103 01/2019
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IBM’s pricing tool
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ALMY SOUSA MAGALHAES
FINANCE The potential of Subscription-based mobility
Nexus communication - Fleet Europe #103 - Periodic magazine - JANUARY 2019 - Deposit Office X
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64% of fleet managers
EMBRACING TELEMATICS
have already implemented Telematics 28
6-31 8
Survey: Are you ready for big data?
Data is the new gold
10 Primary Telematics Players in Europe 14 The dawning of data 16 The investment that keeps on giving
32 IBM’s augmented intelligence helps fleet managers, Ferenc Hegedus, IBM
18 Plan before you play 20 A confusing array of new regulation 24 Embracing hacking to improve security 26 How AI gives telematics an immediate impact
33 ChangeMyCar: Athlon’s Tinder of car leasing
30 Leasing companies are fully embracing telematics
38 “EVs mainstream from 2020” Stéphane Renie, ALD Automotive
COLOPHON SALES: David Baudeweyns, Saskia Lannau, Daniel Savigny, Elke Leën; Aline Verpoorten
FLEET EUROPE #103
CHIEF EDITOR: Steven Schoefs PROJECT COORDINATOR: Céline Gilson EDITORS: Benjamin Uyttebroeck, Dieter Quartier, Fien Van den Steen, Yves Helven, Frank Jacobs
MARKETING: Vincent Degives, Virginie Emonts, Benoit Delisse
CONTRIBUTORS: Tim Harrup, Jonathan Manning, Alison Pittaway, Mark Sutcliffe
PICTURES: ©Shutterstock
PUBLISHERS: Caroline Thonnon, Thierry Degives LAYOUT: Cible - www.cible.be
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THE ECOSYSTEM FINANCIAL MODEL 34 Untapped flexibility in subscription-based mobility
36 The global potential of subscription-based
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mobility
SHARED MOBILITY
Alain Van Groenendael, New CEO and Chairman of Arval
The rise of shared employee mobility solutions
NEW ENERGIES Hybrid penetration based on misleading categories
LAST MILE Last mile innovation by OEMs
MAAS
40 10 strategic questions to Volvo on EV, AV and connected car
How MaaS will revolutionize fleet management
SAFETY How will Blockchain help the fleet industry
AUTONOMOUS Explore autonomous driving at CES 2019
REMARKETING 42
45
“It’s easy to buy a Swedish used fleet car”
We also focus on these channels on our website. Read all these selected articles here:
Stakeholder Management The dark side of projects
48 “Show us what’s valuable!” Almy Magalhaes (PMI), Global Fleet Manager of the Year
FLEET EUROPE www.fleeteurope.com • Fleet Europe Magazine • @Fleet_Europe • FleetEurope • contact@nexuscommunication.be Fleet Europe is published by Nexus Communication SA - Parc Artisanal 11-13, B-4671 Barchon (Belgium) - T +32 4 387 87 71 - Fax +32 4 387 90 63 Fleet Europe is registered and copyrighted trademark. Reproduction rights (texts, advertisements, pictures) reserved for all countries. Received documents will not be returned. By submitting them, the author implicitly authorizes their publication.
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OUR NEW ECOSYSTEM: 9 PRIORITIES, 9 CHANNELS From operational and finance leasing to flexible leasing, private leasing, subscription based leasing, and used car lease models
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IT’S HOT, IT’S A SUPER-THEME!
OUR KEY AUDIENCE IS BECOMING CROSS-FUNCTIONAL
Our editors and experts follow closely emerging trends and decisive changes in the corporate fleet and mobility market place.
Our audience is composed of international fleet and mobility decision makers and influencers operating in multiple countries. We focus mainly on the buyers side, but suppliers are also following our media closely.
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BUYERS PROFILES From Fleet Managers & Procurement to Cross-functional teams
NEW READERS, NEW COMMUNITIES • Mobility Managers (Fleet & Travel) interested in MaaS Implementation • Remarketing professionals • Car sharing operators (they also manage fleets) • CIO / ICT (interested in technology and telematics) • Global Fleet Managers (going beyond Europe)
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• Mobility • Finance • Facility & Logistics • ICT
SUPPLIER PROFILES From mainly OEMs and Leasing company to the full industry linked to fleet & mobility: • MaaS suppliers • Telematics companies • Energy providers And of course • OEMs • Leasing companies • Rental companies • Fleet Management Providers
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DATA IS THE NEW GOLD Data is commonly referred to as the new gold. The precious metal comes in different shapes and can be tricky to mine, though. It’s time to get familiar with the tools and the landscape. @DieterQuartier
Mercedes-Benz is one of the first OEMs to open up vehicle fault codes to third parties.
FLEET EUROPE #103
Data is a sine qua non for companies in the mobility scene: it constitutes a multitude of opportunities – and a huge competitive threat if you miss out. The evolution from data gathered by retrofit solutions to data provided directly by the OEM thanks to the connected car is paramount. Since the introduction of eCall (automatic crash response) last year, every new car leaves the factory equipped with the connectivity and hardware to exchange data. However, the good old retrofit OBDII dongle is not dead yet – and is likely to survive for another decade. For starters, tech companies move faster than car manufacturers. “While we encourage the automotive OEMs to provide
rich data from their vehicles, the automotive product lifecycle is significantly longer, meaning that they have a real challenge in keeping up with technological evolutions and integrating them in the industrial complex that they have, not least in the realm of telematics,” says Edward Kulperger from Geotab. Another aspect is that OEMs are still figuring out themselves which data they want to share, in which way and with whom.
Breaking down the system To wirelessly enable devices within vehicles to communicate with a platform in order to automate processes and enhance efficiency: that is how you
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could define vehicle telematics. There are basically three steps: data collection, data transfer and data processing. Data can be collected in several ways. You could use an app installed on your smartphone – to share location, speed, direction of travel, G-forces, and so on, but such a solution offers limited possibilities and reliability. To really strike data gold, you need access to the brain of the car. That’s where OBDII dongles come in: little pieces of very smart hardware installed in the vehicle that can understand and read signals coming from the vehicle’s CAN bus and send them to the cloud for analysis. The OBDII port gives you access to just the tip of the iceberg: you basically get
OEMs hold the key OEMs could make things a lot easier for telematics companies, for starters by standardising the data output, but by the looks of it, they are still figuring out themselves how they want to share their vehicle data. Sharing means opening their technical DNA to third parties, who could pose a threat to the OEM’s own business. That is why proprietary telematics platforms today offer access to just a fragment of the data available. Some car manufacturers are taking the first steps towards data sharing. Mercedes-Benz, for instance, upon the customer’s request, grants access to vehicle fault codes to independent third-party providers in line with the European type approval regulations. This means that they can produce a remote diagnosis for networked Mercedes-Benz vehicles. Moreover, since December 2018, vehicle data specifically for other services is available for the first time through an interface for Mercedes-Benz data products. The latter are available to any third-party provider wishing to offer services based on vehicle-generated data. This ensures fair competition between all market participants with respect to services. At the same time, it makes new business models and innovations possible for customers, Mercedes reckons. Vehicle-generated data are made available by the so-called Extended Vehicle Concept. There is no direct access to the vehicle by third parties, but only to the backend server of the OEM. This ensures operating safety as well as data security.
Rental takes the lead Telematics offer many benefits for short and long-term rental companies, who do not want to wait for OEMs to come up with an integrated solution for crash management, SMR management and so on. Leasys, for instance, recently teamed up with Targa Telematics. ALD Automotive has started working with LoJack in Italy in 2018 and plans to expand throughout Europe this year. In Spain, Europcar has reached out to Telefonica and Geotab to connect their fleet. “We have been working with Europcar and Telefonica for a year in preparation of this partnership, which enables Europcar in Spain to improve their operations,” says Geotab’s Edward Kulperger. “They will be using technical data from our device including odometer, fuel level as well as diagnostic codes. Our device will also inform them when the car is involved in an accident. Telefonica adds a layer of technical and business intelligence leveraging our data to help improve operational efficiencies even further.”
Geotab offers dongles that can turn any car into a connected car.
Retrofit devices will continue to thrive for at least the next decade.
THE TELEMATICS LEXICON • OBDII port The on-board diagnostics port is a standardised interface to read out vehicle information, mainly pertaining to the engine management and emission control. It is through this port that technicians diagnose the vehicle and perform updates. • Dongle A small piece of hardware that can be connected to the OBDII port to collect vehicle data and send these to a cloud. They have a transmitter and a receiver. • Cloud A virtual place that through a network connection gives access to computer, information technology (IT), and software applications. Its main advantages are faster innovation, flexible resources and economies of scale. • API An Application Programming Interface is a set of data protocols that allow communication between various systems. In telematics, an API allows fleet managers to integrate vehicle metrics into internal systems, for instance to manage billing.
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emission data – which already enable you to learn many things. The rest of the iceberg, including the vehicle’s mileage and seatbelt use, comes out in a language that differs per brand and per model and requires reverse engineering. For driving data, including sudden deceleration, harsh cornering, and so on, you need an accelerometer. To keep track of the vehicle’s position, a GPS tracker is necessary.
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PRIMARY TELEMATICS PLAYERS IN EUROPE The European telematics market has been characterised by a raft of mergers, acquisitions and take-overs in the past couple of years, which shows no signs of abating. Alison Pittaway
Microlise looks set to invest in Trakm8 and Trak Global Group acquired Canadian-based Mechatronic Systems in December 2018. Rumours abound that Michelin and Bridgestone are eager to acquire TomTom Telematics. North America remains the largest telematics market but Europe is one of the fastest growing, with various research reports predicting growth figures over the next decade of between 14-20%.
Low adoption, fast growth According to a report from McKinsey & Company, the USA, Italy, South Africa and Singapore are the most mature telematics markets sharing 58% of worldwide penetration (20%, 17%, 12% and 9% respectively).
FLEET EUROPE #103
China, the UK, Belgium, Canada, Australia, Russia, Spain and Switzerland are “fast-growing” sharing 24% penetration (China 5%, UK, Belgium and Canada 4% each, Australia 3%, Russia 2%, Spain and Switzerland 1% each). Argentina, Brazil, Poland and New Zealand are “slow-growing” markets each with 1% penetration. The top telematics vendors in Europe today have between them over 1 million active units across the region. TomTom Telematic’s subscriber base has grown both organically and through acquisition to make it the clear market leader with an installed user base of 862,000 worldwide.
Masternaut is the second largest telematics provider in Europe with an installed base of over 300,000 units. Microlise is the third largest player in the region with an installed base of over 210,000 units. Other key players in Europe are: ABAX, Viasat, Bornemann, Trakm8 (which acquired Roadsense Technology in August 2016), Quartix, OCEAN (Orange Business Services), EcoFleet, GSGroup, Vehco. International players active in Europe include: Verizon (Fleetmatics and Telogis), Geotab, Trimble, Transics, Gurtam and Teletrac Navman, Astrata Europe from Singapore and Ctrack (Inseego) from South Africa and MiX Telematics. Between them, these companies have an additional 100,000 plus active devices in the field in Europe.
IS IT BETTER TO WORK WITH LOCAL HEROES OR TO HAVE A PAN-EUROPEAN SUPPLIER? The consensus is there’s no clear answer either way. A local telematics provider may know the market better, have greater knowledge of locally applicable laws and regulations but may lack longevity, track record and experience. That said, their solution may be more competitively priced. As data is important for telematics, global providers could argue their solution has the upper hand in terms of data volume, which is important for business insight. Another aspect to consider is language and fiscal capabilities. Europe is a region of many languages and different fiscal reporting requirements.
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North America remains the largest telematics market, accounting for 20% of worldwide penetration.
TOMTOM TELEMATICS
MASTERNAUT
TomTom Telematics provides WEBFLEET, an online platform connecting fleet owners with vehicles. Webfleet began as a fleet management software solution 20 years ago and is now offered as SaaS (software-as-a-service). In-vehicle telematics devices and driver terminals can be added to offer additional functionality. The solution is cloud-based and offers dashboard, maps, reporting and integration with third party software. The company claims ROI (return on investment) can be achieved within 6-9 months. Depending on configuration, the solution enables real-time vehicle tracking, 20% savings in fuel from driver behaviour monitoring, easy integration into other business systems, reduced journey times, improved service levels and greater regulatory compliance.
Masternaut is evolving from a traditional fleet management solutions provider to something of a data specialist. It connects fleets with a range of telematics to read data straight from CAN bus or OBD. From simple vehicle tracking (Masternaut Go), to fuel cards and company car products. Masternaut Connect gives full visibility in real-time so fleet managers can manage jobs at their desk on the go. Data comes from thousands of data points per second and can be turned into actionable insight. In October 2018, Masternaut launched Pulse, a plug-and-play solution offering low-cost, pay-as-you-go telematics. It is particularly suited to organisations needing to expand their telematics monitoring into short-term hires, company cars and grey fleet.
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FLEET EUROPE #103
AN OVERVIEW OF THE MAIN TELEMATICS PLAYERS IN EUROPE
CONNECTED
LOJACK Italy-based telematics fleet management provider LoJack Italia recently introduced LoJack Connect, a telematics solution dedicated to rental companies, company fleets and insurance providers in Europe. The SaaS fleet management solution helps such businesses to increase operational efficiencies, generate new revenues and mitigate fraud. A subsidiary of CalAmp, LoJack Connect leverages the CalAmp telematics cloud and device portfolio to allow customers to track mileage for preventative maintenance and utilise geofencing techniques for faster checkout. Automated vehicle location features enable real-time pricing and optimised fleet distribution management. The product also features instant crash alerts, accident reconstruction and damage assessment.
Microlise was awarded the prestigious Queen’s Award for Enterprise - International Trade, which is considered the highest honour a UK business can achieve.
MICROLISE Microlise is a UK-based, privately owned business that has been in operation for over 30 years. It supplies telematics and proof of delivery solutions for market sectors including transport & logistics, light commercial vehicles and fleets, defence & security, plant & agriculture. It also offers white label solutions for OEMs and automotive suppliers. The company focuses on a number of telematics products that cover vehicle tracking and utilisation, driver performance and driver and customer communication. Microlise says it invests significantly in research and development annually to ensure its solutions continue to be underpinned by market-leading technology. However, as it’s a private company there are no publicly available figures to back this up. In 2018, however, the company was awarded the prestigious Queen’s Award for Enterprise - International Trade, which is considered the highest honour a UK business can achieve.
“Almost every vehicle insurance company is either using or plans to use telematics solutions in future.”
THE DIFFERENCE BETWEEN EUROPE AND THE USA The European Automotive Telematics market is expected to grow to $46.4 (¤40.57) billion by 2024 with a GAGR of 21.7%. Telematics penetration is low globally but currently Europe lags behind the USA. The primary difference between Europe and the USA is the willingness of governments in the EU to mandate emergency call capabilities.
TELETRAC NAVMAN Enables the grouping of drivers and vehicles so they can be easily tracked: exact location, historical route data, mileage, maintenance and fuel consumption. The system also allows fleet operators to see the exact location of multiple vehicles and compare that with live traffic feeds. This means drivers can be advised of alternative routes to avoid traffic jams and/ or customers can be updated with driver’s ETAs. As of the end of 2018, the company has a new VP and managing director of its Europe division. Richard Lilwall took over the reins, having joined the company in 2011.
The North America (which includes Canada) Automotive Telematics market is expected to grow to $60.5 (¤52.89) billion by 2024 with a CAGR of 20.9%. The requirement for advanced diagnostic systems is helping boost the market. Telematics insurance (or Usage-based insurance) is another important driver for growth. Almost every vehicle insurance company is either using or plans to use telematics solutions in future.
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GEOTAB Geotab is one of the largest telematics providers in the world supplying its own hardware combining accelerometer technology with GPS, and software, which can also work on third-party devices. The accelerometer can more accurately capture events such as braking at low speed, distracted drivers and other metrics. The Geotab system enables additional sensors to be added in to extend functionality. The system provides over 30 reports and dashboards, including productivity monitoring and reporting.
The vehicle telematics market is maturing at an unprecedented rate and will continue over the coming decade. We are likely to see further M&A activity among the key players as they strive to win market share and swiftly expand their technology portfolios and data capabilities.
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ENABLING ELECTRIFICATION WITH ACTIONABLE VEHICLE DATA Discover how vehicle data impacts businesses and society, the key to enable mobility services and the close link between the adoption of electric vehicles (EVs) and telematics.
testdrive@geotab.com | www.geotab.com Geotab
@GEOTAB
MyGeotab
CONNECTED
THE DAWNING OF DATA Telematics has more potential than simply tracking vehicles and managing fuel. It is the key enabler for the future of transportation, sharing-based mobility services and autonomous driving. Alison Pittaway
Right now, the missing piece of the puzzle is that fleet-owners and operators lack expertise in data management and analysis, which is required to deliver breadth of view and true business insight. Having realised technology is only one aspect of the solution, many telematics companies are evolving into data service providers to fill this gap. Meanwhile, let’s look at the application of telematics and what it’s being used for.
Preparing for a connected future
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TomTom Telematics, Europe’s largest provider, is working with manufacturers, such as Renault, PSA, BMW and others, to connect to the line-fit telematics devices so they can be activated when fleet managers wish so. George de Boer - leader of connected car initiatives at TomTom Telematics, explains: “In the future, more cars will come with factory fit connectivity and the value aftermarket telematics providers will deliver is making data from multibranded fleets more insightful for fleet managers, mobility managers, customers and drivers. The data coming from the car can be combined with other applications, such as on-street parking, for example.” As for an autonomous future, de Boer points out the role of connectivity to more accurately map the driving environment. “You can only have an autonomous future when the vehicle has enough data about its environment. But roads are changing rapidly so we need cars to feed data back, process the data and close the loop in real-time with incremental map updates.”
Teletrac Navman carried out research in 2017, which highlighted that fewer than a third (27%) of fleet organisations interact with their telematics solutions on a regular, daily basis. In an article on the company’s website, managing director of Teletrac Navman in the UK Stuart Berman says this is fine if the only goal is fuel savings, but companies are missing out on key intelligence data can give them. Currently, telematics data is only being utilised to optimise operational performance and efficiencies. But the true value, writes Berman, comes “through the systematic exploitation of data-driven insights”.
Video telematics Video telematics from companies such as Lytx offers a more complete picture of accidents or incidents, including how safely drivers are operating on the road. When an event occurs, Lytx’s system provides core telematics data, plus the forward view of an externally-facing video camera captures what happened and the internal view, provided by in-cab video recorders, may provide information as to why it happened.
Predictive maintenance Telematics data can also unearth patterns within vehicles that can improve business performance and ensure vehicles are on the road longer. Diagnostic data can improve maintenance scheduling and servicing, ensure MOTs are never missed and flag symptoms that could lead to breakdown if not dealt with early.
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Mobility telematics Berg Insight published its first report analysing the latest developments in the connected micro-mobility markets worldwide. Free floating micro-mobility services (which could include bike and scooter-sharing) mostly encompass a telematics system comprising an on-board computer and telematics device for capturing trip data. The system also
Monitoring driver behaviour can reduce fuel consumption by
10-20% on average
Aftermarket telematics providers can make vehicle data more insightful for fleet managers.
Fuel cost reduction This is one of the primary reasons fleets install telematics. The data captured from monitoring driving, driver behaviour and fuel consumption can be used to optimise the fleet, routes, retrain drivers and reduce fuel consumption by 10-20% on average. It also reduces CO2 emissions, helps drivers avoid congested journeys and the knock-on effect is increased productivity and reduced costs.
Addressing fraud Mileage fraud is an issue that has proven difficult to detect and deal with. Telematics systems provide an accurate way to capture and log true mileage data, allowing fleet managers to track business and private mileage. Over the next few years, the application of telematics and telematics data
in particular promises to change the face of fleet management. Businesses can enjoy huge operational benefits now but a whole new raft of telematics-enabled business models is about to emerge.
A whole raft of telematics-enabled business models is about to emerge.
CHAMPIONING GOOD DRIVER BEHAVIOUR One example of the value of analysing telematics data is driver training. Such data can provide in-depth analysis of driver behaviour, notifying of safety breaches, such as speeding, harsh breaking, sudden swerving. This gives insight that can be used to offer training to counteract bad habits and improve overall driving standards. Lior Sethon, VP and General Manager of the Aftermarket Division at Mobileye: “Today, Mobileye’s collision avoidance technology can be integrated with most of the major telematics providers. This means, in addition to real-time alerts helping the fleet avoid collisions, fleet managers can gain visibility into driver conduct: tailgating, harsh braking, lane drifting, etc. This data can be used to incentivise improved behaviour.”
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enables fleet management and grants access to vehicles through a smartphone app.
CONNECTED
THE INVESTMENT THAT KEEPS ON GIVING @DieterQuartier
The Return on Investment (ROI) of telematics can be difficult to quantify. Some of the gains are straightforward, but others result from incidents not happening. In any case, data only does the talking – it’s up to the fleet manager to do the walking.
ACCORDING TO FROST AND SULLIVAN, EFFECTIVE USE OF DATA CAN HELP FLEET MANAGERS:
Increase productivity by
10-15%
20-30
Save minutes labour time per driver per day Reduce overtime by
10-15%
Cut fuel expenses by
20-25%
Reduce vehicle idle time by
20-30%
Boost vehicle utilisation by
15-20%
FLEET EUROPE #103
Cut total miles driven by
5-10%
THE EXPECTED TIME TO ROI CAN BE AS LITTLE AS SIX TO EIGHT MONTHS
Basically, the cost of telematics pertains to the hardware, the installation of this hardware, the monthly subscription fee and the use of the data platform. As such, the price per vehicle depends on the fleet size, the contract duration, the type of device and the functionalities offered by the platform. You could connect your fleet for less than ¤10 per month per vehicle if you are happy with a basic device and a platform that enables basic fleet management functionalities. If you have a fleet of 2,500 vehicles, that corresponds to an investment of roughly ¤1 million strung out over four years (the average contract duration). That may seem prohibitive, but there are plenty of ways to make telematics worth your company’s while – depending on the type of fleet and the way vehicles are used, evidently. Just collecting and analysing data won’t cut it, though. It’s all about determining the baselines, setting your goals, picking your tools and acting upon the results.
Set your goals, pick your weapon Before starting to measure the big bottom-line results, you need to identify your company’s goals, establishing what you expect to achieve. You could for instance track your current fuel costs, customer satisfaction rate, insurance costs, and so on – only then will you get a comprehensive view on the return on your investment.
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Wincanton, the UK’s largest 3PL company, decided to install integrated cameras in all its 4,500 trucks and vans. “We were looking for the right tools to change our drivers’ behaviour,” explains Carl Hanson, Fleet Director. “The key thing for us was to obtain accountability. A driver who logs on, is engaged and able to change his behaviour as long as you provide training. The app tells you where to focus your attention, but the video helps you do the training by bringing the incident to life.” The tricky part is quantifying costs associated to events that are not happening. “It’s too soon to come to any conclusions: we did a trial in January and we started with three contracts; we are now on a roll out programme across the business. What’s really quite difficult to measure is accidents that have not happened as opposed to those that have in the past.” Based on previous experience with a fleet of vans and cars, he is convinced that over a period of time, Wincanton will see its accident statistics by contract coming down. “We use the video footage very effectively to increase awareness and demonstrate what the drivers can do differently, but also to let other drivers experience near-misses that maybe they don’t get to see every day.”
Sharing the costs Leasing companies are increasingly equipping their vehicles with telematics devices. “EU regulation allows them
peer-to-peer car sharing. If you rent your vehicle to someone else, you get a discount on your monthly rate,” explains Mr De Mattia.
Maximising the benefits of EVs Telematics could yield yet more return on investment when used in the realm of electric vehicle adoption in your fleet. “There are sustainable and economic rationales to do so. Connecting these EVs so you have a constant view on their state of charge, their range, and the impact on the grid is crucial. Moreover, telematics helps you pinpoint where else in your fleet you can adopt electric vehicles by profiling your drivers,” reckons Geotab’s Edward Kulperger. Connecting EVs gives you a constant view on their state of charge, their range, and the impact on the grid.
10 FINANCIAL BENEFITS OF TELEMATICS FOR FLEETS Direct (measurable) 1 Fuel and mileage fraud detection
2 Better contract management 3 Route optimisation and vehicle use optimisation
4 Lower insurance premiums
For leasing companies, telematics has a double value proposition. “On the one hand, telematics enables indirect monetisation due to a better asset management and improved internal processes. You can better manage the contract, follow up on SMR, manage accidents and insurance claims. All of this ultimately results in a vehicle that is kept in shape and therefore yields maximum resale value in the remarketing process,” adds Nicola De Mattia.
Indeed, EV compatible telematics systems have the potential of greatly enhancing the benefits of electrification. Moreover, even more than with an ICE vehicle, drivers need to be coached to help them to drive in a range-optimising way. Finally, based on factors like range remaining, the planned route and the vehicle’s location, telematics can predict exactly where and when you should recharge to optimise efficiency.
thanks to pay-how-you-drive business-private
Indirect (costs avoided) 6 Behavioural coaching to help lower fuel consumption, wear and tear, accident rate; enhance compliance
7 Vehicles in better shape maximise the residual value of the car
8 Theft prevention and stolen vehicle recovery
9 Predictive maintenance and
“On the other hand, there is the direct monetisation aspect: leasing companies can sell telematics fleet management solutions to their customers – at a reasonable price because the cars come equipped with the hardware and software in any case. This readyto-use solution perfectly serves the requirements of small and medium fleets, while big corporates might be willing to implement telematics themselves: the leasing company installs the device, the telematics provider makes APIs available for them to customise the solution.”
repair: less downtime, less costs
10 Increased customer satisfaction through better service to do so in the realm of asset management and for fleet management offering too – as long as you collect and use the data according to the GDPR law,” explains Nicola De Mattia, CEO of Targa Telematics.
Moreover, telematics allows leasing companies to implement new business models that ultimately benefit their customers too. “Leasing companies are venturing into the short-term rental business and are inventing new business models to cover the entire mobility spectrum. Telematics helps towards this change. By integrating the technology that enables car sharing, for instance, you open the path to
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TIPS AND TRICKS • You get what you pay for. Cheap or badly installed hardware devices offer “cheap”, less reliable data. • You don’t always have to go for the costliest solution or the one with the most bells and whistles. Make your choice based on your needs. • Even it is hard to quantify the benefits, telematics enables you to detect and tackle the excesses, and that can have a massive effect on your average. • You cannot calculate the ROI if you don’t measure today already the cost aspects you want to improve. • The ROI is not determined by which and how much data the telematics platform collects, but by how you put this intelligence to practice.
FLEET EUROPE #103
5 Easier route administration
CONNECTED
PLAN BEFORE YOU PLAY Mark Sutcliffe
After initial suspicion about Big Brother trying to catch out drivers using a spy in the cab, in-vehicle telematics are becoming an essential tool to promote safer and more efficient fleets. Here is what you should know before you press the button.
way to demonstrate the likely return on investment and projected payback period. After installing telematics across its 1,000-vehicle fleet, one UK corporate saved ¤75,000 on fuel, ¤77,000 on accidents and repairs and a staggering ¤331,000 on mileage expense claims. Environmental considerations should also be climbing up most senior manager’s priority list and any measures that reduce the company’s environmental impact will be welcomed.
Choose a criterion like fuel consumption and produce a league table of the top 10 drivers – maybe with a small reward for the most frugal driver.
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In a little over a decade, the fleet industry’s attitude to in-cab technology has undergone a transition from suspicion and scepticism to – in some sectors – wholesale adoption. The debate over whether to introduce telematics quickly polarised, with commercial vehicles fleets and especially couriers and delivery companies rapidly adopting the technology, while user-chooser and perk car fleets remain much less enthusiastic about embracing the technology. For fleets focused on getting goods to people who need them on time, the return on investment quickly became clear: more efficient journeys, safer drivers, happier customers – all of which translated into real world bottom line gains in the areas of fuel economy, repairs and insurance premiums. So what can be learned from the experience of fleet operators who have
already embraced telematics? After speaking to a number of true fleet managers, fleet management consultants, software developers and legal experts, we’ve distilled the key learnings into a ‘Telematics 101’ briefing.
What’s in it for them? This applies to both drivers and senior decision-makers. The latter will be focused on the bottom line and will want to see return on investment within year one, but your boss may also need reminding that in most EU jurisdictions, employers have a clear-cut duty of care to provide a safe working environment and that the workplace extends to cars and vans. The C-suite will also be wary of alienating the workforce or stirring up industrial relations problems. A small-scale trial involving only a small number of vehicles is generally the most effective
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For drivers, it’s all about safety and the employer fulfilling their duty of care to their employees. More sophisticated systems may offer improved route planning and congestion mapping, which could make their life easier. For company car drivers, many systems offer a simple way of recording business mileage for their expenses.
Savings by 1 UK corporate with 1,000 vehicles:
£75,000 on fuel
£77,000 on accidents
£331,000
on mileage expenses
Installing telematics in light commercial vehicles is generally seen as a more justifiable safety measure than in benefit cars.
4 KEY TAKEAWAYS The traditional ‘carrot and stick’ approach of rewards and sanctions to encourage compliance with a safety and sustainability policy is essential to ensure compliance, but it can be time-consuming and stressful for both managers and employees. Introducing a telematics system does make tracking positive and negative behaviour behind the wheel easier, but it doesn’t automatically ensure everyone’s driving will improve (although this is often the case when telematics is first introduced across a fleet.) A telematics system facilitates the production of an element of gamification to encourage best practices. Choose a criterion – for example: fuel consumption – and produce a league table of the top 10 drivers – maybe with a small reward for the most frugal driver. If you want to ‘name and shame’, the bottom 10 drivers could also be flagged up – but this isn’t always the best way to encourage safer or more economical driving styles. Highlight successes on a monthly basis and measure the impact it has on fuel bills across the entire fleet.
1 DIVIDE AND CONQUER
Installing telematics in light commercial vehicles is generally seen as a more justifiable safety measure than in company cars, so for mixed fleets, targeting van drivers and essential users first can be a smart way to introduce telematics. A year’s worth of data should clearly demonstrate driver safety, fuel consumption and environmental concerns and make it easier to justify extending telematics to the perk fleet.
2 DON’T DROWN IN DATA
The latest telematics systems produce gigabytes of data every month and someone needs to make sense of it. For large corporates, this sort of resource should be relatively easy to find, but for smaller organisations, employing someone to interpret the data and act upon it should be factored into the cost of implementation.
3 MANAGE BY EXCEPTION
Establish a baseline for key indicators such as fuel consumption, accidents per 10,000km, average insurance premium per vehicle, then set up the reporting so that outliers are highlighted. Tackle ‘low hanging fruit’ such as drivers with a poor accident record and/or high fuel consumption first. Don’t try to micro-manage the entire fleet so that every driver meets all your KPIs.
4 RESPECT CULTURAL DIFFERENCES
Drivers in some EU member states are more relaxed about in-car tracking than others. The key consideration is to gain buy-in and – where appropriate – involve the unions at an early stage and gain driver buy-in before imposing a telematics solution from the top down. For large multinationals, a country-by-country rollout rather than a big bang approach is advisable. For fleets looking for a pan-European software solution, a system which incorporates a privacy button – allowing the driver to disable tracking for private use – should be a consideration.
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FLEET EUROPE #103
GAMIFICATION TO GAIN BUY-IN
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A CONFUSING ARRAY OF NEW REGULATION Alison Pittaway
Since 25 May 2018, GDPR has been in effect and there are good reasons to treat it with respect. The data-driven business models, so important to the future of fleet, are inconceivable without it, plus there’s the competitive advantage of regulatory conformity.
At this moment, there is little regulation for vehicle data across the globe, but it’s growing.
Data compliance is not the only legal consideration of telematics to consider. There’s also the legal context of safety, cyber-security, human rights and software quality - all elements that no fleet manager would have expected he or she would need to be an expert in. Add to this the fact that, although GDPR is a European law, not every law regarding the above is the same in each country across the Union and beyond.
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Data protection If your business is multinational and relies on telematics data, it’s likely that data will cross borders and there could be country-specific laws you need to be aware of.
Crossing borders could have implications in terms of laws applicable to telematics in different countries. In Russia, for example, the data localisation law says you have to store data locally and keep it there. In China, there are security laws specific only to that country - and it’s the same elsewhere. Currently, there’s no simple way to find or highlight these peculiarities other than do the legwork and research each specific country. The regulation of data flow has increased, which is new for the IT industry. Just like when smoking first became fashionable, there was little regulation but the tobacco industry is highly regulated today. The situation is comparable for data.
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Data free-flow The European Union wants data freeflow, just like the free flow of goods, currency and people. Many countries have mandated telematics for certain applications. eCall, for example, mandatory for all new EU vehicles as of March 2018. There is a new regulation coming (in April 2019), known colloquially as the ‘EU’s Fifth Freedom’, aimed at removing obstacles to the free-flow of non-personal data within the Union. This was approved by council in October 2018 and prohibits national rules requiring that data be stored or processed in a specific member state. It only covers non-personal data (machine generated, commercial data such as aggregated data sets used for big data analytics).
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Up to 4.4 m3 of load volume3
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Cyber security George de Boer - leader of connected car initiatives at TomTom Telematics: “As vehicles become more connected and connectivity is made with the systems of the vehicle (e.g. through the OBD port or CAN bus), the security risk goes way beyond data. Now it also concerns the safety of the car and whether it can be operated in an effective manner.” He continues: “If you want to secure the connectivity of vehicles (regardless of aftermarket or line-fitted connectivity), one has to look at the complete chain and all the different vectors. A vector could be the wireless connection or the physical interfaces of devices in the car.”
Security standards Throughout Europe these include software security standards: ISO 21434 (cyber security engineering for road vehicles), ISO 26262 (covering the functional safety of road vehicles), ISO 27001 (concerning software quality and security risk management). At this moment, all OEMs are working to comply with these standards, not only because they have to but because it’s a competitive advantage.
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Market research has repeatedly shown that data privacy is an issue of concern when buying new vehicles.
Data privacy is an issue of concern when buying new vehicles.
Who owns the data? Data brokerage and data sharing is an issue. Open source software has become popular as it enables accelerated development and other advantages but there’s an increased risk, which is the same with data sharing. In the data sharing economy, using data from multiple or unknown sources makes the use case faster but increases the risk of data becoming infected. This is a potential issue with telematics data. Telematics technology itself can help improve cybersecurity. New protocols have been introduced (and continue to be introduced) by telematics providers to help mitigate risks.
Ask how the supplier is securing it and bear in mind: installing a secure device is easy, keeping it secure over the lifetime of the vehicle and device, is more challenging.”
Human Rights Another element to consider is Human Rights law. In the UK, for example, the Human Rights Act of 1998 states that all citizens have the right to respect for their private family life. So, when tracking vehicles owned by the business but used by an employee outside of business hours, a privacy button is a must so the driver can switch off vehicle tracking outside working hours. Similar laws exist in other countries. Data privacy law has dominated the scene for a while now but it’s only one of the legal aspects to consider in terms of telematics. There is an array of new regulation to do with the computerisation and connectivity of vehicles and people and no easy way of mapping it for operators of multi or international fleets. Reliance on local knowledge is paramount. However, the benefits of valuable telematics data can outweigh the potential risks.
De Boer has this warning: “Now, the car is a computer on wheels and the issue of cyber security will increase as we get more connected vehicles on the road. Fleet managers should be wary when installing telematics about how and where it’s been manufactured.
A new EU regulation will prohibit rules requiring that data be stored or processed in a specific member state. (Photo: European Commission building, Brussels)
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ADVERTORIAL
CONCEDED EDITORIAL SPACE
TELEMATICS AND COLLISION AVOIDANCE SYSTEMS GO HAND-IN-HAND Few fleet and safety managers would still debate the necessity of having telematics as part of running an efficient fleet. Nevertheless, fitting vehicles with collision avoidance systems (CAS) could provide even more cost-savings. Telematics Telematics help you keep track of where your vehicles are, where they are going and how they are getting there. A good telematics system can significantly increase your fleet efficiency. The Telegraph1 reported that the Automobile Association saved £1 million the first year they implemented a telematics system.
Collision avoidance systems This is where collision avoidance systems come in. These systems warn drivers of potentially dangerous situations, such as getting too close to the vehicle ahead of them or unintentional lane departure. A study2 by the US-based Insurance Institute for Highway Safety found that lane departure warning systems for lorries cut in half the number of collisions resulting from unintentional lane departures.
Dilemma When confronted with the choice to invest in telematics or collision avoidance systems, fleet managers are faced with a dilemma. Which one to choose? However, the answer quickly becomes apparent when looking at the true cost of accidents. According to figures published by the Department for Transport Statistics3 in the UK, even minor accidents cost an average of £25,451, increasing tenfold for a serious accident and even hitting £2,000,000 in case of a fatality.
Combining telematics and collision avoidance systems can lead to increased savings and ROI. Imagine reducing collisions by almost 30%4, which is the effectiveness of forward collision warnings alone, and you get an idea of the scale of the return-on-investment (ROI).
Driver behaviour Cost-savings don’t stop there. Collision avoidance systems can add to the fuel savings you’re already getting from telematics. Many fleet managers are unaware of how much fuel is eaten up by poor driving habits like sudden braking. Best of all, integrated telematics and collision avoidance systems provide the data you need to show the ROI of both by tracking collision reduction, fuel savings and uptime.
More info Download your copy of the whitepaper “Measuring Return-on-Investment and Cost-Savings of Collision Avoidance Technology”
So the dilemma fleet managers are faced with might actually be an opportunity to combine both telematics and collision avoidance systems, and increase savings and ROI.
Reference: https://www.telegraph.co.uk/business/business-reporter/fleet-management-telematics/ Reference: https://www.iihs.org/iihs/news/desktopnews/stay-within-the-lines-lane-departure-warning-blind-spot-detection-help-drivers-avoid-trouble 3 Reference: https://www.gov.uk/government/statistical-data-sets/ras60-average-value-of-preventing-road-accidents 4 Reference: www.iihs.org/bibliography/topic/2111 1
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However useful telematics may be, improving fleet efficiency doesn’t stop there. They certainly help to ensure your vehicles take the most advantageous route, but all the savings they provide you could be gone in a flash if they end up in a collision.
CONNECTED
EMBRACING HACKING TO IMPROVE SECURITY @DieterQuartier
A lot has changed since 21 July 2015, when a team of cyber wizards succeeded in hacking into the infotainment unit of a Jeep Cherokee. What has changed since this wake-up call that exposed the blatant risks of the connected car?
Connectivity and cyber security are relatively new to the automotive industry, which evolves at a much slower pace than ICT. You could say that the hardware and software embedded in vehicles keep on struggling to keep up with the evolution of data technology, exposing them to malicious attacks and possibly turning them into a terrorist’s weapon. What are OEMs and regulators doing to keep your fleet safe from exposure to these risks? And is this protection watertight? We asked Dvir Reznik, Sr Marketing Manager, Automotive Cybersecurity & OTA BUs at Harman, the Samsung-owned company that designs and engineers connected products and solutions for automakers, consumers, and enterprises worldwide, including connected car systems, audio and visual products, enterprise automation solutions; and connected services.
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Digital locksmiths Since the Jeep incident, OEMs and regulators have addressed the issue. Rather paradoxically, car manufacturers have realised that the best way to protect their vehicles against hackers is to embrace them. So-called whitehat hackers are asked to break into the system and find bugs in return for a bounty. You could compare them to digital locksmiths: they would make the best burglars, but they don’t want to cause harm.
“Over the course of the past four years, ethical hackers and researchers have been looking for vulnerabilities, either part of a bounty programme initiated by the OEM or for the sake of their own research. Some OEMs have created special teams of cyber security engineers, or introduced senior sponsorship,” explains Dvir Reznik. He is working out of Israel, a country that leverages years of experience and accumulated knowhow in cyber security and that hosts over 400 companies specialised in securing systems against attacks. Many of them work together with car makers to tackle the issues of cyber security regarding the connected car – and self-driving cars.
Connecting is protecting Today, virtually every car that leaves the assembly line is born connected, but 80% of vehicles on the road across the globe are still unlinked to the outside world. That is where dongle solutions come in. Does that not make them vulnerable to hacking? “In theory, anything is possible, given sufficient time and a big enough incentive. What Harman can do, is provide a gateway to prevent access into the vehicle through the OBDII port. In other words: only give the device reading, not writing rights,” says Dvir Reznik.
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“With the OEMs, we design vehicles that are safer, including measures like an automotive SOC – for security operation centre, which provides the OEM or fleet manager with visibility into all of the end points that are connected to the network. In parallel, aftermarket devices, such as Harman Spark, offer consumers, through the mobile operators, the option to connect their cars with an OBDII dongle. That gives them access to the cloud, over the air software updates, WiFi in the vehicle and connected services. It also means their car is safer, because it is connected.”
80%
of vehicles on the road across the globe are still unconnected
Can you make a car 100% hack-proof? “No, but it is our goal to design the next vehicle architecture together with OEMs to make the car more secure. The industry cannot afford to have a vehicle hacked and crash,” his colleague Dvir reckons.
Regulators and suppliers team up On the Old Continent, the European Union Agency for Network and Information Security (ENISA) works together with the member states, the private sector and citizens to develop advice and recommendations on good practice in information security. In its 2016 report “Cyber Security and Resilience of Smart Cars,” it identifies good practices that ensure the security of cars against cyber threats. The study lists the sensitive assets present in smart cars, as well as the corresponding threats, risks, mitigation factors and possible security measures to implement. The protection of smart cars depends on the protection of all systems involved: cloud services, applications, car components, maintenance and diagnostic tools, and so on.
Michael Kowalewski, Director of Business Development EMEA, Automotive Cybersecurity at Harman International: “Connecting an unconnected vehicle through an OBDII dongle brings both benefits and risks. However, I don’t think there is any provider on the market today that provides an unsecure solution. Both from a hardware and a software perspective, the new generation of dongles are per se secure. If you add on top of that the Harman Shield for Telematics, featuring intrusion detection and prevention software, you minimise the risk of a newly connected car being hacked. That is a major evolution compared to just a few years ago.”
In the US, the administration along with the industry itself has created organisations to standardise cyber security. They are also looking at what type of protective measures you need to include especially in the realm of autonomous vehicles and tests on public roads.
“The industry cannot afford to have a vehicle hacked and crash.” Dvir Reznik (Harman)
Harman is very much involved in the legislative and regulation work. “We are part of Auto-ISAC, the automotive information sharing and analysis centre, which unites all US-based car makers and many tier-one suppliers. We have been working closely to address cyber security concerns. Within our own automotive cyber security business unit, we have our own hackers. They try to break into our own systems or those of the OEMs we work with,” Dvir Reznik clarifies. Cyber security will always be a work in progress as technologies become ever more advanced. For sure, encryption aficionados and code crackers won’t be out of a job any time soon.
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FLEET EUROPE #103
The hacking of a Jeep Cherokee not unlike this one in 2015 has woken up OEMs. Nevertheless, no vehicle is 100% safe to hackers.
CONNECTED
HOW AI GIVES TELEMATICS AN IMMEDIATE IMPACT Jonathan Manning
Artificial intelligence and machine learning is helping vehicle fleet operators to analyse massive volumes of data and react instantly to developing issues.
In the late 1970s the VHS video recorder represented the apex of domestic technology. The opportunity to record television programmes in order to watch them at a later date transformed the TV-viewing experience. Fast-forward 40 years and VHS appears arcane in the face of on-demand services such as Netflix. It’s tempting to see vehicle telematics follow a similar trajectory, but over a much shorter timespan. The ability to capture and subsequently analyse vehicle data has proved hugely valuable to forward-thinking fleet operators. But new technology allied to artificial intelligence (AI) is transforming telematics from historical analysis to a real-time tool capable of instant action.
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The combination of myriad sensors throughout a vehicle, cloud-based communication networks and machine learning are enabling fleets to identify vehicles in urgent need of maintenance, intervene immediately when a driver displays unsafe driving behaviours, and take advantage of the fledgling connected road infrastructure. Today’s popular data fields, such as drivers who accelerate too quickly, brake too sharply or swerve too aggressively, barely scratch the surface of what state-of-the-art telematics systems can and will deliver.
Predictive maintenance Vehicle downtime represents a high yet avoidable cost for any fleet, which makes the opportunity for telematics
systems to identify vulnerable vehicle parts and avoid breakdowns highly desirable. If stage one of this process is preventative maintenance, based on the learning that after a certain number of hours or kilometres a specific part is likely to fail, stage two is altogether smarter. Modern vehicles can have upwards of 200 sensors monitoring the performance of individual parts. Historically, this information would be downloaded by a garage technician during a service, but the Internet of Things (IoT) allied to connected technology can transfer this data in real-time to the cloud, where analytical AI tools immediately identify impending faults. So if, for example, the temperature of an engine part is running too hot, the system can flag this information instantly, allowing the fleet and driver to book the vehicle in for maintenance work before the issue leads to a breakdown. Voltage fluctuations, for example, can indicate a pending alternator failure, or that the diesel particulate filter needs to be cleaned sooner than expected. Armed with precise information like this, fleets can move from diagnosing vehicles while they are in a workshop to predicting failure. AI and IoT software company, Uptake, says vehicles “now operate a lot more like computers, generating rich data and information that tell us how they are operating at any given second.” At the end of last year Uptake formed a partnership with telematics specialist
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Geotab, to combine the two company’s AI software and telematics hardware, to capture and analyse huge amounts of data into actionable insights. Scott Sutarik, Geotab’s associate VP of commercial vehicle solutions, said: “Uptake’s ability to predict equipment failures with an incredibly high level of precision, even down to the sub-component level, has not been possible before in this industry. By aligning with Uptake, Geotab customers can access a new level of detailed, actionable data to help prevent unplanned downtime, improve their bottom line and stay competitive.”
Safety sensors Progressive fleets have long used insights from telematics systems to improve their safety. Historic data about employee driving styles has identified drivers with more dangerous behaviours behind the wheel, enabling companies to take action through education and training. But new AI systems can highlight riskier behaviour
With up to 200 sensors in a modern vehicle, fleet operators can capture and act on unprecedented levels of data.
requiring them to wait for a face-toface or a monthly meeting.”
Smart software, for instance, can scrutinise the film from forward-facing cameras for evidence of tailgating, while film from driver-facing cameras can reveal signs of fatigue, such as yawning, distraction, eye movement and even the angle of the driver’s head. When AI identifies this type of behaviour, it can prompt automatic alerts to both fleet and driver, allowing for on-the-spot action.
World’s Smartest Intersection
Netradyne’s Driveri RealTimeCoach, for example, uses audible in-vehicle reminders to refocus driver attention with a proactivity that legacy recordings cannot hope to match. Adam Kahn, vice president of fleet, Netradyne, said: “Safety managers have struggled reaching their drivers effectively, either due to location or time limitations. Technology is serving as an advocate for drivers by ensuring safe driving throughout the day, versus
A glimpse of the future for telematics and AI is available from the original motor town of Detroit, home to a pilot of the ‘World’s Smartest Intersection’. The project relies on sensors, video and connected traffic signals to monitor real-time road conditions and react accordingly. Among its most interesting feature is a freight signal priority which can keep traffic lights on green for up to an extra 10 seconds to allow a freight vehicle to pass (heavy vehicles slowing to a standstill and then taking time to accelerate back up to speed are one of the causes of urban congestion). Eventually, of course, AI and connected vehicles will remove the need for drivers all together, but until full autonomy arrives the combination of machine learning and data from telematics systems has the capacity to add huge value to fleets.
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AI IN LAST MILE DELIVERIES In the high volume, low margin world of last mile deliveries, artificial intelligence holds the key to unlocking vital efficiencies. A 2018 report by DHL and IBM said: “AI can help the logistics industry fundamentally shift its operating model from reactive actions and forecasting to proactive operations with predictive intelligence.” AI has the capacity to predict demand so that vehicle location can be optimised; to route plan in real time in order to avoid hold-ups and accommodate ad hoc pick-ups; and to generate accurate arrival time windows for customers – qualities increasingly expected by private and business consumers.
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the moment it manifests itself and intervene immediately.
CONNECTED
TELEMATICS SURVEY: SAFETY AND MANAGEMENT BENEFITS TRUMP DRIVER RESISTANCE Benjamin Uyttebroeck
@uytteb
Telematics may be on the brink of their breakthrough but how popular is the technology already in practice? In an online survey, Fleet Europe set to find out what obstacles fleet managers encountered when implementing telematics, what gains they expected and what motivated them to embrace the technology.
IMPLEMENTATION
MOTIVATION
VEHICLE TYPE
Have you already implemented telematics?
What is your motivation for the adoption of telematics?
What type of vehicles are or will be connected via telematics?
Driver safety
36% 64%
YES: 64% NO: 36% Do you intend to implement telematics in 2019?
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56%
44%
YES: 44% NO: 56%
75%
Functional cars
55%
Vehicle utilisation optimisation
Pool cars
44%
48%
Fuel monitoring
44%
Vans
44%
Vehicle tracking
38%
Benefit cars
35%
Route optimisation
25%
Driver profiling
13%
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GARAGE
Replacement cars
4%
STRATEGY
EXPECTATIONS
OBSTACLES
How did you or will you implement telematics?
What gains do you expect from telematics?
What obstacles did you encounter or do you expect when implementing telematics?
Organise a pilot
43%
Use consultancy
29%
Select supplier through tender
24%
Through a leasing company
24%
Don’t know
5%
Lower fuel consumption
81%
Driver buy-in
Data collection
Privacy regulations
Data analysis
Return on investment
Device installation
62%
Better vehicle occupancy and planning
73%
52%
43%
Fewer traffic accidents
58%
33% 33% 19%
Work council protest and stakeholder resistance
Predictive maintenance
48%
33%
The results are based on an online survey Fleet Europe held at the end of 2018 and the beginning of 2019, aimed at members of the Global Fleet Managers Club and the Fleet Europe community.
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YOU. YOUR CAR. CONNECTED.
telematics.tomtom.com/connectedcar
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CONNECTED
LEASING COMPANIES ARE OVERCOMING DRIVERS’ TELEMATICS QUALMS Benjamin Uyttebroeck
@uytteb
Fleet managers may have their work cut out to sell the idea to their drivers, but telematics are slowly becoming ubiquitous. Fleet Europe asked some of the largest leasing companies how they are implementing telematics for their fleet customers.
All customers Representatives of ALD Automotive, Alphabet, Arval, Athlon, Business Lease and LeasePlan all confirmed their companies are offering telematics solutions targeting all customers, regardless of fleet size or type. John Saffrett, COO, ALD, said: “We target fleet managers, company car drivers and private individuals with our offers. The geographic spread is global but the need is country-specific, so our platform will be adapted around different products, depending on the market need.” Athlon reports it is focusing on LCV fleets but as the company is running various pilot programmes, the scope could widen in the future. Alphabet has full-scale telematics solutions in France and Spain and pilots in all other markets. Moreover, AlphaCity and AlphaRent require telematics in all regions.
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All vehicles Most leasing companies agreed that most if not all vehicles will be equipped with telematics solutions soon. “We anticipate connecting all our vehicles to our connected car platform in the future and this will be a combination of OBD devices as well as leveraging OEM on-board capability
in cars as they come into production,” said Mr Saffrett. Athlon has a nuanced stance. “Depending on the types of telematics, there are various reasons for customers to wait with the implementation, especially if it involves a physical adjustment to a vehicle that is already on the road,” said Peter Derks, CCO, Athlon International. Marcio Hociko, Strategy and Transformation Director at LeasePlan, also believes all vehicles will become IoT connected. “It’s only a positive thing, as the more data we have, the better service we can offer.”
All services “There is no particular customer profile that we are targeting,” said Mr Hociko, “as telematics solutions are very flexible and can solve a number of different problems for fleet managers.” Most leasing companies offer a wide range of telematics services from which a customer can build a tailor-made solution. The focus depends on various factors like fleet size, company policy but also local regulation and market preference. Traditionally, the Latin American market is focused strongly on driver safety whereas the UK market is focused on
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proactively managing driver behaviour and other markets may be more driven by journey tracking for expense and tax purposes. “We have a higher impact on telematics where they relate to the customer’s core business,” said Giuseppe Sacchi, Product Manager Business Mobility & Consultancy, Alphabet International, adding home delivery and pool vehicles as examples. “We see that safety and sustainability are related to driver behaviour and not only to the vehicle’s technical characteristics.” Plug-in hybrids that are never plugged in, for instance, will never provide their full potential.
ROI The Return on Investment for telematics solutions including hardware is often well below one year, depending on the preferred solutions.
“The ROI of telematics is about 6 months.” Brigitte Fouque (Arval)
Erika Korver, International Sales Support, Business Lease, said: “For maximum results, all internal stakeholders should give their approval and support. Providing clear information about the project in advance will help in minimising time of approval and implementation.”
Obstacles According to Ms Fouque, the main obstacles to the roll-out of telematics have to do with the Big Brother image and not with technological limitations. “However, our solution is designed in respect of data protection regulations. When all parties in a company are convinced and communicate positively about this kind of solution, the adoption is quite easy and quick.”
There may still be opposition to telematics but acceptance is growing. In early 2019, Arval is seeing over 1 million trips recorded every day and expects this number to continue accelerating. Mr Hociko said: “The biggest concern for our customers is that of data privacy. LeasePlan’s Privacy Office is addressing this by ensuring that best practices (in line with GDPR) are followed across all aspects of the business.” “The adoption rate has been increasing,” said Mr Hociko. “Along with autonomous driving and electric vehicles, telematics is an essential aspect of the future of the car industry.”
Most leasing companies, for instance, are providing an affordable car sharing solution that was made possible by telematics technology. As more and more new vehicles are being equipped with telematics hardware and third-party suppliers offer aftermarket solutions for those that aren’t, and as acceptance is growing, leasing companies have started embracing this new technology. And so should fleet managers. “The best is yet to come,” said Mr Sacchi.
Benefits Benefits telematics offer, are clear. TCO is optimised, CO2 can be monitored, driver behaviour can be monitored, journeys can be reported more easily. However, it also makes fleet managers lives easier and it creates new possibilities that weren’t possible before.
Any car can be a shared car with the right telematics solution.
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“The more data we have, the better service we can offer.” Marcio Hociko (LeasePlan)
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“The ROI of telematics is about 6 months,” commented Brigitte Fouque, Arval Active Link Programme Director. “However, telematics solution deployment is not a fleet manager’s solutions but a company management decision and should be managed as such.”
FINANCIAL MODEL
IBM’S AUGMENTED INTELLIGENCE HELPS FLEET MANAGERS Benjamin Uyttebroeck
@uytteb
You thought computers were getting clever because they can change to summer time without your intervention? IBM does even better, with an augmented intelligence tool that helps fleet managers choose the right vehicle or leasing company at any given time.
The 2018 Fleet Europe Awards jury was impressed by IBM’s Pricing IQ tool, which provides continued rate competitiveness, enhanced negotiation capabilities and proactive reactions. Reason enough for the 2018 International Fleet Innovation Award to go to IBM. We spoke with Ferenc Hegedus, Global Category Lead, Car Lease, Rental and Ground Transportation about this innovative fleet management tool.
How can technology help optimise fleet management? It’s already a cliché, but data is the new gold. You have to understand your data, you have to understand your fleet in order to make the right decisions. When we kicked off this project, we were struggling with monthly or quarterly reports and data coming from different sources. Can you imagine how many ways I have seen to refer to Volkswagen? It can be VAG, VW, VAG Group, Volkswagen AG, Volkswagen Group, and so on. Date formats or country names are also good examples of how complicated even small details can make things.
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That doesn’t help when you have tremendous amounts of sources. Drafting quarterly reports took about a week. Next year, we are also moving towards a new leasing accounting standard, so Accounting knocked on my door to see what we could do to have a reliable data source.
That’s how I came to sit around the table with some very smart IBM programmers and the result is the Pricing IQ dashboard. Our dashboard normalises and standardises everything and adds a layer of predictive analysis models and cognitive capabilities. It’s not artificial intelligence, it’s augmented intelligence. Artificial intelligence decides by itself, augmented intelligence helps the human better understand and helps the human make the right decisions. So it’s Man (or woman) WITH machine. The basis of what our system does is standardise and normalise data. The next step runs analyses and scripts. There’s also a layer of machine learning that monitors vehicle data during the vehicle’s lifetime. How far is the vehicle in its mileage after two years of a four-year contract, for instance? If needed, the machine can recalculate the contract based on that specific country’s criteria.
Does your system also help you choose vehicles, or choose the best leasing company for one particular car? That’s in progress. Right now, we have third-party data sources for market-intelligent data: total cost, residual value and some selected aspects of the service fee. What I am currently working on, is to have more data, more coverage and to have all the service elements listed for a certain period of time, giving us the cost build-up. We know the interest rate, we know the base rate, the contracted mark-up.
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Ferenc Hegedus • Joined IBM in 2010 • Became Global Category Lead, Car Lease, Rental and Ground Transportation in 2017 • Manages more than 20,000 vehicles (80% in EMEA; 85% benefit cars) • Winner of the 2018 International Fleet Innovation Award (pictured)
With this knowledge, we can easily check whether it is good or not. Once you have all the market intelligence data in that format, you can build a cost which you can compare to the cost of the leasing company, which tells you whether the selected leasing companies are competitive at any given time during the contract cycle, or whether we need to do anything. So how we select a leasing company, depends on the picture of the time frame. When I select a leasing company, it’s because they are the best today.
FINANCIAL MODEL
ATHLON’S TINDER OF CAR LEASING Benjamin Uyttebroeck
@uytteb
Today, the typical 48-month car leasing contract no longer suits everyone. Athlon agreed and launched ChangeMyCar, a flexible leasing formula that won the 2018 International Fleet Industry Award. Fleet Europe spoke with Paul Bouwmeester, Lean Innovation Manager, Athlon. Out of 12 candidates and 9 nominees, Athlon won the hearts and minds of the 2018 International Fleet Industry Award jury. The jury vote accounted for 70% of the result, the other 30% was in the hands of the public. The Award was presented at the 2018 Fleet Europe Summit in Barcelona.
You call ChangeMyCar “the Tinder of car leasing”. In what way is it similar? It’s actually funny. When we pitch our product somewhere, we always ask who’s on Tinder – no one ever raises their hand. Still, we all know how it works…
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Basically, users log into the ChangeMyCar app and they can start swiping through all the cars that are available within their personal budget at that moment. When they find a car they like, they press the change button to order it. The next day, we come to their house and deliver the car and we take back the car you had if you already had one. Simultaneously, the fleet manager receives an email will all the details of the new vehicle. After one month or longer, you can start swiping again to pick another car and the process is repeated. There is a one change per month limit to keep the administrative burden for fleet
The ChangeMyCar team (Paul Bouwmeester, Jos van As, Joost van Aalten) with their 2018 International Fleet Industry Award. managers low. However, we notice people are only changing cars twice a year on average.
The International Fleet Industry Award goes to a product or service that helps fleet managers achieve their goals in terms of People, Planet and Profit. How does ChangeMyCar do that? We wanted to address the need for flexibility and we managed to do that in all three Ps. When we look at People, we offer people flexibility when they need a different car. What’s more, our app makes changing fun, which helps make employees happy and makes you an employer of choice. In today’s market, in which young professionals are hard to get, that’s very important. For the Planet part, we help fleet owners lowering their CO2 footprint by speeding up their fleet electrification. With ChangeMyCar, people can try out an electric car and if they don’t like it, they can switch back. Alternatively, if a user wants to wait for a particular car that he knows is coming in a year or so, and he doesn’t want to start a new 4-year contract while he’s waiting, we can cover that bridge period.
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In terms of Profit, we help companies by allowing them to turn in a car immediately when an employee leaves the company, or at any moment after six months. No more cars sitting in the car park waiting for the contract to expire, no early termination costs.
In what markets is ChangeMyCar already available? We’re already a commercial product in the Netherlands and we’re of course looking into bringing it to other markets as well. At the moment we only target businesses. Our smallest customer has just one car, but it still is a business contract.
Like on Tinder, users can swipe through the ChangeMyCar app looking for a car they like.
FINANCIAL MODEL
UNTAPPED FLEXIBILITY IN SUBSCRIPTION-BASED MOBILITY Fien Van den Steen
“We believe that by 2025 all major OEMs will offer subscription-based mobility,” says Octavian Chelu (Frost & Sullivan), who provided us with crucial insight in this fast-evolving business.
“When we decided internally to analyse this product, we noticed that no one in the market was providing a clear definition. There were iterations of subscription services with monthly contracts, 1-year or even 2-year contracts. Some companies were offering the option for vehicle swaps after one month, others only after the 2 years of the mandatory contract period,” says Octavian Chelu. Eventually, Frost & Sullivan placed the service ‘between short term rental (which makes sense for use up to 1 month) and traditional leasing (which is best used when looking at a period of 3-4 years).’ The shorter contract period and the possibility to swap vehicles in that contract period, from a different size to even a different type of vehicle, increase the flexibility of the service compared to a traditional leasing contract.
Subscription-based economy
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Octavian Chelu, Frost & Sullivan: “For the time being at least, vehicle subscriptions can’t replace the traditional vehicle fleet with its benefits.”
Even though the business model is young and the market still immature, its potential should not be underestimated since it is a part of the overall trend towards a shared economy where usership competes with ownership. “The fact that we have been seeing subscription services offered for vehicles lately is no coincidence,” confirms Octavian Chelu, “the trend that is increasing in the market with regards to subscription services in general was correctly identified and introduced in the automotive market by OEMs, dealers and third-party companies.” Hence, one would think the younger generation which is already used to
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this mindset, will become the most likely consumer of the service. Not entirely, according to Mr Chelu. “We have noticed so far two major factors at play. On the one hand yes, the younger generations are certainly the major segment that this type of services are being offered to but, at the same time, we see an increasing appetite for subscription-based services in those countries or states (when talking about the US market) where people have a more usership-centred mindset and are not too keen on owning.”
From car manufacturers to mobility service By analogy with other evolutions in the mobility market, this service will not be provided exclusively by traditional actors either. “We see today quite a mix of players on the market – OEMs, dealership networks, start-ups, leasing companies as well as software/platform providers,” confirms Mr Chelu. “I believe that the variety will not necessarily come in the future from a new type of players, but by increasing the presence and number of the existing ones. We believe that by 2025 all major OEMs will offer this type of services for example, so the number of players will definitely increase.”
The OEMs did not get on board by coincidence “In a world where everyone talks about new mobility, usership vs ownership and so on, I believe that this is a natural evolution of the OEMs as well,” explains Mr Chelu, ‘I think they need to be more involved in the development of new trends (like mobility) in order to become an active player in this environment and
Revenue If a service offers that amount of flexibility in terms of vehicle type and contract period, with little certainty, you might wonder if the service is actually economically viable. “We need to keep one thing in mind: flexibility sounds nice but by all means, when you want complete flexibility, this will come at a cost,” emphasises Mr Chelu. “We can’t expect companies to just offer vehicles with almost no contract period and for very little cost. The current players have quite a complex cost matrix, with a lot of factors influencing the final result: the condition of the vehicle (new or used), the class of vehicle (small, medium, sports, SUV etc.), the type of powertrain (diesel, hybrid, full electric), the length of the contract, the monthly or yearly mileage, the number of swaps etc. All of these are also areas that will
ensure certain profit margins to the service providers.”
Subscription-based vs traditional lease Which is where traditional fleet comes in. “There is a reason why this type of products is being marketed mainly towards private individuals today,” says Mr Chelu. “And that reason is that, for the time being at least, vehicle subscription can’t replace the traditional vehicle fleet with its benefits.” It can benefit employees in specific situations, though, according to Mr Chelu. “I believe subscription services make most sense when used by expats (not necessarily directly through their company but mainly because the lack of a credit line when moving to a new country) or to fill in the gap between ordering and delivering of a new vehicle (which in some cases can take months). I think we are still far from seeing vehicle subscription used on a large scale by employers but the first step can come from companies that
try to facilitate vehicle access for their employees (a B2B2C type of partnership between employers and vehicle subscription providers).”
Untapped flexibility At the end of the day, the model is young and has a lot of potential to grow and change. Octavian Chelu believes that the biggest challenge is first to identify the market potential – there are still a lot of unknown factors– and to try and keep the prices within reasonable limits, while increasing the overall flexibility of the service.
“We’re still far from seeing vehicle subscription used on a large scale by employers.”
Octavian Chelu (Frost & Sullivan)
Care by Volvo is a pioneering subscription service offered by the Swedish carmaker.
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not only a manufacturer. At the same time, this new type of services can help OEMs to also reduce the stocks of vehicles while generating revenue at the same time.”
FINANCIAL MODEL
THE GLOBAL POTENTIAL OF SUBSCRIPTION-BASED MOBILITY Fien Van den Steen
Originating from the US, subscription-based mobility services are rolling out into other regions, providing the global mobility answer of the 21st century.
“The rise of the Millennial consumer segment is the single biggest trend in the subscription mobility market,” points out Georg Bauer (Co-Founder and Chairman of the automotive financial tech company Fair), “Subscriptionbased models are a fairly new concept to the auto industry, but Millennial financial and spending habits are making it clear that brick-and-mortar dealerships and 60- to 72-month auto loans aren’t working for them. Millennials are demanding flexibility, transparency and affordability.”
Usership
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Therefore, Octavian Chelu (principal consultant fleet and leasing, Frost & Sullivan) identifies the most successful regions for subscription-based mobility as the ones where a strong usership mentality applies. Mr Chelu believes that the Chinese market does not yet have many developments in subscription-based mobility “since people prefer buying their vehicles, which places the vehicle still in the area of ownership. Europe on the other hand, is gradually catching the focus of more and more companies that are launching their vehicle subscription services.” Still, the market will remain dominated by the USA for a while. “The leader is by all means the North American market, which was the hotbed for vehicle subscription from the beginning,” says Mr Chelu, “And it will continue to stay like this, as most of the biggest players initiated their trials in North America and will continues to do so. So, from a diversity point of view or even in absolute numbers, the North American market is the biggest market for subscription services.”
Millennials expect flexibility, transparency and affordability.
‘The US has it all’ The current business model of Fair confirms this conclusion. “The United States will be the largest part of Fair’s business for quite some time,” says Georg Bauer, “In many ways, the US has it all: it’s the largest market for vehicles in the world, has detailed automotive data available and more established regulations covering the industry.”
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“That said, we have to consider these things when looking into new international markets,” explains Mr Bauer, “A well-established and liquid used vehicle market is critical, second to how much valuation data is available for that market. Lastly, the country must have a digital infrastructure that can support the timely rollout of a digital solution like ours. That said, Germany, the
Passport was launched in Atlanta, Book by Cadillac was launched in New York City and expanded to other North American cities afterwards, and the Complete Lease Programme of Lexus will be launched in the first quarter of 2019 in a variety of US cities, from Boston to Miami. Conversely, Carpe of Jaguar Land Rover is at the moment only available in the UK.
Lessons to be learned Yet, the market is still in its infancy and both the traditional market players and the newcomers are still looking for the best answer, both in terms of economic feasibility as in terms of fitting into the existing market. The success of Volvo’s Care in the US even almost resulted in the ending of the service. The high interest in the Volvo XC40 as part of a subscription-based contract, actually pinched the supplies dealers expected for traditional sales. To answer the concerns of the California New Car Dealers Association, Volvo is now working on a Care 2.0 version. A similar story is heard by Cadillac’s Book, which announced it ceased operations at the end of 2018 to be relaunched in the first quarter of 2019 “based on the learnings the company has made.” For instance, the subscription fee had already been raised from $1,500 to $1,800 earlier in 2018.
change the way we all do business, just as it has before.” Octavian Chelu does not see the other mobility finance models disappear overnight either: “We are far from a saturated mobility market, so I believe all these services will co-exist, as they appeal to different needs of people.” However, the case of Volvo clearly demonstrates how the different actors have to find their way. “Though the car-as-a-service model has never been done before, we’re sure that it’s the way the industry is moving,” says Mr Bauer. “Agile, smart companies that put the customer first are the ones who will win in the end.” Octavian Chelu concludes: “Being so early in its implementation, basically each new (or even existing) player can adjust, test and trial out new features, in order to find the winning scenario.”
Following the US, more and more providers are offering subscription-based services in Europe.
United Kingdom and China lead the list of 17 countries we’ve identified that can meet these critical requirements.” However, expanding to the European market, most of the subscription-based services were launched in the USA, both from OEMs and from new players. BMW, for instance, launched Access in Nashville, Porsche’s
Hence, the searching position of OEMs is part of the bigger evolution the industry is facing. “We believe that the auto industry is on the cusp of a major transition,” says Georg Bauer, “We’ve seen businesses like Amazon, Netflix and Spotify pioneer change in their industries by creating more personalised end-to-end experiences. The auto industry will head in this direction, too. Increasingly, Millennials and Generation Z buyers want fewer commitments and greater transparency in car shopping, and they want to do it digitally. Is the traditional auto loan totally dead? No! But these generations’ preferences will ultimately
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‘On the cusp of a major transition’
NEW ENERGIES
EVS MAINSTREAM FROM 2020 @StevenSchoefs
Corporate Social Responsibility (CSR) is at the core of ALD Automotive’s transformation, says Stéphane Renie, who heads the CSR effort for the entire ALD Automotive group: “Our aim is to bring CSR into our business and vice-versa.”
to be the ambassador of this change within ALD Automotive group”. “The idea is that we identify a set of KPIs for each of these four pillars, so we can monitor progress. Two examples: internally, we aim to reduce our own corporate carbon footprint by 25% compared to 2014. And externally, we aim to increase our fleet of hybrid and electric vehicles – 84,000 units at the end of June 2018 – to 100,000 by early 2019, and to at least 200,000 by 2020.” “That means that electrified vehicles (xEVs) will make up at least 20% of our new contract output. So, electric mobility is going from niche to mainstream. And we expect a big acceleration in 2020.” Stéphane Renie, ALD Automotive.
“For a leasing company, sustainable mobility is an obvious priority.”
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Stéphane Renie (ALD Automotive)
EVs are not necessarily zero-emission. How do you deal with that?
“Our CSR strategy rests on four pillars,” says Stéphane Renie. “One: reducing our own internal carbon footprint. Two: focusing more on inclusivity, gender equality and people development. Three: responsible sourcing. And four: sustainable mobility. For a leasing company, sustainable mobility is an obvious priority. We break it down into three components: safety on board; ride-sharing, MaaS and other new mobility schemes; and transitioning to low-emission fleets – electric vehicles in particular.”
“In countries with coal-based electricity production, EVs have a worse “well-to-wheel” CO2 footprint than petrol cars. That footprint will be much lighter in countries with an emphasis on renewable or nuclear energy, like Norway and France, respectively. That’s why we developed an assessment tool that quantifies the actual CO2 footprint of EVs, depending on where they are being used”.
How do you translate that strategy into practice?
“It means a lot of things have to be reimagined: pricing, consultancy, and most of all servicing – clients will need a one-stop shop, with us providing charging infrastructure, payment solutions, etcetera.”
“Within any company, CSR is a change management adventure, convincing all the relevant departments to include it in their roadmap. I am trying every day
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It’s impossible to treat EVs like other vehicles. How is that affecting your job?
So you can’t predict when your fleet will be all-electric? “It’s a question of finding the right use cases. We don’t want to implement EVs when they don’t make sense. It’s hard to predict when they will make sense in 100% of the cases: it could be in 2025, in 2030 or 2035. Nobody knows.”
On EV batteries: What’s your strategy there, and how does it relate to CSR? “EVs being marketed today are typically unconcerned with battery life expectancy. Most OEMs offer an eightyear warranty, but we believe battery life can be much longer than that. We take care of an EV’s first life, but the battery could have multiple lives. We’re already seeing some examples of used batteries being combined into storage facilities. We’re confident that this sector will have matured by the time EVs will start to be remarketed in large numbers”.
Does your emphasis on sustainable mobility also mean that your customers will have smaller fleets? “We’re moving from a car-centric to a trip-centric approach, but the car will remain part of the equation for a long time. CSR may help push the change, but it’s not the only driver. ALD Automotive is there to support our customers, and if cars are part of their best solution, we provide that service. Our approach is to provide the right car or the right mobility service at the right time and the right place.”
You’re responsible for CSR across ALD Automotive’s 43 markets. That must mean different things in different places.
alone any charging infrastructure, electrification is not a priority yet. For this, we focus on the major Western European markets first.”
“Our assessment tool quantifies the actual CO2 footprint of EVs depending on where they are being used.” Stéphane Renie (ALD Automotive)
“In the previous months, we’ve made it clear where we as a company want to go. But that roadmap has to be customised to each country’s own circumstances. For example, in Peru, where there are hardly any EVs, let
BUSINESS
UPDATES FROM THE FLEET INDUSTRY
Alain Van Groenendael, CEO and Chairman at Arval New year, new CEO. Effective 1 January, Alain Van Groenendael took over the reins as CEO and Chairman at Arval. The Belgian replaces Philippe Bismut, who served as CEO for the previous eight years.
Frédéric Leurent has been appointed Country Manager for CarsOnTheWeb in France. Mr Leurent takes over from Pieter Behets, who had taken on the role on a temporary basis in January 2017.
Beginning of January, General Motors announced the appointment of Mark Reuss as company president. Last month, Dan Ammann left the President position to take over leadership of Cruise, GM’s autonomous driving position.
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Terberg Leasing and Business Lease Nederland have finalised their merger. Called Terberg Business Lease Group, the merged company manages a combined fleet of 46,500 vehicles, via three separate labels: Business Lease, Privatelease.com and Justlease, all in the Netherlands.
In an interview, Tex Gunning, CEO, LeasePlan, has said his company will not launch an IPO in the next two years.
Jurgen Claus has been appointed International Business Development Manager at Autorola, the company specialising in online remarketing and automotive IT solutions.
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At Opel Belgium, Michel Vercruyssen succeeds Sarah Timmermans as Managing Director of Opel Belgium. Mr. Vercruyssen was Marketing Manager of Opel Netherlands. Sarah Timmermans has joined Carglass Belux as Operations Director.
NEW ENERGIES
10 STRATEGIC QUESTIONS TO VOLVO ON EV, AV AND CONNECTED CAR @DieterQuartier
Just before Christmas, Fleet Europe went to Gothenburg armed with 10 questions for Volvo about electrification, autonomous driving and connectivity. This is what we came back with: a set of politically correct, official answers and a few of our own thoughts based on what we gathered outside the HQ’s gates.
there are only PHEVs in Volvo go as far as 1 Today, 3 Will your line-up. How far is Volvo Tesla and Nissan in Cars in achieving its goal of total electrification, including mild hybrids and full electric cars?
terms of bi-directional charging, domestic batteries, solar panels…?
Official answer: “Volvo does not share information on the powertrain split. The first mild hybrid will be launched in 2019, after which the technology will be rolled out across the range. The first fully electric Volvo will be the XC40.”
Official answer: “Our focus is on the roll-out of electrified cars. We do not go into further detail at this time.”
What we think: Like any other OEM, Volvo will have to step up its game to dive below the mandatory 95 g/ km limit by 2021. The first mild hybrid will probably be the XC40 next year because the technically related Geely Bo Rui already features this technology in China. It will also come with a 1.5 three-cylinder mated to a pluggable battery next year, followed by an all-electric version.
Volvo be joining the 2 Will Ionity DC fast charger network to offer a ‘Tesla-worthy’ solution?
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Official answer: “No comment.” What we think: “In April 2018, media reported that Ionity was negotiating with new OEMs, such as Volvo, PSA, JLR and even Tesla to join the project. It would make perfect sense for Volvo to do so when the all-electric Polestar 2 and Volvo XC40 launch next year.”
What we think: Mass electrification goes hand in hand with the set-up of an ecosystem in which EVs are connected to the smart grid, domestic batteries and preferrably solar panels. Today, Nissan and Tesla are the only OEMs that are ready for this next step, leveraging years of experience. Volvo isn’t there yet.
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Volvo has announced it will be working with Ericsson for the Connected Vehicle Cloud. What does this entail? Official answer: “The deal with Ericsson is for the continuation of the development and supply of one of the existing base platforms (infrastructure) used for some of Volvo’s cloud services.” What we think: The cloud will enable Volvo to provide customers with automation, fleet management, telematics, navigation and infotainment. As long as the 5G network isn’t there, the
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possibilities of the connected car are limited. Volvo is currently hiring telematics specialists.
is Volvo’s opinion on 5 What open data sharing? Are you
prepared to cooperate with other OEMs and telematics companies? Official answer: “Volvo Cars believes that the more vehicles we have sharing safety data in real time, the safer our roads become, therefore we call for the governments and car makers to join hands in sharing traffic data in order to improve global traffic safety.”
What we think: Volvo – logically – focuses on traffic data to the benefit of safety. Data is much more than safety. OEMs should work together with specialist telematics companies and each other to decrease the number of miles driven, the amount of resources wasted and the quantity of time lost. The latter is one of Volvo’s mottos, incidentally: it wants to give back time to people.
CEO stated that “making 7 Your money off driver data is the wrong approach.” Will Volvo not share personal driver data with Google or Amazon?
Official answer: “Volvo Cars believes that it should focus on making the cars attractive to its consumers through new ownership models, new services and autonomy. Any customer data-sharing will be opt-in.” What we think: This opt-in will also apply to other OEMs, by law. Nonetheless, we applaud Mr Samuelsson’s ethical and customer-oriented approach.
your hands to the touch screen and your eyes off the road.
are the major challenges 9 What in Europe for autonomous driving? When will you be ready?
Official answer: “Overall, the challenges are the same across the globe – the need for development of technology, the need for changed legislation and the need for public acceptance. Volvo Cars intends to introduce a car capable of unsupervised autonomous driving in the early 2020s.” What we think: This autonomous car will probably be launched in China or the USA first and only be able to drive itself in relatively controlled areas, such as motorways. In other words, it will be level 3. The step towards level 4 and 5 will be a difficult one.
China, Volvo wants to 10 Inenter the robo-taxi market. Will Europe be next?
Official answer: “One of our aims is to be the supplier of choice for ride-hailing companies. We have deals with Uber and Baidu today. Others may come in future.” What we think: Good old conservative Europe will make things very complicated for robo-taxis. The EU member states will have endless discussions on robo-taxi legislation and accountability, whereas the public – including employers – will be difficult to convince of the fail-proofness of it all.
The XC40 will be the first fully electric Volvo. Pictured here is the XC40 T5 plug-in hybrid.
Android: Volvo will be about the use of apps 6 Google 8 Talking integrating Maps, Assistant in the car: what does Volvo do
Official answer: “The first model in the Volvo Car Group with an infotainment system based on Android will be the Polestar 2, to be launched next year and later followed by other cars on our CMA platform.” What we think: The current Sensus generation is ok, but does not really compare to the latest systems deployed by BMW and Audi. Time to step up your game, Volvo.
to make it safe?
Official answer: “Designing interactive apps for cars is fundamentally different than designing for handheld devices. App content and interactions should complement the driving experience while minimising driver distraction.” What we think: Safety-focused OEMS like Volvo could do more to minimise distraction – for instance by integrating Google Assistant or Amazon Alexa. Natural language voice control, as featured by the latest Mercedes and Audi models, avoid having to move
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and Play Store in the next-gen Sensus. When can we expect this?
REMARKETING
IT’S EASY TO BUY A SWEDISH USED FLEET CAR @Frank_J_Jacobs
Relatively small and geographically eccentric, the Swedish usedcar market is nevertheless an important player in the European concert – for the high quality not just of its vehicles, but also of the surrounding logistics.
Niklas Hallström at Björkvik, a former military airfield acquired last spring by TradingSolutions to perform vehicle inspections.
The Swedish used-car market has an estimated annual volume between 100,000 and 120,000 units. Around 15,000 each are processed by the big three auction houses, BCA, KVD and TradingSolutions.
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Large models The used-car market in Sweden reflects the local preference for large models, a bit above average. New car registrations until November 2018 show that the best-selling cars in Sweden are the Volvo V90, the VW Golf and the Volvo V60, in that order. “Swedes like premium brands like Volvo and BMW and have a preference for the mid to upper segment,” says Niklas Hallström, CEO and co-founder of TradingSolutions.
Swedish used cars are often also very well equipped. Because the terrain requires it, and because it’s fiscally interesting: “In Sweden, BMWs are sold more with xDrive than without. That’s partly because in many parts of the country, you need all-wheel drive,” says Hallström. “But the Swedish corporate market is also very price-driven. OEMs are eager to make a package of options that will keep a company car in a lower tax bracket. AWD is often included since it also increases the residual value.”
Finance leasing The peculiarity of Sweden’s used-car market is also related to that of its lease market. “Less than half of the corporate fleet market uses operational leasing, most stick to finance leasing – even forcing LeasePlan and ALD to offer the latter option here as well. Operational lease is still not popular with smaller fleets either – at least not yet. Why? There was no urgent financial reason to do so a few years ago. Volvo, the most popular brand for corporate fleets, had great residual values: you could easily get 55% or even more back after three years. But those have since decreased, towards the EU average.” So operational leasing is increasing in Sweden and will continue to do so, as the big lease companies as well as captives extend their reach, and as private leasing grows in popularity. It
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remains to be seen whether another Swedish peculiarity can survive the future: “In northern Sweden (sparsely populated and lacking in infrastructural density, - ed.), the locals prefer to lease their cars straight from the local dealership.”
Born digital Every Swede has access to broadband, so digitisation has been an important part of remarketing – especially for TradingSolutions, says Mr Hallström. “In fact, that’s how we started: from 2002 to 2015, we were a software company, offering a digital platform. Only in 2015 did we start doing physical vehicle inspections. And our development has since been excellent.” And it still pays to be born digital: “Our vehicle inspectors only use their smartphones and not a single piece of paper; the others are still struggling to get rid of their paperwork. That is one of the things that has helped us cut lead times in half, to 9 to 10 working days, from availability to sold car.” Sweden is really in the north of Europe, but all that is relative: “We have long distances in our country: you can go a thousand km north of Stockholm and still be in Sweden. Go south the same distance from Malmö, in southern Sweden, and you’re in Italy. So in fact, we’re used to selling at a distance,” says Hallström.
Increasingly, Swedes are selling their used cars outside Europe.
And increasingly also used to selling outside Sweden. The slide of the Swedish krona, which has lost about 10% against the euro over the past two years, has boosted exports. “In 2016, 46,000 Swedish used cars were exported. In 2017, that figure had increased by 44% to 66,000 units. In the first nine months of 2018, the figure already stood at 49,000.” It’s not hard to figure out why Swedish used cars are popular throughout Europe: they’re generally high-end, well-equipped, well-maintained, and often a bit younger than used vehicles elsewhere: “Swedes change lease cars every three years; in Belgium or Germany, for example, it’s often after 48 months. As a buyer you are also able to track the vehicle history more easily, since a lot of information is open and accessible.” Also, the VAT in Sweden is quite high - 25% versus only 21% in Germany – adding a push factor to the flow of used vehicles from Sweden.
370,000 units But the main push factor is supply: overall vehicle sales reached an all-time high in 2017, with 370,000 units. Plus, there are a lot of company cars and private lease cars in Sweden – with the first cohort of vehicles in the latter category now coming off-lease. “Sweden is often thought of as this strange, cold country far up in the north. But it’s actually pretty easy to
buy a Swedish used car: we’re very advanced digitally. You won’t need to get physical stamps of license plates. And transporting the cars is easy, either via the Öresund Bridge to Denmark, or via ship to Bremerhaven in Germany.”
Increasing importance With an oversupply of used vehicles glutting the Swedish market over the next few years, the importance of Sweden in Europe’s remarketing landscape is likely to increase. “The only thing that could reverse this trend is if the Swedish krona would appreciate significantly against the euro, but I don’t expect that to happen,” says Hallström. Traditionally, Eastern Europe is a major buyer of Swedish used vehicles; but for certain higher-end models, the Benelux, France and other Western European markets seem a more likely destination.
Minimising risk So, does the future look sunny for Swedish remarketers? There are a few clouds on the horizon. Notably the trend toward insourcing: “With CarNext.com, LeasePlan is investing in building a proprietary outlet for its own defleeted vehicles. ALD has done the same, others might follow.” So the next years could be a bit tough, but TradingSolutions will continue to benefit from its digital-first stance: “There’ll be a run on digitalisation in remarketing, focused on minimising
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the risk for the buyer. It’s going to be our job to make the customer feel confident about the risk and price of his purchase.” That trend will only increase the visibility and attractiveness of the Swedish used-vehicle market in general, and of TradingSolutions in particular, Mr Hallström foresees.
SWEDEN’S 10TH-LARGEST EXPORTER TradingSolutions was founded in 2001 as a fully-online remarketing platform for Swedish lessors – with over 170,000 units traded so far. Their first and still largest client is Swedbank. Their systems are developed entirely in-house, digital-first and focused on efficiency. The average vehicle they remarket is 38 months old, has 79,000 km on the odometer and is sold for about 138,000 SEK (¤14,500), excluding VAT. With a total of 49,000 vehicles exported from Sweden, TradingSolutions is already the country’s 10th-largest export company overall. Main target markets: Eastern Europe, but also – for electric and hybrid vehicles – Norway. Eager to expand its export channel further, TradingSolutions has struck up a partnership with CarsOnTheWeb (recently acquired by KAR Auction Services).
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Boosted exports
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EXPERT
STAKEHOLDER MANAGEMENT: THE DARK SIDE OF PROJECTS Yves Helven
As projects go, enthusiasm is great at the beginning, but often much less so once one is back in a business-as-usual mode, when the stakeholder presentations and the obligatory team dinner are forgotten. Project professionals, keen to demonstrate their value, tell us that up to 70% of all projects don’t reach full potential. This figure is as frightening as it seems to be intangible. How to calculate the value of a project? And is a professional project manager needed for each project? Here are some tips and tricks to successfully conduct a fleet project.
How much does it cost?
The first stage is the “Order of Magnitude Estimate”, based on experience in similar projects. This estimate should be between -25% and +75% of the actual project cost and is used only for project screenings. The initial parameters are linked to people cost:
• Functional
expertise: who are the project team members? • Multiplied by labour cost: what’s the day cost of each of the team members?
Remember the “handheld rule” for email communication: the essentials of your project or message need to fit the screen of a mobile phone without your project stakeholders having to scroll down.
• Multiplied
by time estimate: how much time is required for each of the team members?
The next cost components are added to the people cost:
• Service
cost: the cost of external advisors • Software: also in the fleet industry, true projects come with software cost, such as app development, employee interfaces • Facilities • Contingency cost: costs added to the project budget to address pre-identified risks
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Should we do it? Once the cost is transparent, it’s time to focus on the value. The value of a project is, in the first place, essential to determine whether the project should make the agenda. As a rule of thumb, any project should pay itself back in less than the so-called payback hurdle (the time within which all projects should be in the black, different for each company, and depending on the cost). If the hurdle is 3 years, the investment is 100 and the annual return is 40, you’re good, if the return is only 30, forget about it.
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Engineers are experts in cost calculation and we can learn from them. They use various techniques of calculation depending on the state of a project and narrow down the error margins as they go. A similar approach is recommended for fleet related projects; keep track of your budget and include them in your status updates.
EXPERT
FINANCIAL STRATEGIES • ROI or Return on Investment: great to show a big percentage to your stakeholder, less great if you need to be accurate to impress your CFO. ROI calculations don’t take into account factors such as TVM (time value of money) and OCC (opportunity cost of capital).
• NPV or Net Present Value: more reliable as it takes into account the time value of money as well as the fact that there is always an Opportunity Cost of Capital. As it recognises that $1 today doesn’t equal $1 tomorrow, it measures the net difference between the present value of an investment’s benefits and the present value of the costs.
• IRR or Internal Rate of Return: much alike NPV except that it uses an approach that determines the interest rate and then compares it to the “risk adjusted rate of return”. It expresses, in percentage, the return rate and can be compared to the OCC in percentage.
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TIPS Formatting is important. When showing documents to your stakeholders, make sure to visualise your project in a pleasant way. Make it recognisable in accordance with your company’s look and feel; what looks alien, is less likely to be accepted. Include an executive summary that demonstrates what, why, how much it costs and what the expected return is. It also states what you need from your stakeholder. For email communication, remember the “handheld rule”: the essentials of your project or message need to fit the screen of a mobile phone without your reader having to scroll down.
When showing documents to your stakeholders, make sure to visualise your project in a pleasant way. Next to this generic indication of a project’s value, it is recommended to talk the language of finance stakeholders and calculate the value according to one of the following methodologies (see the insert for a brief explanation of each methodology):
• ROI or Return On Investment • NPV or Net Present Value • IRR or Internal Rate of Return Screening and Socialising your intentions As a Fleet Manager, you will most probably have a stakeholder matrix at hand. The screening phase is destined to convince your primary internal stakeholders, usually (but not limited to) your Line Manager, Finance responsible and functional leaders. A successful screening phase leads to green light for the project. “Socialising” refers to sharing your project’s elevator pitch (a 3 minute
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overview) with your peers and remote stakeholders. Figure out who would like to play a part in your project and who needs to be informed. The socialising phase is also important to start populating your RAID log.
Tools and methodologies Projects that are done instinctively and without a predefined methodology and tools, are more likely to fail. If you have access to a professional Project Manager, it is highly recommended to book this colleague for a couple of hours and walk her/him through the project. If you don’t have a Project Manager at hand, it is recommended to use a simple methodology that allows readjustments as you go. A hybrid between the Waterfall and Agile is a good place to start. In terms of tools, there’s no need to subscribe to expensive project management software. A Gantt chart
It might seem like an admin overload to keep all these documents up to date, but you’ll be asked how the project is progressing on a regular basis. By having these documents ready to share, you’ll reassure your stakeholders and you’ll be able to identify issues early.
Do I need a project manager? A simple answer: Yes. No project has ever run by itself – the better question is to know if you need a professional project manager. There are different online tools available to figure out what type of project management fits what type of project (an example can be found here: https://www.connector. expert/projectcategorizationtool), but as a ground rule, you’ll need professional project management if one or more of the following conditions is true:
• High project costs • Delivery date directed
by external entities or significant opportunity for loss • Project is done for compliance reasons • Your CEO is following the project • Other projects depend on the success of your project • Your project will impact a large number of stakeholders or users
Project Management (PM) versus Change Management (CM) Essentially different from Project Management, there are nevertheless some touchpoints between Change Management and PM: both drive a Current State to a Future State. Nevertheless, there are many differences. From a definition point of view, PM delivers a product or service, whilst Change Management manages the people side of change from a current state to a new future state.
“cheerleaders” of your project, who convey enthusiasm for your project to the user. CM follows less formal processes and has no concrete timelines. It focuses on people through the project, but not within the project. The tools are also essentially different: individual change models, readiness assessments, communication plans, resistance management and reinforcement mechanism are some examples of CM tools. Much alike PM, CM also has a number of methods. To name some: Lewin, McKinsey’s 7S, Nudge, Kotter. The selection of the right methodology depends on which type of change needs to be implemented, what the Future State looks like and who will be the users most impacted by the change. Regardless of the method, all options go roughly through an “unfreeze”, “change” and “refreeze” stage, to use the Lewin terminology. Combining PM and CM can increase the success of your project’s solution but doing both in parallel requires a lot of confidence; there is no more room for corrections, reiterations or failure. It is not recommended if you’re working on a high-risk project or if you’re not assisted by a professional project manager. Here’s an example of how it can work: during the initiation phase of the project (PM), you can start planning or “unfreezing” the Current State (CM). Change (CM) can run at the same time as the execution of the project (PM). Finally, the “monitor and control” phases of PM could coincide with the reinforce or “refreeze” stages of CM.
Evaluation The conclusion is simple: project and change management are not instinctive activities and teach us an important lesson. If our project fails, it’s rarely due to the stakeholder or the end user. If you’re facing change, be it a car policy review, the implementation of new suppliers or a switch from car to mobility, take the time to walk – at the very least – through the stages described in this article.
This results in entirely different characteristics; the Change team are the
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PROJECT MANAGEMENT METHODS WATERFALL is a sequential, requirement-focused project management method, divided into 7 distinct stages (Requirements, Analysis, Design, Implementation, Testing, Deployment, Maintenance) that are self-contained, i.e. you finish one phase before going to the next one. Waterfall is a pretty easy and intuitive method and has a high chance of success as each stage needs to be “perfect” before moving to the next. On the downside, it’s very rigid; if you discover a mistake, you’ll have to go back to square one and redo everything. AGILE on the other hand is a back-and-forth between “Scan”, “Analyse”, “Respond” and “Change”. Due to its built-in reiterations, it’s extremely flexible and reduces the risk to go back to square one. The downside of Agile is that there is no fixed plan or deadline and you’ll have to juggle resources and you’ll have to manage your stakeholders differently. HYBRID or STRUCTURED AGILE keeps the 7 steps of Waterfall, but allows for constant corrections and reiterations, whilst keeping a structure and deadlines in place. Nevertheless, as it’s a compromise of 2 opposite methods, it also removes some of the best parts of both.
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can be downloaded from the Excel templates on your Windows computer, and Excel is also sufficient for your RACI (Responsible, Accountable, Consulted, Informed) matrix and your RAID (Risks, Assumptions, Issues and Dependencies) log. All you need on top of these basic tools is a Statement of Work, a Project Charter, a budget follow-up document and some pre-agreed project governance.
MANAGEMENT
“SHOW US WHAT’S VALUABLE!” @Frank_J_Jacobs and @StevenSchoefs
Philip Morris International (PMI) is a huge and truly global company, with a fleet presence in 80-plus markets, totalling more than 23,000 vehicles. That fleet is managed by Almy Sousa Magalhães (35), who for his efforts and vision won the Global Fleet Manager of the Year award at the Fleet Europe Summit, this past November in Barcelona.
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Almy Sousa Magalhães • 35 years old, Brazil-born • Lives in Madrid • Joined Philip Morris International in 2006 • Global Procurement Executive Fleet, E-Commerce and Distribution • Manages a car fleet of 22,930 vehicles worldwide
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Magalhães (35) is a busy bee. On his business card, it says he manages PMI’s Global Procurement for Fleet & Mobility, E-commerce B2C, Distribution B2B. “Distribution of our conventional products is the main business until now. E-commerce is a new distribution model that PMI is developing, launching new products that combine conventional and electronic components,” he says.
A lot of multinationals still have a regional approach. When did PMI go global?
What are the essentials of your global fleet programme today? “We have three main pillars: safety, sustainability and Total Cost of Ownership (TCO). For any project in development, we take these into account. We have an annual budget of about ¤150 million, of which we control 80% centrally, via global agreements with OEMs, lease companies and other key stakeholders. We have a global strategy, but regional and local execution varies depending on market maturity and the availability of partners.”
What progress have you made in those three fields? “A first initiative for TCO is a fleet management optimisation programme, or FMOP: we look to consolidate brands and models with a few worldwide vendors – with an eye also to decrease CO2 emissions and increase safety features. The second is consolidating leasing, with predefined conditions applicable to all affiliates. And the third is a volume rebate programme we have at the global level with OEMs. With all this, we managed a savings of 7.5% annually in the fleet category.
Around 12 years ago, PMI decided to centralise its fleet management in Poland and at the headquarters in Switzerland
As for sustainability, PMI is committed to decrease CO2 emissions by 30% against the 2010 baseline, across its entire value chain. For fleet, we have defined strategies and focused our programme to engage with procurement and oversee logistics globally. And we measure how our CO2 emissions evolve. Talking about fleet safety, we provide e-learning to over 20,000 drivers. We have an internal award for market safety: in 2017, PMI Spain won. It decided to replace its entire sales fleet of over 300 diesel cars with Hybrids, while maintaining all safety features. That has an impact on fleet CO2, now estimated at 117 g/km.”
In the next few years, will you be able to realise similar cost savings than in previous years? Or have you run out of low-hanging fruit? “We see the need for more flexible and customer-centric solutions, and we believe that moving from asset to mobility management we can also have more efficiency. Our car-sharing pilot is already showing good cost results in comparison with both leasing and rental.”
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How does PMI see the future of alternate powertrains - especially given that market maturity is very varied in this respect? “We take each opportunity to scan the markets for the most advanced models and technologies available. Where there’s enough maturity, we’ll test or implement alternate powertrains. We did this exercise for Europe and Latin America last year. Next year, we’re doing it for Asia. Last year’s exercise showed that though there are good options out there, the alternative-powertrain market as a whole is still underdeveloped. But we’re mapping, and that allows us to start piloting. That allowed us to increase the share of hybrids and electrics in our fleets from 0.5% to 5%. In a few years, we’ll be able to scale these initiatives. By 2020, we expect to have large-scale projects in a number of affiliates.”
Are you already using telematics? “Yes, in over 30 affiliates. We’re using a decentralised approach, so they have been implementing the technology according to their specific demands. We have a few preferred suppliers, and we offer advice to the affiliates.
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“Around 12 years ago, Philip Morris identified an opportunity to centralise, gathering previously procurement local activities in a shared service centre based in Poland and at our headquarters in Switzerland. At the same time, we also set up a centre of expertise for procurement in Madrid, in order to integrate procurement initiatives and eventually develop a global approach.”
Almy Sousa Magalhães at the stage of the 2018 Fleet Europe Awards, where he received the Global Fleet Manager Award.
We’re seeing advanced solutions in place in Russia, Israel, Ukraine and throughout Eastern Europe. The challenge for the future will be to integrate all systems to do with data, safety and inventory control in one system, from which our affiliates can pick and choose.”
In EMEA, LatAm and North America, you work with three OEMs. In APAC, you work with five. Will you downsize further or are you in a good place now? “These preferred suppliers represent about 93% of our fleet. But we work with other OEMs as well, for the remaining share. We have now completed the exercise a second time and we believe we’ve achieved the optimal mix.”
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You work with four lease companies. Do they have an official preference over the others? “These four are preferred because we ran a benchmark exercise to identify lease companies capable of covering our needs. With the four that came out of that exercise, we established an international framework agreement, which includes pre-negotiated conditions on management fees, interest rate formulas, early termination conditions for any affiliate.”
PMI works with external fleet management companies. Does that mean you don’t have local fleet managers?
What’s your timeline to have a mobility management approach implemented at the international level?
“Our fleet management is split into two parts. The more strategic part is global and centralised and covers 80% of the total costs. Then there are the affiliates, where we deal with local contract management, mileage, leasing renegotiations, maintenance and repairs, and admin. Historically, we use internal teams for this. We’re outsourcing this to market experts with systems available to increase our efficiency. For now, we have implemented this in 13 countries – including Belgium, the Netherlands, France and Germany – with a total of three partners.”
“We have mobility initiatives in place in 15 countries already. We implemented a very successful corporate car sharing pilot in Italy last year. That’s the type of solution we think has potential to be scaled. Car subscriptions are of interest to a smaller portion of our fleet, the 20% used by senior management.
You’ve said that you want to evolve from an asset management to a mobility management approach. How exactly? “When it comes mobility, leasing companies today are the ones most capable of aggregating all the mobility products and services we need. So it makes sense to escalate our existing leasing relationships. For now, we see most demand related to car sharing and subscription services.”
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What’s your word of advice to other fleet managers who are developing a global programme? “Don’t wait until the circumstances are ideal. Start today! Identify internal demand, identify market trends, work out a pilot concept. That’s how we did it for leasing solutions. That’s what we’re doing with mobility and green solutions. Even if most markets are not ready, you can still pilot your concept in the more mature ones and raise very good cases that will help you sell the concepts internally.”
MANAGEMENT
“OF COURSE, FOOTBALL COMES FIRST” Brazil-born Almy Sousa Magalhães (35) has a background in electrical engineering, with an MBA in Business Management, Logistics and SupplyChain Management. He joined Philip Morris International (PMI) in 2006 and joined its global operations in Europe in 2013. Who’s the man behind the job description? Tell us a little bit about where you’re from in Brazil.
How about family? “I’m not married yet, but I have a lot of friends in Spain. My family loves to visit and enjoy Europe.”
What are your passions outside business?
Almy Sousa Magalhães, a native of Brazil, moved to Europe in 2013.
Europe. And not just in football, but other sports as well.”
You’re now based in Madrid. What’s your tip for visitors? “Madrid is a very dynamic and culturally vibrant city, so there is always a lot going on. But if I had to recommend one place, it would be Matadero, a cultural centre that was renovated three years ago. It’s an amazing venue, close to the river.”
“I’m very passionate about music, especially Brazilian music. We have a rich musical history and tradition. I’m also passionate about sports. Ayrton Senna is one of my country’s biggest legends. I appreciate his legacy. So I’m also a big Formula One fan.”
Do you remember your first car?
What, no football?
Am I right in thinking a Brazilian must be able to mix a good cocktail?
“Of course, football comes first! It’s in Brazil’s culture, it’s in our blood. I really enjoy the fact that there are so many successful Brazilians playing in
Who would you say was an inspiration in your life? “Definitely Carlos Manuel Taboada. He was my coach and mentor at university and he opened my eyes to the world of logistics, supply chains and mobility. He also helped me find an internship in Spain, 15 years ago. And that’s when the ball started rolling for me. Today we’re close friends. Whenever I achieve a success or get a recognition for my work – such as this Award – I remember him and the difference he made for my career.”
“Good question. I’m passionate about racing and about cars, but I’m also happy not to own one. And I’ve never owned one for longer than a year. For me, it’s about mobility solutions and the opportunities they provide.”
“You’re right. I’m an expert in making caipirinhas.”
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“I’m from Goiânia, a city in the centre of the country, not far from Brasília, the federal capital. I studied at Santa Catarina Federal University in Florianópolis, in southern Brazil. Then I worked in São Paulo, Brazil’s business capital, for four years until 2013. That’s when I moved to Europe, where I’ve lived in Switzerland, Poland and now Spain.”
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