation, which would produce much more homogenous levels of service, as well as a single point of contact”. “I do believe that some suppliers are striving to become as global as some of their clients would want. That can perhaps be achieved via a network of alliances, as some already have in place. Another option is if manufacturers fully get into the leasing business, for example via private leasing. That would position them to offer simple, global offers – also to corporate clients”.

“Demand is more international than supply”

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NO WAY BACK The internationalisation, or better globalisation, of fleet management is not at an end. There are lots of opportunities to be grasped, in unserved markets and market segments, through new technologies, by both fleet suppliers and fleet customers. But change will not be linear: new developments in mobility and technology will transform the fleet industry beyond recognition. The only thing we can be certain of, is that the fleet future will be very different from the present. For the international fleet suppliers, there is no way back. The international business represents nearly half of their portfolio, in some cases even more. The globalisation will continue, with large corporate customers acting as trailblazers into new markets. However, progress will not be smooth everywhere. There are limits to growth. Some are infrastructural. For example, in some less developed nations in Africa, it is extremely difficult, if not at present impossible, to set up a nationwide network of service and maintenance stations. In Asia, it could be the very low cost of local labour that prevents the large international lessors

SPECIAL

from setting up a proprietary network – because it would be prohibitively expensive by comparison. And in any case, the potential pool of benefit car users will be relatively small in emerging markets, because wages are low. Although some in the industry may still see them as threatening the status quo, new, alternative mobility modes may be the answer. These solutions will eventually permit to offer transport at a much lower cost, be it via car-sharing, two-wheel mobility, private lease concepts, or other (multimodal) solutions. And that will open up interesting possibilities, also in potentially fast-growing emerging markets. New mobility solutions are a global issue, but are trialled and introduced according to local circumstances. Fortunately, Think global, act local is a motto by now well familiar to global fleet managers. In the coming years, they will be the first to put technological progess into practice, thus shaping not only the future of global corporate mobility, but of global mobility per se.

CELEBRATE 20 YEARS OF FLEET MANAGEMENT WITH US IN OUR UPCOMING MAGAZINES. DON’T MISS: Fleet Europe °91 – June 2017 The Digital Revolution: enhancing Fleet Management reporting Fleet Europe °92 – August 2017 Survival of the smartest: evolution of powertrains and other automotive technologies Fleet Europe °93 – October 2017 Embrace safety and telematics by enhancing driver behaviour Fleet Europe Special – November 2017 Fleet Management in Benelux and France: The retrospective on a fleet management innovation Fleet Europe Directory 2018 – December 2017 The three waves towards Smart Mobility Management

And more articles on our website www.fleeteurope.com

together with :

FLEET EUROPE #90

EXPERT

Open Cars for Safe, Modern, Diverse Fleets Fleet managers are preparing for a near future where cars are autonomous, connected and full of innovative information technology features, computer networks on wheels. They know the car of the future will need to interoperate and communicate automatically with other cars, cyclists, pedestrians and traffic systems in the interest of everyone's safety. That raises the question how open the car of the future will be. PROF. DR. LOTHAR DETERMANN, Rechtsanwalt and Attorney at Law, advises companies at Baker & McKenzie Palo Alto and teaches law at and Freie UniversitĂ¤t Berlin (Germany) and University of California Berkeley School of Law.

Will it be like a desktop PC which will allow a user to select any software and connect to pretty much any third party products, including DVD burners, printers and remote Internet services? Or will it be as closed as a DVD player with region control that can't be connected with anything but a television, can't be operated remotely, can't play Blu-Ray disks, and which will have to be replaced in a few years? THE CLOSED CAR The closed car remains controlled by its original manufacturer, which is in most cases a large company with a strong brand, good safety track record, well-capitalized, supported by governments, and generally considered trustworthy. The original manufacturer of a closed car retains the power to decide if and when updates and upgrades are offered for the closed car, with what functionality, and at what price. Owners of closed cars tend to have few options to add or update parts or services on their own. They may have to discard an automobile with a fine motor and design if its original manufacturer does not offer updates that are attractive, reasonably priced or perhaps even necessary for safety or compliance in the rapidly evolving world of connected, autonomous cars.

Today, owners of closed cars are already getting used to the fact that "call home" features, entertainment ports and navigation systems can become obsolete relatively quickly after purchasing a new car. They may accept functionality degradation and make do with smartphones for now. Tomorrow, however they may find it unreasonably dangerous to drive yesterday's car if it has outdated sensors, software, autopilot or safety features. They may feel compelled to discard and replace yesterday's car, unless it is open enough that they can upgrade it with the latest and safest technology, offered by any automotive technology provider, be it the OEM, an OEM-vetted supplier or a completely independent company. This is particularly important for managers and operators of large fleets of vehicles made by different manufacturers. Fleet managers, trucking companies, mobility services providers, ride sharing operators, leasing businesses and rental car companies for example need control and access regarding vehicle data to support critical enterprise functions. They need to sustain long-term competitiveness with an ability to rely on multiple sources for parts and maintenance as well as specialized

FLEET EUROPE #90

EXPERT

connected services to assure up-to-date safety features, economic fleet maintenance, optimized telematics, fleet productivity and compliance. International fleet managers are unlikely to favour self-repair or unfettered access for hobbyist and individual tinkerers (even if they, too, benefit from independent researchers uncovering cybersecurity deficits, emission scandals and safety problems). International fleet managers are more likely to look to reputable automotive OEMs and technology providers for access to quality vehicle data and competitive technology features - but they need technologies that cover their entire fleet, not brand-, year- or model-specific telematics. Fleet managers should demand open on-board diagnostic (OBD) ports, open interfaces, interoperability and control over vehicle data vis-Ă vis governments, vehicle manufacturers and service providers. Yet, to date, there is hardly a public discussion about open versus closed cars. THE OPEN CAR To qualify as an open car, an automotive product must be open for technology upgrades, aftermarket products and security researchers. It must have open interfaces, open ports and openly disclosed software and hardware. It will thrive if it is associated with open developer platforms. The open car does not need to run on open data; it can protect data privacy and security as well or better as proprietary automotive products do today. It does not require open source software either, but would work well with it. If we compare the open and closed car from a policy perspective, the open car comes out ahead based on technological, competition, sustainability and environmental considerations. Those advocating against the open car are citing concerns regarding cybersecurity, safety and data privacy; but upon closer review, such concerns do not truly justify speedbumps for open cars and rather support increased transparency and openness. Current law is not holding the open car back. Right-to-repair statutes and competition laws are providing tailwind in the

FLEET EUROPE #90

United States. Onboard diagnostic ports - originally required in California for emission checks - have become a gateway to openness and transparency. Rules affecting automotive product developments and safety have not (yet) dictated a path in either direction, open or closed. Intellectual property laws do not present any insurmountable obstacles to openness either, because they are intended to promote innovation and protect interoperability and public access. No one owns data per se under current law; vehicle operators should retain access and control regarding data generated by their vehicle operation just like smartphone and computer owners are entitled to access and control regarding their personal data. Traditional automakers are considering business models involving open platforms, standards and developer ecosystems. They have been carefully observing business models that information technology companies have successfully introduced with respect to personal computers, smartphones and other connected devices. Computers on wheels must increasingly interact and compete with other computers. But, product and cybersecurity liability concerns could establish road blocks if manufacturers of open cars are held indiscriminately responsible for risks created by third party software, services or parts that car owners add at their own initiative. Courts and other lawmakers should carefully reconsider liability principles and precedents in the automotive, PC and Internet sectors, to develop an appropriate regime for allocation of liability and burden of proof regarding defects in open cars. As the car of the future is designed and developed, fleet managers and operators should voice their needs and preferences regarding control and access to vehicle data, open interfaces, open ports, multiple sources for parts and maintenance, interoperability standards, and specialized connected services to assure up-to-date safety features, economic fleet maintenance, optimized telematics, fleet productivity and compliance. Consider pre-ordering open cars today.

REMARKETING

World is ready for B2C remarketing Frank Jacobs @FrankJacobs

Vehicle remarketing is no longer limited to the B2B channel. B2C and BCE initiatives are flourishing. But the car manufacturers, car lease companies and auctioneers involved find challenges as well as opportunities.

Just two remarketing headlines from this year: PSA Group acquires 30% in French B2C specialist Aramisauto to further its goal of doubling used-car sales to 800,000 units by 2021; and: ALD Automotive Netherlands launches Own My Car, a scheme allowing employees to easily buy their end-of-lease car (B2E) or act as mediator in selling it to other end customers (B2C). CORE BUSINESS Most other car manufacturers and lease companies are also developing or perfecting B2C (Business to Customer) and/or B2E (Business to Employee) remarketing solutions. As are auction houses, even if, as admits Morten Holmsten, Global Sales Director at Autorola Group, “Our core business is B2B, and the typical buyers at our auctions are and will remain dealers”. Extending the remarketing effort to the general public may sound appealing in theory, in practice there are a number of problems, Morten knows: “Used vehicles are auctioned as-is. End consumers do not always appreciate the risk that this entails”. EU LAW Autorola has previous experience with B2C platforms: “Eight years ago, we rolled out a programme to auction vehicles directly to consumers. But our dealer-customers were not happy with the competition, so we halted it. Meanwhile, similar schemes are accepted by the market. The world has changed. It is now ready for B2C remarketing”, says Morten. He foresees a dedicated B2C channel to be rolled out by an industry player – not necessarily Autorola itself

- “next year or in five years, whenever the market is ready”. Because some issues remain: “Under EU law, consumers may return goods within 14 days of purchase. Extrapolate that to a large number of used cars, and that presents a cash-flow problem. Who will take the risk? Or will consumers accept another type of deal?” STRONG BELIEF Not all auctioneers are convinced those issues will be easily resolved. “We continue to strongly believe in the B2B concept, rather than in the B2C or B2E channels”, says Johan Meyssen, CEO of CarsOnTheWeb. COTW auctions vehicles from lease companies and other sourcing partners, reselling them to the auction winner for a price that includes their commission. “In our business model, there are no after-sales issues such as administration, logistics and warranty claims for our sourcing partners. We are fully VAT compliant, so there are no financial risks. We also carry the cancellation risk. A pan-European e-auction approach maximises prices. In short, our solution is flawless and low-cost and zero-risk for our partners”, says Johan. HIDDEN COSTS And it is exactly those advantages that are eroded in the other channels: “In the B2C and to a lesser extent B2E channels, customers need to be screened and serviced individually, which leads to a number of after-sales issues and financial risks. These hidden costs are often not taken into account when comparing B2B to B2C/E solutions”.

FLEET EUROPE #90

As drivers know their vehicle best, they can become a key part in the future of remarketing, a future where B2B meets with B2C and B2E.

“In B2C/E model, deals will be one-off, meaning customers are very demanding, deals require lengthy negotiations and lead to complaints about damages – which are a reality when dealing with used cars”. SPECIFIC ADVANTAGES “As the European B2B remarketing business is still immature compared to the U.S. market, we expect our B2B-oriented business model will triple growth in the coming three to five years”. That being said, Johan Meyssen does concede that CarsOnTheWeb are looking into linking their business with solutions offering other sales channels, to diversify the company's offering. GARCHING As points out Bart Beckers, CCO at Arval, the B2E channel is quite familiar to today’s car lease companies: “Drivers know their company car best, and are the most logical buyers once they are off-lease, either for themselves or for their friends. At present, about 10% of our vehicles are remarketed this way. And digital tools are making this increasingly easy to do”. “Marketing directly to consumers requires more effort and logistics. It is a limited part of

FLEET EUROPE #90

our business, which remains oriented for 85% on professional buyers. That being said, we do have some B2C experience in certain geographies, for example in the Benelux countries and in the UK. And in Germany, where we operate a retail used-car centre in Garching”. NEW FORMULAS “Remarketing vehicles is core business for us. And that implies that B2C could become bigger for us than it is now. Either by teaming up with professional buyers and sellers, of by doing it ourselves, if we can do it more efficiently”. “As new formulas like private lease take off, we could want to do the remarketing of the older cars ourselves. However, we are in habit of remarketing cars from 2 to 6 years old, not 15-year-old cars. That would require us to find a whole new segment of buyers. One way to do that is to make sure we sell more than metal. We can also offer our remarketing clients services such as logistics, warranties and stock financing, for example. This drives loyalty”. “Last year, we resold 260,000 vehicles. Eventually, our aim is to double this figure over the next five years, also via B2C. Will we manage? Let's speak again in five years...”

HOW BIG IS THE B2C PRICE ADVANTAGE? The price advantage of B2C constitutes much of its appeal. But how big is it? “Online auctions have made the market more efficient. Profit margins have decreased”, says Morten Holmsten “Suppose the difference between wholesale and retail is €2,000 gross. You still need to factor in a fee for the seller, the cost of transport, and of repairing small damages. Plus, the consumer will expect a cheaper deal at auction. So you are looking at a couple of hundred euros difference. You have to ask yourself: is that worth the additional risk?” Increasingly, the answer will be yes: “Online auctions to consumers will take off because high-resolution imaging now makes it possible to describe and show the cars online in greater detail than ever before”.

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Kia: plug-in hybrids take centre stage

The two KIA's models come with an 8.0-inch touchscreen infotainment and navigation system, configured to display the location of nearby charging stations.

Two of the latest models from Korean manufacturer Kia show its direction for the future. Along with the Optima PHEV, offering outstanding fuel economy of 1.62 litres per 100 km (176 mpg), with CO2 emissions to match (just 37 g/km), the Niro PHEV (pictured) has now been officially launched.

polymer battery pack, of below 30 g/km and a zero-emissions pure-electric driving range of over 55 kilometers (34 miles). Total power and torque output for the Niro PHEV’s powertrain are 141 ps and 265 Nm, enabling the new model to accelerate from 0-to-100 kph (62 mph) in 10.8 seconds. VERSATILE AND FLEET FRIENDLY Where practicality is concerned, the Niro PHEV has built-in advantages. The battery pack is located beneath the floor of the boot and the rear seat, with cabin space unaffected, making it the ideal choice for fleets that are targeting crossover segment versatility with ultra-low carbon emissions!

The Optima already impressed with its performance figures: 202 bhp and 375 Nm of torque. And as an added bonus, the 53 km (33 miles) range in all-electric mode, means that the daily commute to and from work will burn no fuel at all for the vast majority of business users.

CREATURE COMFORTS… Just like the Optima PHEV, the all-new Niro also comes with a comprehensive range of standard connectivity features, including an 8.0-inch touch-screen navigation system with European mapping, Android Auto and Apple CarPlay, Kia Connected Services powered by TomTom®, a wireless mobile phone charger, and a 10-speaker Premium Sound audio system.

The Niro PHEV reinforces this commitment to ‘clean power’. Official figures are set to show combined CO2 emissions from the 1.6-liter GDI engine and the 8.9 kWh lithium-

…AND STYLE Kia surveys show that one of the main reasons why drivers are increasingly turning to its models is style. The Optima already breathed a breath of fresh air into the

D-segment sedan and wagon segment, and the Niro is set to do just the same in the crossover domain. BUILT-IN SAFETY Active safety features are built into the Kia hybrid line-up, including: Electronic Stability Control, Vehicle Stability Management and Hill-start Assist Control. Kia models are also available with a series of features to supplement the driver's vision and control. Among these, Autonomous Emergency Braking with pedestrian detection brings the car to a rapid halt at speeds of up to 80kph (50mph) if the driver fails to react to a potential accident. 7-YEAR WARRANTY In keeping with every Kia, the Optima and Niro hybrids come with the company’s 7-year or 150,000 km warranty (U.K.: 100,000 miles). The warranty is fully transferable should the car be sold before the time or mileage limits have been reached.

MORE INFO www.kia.com/eu

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REMARKETING

No bad news effect on diesel RVs Frank Jacobs @FrankJacobs

Today, there is no clear downward trend with regard to diesel residual values. But a balanced energy and powertrain mix in your corporate fleet can be the right thing to do in order to get no bad surprises in the near future.

Journalists love big fat trends. Like the Decline of Diesel, a story that almost writes itself. But does all the evidence support the thesis? Not according to the latest data on Residual Values, collected for Fleet Europe with the support of LeasePlan.

The story that writes itself goes a bit like this. For many years, European governments supported and subsidised diesel, in the mistaken belief that it is a less polluting alternative to petrol. But from 2015, the emissions scandal known as Dieselgate helped turn public opinion against the fuel. Subsidies are being redirected, and local governments are increasingly installing entry restrictions for most-polluting vehicles, a measure that hits diesels harder than other motorisations. Diesel sales levels are falling, to the advantage of petrol and to a lesser extent alternative motorisations.

extent than the private market, especially for longer distances, the cost advantage will disappear very soon, as the Residual Values of diesels are about to crash. Because who will want to buy a diesel in a couple of yearsâ&#x20AC;&#x2122; time? Its a convincing scenario, with an evil villain (deadly, polluting diesel), obvious heroes (anyone brave enough to turn to alternative fuels) and a clear moral (even if you donâ&#x20AC;&#x2122;t go electric, turn away from diesel now, for soon it will be too late). But, as H.L. Mencken once said, some scenarios are neat, plausible and... wrong.

Although corporate fleets throughout Europe continue to prefer diesel to a larger

FLEET EUROPE #90

REMARKETING

Trends Residual Value Evolution* FIVE QUARTERS

As shown by these graphs, charting the evolution of Residual Values of both diesel and petrol vehicles, as they were set for each of the past five quarters. The data pertains to large samples of vehicles in a number of key European markets. The baseline value for Residual Values in Q1 2016 is set at 100. Even without the benefit of absolute figures, the relative evolution of the values itself is revealing enough.

102% 102% 101% 102% 101% 102% 100% 101% 100% 101% 99%

POINTING DOWNWARDS

“Of the seven countries for which we collected and analysed data, only one – the UK – showed a decline in the Residual Values of diesel cars. Diesel RVs were relatively stable in France and Germany, and increased in the remaining four countries: the Netherlands, Spain, Italy and Portugal”, says Sjoerd Brenters, International Fleet Consultant at LeasePlan International.

Falling diesel DE RVs

However, this is only the case for the UK, where RVs for diesels projected in Q1 2017 are at 96.3% - after peaking at 100.7% in Q4 2016. The DE evolution over five quarters is largely parallel to that of petrol RVs: down to 97% in Q1 2017, with the difference that petrol has recovered from an even deeper dip, to 96.1% in Q2 2016. It is possible that the decline of RVs in the UK is connected to anxieties about Brexit.

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In two of Europe's Big Five markets, diesel RVs remained stable over110% the past five quarters. 108%

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NL upwards in Q2-3 2016, to 100.6%, In Germany, they tipped only to decline slightly to 99.9% in Q4 2016 and to 99.8% in Q1 2017. This was almost the perfect mirror image of the evolution of petrol RVs: down to 99.8% and 99.3% in Q2-3 NL 2016, before rising to 100% in Q4 2016 and 101.5% in Q1 2017.

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Residual Values are set with the projected selling price of the vehicles in mind. If remarketing experts thought that public confidence in diesel is on a downward trajectory, this would negatively impact the resale price of diesel vehicles forecast for the end of their lease cycle (typically 36 or 48 months). In that case, the diesel RVs on these graphs would all be pointing downwards.

96% Q1 2016

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ES In France, stability for diesel RVs (101.5% in Q1 2017) was 103% overshadowed by a steep increase in petrol RVs in Q2 2016 102% (to 108.2%), which would remain consistently high (at FR 108.7% in Q1 2017). France is seeing an increased demand 101% 110% ESimproved taxes on in petrol vehicles, partly fuelled by 103% 100% vehicles. petrol 108% 102% 99%

106%

For diesel en petrol vehicles in NL, UK, DE, ES, FR, IT en PT in de periode101% Q1-2016 t/m Q1-2017. Source: LeasePlan, 2017.

98%

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Diesel RVs increased in a number of countries, among 97% whichQ2the Netherlands. we see theQ1Q4 value Q1 2016 2016 Here, 2016 2016 land on Q1 2017 Q1 2016 2016 Q3 Q2 2016 Q4Q3 2016 2017 100.8% in Q1 2017, but only after peaking at 104.2% in Q4 2016. “That peak is influenced by a change in the Dutch vehicle taxation system”, according to Sjoerd.

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In Portugal, the situation is reversed: petrol RVs increase to 109.2% in Q1 2017, versus 104.1% for diesels – again, as always, compared to Q1 2016.

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Italian RVs, showed a clear dichotomy: negative for petrol cars (97.4% in Q1 2017) - but clearly positive for diesels (103.6%).

CONCLUSION

“Judging from these figures, we can conclude that there is no measurable ‘bad news effect’ on diesel RVs throughout Europe”, says Sjoerd Brenters. “In fact, there is no clear downward trend among the countries in scope”. "Market forces in each of the countries analysed, such as increased trust in the economy or changes in –fiscal- legislation, remain dominant, pushing diesel RVs down, causing them to remain stable or, as it happens in the majority of cases, rise upwards”.

FLEET EUROPE #90

Q1 2017

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Diesel Petrol

In Spain, diesel and petrol RVs rise in a similar pattern, but 95% 95% with diesel in the advantage (rising to 102.3% in Q1 2017 2016 2016 2016 2016 Q1 2016 Q2 Q1 2016 Q3 Q2 2016 Q4Q3 2016 Q1Q4 2017 versus 100.7% for petrol).

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REMARKETING

96%

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In two of Europe's Big Five markets, diesel RVs remained stable over the past five quarters.

ADVERTORIAL

CONCEDED EDITORIAL SPACE

Smart Cities, Smart Mobility When speaking about Mobility Revolution we can find optimists and pessimists, but one thing is for sure: both agree that changes are coming and absolutely mandatory. Transformation will come from drivers, autonomous vehicles, and the sharing economy. But these will be common sights for drivers in due course. Beyond this, these changes are also shaping the future of cities. In the last 100 years, we have adapted our lives more toward cities, than the city has adapted to us. But revenge is coming: city governments are now building smart cities toward a higher quality of life that encompasses pedestrians, vehicles, and public transport in more equal measure… New ecosystems are evolving, enabling us to go forward and at full speed. No single book can ever seek to do justice to all the incredible urban transformations and city initiatives taking place all around the world.

These initiatives can be perceived in many different ways but the main objectives are and will remain building a healthier ecosystem, lowering pollution, increasing mobility for everyone, respecting nature and society… In his next release “Smart Cities, Smart Mobility” Lukas Neckermann in collaboration with the Corporate Vehicle Observatory, focuses on the specific interconnection between smart mobility and smart cities and how this results in a new and smarter way of living and working.

We have been hearing the term “Smart Cities” for a few years now, but it had been forgotten and suddenly widely used. Why then? Because in 2017 we can clearly state we have entered the smart era, necessary preconditions such as electric vehicle’s adoption, driverless cars, cheap renewable energies, artificial intelligence and many other new technologies are becoming reality. Lukas argues that there is no secret formula to creating a smart city; it is a product of the interplay between government, companies, mobility and its people - with a common aim. A smart city, in combination with smart mobility, offers residents, visitors and stakeholders a quality of life and an ease of experience that pre-emptively addresses their needs, desires and transport requirements.

“The mobility revolution represents the biggest paradigm shift since the advent of personal transportation. The impact goes beyond just transportation, however, and Lukas’s new book offers an invaluable insight into the transformation of cites, mobility and society in the coming decades.” Mark Preston, CEO, PrestonEV Team Principal TECHEETAH Formula E Racing Team “Lukas Neckermann is clearly enthusiastic about the promise of technology, yet he does not fall into the trap of imposed top-down solutions by experts and ideologues. In his book, he rather advocates for a human-centered bottomup approach where people will have choices according to their own preferences. A well readable book with a wealth of information about the transformative challenges and opportunities that cities - and their residents - will face in the 21st century.” Richard Straub, President, Peter Drucker Society Europe “Lukas has a passion for the industry challenges brought about by the transformation of cities, mobility, and the working environment. He has produced an inspiring, breakthrough book that combines both long-term trends with pragmatic, real-life best practice examples. It’s a pleasure to collaborate with Lukas.” Hervé Girardot, Head of ARVAL Consulting and Corporate Vehicle Observatory

“Smart Cities, Smart Mobility – Transforming the Way We Live and Work” will be available soon on the corporate vehicle observatory website and downloadable on different platforms. Stay connected on our webpage: https://www. corporate-vehicle-observatory. com/

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ANALYSIS

Private leasing powers ahead Jonathan Manning

A growing number of employers are looking to provide staff with a more flexible package of corporate benefits, and widen access to a â&#x20AC;&#x2DC;company carâ&#x20AC;&#x2122; type product to all employees.

Employers across Europe are increasingly looking to include personal leasing products within the range of benefits they offer to their staff. In some cases, private or personal leasing is offered as an alternative to a traditional company car, but in many cases it is also made available as an option to employees who would not normally qualify for a company car. The current uptake differs from country to country, with the UK leading the way in Europe. As many as 650,000 employees in the UK take advantage of an Optional Remuneration Arrangement, whereby they receive a cash allowance or sacrifice a proportion of their salary in order to finance a car, according to the British Vehicle Rental and Leasing Association (BVRLA). It commissioned research by Oxford Economics which calculated that employees in receipt of a cash allowance account for about 217,000 new car registrations in Britain every year. Indeed, in its last quarterly report in March, the BVRLA reported a 12% year on year increase in contracts between its members and private individuals, compared to overall market growth of 3.6% in car leasing; and personal contract hire (PCH: full service leasing) contributed 49% of this growth. Only cars with emissions below 75g/km will avoid new personal leasing tax rules in the UK.

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ANALYSIS

“The war for talent is intensifying the pressure on businesses to create more flexible benefits packages”, says Michiel Alferink of Athlon International

650,000 THE NUMBER OF UK EMPLOYEES THAT TAKE ADVANTAGE OF AN OPTIONAL REMUNERATION ARRANGEMENT FROM THEIR EMPLOYER TO SOURCE A CAR

12%

ANNUAL INCREASE IN CONTRACTS BETWEEN BRITISH LEASING COMPANIES AND PRIVATE INDIVIDUALS

Gerry Keaney, BVRLA chief executive, said “The real growth is coming from personal contract hire. BVRLA members can tailor a personal contract hire arrangement to suit a driver’s monthly budget and include costs such as maintenance and replacement tyres, and it’s clear that more and more customers appreciate these benefits.” Evidence from international industry experts suggests that other countries are following a similar path. “In the UK, Arval has been offering PCH for a long time. It’s very well established there,” said Lakshmi Moorthy, Arval SME solutions director. “In other markets we are seeing the overall demand for private leasing increasing, especially the Netherlands, and in France, Spain and Italy.” The different structures of private leasing products make market volumes difficult to measure, but Michiel Alferink, vice president international sales at Athlon International, said the product is increasingly important. He identified significant growth in demand, with the Netherlands, Belgium and France leading the way. And Twan van den Elsen, manager product and sales channel development, Alphabet International, singled out Netherlands, Spain, Italy, Sweden and Switzerland as countries with high potential for personal leasing. “Private lease and other employee mobility / vehicle solutions are growing in almost every market. Companies are searching for

Twan van den Elsen of Alphabet International sees an increased attractivity of private lease and other flexible mobility solutions in almost all markets in Europe.

easy and flexible solutions (with less hassle) and more often find them in arrangements whereby the relationship between the provider and employee is directly handled,” said van den Elsen. To the driver, personal leasing is very similar to having a company car. In return for a fixed monthly rental, the leasing company provides a car with full maintenance, servicing, insurance and no residual value risk. At the end of the contract the employee returns the car, and so long as its condition and mileage meet fair wear and tear terms, there is no more to pay. The difference lies in the structure of the contract, which is typically between the leasing company and employee, a so-called B2E (business to employee) arrangement. Employers are simply introducers or facilitators of these schemes. However, the technical sophistication of certain policies can involve employers, especially when salary sacrifice is involved. This is a more tax aggressive arrangement whereby the employee sacrifices some of their pre-tax salary and the employer uses the saving to fund the car, saving the employee income tax while the employer reduces its national insurance contributions. There are important considerations for businesses which are thinking about the introduction of a personal leasing product. The first is whether any cash allowance paid to staff in lieu of a company car is pensionable; and whether it will it increase annually in line with any pay rise. FLEET EUROPE #90

ANALYSIS

Lakshmi Moorthy of Arval: “We could see the number of benefit or salary sacrifice cars reduce to be replaced by private lease schemes.”

The second is to accept that corporate duty of care responsibilities extend to all staff whenever they are driving for business, regardless of the name on the car’s ownership documents.

due on the cash allowance, or the benefit in kind if the personal lease car were a company car. The only exemptions are for ultra low emission vehicles that produce less than 75g/km of carbon dioxide.

The legal enforcement of these responsibilities will differ from country to country, but in the UK the Royal Society for the Prevention of Accidents (RoSPA) is clear that the Health And Safety at Work Act requires employers to ensure, so far as is reasonably practicable, the health and safety of all employees while at work. It describes employees driving their own cars as ‘grey fleet drivers’.

Across Europe, local tax regimes will dictate the cost effectiveness of a cash allowance as a replacement for a company car, but personal leasing has much broader appeal than merely as an alternative to a company car.

“You have the same legal duty of care for grey fleet drivers as you would for those in a work supplied vehicle,” said RoSPA. Personal leasing can actually provide part of the solution to this responsibility if employers demand that their nominated personal leasing provider ensures that all cars are properly insured for business journeys and that the vehicles are professionally maintained, a degree of control that employers would not otherwise have over their staff’s private cars. DRIVING DEMAND The original popularity of corporatelysponsored personal leasing in the UK arose in response to company car tax changes; and further tax changes introduced in April 2017 have complicated the issue. These now see the British government tax employees on the greater of either the income tax FLEET EUROPE #90

“With advances in alternative mobility, in some markets corporates are looking to see if a company car is really the best thing to offer to all their employees,” said Arval’s Moorthy. “They want to give employees good benefits, and that could be a company car or an attractive personal leasing scheme. Companies also want to curtail the segmentation between employees entitled to a company car and those who are not, by providing access to an attractive personal leasing scheme to those not eligible for a company car. “Some organisations might decide to get out of company cars for select employee types, and to replace them with access to a personal leasing scheme. But they would only do it if they were sure it would not have an impact on the business. Roles where cars are needed would still be company cars, but those drivers might be able to access a personal leasing car for their families. We could see the number of benefit or salary sacrifice cars reduce to be replaced by personal leasing schemes.”

As economies improve, the ‘war for talent’ is intensifying the pressure on businesses to create more flexible benefits packages that meet the lifestyle needs and expectations of their employees, said Alferink. He added that Athlon is currently working with a large industrial company that is in the process of moving its headquarters from the centre to the outskirts of a city, where public transport options are much more limited. In this scenario, personal leasing will give those employees who need a car, to get to work in the new office, access to a vehicle for a low initial outlay and fixed monthly cost. More generally, private leasing also widens the selection of cars available to drivers from restricted fleet choice lists. This wider choice does, however, oblige companies to identify which company car drivers should be eligible to swap their company car for a personal lease vehicle. “In a private leasing scheme, employees are not so limited by a company policy. If someone wants a particular car, we can offer the benefit without restriction. We look at CO2 etcetera, but there is more freedom if you want a convertible or coupe, where a company might say that is not part of our policy,” said Alferink. THE EMPLOYEE PERSPECTIVE The change in the wider consumer culture from ownership to usership, seen in the success of companies like Spotify and Netflix, underpins the appeal of private leasing.

ANALYSIS

“With personal leasing, complexity has to be kept to a minimum, so we see the product as a bundle of services, with SMR included,” said Moorthy. Armed with a cash allowance, drivers could choose to go directly to their local car retailer, so the onus is on the leasing company approved by the employer to provide a competitive deal. “Employees can come to Arval or go to a car dealership. We can give them the benefit of better discounts, from OEMS as well as SMR providers, and those discounts are bigger than they would get as retail customers,” added Moorthy. FUTURE PROSPECTS The growth in private leasing coincides with the development of mobility solution concepts, whereby employees and private individuals use the most convenient and cost effective mode of transport for every journey, rather than automatically defaulting to the car. Gerry Keaney, BVRLA chief executive: “The real business growth is coming from personal contract hire.”

The more educated and aware that people become about the true costs of car ownership, the more attractive private leasing becomes. “People are starting to understand wholelife costs and risk aversion,” said Alferink. “A lot of private individuals don’t like buying a car because they are never sure they are getting a good price, they don’t trust garages, and they have a hard time selling the car at the end.” Progressive employers want to remove this hassle from their employees, and personal leasing solves this problem, with the appealing simplicity of bundling the entire cost of motoring into a single monthly fee, without the potential awkwardness of pre-contract credit checks and large deposits.

All the companies contacted by Fleet Europe reported that private or personal lease cars tend to be smaller, more efficient and cheaper than company cars, an indication that employees will be more modest in their tastes when they’re spending their own money. Any surplus in the cash allowance after the car has been leased could potentially be used to pay for public transport and season tickets. “More and more a menu of flexible fringe benefits is offered to employees whereby mobility or transportation are included in the options to choose from, said Alphabet’s van den Elsen. “For leasing providers, the growth in private lease and particularly the development of B2E business will depend on the ability to provide a relevant range of models with an attractive type of pricing and other conditions based on corporate discounts and sourcing efficiencies.”

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Going International, Going Global: Missions, responsibilities, challenges & trends The International Fleet Managers Institute (IFMI) provides international fleet managers with ongoing training opportunities. Are you the manager of a fleet of cars and/or LCVs â&#x20AC;&#x201C; and does your job have an international scope? Then the International Fleet Managers Institute (IFMI) is what you need!

> WEBINAR: 28 SEPTEMBER 2017, 2:00 TO 2:45 PM Company Car versus Cash Allowance and the rise of Private Lease - which is right for your employees Since years the company car has been seen as the ideal incentive towards taking a new job and with regard to salary. Recently, however, employers and fleet managers are questioning to replace the company car by a cash or car allowance, steered by taxation, cost optimization and the increasing popularity of employee-based mobility. Also private lease is put in this equation. But how to deal with all this, and what is the best fit for your strategy? Industry experts and fleet peers will be providing insight with regard to this topic in a lively webinar.

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The Fleet Europe Forum, organised on 6 December at the Estoril Congress Center, will be the place to get grip on the new direction our corporate fleet and mobility business evolves into. THE TRANSFORMATION ERA For some years now, the international Fleet and Mobility industry has been going through major changes – in terms of supplier organization, service offer and business model. Car manufacturers, lease and fleet management companies and other suppliers are refocusing their strategies on flexible mobility solutions. Driving these changes is rapid technological progress, notably in Big Data and Connectivity, shared mobility and the imminent arrival of the self-driving vehicle. Start-ups with disruptive solutions are accelerating the industry’s transformation. All of which adds up to a curious situation: for the Fleet and Mobility industry, the future is not tomorrow, but today. Five examples of fundamental change have happened recently:

• New shareholders and a new strategy for LeasePlan • Daimler Financial Services acquires Athlon International • Société Générale aims to float its leasing branch ALD Automotive on the stock market • PSA Group acquires Opel/Vauxhall and launches new mobility brand Free2Move • Uber and BlaBlaCar enter into partnerships with lease companies

If the future is today, what will tomorrow look like? An industry in flux creates uncertainty as well as opportunity. At the 2017 Fleet Europe Forum, a panoply of speakers and debaters will focus on both, aiming to minimize the former and maximize the latter. Their goal: to uncover the DNA of the fleet and mobility professions of tomorrow as it is taking shape today.

THIS YEAR’S SESSIONS The overall mission statement for this year’s Fleet Europe Forum will be translated into three session: 1. TWENTY YEARS OF FLEET MANAGEMENT, AND NOW? Fleet Europe celebrates its 20th anniversary this year. The industry has changed almost beyond recognition in those two decades. Famous inductees into the International Fleet Hall of Fame reflect on the industry’s rapid transformation, both past and future. 2. THE AUTOMOTIVE REVOLUTION When it comes to future mobility, everyone wants a piece of the pie. How will car manufacturers stay relevant and avoid becoming mere commodity suppliers? Top executives from across

the automotive industry will zoom in on changing business models, B2B2E customer relations and the impact of connectivity and autonomy on the future of the industry. 3. SUCCESS IN THE NEW MOBILITY GAME As the sharing philosophy takes hold in the automotive world, and with a digitised future increasingly governed by the pay-by-use principle, what are the business models that will help companies not only make money but maximise profit? This session will think out of the box, inviting the views of the outsiders who are challenging traditional fleet players to reinvent themselves.

FLEET AND MOBILITY COMMUNITY The Fleet Europe Forum is forwardlooking, but firmly fact-based, with contributions from experts from inside and outside the industry. Yet the event is also greater than the sum of its presentations, debates and networking opportunities: this is where fleet and mobility custo-mers and suppliers become a true fleet and mobility community, to the benefit of all present. Want to be part of this community, register now.

SAVE THE DATE AND REGISTER At the 2017 Fleet Europe Forum, a panoply of speakers and debaters will examine the future of the fleet & mobility professions.

More information about the Fleet Europe Summit and registration details: forum.fleeteurope.com FLEET EUROPE #90

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