Fleet Europe °106 by Nexus Communication

106 04/2019

FOR INTERNATIONAL FLEET & MOBILITY LEADERS

FINANCIAL MODELS

AUTONOMOUS

The rise of private and used car leasing The race is on: multibrand or captive

Nexus communication - Fleet Europe #106 - Periodic magazine - APRIL 2019 - Deposit Office X

Why opt for LCV leasing

Different speeds within Europe

NEW ENERGIES EV in Geneva, what with hydrogen

“GUIDING ARVAL TO THE FOREFRONT OF MOBILITY” Alain Van Groenendael INTERVIEW WITH ARVAL’S NEW CEO

CONNECTED FLEETS CONFERENCE

BRUSSELS 15 & 16 MAY 2019 www.conference-fleeteurope.com/connectedfleets

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S U M M I T 2019

IMPROVE YOUR KNOWLEDGE with the International Fleet Managers Institute!

for Fleet and mobility Managers ONLY

2019 AGENDA WEBINARS IFMI Digital Masterclass | 23 May 2019 – 02:00 PM CET How to adapt your (LCV) fleet management to the Last Mile context

IFMI Digital Masterclass | 3 October 2019 – 02:00 PM CET How to identify the right MaaS solutions for your mobility management

LIVE SESSION IFMI Masterclass | 6 November 2019 – 08:30 AM - 05:30 PM

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FLEET EUROPE #106

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FINANCIAL MODELS 6-27 6

8 Alain Van Groenendael, new CEO of Arval: “Arval has incredible growth potential as a mobility integrator”

Operational leasing, a tradition of success A look at latest evolution of full service or operational leasing in Europe.

12 An electrifying exercise How EV leasing differs from an ICE offer and how leasing companies accompany their clients in the transition.

14 Why corporates offer private lease

Companies offering private lease to their employees? It works because everybody wins.

Schindler lifts up cargo bikes: Guillaume de Subercasaux, Schindler, about his policy for vans, electric vans and cargo bikes.

16 Private lease: not just HR’s business What is the role of the fleet manager in the private lease set-up.

18 Leasing is not what it used to be Why 2019 could be the year of used-car leasing breaks through?

20 Don’t buy this car!

Subscription services are transforming ownership models, and the automotive sector is no exception.

The future of lease is still bright: Richard Knubben of Leaseurope sheds his light on the leasing market.

21 Finance lease is here to stay Finance leasing, is it time for a dark farewell or does it still have a future?

22 Lease your LCV Is it a good idea to go for leasing to fund your LCV fleet?

24 Strategy: the battle for the future of leasing

The leasing game is changing profoundly. How will it affect the players, both multibrand and captive leasecos?

Water can power your next car: A new hydrogen mix that solves the puzzle, offering zero-emissions, long range, and low cost.

COLOPHON SALES: David Baudeweyns, Mélanie Gohy, Saskia Lannau, Elke Leën, Daniel Savigny, Aline Verpoorten

FLEET EUROPE #106

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: Daniel Bland, Stijn Blanckaert, Tim Harrup, Jonathan Manning, Mark Sutcliffe, Shane Curran

PICTURES: ©Shutterstock

PUBLISHERS: Caroline Thonnon, Thierry Degives

TO CONTACT OUR TEAM: FirstletterfirstnameLastname@nexuscommunication.be 4

LAYOUT: Cible - www.cible.be

NEW ENERGIES 28

The turning point call GeneEVa The Geneva Motor Show, the place where OEMs are forging new partnerships for the electric and mobility transition.

CONNECTED

32 From zero to a fully shared fleet: When it comes to corporate fleets, there are various degrees of sharing.

Connect to expertise Connected Fleets Conference, the high-level event for international decision makers looking to understand connected technology.

SAFETY 36

From spy in the cab to guardian angel What is the positive impact of on-board telematics systems?

A roadmap to safer highways Four technological innovations supporting safety policies.

REMARKETING

34 When fleet and business travel meet: The growing momentum behind the mobility revolution is bringing corporate travel and fleet managers closer together.

CarNext: a remarketing dream come true Ewout van Jarwaarde of CarNext presents the business model and strategy of LeasePlan’s independent marketplace for used cars.

We also focus on these channels on our website. Read all these selected articles here:

38 Last Mile How drones can support efficient parcel delivery.

42 How ready is the EU for our self-driving vehicles of the future? The question is not whether but when self-driving cars are coming.

FLEET & BUSINESS A C O M M O N V O I C E T O W A R D S T H E M A R K E T, PA R T N E R S A N D S U P P L I E R S

FLEET EUROPE

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FLEET EUROPE #106

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FINANCIAL MODELS

OPERATIONAL LEASING, A TRADITION OF SUCCESS @StevenSchoefs

FLEET EUROPE #106

Frost & Sullivan sees continued growth for full-service leasing, but at various speeds throughout Europe (see second graph). Growth could be slower in mature markets in Western Europe such as the UK, France, the Netherlands and Belgium, where the formula has already an uptake of more than 20% of new registrations.

23,2

22,6

21,4

14,21%

14,06%

13,93% 22,0

13,87%

13,79%

13,57% 20,3

19,3

18,2

17,8

11,80%

10,76% 17,5

13,73%

13,10%

20,6

7,2 3,1

7,4 3,2

7,6 3,3

2017

7,0 3,0

2016

6,6 2,7

2015

6,8 2,8

2014

6,4 2,7

2013

5,9 2,4

5,4 2,1

5,0 1,9

2018

2019

2020

2021

2022

16,0% 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0%

395,8

389,0

376,8

371,6

2,51%

2,49%

2,49% 382,7

2,48%

2,45%

2,36% 365,7

2,09%

2,22% 359,9

2,0%

354,3

348,0

1,97%

3,0% 2,5% 2,0% 1,5%

TOTAL MARKET

COMPANY CAR FLEET

46,9 9,9

2017

46,0 9,7

42,1 8,6

41,0 8,0 2016

45,2 9,5

2015

44,4 9,3

2014

43,4 9,1

2013

39,9 7,4

1,0% 38,6 7,0

450 400 350 300 250 200 150 100 50 0

343,1

OPERATIONAL LEASING MARKET: VEHICLES IN OPERATION, 2013 TO 2022

37,9 6,8

Why is full-service leasing so popular? The clue is in its name: full service means no hassle. No need to manage various suppliers for the same asset. Full financing means taxes, insurance, service and maintenance, fuel and repair are all included. Ergo, the total cost is fully known at the start of the contract.

finds attraction in the B2C market via increasingly popular private lease solutions. Hence, it’s definitely not the end of the full service leasing era in Europe.

OPERATIONAL LEASING MARKET: NEW REGISTRATION, 2013 TO 2022

MILLIONS

As new figures released by Frost & Sullivan show, it remains by far the most popular way to fund large fleets across Europe (see first graph). In 2018, 13.8% of all new vehicles registered in Europe were funded by operational leasing. That’s around 2.8 million units. Full-service leasing took a share of 63% of all company cars registered in Europe last year, with financial leasing taking 37%.

its many benefits, it is more than likely that full-service leasing’s tradition of success in the West will be replicated in the East, while at the same time the full service leasing concept also

MILLIONS

Amid the attention lavished on new finance models, it’s helpful not to lose sight of the amazing success of a tried and tested formula: full-service leasing (also known as operational leasing).

2018

2019

2020

2021

2022

OPERATIONAL LEASING

0,5% 0%

PENETRATION*

*Penetration = (Operational Leasing/Total Market) Source: Frost & Sullivan

OPERATIONAL LEASING: MARKET PENETRATION, 2018

It will go faster in the still maturing markets of Central and Eastern Europe – full-service leasing has a less than 5% penetration in Russia and Ukraine, for example. Considering

0-5 % 5-10 % 10-15 % 15-20 % >20 %

Source: Frost & Sullivan

Market penetration of operational leasing / new vehicle registrations. 6

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FINANCIAL MODELS

ALAIN VAN GROENENDAEL, CEO ARVAL “Arval has incredible growth potential as mobility integrator” Steven Schoefs & Thierry Degives

At the start of this year, Alain Van Groenendael took over from Philippe Bismut as CEO and Chairman of Arval. The change of personnel ushers in much more than just a different style of leadership. It underlines the company’s ongoing transformation, from car lease specialist to mobility provider – evidenced also by Arval’s accession to the Mobility-as-a-Service (MaaS) Alliance, announced on 25 March. So, Arval’s new CEO guides us onto the new mobility path Arval is taking.

PORTRAIT A sales and marketing man Alain Van Groenendael meets you with a friendly smile and a firm handshake, looking you straight in the eye. Arval’s new CEO describes himself as a Sales & Marketing man. And it’s true: he wants to share knowledge and convince his audience, with enthusiasm but without showmanship.

FLEET EUROPE #106

Thrust centre-stage Following spells in England and the Netherlands, he’s been in Paris for almost 20 years now – but still speaks French with traces of his charming Belgian accent. At 57, Mr Van Groenendael is now thrust centre-stage. With a diploma from ICHEC and a degree in commercial engineering from Saint-Louis University (both in

Brussels), he knows what makes the banking world tick. He has always worked in finance, with both private and corporate customers. In 2008 he joined the BNP Paribas Group, taking charge of both international affairs and sales & marketing at Cetelem Bank, a BNP Paribas subsidiary specialised in consumer credit. For three years, he even served as the bank’s president.

‘Total immersion’ Mr Van Groenendael took over as Arval’s new CEO at the start of 2019, following a seven-month ‘total immersion course’ alongside his predecessor Philippe Bismut. He describes Bismut, who held the reins at Arval for eight years, as “remarkable and exemplary”,

but points out he has his own management style: “I’m direct. I like things out in the open. I can accept bad news, but I don’t like bad surprises.” That makes things clear. The new CEO is taking up the challenge by reinforcing his team. He plays the partnership card – both inside Arval and for Arval’s external business. And he has confidence in the men and women of ‘Team Arval’, which is well prepared for the challenges ahead, he says. This much is clear: Alain Van Groenendael is ambitious, innovative and passionate about international development. So, how does he recharge his batteries? Cycling, tennis or golf – and then a good glass of beer. Yes: Belgian after all!

MOBILITY CHALLENGES Three future challenges

• “The next one, for 2021, is strate-

“Arval is equipped for the challenges and opportunities of the future, but that doesn’t mean we won’t have to perfect our strategies and abilities,” says Mr Van Groenendael. He has a clear view on the path ahead, on three targets:

gic: keep on generating growth, but also developing partnerships, making sure we transit to sustainable powertrains.” • “Our third target is for after 2021: connected mobility and autonomous vehicles; completing the powertrain transition to electric mobility. And of course, there’ll be plenty of scope for improvement and transformation beyond these three targets.”

• “Our

first target is for 2019: pursue our growth! After another year of strong growth for Arval in 2018, achieving a 9% growth in 2019 is within our reach.”

MOBILITY PROVIDER Arval becomes a mobility integrator “Over the next six months, Arval is going to change its positioning: we’re going to become a major player in mobility – an integrator, even. Of course, in partnership with other players,” reveals Alain Van Groenendael.

Transversal solutions The Arval CEO is brimming with ideas for and examples of transversal mobility solutions – both with current partners (parent company BNP Paribas Group, French insurer Matmut, Spanish bank Caixa, and OEMs like Hyundai, Kia, Volvo and Opel) and prospective ones.

“Arval has incredible growth potential, and there’s a great variety of growth channels out there,” the CEO enthuses. It’s clear things are going to change, including the company slogan, which will reflect the tilt towards mobility. Arval’s transformation will have three levers, Mr Van Groenendael reveals: digitalisation (e.g. the entirely digital private-lease offer recently launched in the Netherlands), data (both enriching it and using it better), and “people”, the human potential. Thirty new people will be brought in to strengthen Arval’s digital and data efforts, both at HQ and in the various countries.

PARTNERSHIPS Local partners, global thinking In the Netherlands, Arval has partnered with mobility card provider XXImo. Is it a model for Arval’s future cooperation with mobility partners? “We don’t have a magic solution for the moment,” says Mr Van Groenendael. “But it’s important that we’re observing, testing, as with XXImo for example.” “The card was originally conceived for the Benelux markets, but with potential for Germany, France and beyond. As we’re experiencing it, the card offers an interesting model for dealing with various mobility options: from fuel and parking cost to tickets for train and plane journeys. We’re closely following its development, both in terms of services offered and geographic expansion.”

Smart City Partnering for mobility innovation means accepting the possibility of trial and error, Mr Van Groenendael: “Very few businesses succeed in everything they do. You have to develop concepts and test them. Some will work, others won’t. Specifically for mobility, we’re looking to co-develop solutions with others, including public transport authorities and, most of all, cities. We’re closely monitoring the Smart City movement, for example.”

Private lease and other new customers “Arval has a long tradition serving corporate clients, who are very happy with our service. That will continue, but we’ll also enter into newer customer segments,” says Mr Van Groenendael – who finds the distinction between B2B, B2C and B2E segments somewhat academic, by the way: “In essence, the relationship is with a driver, so in the end it’s always B2C.” Be that as it may, Arval’s private lease business has a clearly-defined

success rate: “Private lease is growing at an annual rate of 45%, and I’m confident that will continue for some years. It started in markets like the UK and the Netherlands, but now there’s demand all over Europe.”

Immediately available Private lease is also a product that Arval’s partners are keen to offer to their clients. “That’s because private lease has the advantage that it’s immediately available. Other vehicle financing formulas require much more commercial support.”

For Mr Van Groenendael, private lease is a strategic lever of growth: “Yes, we’ll have continued growth in our core corporate segment. But on top of that, we’ll have relatively stronger growth in our SME and private segments. Of great help in this will be private lease that we can steer via our banking relations, as well as with our white-label arrangements with Hyundai, Opel, PSA and other OEMs.”

FLEET EUROPE #106

PRIVATE LEASE

FINANCIAL MODELS

GEOGRAPHY Out of India, into Latin America At the end of 2018, Arval decided to leave India. “We’ll still serve our present clients until the end of our contract. And international customers in India will still be served via our partners within the Element-Arval Global Alliance,” says the CEO.

FLEET EUROPE #106

Why leave? “We tried for 11 years, but India is just a a difficult market when it comes to full service leasing. Compared to the size of the country and its automotive market, full service leasing market remains very small and the preferred funding modes for Corporates remain outright purchase and financial leasing. Leaving was

not an easy decision, but in the end, the market was not fitting with Arval growth strategy.”

Conquered territory Will Brexit turn the UK into another ‘difficult’ market? “Our British customers are corporates headquartered over there. Our own teams are based in the UK as well. Financing is done via a local BNP subsidiary. And our vehicles are defleeted within the country as well. If there is a risk, it’ll be related to an economic downturn in the UK itself, with lower levels of investment and a higher price for importing vehicles. But apart from that, Brexit for us is a purely local matter.”

Now the Nordics are covered, Europe is largely conquered territory. But Latin America is still up for grabs. “Sooner or later, we’ll be opening a subsidiary in Colombia, a promising market. That indicates how important the region is for us. Latin America has a culture of financing and leasing that is pretty close to the European model, with lots of corporate clients headquartered in Europe developing their business in Latin America, and looking for the level of service they’re used to in Europe.”

“9% GROWTH” IN 2019

ARVAL’S EV AMBITIONS

For 2019 and beyond, Arval targets growth via innovations and digital apps fit to offer a broader range of mobility services to its clients. “Achieving 9% growth for the year ahead is within our reach,” says Mr Van Groenendael. The Arval brand new Employee Value Proposition “Arval, a place for people in action”, which empowers people to bring forward new ideas and deliver outstanding service and expertise, that has been launched earlier this year, will be key to achieve this goal.

“When it comes to EVs, we want to do better than the market by double as much,” says Arval CEO Alain Van Groenendael. “If the market does 3%, we’ll do 6%. And so on, for each of the coming years.” The company also wants to halve the share of diesels in its fleet, from almost 90% in 2017 to no more than 45% in 2021.

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FINANCIAL MODELS

AN ELECTRIFYING EXERCISE @DieterQuartier

Determining the right usage case and seamlessly implementing EVs are no easy tasks. We asked Arval, LeasePlan and Alphabet how EV leasing differs from an ICE offer, how they accompany their clients in the transition and how they see the TCO evolve. Last year, most leasing companies registered a double-digit growth in the number of new BEVs (battery electric vehicles) and PHEVs (plug-in hybrid electric vehicles) that entered their fleet. At Alphabet, both EV categories combined now represent 6% of their portfolio in 13 core markets. In terms of new activation the growth is close to 30% with around 15,000 vehicles registered in 2018. LeasePlan, a company that is a member of the EV100 group and recently issued its first ever green bond worth ¤500 million, saw the number of EVs in its fleet go up by 40-60% every year, depending on the market, and expects this to continue. Arval can look back on an EV growth in 2018 that was four times as high as in 2017. It expects an exponential increase in the coming years – by 2020 it reckons that over 5% of all new deliveries will be BEVs.

analysis to define the right vehicle for the right use and the adapted contract terms,” the French lessor says. This is more or less echoed at Alphabet. “As the range of available EVs is constantly expanding, and for many, knowing which EV to drive is unfamiliar ground, we guide our customers through the important factors to consider and help them select the mix of BEVs or plug-in hybrids that best fit their needs.” As to the contract duration and mileage, they are typically the same as for an ICE vehicle, says LeasePlan. “International fleets usually have a standard term for all vehicles for a fair eligibility and cost-effective fleet.

Since many fleets are gradually introducing EVs, it’s common practice to treat the term of the lease contract the same as conventional internal combustion engines. Also, EV drivers don’t show different driving patterns because of a different powertrain.”

EV supporting services Do leasing contracts for EVs differ from those for conventional vehicles? Are there different services needed, and if so, are they always included? The answer is yes and no.

FLEET EUROPE #106

It is safe to state that the lessors are preparing for the big e-wave to come crashing on their shores and are pulling out all the stops to surround their customers with advice, services and solutions to make the transition from fossil to electric.

Which EV where & for whom According to Arval, which EVs are interesting is very much dependent on the vehicle use and the client’s expectations. “That is why we encourage and support our clients to conduct an

Arval offers a fully integrated solution for EVs, including charging systems, as demonstrated here at the Nordic EV Summit in Oslo on 21 and 22 March.

Tesla Model S – performing? Is there a growing market for used EVs so that RVs increase and the TCO comes down? “The performance is in line with the expected value - in some cases slightly higher - but the volumes were still low. More importantly, new EV models are better positioned in terms of product substance, i.e. battery range, pricing, and options,” says Alphabet. “So far, we see a rather positive outcome in terms of EV remarketing with a healthy appetite in the market for EVs, since the demand is high,” explains Arval. “We also notice that the battery holds quite well, which makes it possible to re-use these vehicles in new contracts.”

The range of available EVs is constantly expanding and for many, knowing which EV to choose is unfamiliar ground.

Alphabet believes in a holistic approach for EVs to cover all EV-related needs. Their 4-step strategy includes not only the analyses of the fleet to define usage patterns and benefits, and the vehicle selection process, but also setting up the right charging infrastructure. “It is crucial to hassle-free driving and business. We pinpoint the number, location and types of charging points. Also setting up these facilities is done by Alphabet – we provide the charging infrastructure at home and at the office.” Finally, there is Alphabet’s so-called add-on mobility solution. “As a fully flexible solution, we offer numerous additional services to keep the fleet running smoothly. This includes rental options and driver support, so Alphabet drivers are covered in all situations.”

For LeasePlan, the difference between ICE and EV services also mainly comes down to providing charging infrastructure. “The charge points we provide can be used for all EVs, enable load-balancing and offer automatic reimbursement. In addition, our EV customers receive a charge card that gives them access to more than 108,000 charging points across Europe.”

RV performance

If professional high-mileage drivers have faith in the technology and the cost-efficiency of EVs, then the future of the latter seems brighter than ever.

The batteries seem to hold quite well, which makes it possible to re-use EVs in new contracts.

How are the first-wave EVs – BMW i3, Nissan Leaf, Renault Zoë, VW e-Golf,

OFFSET YOUR CARBON FOOTPRINT To support its customers with their sustainability ambitions as they make the transition to zero emission mobility, LeasePlan has introduced carbon neutral contracts through its partnership with Land Life Company. Under the partnership, LeasePlan customers will be able to offset their fleet emissions through Land Life Company’s innovative reforestation programme.

FLEET EUROPE #106

The difference between ICE and EV services in a leasing contract mainly comes down to providing charging infrastructure.

Arval sees that the relevant EV charging solutions are key in implementing and managing EVs in fleets. “We have partnered with NewMotion for charging infrastructure and payment and we have recently announced a partnership with Engie for a fully integrated EV offer.”

“The current supply seems to match the current demand of this generation of 3-to-4-year-old EVs. The used-car leasing of EVs is quite popular. This is due to the lower pricing, instant availability and in some markets more generous taxation rules for the older generation of EVs. We see a high uptake on certain businesses, such as taxi drivers,” LeasePlan highlights.

FINANCIAL MODELS

WHY CORPORATES OFFER PRIVATE LEASE @Frank_J_Jacobs

Companies offering private lease to their employees? Sounds like a contradiction in terms. But it works because everybody wins. Companies get to offer an extra benefit, hassle-free; employees get cheap and easy mobility; and suppliers get extra volume.

Rather than buying their cars, private consumers are increasingly leasing them. The advantages are similar to those already well known by corporate fleets: fixed monthly fees, bundled services, no financing required, no residual-value risk. This is called private leasing, and it’s growing rapidly, especially across the mature leasing markets of Western Europe.

Safe and easy “For private consumers, private leasing is both safe and easy. It’s a stepping stone on the road from ownership to usage, and as part of that megatrend, it’s very much a key element of the mobility of the future,” says John Saffrett, Deputy CEO of ALD Automotive.

FLEET EUROPE #106

Basically, private leasing is the traditional vehicle leasing product finding a new channel. And it’s the traditional lease companies that are best positioned to benefit from this new opportunity, Saffrett argues: “They have the advantage that they can bring their decades-long leasing experience to bear, and they have the scale required. At ALD, we’ve seen 45% growth in private leasing in 2018, to 112,000 units at the end of last year. We’re aiming at 150,000 units by the end of 2019.” Whether offered by traditional lessors or other players, private lease formulas are often offered via channels with which end-consumers are more familiar: banks, insurers, consumer retail

chains – and employers. So, companies offering private lease is less of a contradiction than it sounds.

Salary sacrifice Differences in implementation are geographical rather than sectorial: “It’s already very popular in the UK, where it has some history in the form of salary sacrifice schemes. And it’s also coming up in the Netherlands, Belgium, Spain and Italy,” says Lakshmi Moorthy, SME Solutions director at Arval. Private leasing can be both of the operational or financial kind. In the UK, for example, the former is on offer as Personal Contract Hire (whereby the provider retains ownership and depreciation risk), the latter as Personal Contract Purchase (the user takes on board the depreciation risk and will dispose of the vehicle themselves). “We also see a surprising amount of activity in Germany, where a change in fiscal regulations has made cafeteria plans (which offer employees the choice between a variety of pre-tax benefits, Ed.) less interesting, leading to a sharp increase in popularity of corporate private-lease schemes,” Ms Moorthy continues. “There’s less activity in France, but a lot of companies are already requesting information on the formula.”

Penetration rate Those requests often originate on the workfloor, with employees reflecting

on the increase of private-lease options they’re seeing in the wider market place – and why can’t their company offer it as well? The overall rule is: corporate private lease gets more popular as private lease increases its penetration rate in the wider market, and consumer behaviour in general changes. “Taxation is driving people in and out of company cars,” Mr Saffrett observes. “So it’s natural that companies start

“Private lease is a key element of the mobility of the future.” John Saffrett (ALD Automotive)

LIMITS ON CORPORATE PRIVATE LEASE GROWTH • Whereas a traditional company car scheme can be imposed, corporate private lease is always an optional system, limiting uptake. • The employee thinks like a consumer, and shops around at other trusted institutions. In the end, they might prefer the private-lease formula offered by their bank, for instance.

Private lease is a way to offer employees cheap and easy mobility.

Three percent

Lakshmi Moorthy (Arval)

examining alternatives. Private lease gives companies the opportunity to offer structured mobility via a limited number of providers. It has all the advantages of traditional corporate lease, but with less admin. As such, private lease is an ideal part of a flexible, comprehensive solution for corporate mobility.” “Private lease can offer a nice benefit to all partners in a corporate setting. It’s a win-win-win, but it’s not a magic wand,” says Ms Moorthy. “In this situation, employees get to act as consumers, and decide what they’re comfortable with. So, corporate private lease will probably not generate high volumes immediately, as it’s an optional product.”

Ms Moorthy estimates that the take-up of corporate private mobility in companies where it’s on offer varies between 1 to 5% of all eligible employees and is rising over a three-year period: “Three percent is probably a realistic figure to aim for in the first year.” Mr Saffrett thinks it could be a whole lot more: “The overall private-lease model will evolve and mature. And with it will come a flavour of private lease that is more corporate-friendly.” And when that happens, it won’t just be in Western Europe. “Yes, we’re seeing rapid growth in demand for private leasing in our Western European markets, but also in Central and Eastern Europe, and in Latin America,” Mr Saffrett says. “We already have a private-lease capacity in half our markets and are selling the formula via more than 150 agreements. By the way, we see that for corporates, offering private lease as part of employee schemes is an additional way to create employee benefit, not a replacement of the company car.”

KEEP AN EYE ON THIS • Due to varying fiscal rules, differences in pay and benefit situations and other circumstances, some employees may be better off sticking to a company car. Depending on how much, this may eliminate any potential benefit of the scheme. • Employers have a duty of care for their employees when travelling for work. Health and safety standards are often more easily monitored and maintained in a traditional lease setting than via private lease, which may be offered by providers beyond the control of the company. • Problematic situation: employees who leave the company before their private-lease contract is up. This risk will have to be mitigated by higher fees, or an early-return penalty.

FLEET EUROPE #106

Private lease can offer a nice benefit to all partners in a corporate setting.”

FINANCIAL MODELS

PRIVATE LEASE: NOT JUST HR’S BUSINESS @Frank_J_Jacobs

When corporates offer private lease, HR typically is the department in the driving seat. But fleet managers still have a valuable role to play, experts say. “Private lease is a contractual relation between the employee and the leasing company, so in a strict sense this doesn’t concern the fleet manager at all. Setting up a private-lease offer in a corporate context mainly requires the involvement of management and HR,” says Dr Carsten Esbach, COO for Germany and Austria at BNP Paribas.

Three-party collaboration Even so, fleet and mobility managers can be much more than bystanders, says Lakshmi Moorthy, SME Solutions director at Arval. “Often, HR doesn’t know the product. With their attention focused on the mobility space, fleet managers are more likely to be aware of the formula – and to get questions about it from the employees.” The best way to promote the product, Ms Moorthy says, is a three-party collaboration between HR, the fleet manager and the internal communications department. “It’s essential to explain and promote the formula with the employees, provide them with enough information so they can make an informed choice.”

FLEET EUROPE #106

Available and known “Some companies simply include information on the private lease offer on their intranet, others also offer additional marketing material and send out emails. At Arval, we also offer to come in and explain the formula and answer any questions. The key is to make the option available to and known by employees.”

‘however’: “If the employer wants to support their private lease initiative with incentives, these have to be properly defined. Wage tax topics have to be sorted out beforehand.” Indeed, in some jurisdictions private lease may be fiscally unattractive. But mere uncertainty regarding the tax implications of the formula may be enough to discourage even those employees who are potentially interested in taking it up.

Trusted party “Private lease is a very interesting tool and is set to grow, but the benefits should not be overestimated: not all employees are happy with pricing and offers,” says Dr Esbach. “For employees, corporate private leases can be attractive because they’re offered by a trusted party, i.e. their employer. But their bank can also be a safe option, for example,” says Ms Moorthy.

Lakshmi Moorthy (Arval): “It’s essential to explain and promote private lease with the employees.”

CORPORATE PRIVATE LEASE: DO’S AND DON’TS If you are a company looking to offer private lease to your employees: • Make sure you find a trusted and relevant partner to supply the private lease offer • Keep things simple and outsource as much as possible • Ensure maximum uptake by promoting the programme well with your employees • Be creative in your promotion and think cross-functionally • Make sure you generate maximum visibility without creating extra admin work • Don’t expect big volumes quickly – and don’t let that ambition drive your decision.

“So it’s not going to generate large volumes overnight. Companies should think of and treat it as promotional offer to have in their overall benefits package that’s low-effort for them and good for their employees – a bit like an employee offer for insurance at reduced rates, for example.”

Carsten Esbach (BNP Paribas): “Wage tax topics have to be sorted out before you start introducing a private lease model.”

Dr Esbach agrees: “With the set-up clearly laid out, a private lease offer in a corporate context is relatively easy to implement.” But there is a

FINANCIAL MODELS

LEASING IS NOT WHAT IT USED TO BE @DieterQuartier

2019 will see a strong increase in used-car leasing, the experts say. It offers opportunities for the lessor, who gains control over the end-of-lifetime sweet spot, whereas the lessee gets more flexibility and value for money. What’s more in the second-hand store?

WLTP, the rise of EVs, the downfall of diesel, Brexit: today, residual values are influenced by many more variables than ever before. Leasing companies can base their forecast resale prices on their own historical data and on calculations made by Autovista and Cap Hpi, for instance, but even these consultancies could not have predicted four years ago what is happening here and now. What if there was a way of offsetting remarketing losses or maximising profitability by gaining control of the usedcar supply chain and the lifetime of the vehicle? With used-car leasing there is. Add to that the growing interest from private customers in leasing plus the need for contract flexibility and you could say the writing is on the wall for 2019 and 2020.

Flexibility please

FLEET EUROPE #106

Over the past few years, ALD Automotive has been progressively implementing used-car leasing. “We are continually developing the channels required to promote used-car leasing. We believe in providing our clients with total flexibility and see this service as a beneficial addition to our overall comprehensive offering for our clients, in particular retail clients,” explains Carel Bal, Director & Second Lease Sponsor, ALD Automotive in the Netherlands. This is echoed by Ewout van Jarwaarde, Managing Director at LeasePlan’s CarNext.com: “If we look at the customers that are interested in leasing a used vehicle, most of them are looking for flexibility. They don’t want to be stuck

ALD has successfully implemented a “click and brick” approach with ALDCarmarket.dk in Denmark. for three or four years, but lease for a shorter period of time.” “We have implemented used car leasing both directly and through targeted partnerships with, for example, BlaBlaCar in France or Natwest Bank in the UK,” Carel Bal continues. “Going forward in 2019, we intend to expand our direct retail offering through a

“click and brick” approach based on a fully digital platform and physical showroom, backed by our successful experience with ALDCarmarket.dk in Denmark.” To date, ALD Automotive offers used car leasing in 9 countries and has the opportunity to potentially channel this through its resale market of 50 branded

With used-car leasing, the contract duration is disconnected from the lifetime of the vehicle.

used car outlets which operate across 19 countries. LeasePlan has a similar approach with CarNext (see article on page 40).

employees have a broader range of vehicles to choose from which they wouldn’t normally have access to,” says Carel Bal.

Link with private lease

As for advantages for leasing companies, used car leasing represents an advent in vehicle lifetime management where the contract duration is disconnected from the lifetime of the vehicle. “This provides flexibility by optimising the use of the vehicle in terms of moment of sale, potential releasing opportunities or adding it to a flexible pool of vehicles.”

ALD Automotive clearly sees potential in the used-car leasing market with activity increasing significantly by 2020 through their digital platforms and retail outlet coverage. “With operations available in all of our mature markets, where there is demand for Private Lease in general, these will be our focus areas in the next 12-18 months,” Carel Bal says. Indeed, there is a strong connection between used-car leasing and private lease, reckons Frank Van Gool, managing director of Belgium’s leasing and rental federation Renta: “2019 will be the year in which used-car leasing breaks through. The biggest chunk of that segment will be taken up by private-lease providers.” According to Mr Van Gool, the privatelease market is an ideal environment for offering young, small and well-maintained used vehicles to a new consumer audience, at an attractive price. Which vehicles are ideal to be leased second hand varies from country to country, but ALD Automotive lists four sources: early returned vehicles (0-2 years), regularly returned vehicles (3-4 years), specifically bought vehicles to enhance their varied offering on their car sales platforms where they offer vehicles for sale or lease, and finally manufacturer partnerships through partners’ stocks. “Selection criteria depend on B2B and B2C profiles who have different needs and expectations as to the vehicle type, brand, usage, mileage, and so on,” says Carel Bal. “Our aim is above all to ensure that we provide our clients with excellent quality whether the leased vehicle is new or used.”

“Leasing companies gain in agility and control over how and when a vehicle is used and can adapt sales based on market conditions. Additional benefits include managing residual value risk, expanding the customer base and fleet, creating economies of scale, expanding service offerings and further diversifying client segments,” ALD Automotive’s Director & Second Lease Sponsor concludes.

ADVANTAGES FOR CUSTOMERS • More value for money • More flexibility as to contract duration • Immediate availability of vehicle

ADVANTAGES FOR LESSORS • Control over residual value risk • Expansion of the customer base • Creating economies of scale

2019 will be the year in which used-car leasing breaks through. The biggest chunk of that segment will be taken up by private-lease providers.

Retail customers for used-car leasing benefit from flexibility, cost effectiveness, shorter leasing periods, easiness of returning the vehicle, a higher-quality car for an advantageous price with maintenance included and no delivery delays. “There is also no hassle at the end of the contract in selling the car, you just return it and can opt for a newer model. For corporate customers,

FLEET EUROPE #106

Win-win situation

FINANCIAL MODELS

DON’T BUY THIS CAR!

EXPERT’S VIEW

Jonathan Manning

From mobile phones to music, television and even razors, subscription services are transforming ownership models, and the automotive sector is no exception.

Created by Athlon, this subscription service targets corporate customers, offering a flexible alternative to fixed term leases. As soon as a contract is six months old, companies can end it without any early termination charges or reallocation difficulties. ChangeMyCar already has 50 corporate customers in the Netherlands and has started a trial in France. Drivers swipe their smartphone screen to find a ‘car match’ - cars are typically new to 24 months old, although drivers are also selecting older cars if the model and price are attractive.

Entirely app-based, including credit approval, Fair offers its customers access to used cars on car dealer forecourts. Customers pay a Start Payment followed by a fixed monthly fee, and can return their cars without penalties with just five days’ notice. Contracts include routine maintenance, breakdown cover, and the option of insurance. Fair is currently only available in the United States.

Mark Fitzgerald, director, Frost & Sullivan: “We are looking for subscription services to rocket from 2020 to 16.3 million vehicles by 2025. There is a lot of scope to be creative and bring innovation into the services packaged under a monthly fee. That can include parking, refuelling and recharging, and congestion fees. We believe there is huge potential growth for these subscription services throughout the globe.”

fair.com

athlon.com/nl

FLEET EUROPE #106

0 7 89

Launched in Italy by ALD Automotive, this flexible three-year lease offers unlimited mileage. There’s no deposit or final payment; and the monthly rental depends on how far the driver wants to drive. Three packages offer 300, 500 or 800km per month, and drivers can then buy mileage top-ups online. Road tax, service and maintenance, as well as breakdown cover and insurance are included.

Boasting fresh investment from Peter Thiel, co-founder of PayPal, Cluno is a Berlin-based subscription service for businesses and private individuals. All expenses, including car warranty, comprehensive insurance, road tax and winter tyres, are covered by the fixed monthly fee - drivers just pay for fuel. There’s a monthly cap of 1,250km, and contracts are for a minimum of six months, with a three-month notice period either to switch cars, or pause or cancel the subscription.

The technology platform behind Dribe, a Danish subscription service with no deposit, and all service, maintenance, tyres and insurance included, Flexdrive is a joint venture between Cox Automotive and ARI. The app links drivers with the inventory of their local car dealers, who continue to own the vehicles, in return for subscription fees. The all-inclusive contracts range from seven to 28 days, and drivers have the option to renew their subscription whenever they want. flexdrive.com

mobilitysolutions.aldautomotive.it cluno.com 20

FINANCIAL MODELS

FINANCE LEASE IS HERE TO STAY Benjamin Uyttebroeck

@uytteb

At a time when flexible mobility solutions are growing in popularity and importance, how is finance lease holding up? Fleet Europe spoke with Global Fleet experts Pascal Serres and Yves Helven.

“Finance lease is offered by most banks,” added Mr Helven, “so customers can stay with a bank they already have an established relationship with and that doesn’t require a strict credit check.” Mr Serres said: “Finance lease is also offered by OEM captive finance companies and by consumer credit companies. Large leasing companies typically don’t offer finance lease.” Contrary to operational lease, finance lease does not include operational costs like service and maintenance or insurance. Customers can choose to sign a maintenance and service agreement at their vehicle’s dealership, but that remains outside the scope of finance lease.

Buy-back “Self-employed people often prefer a finance lease,” said Mr Helven, “often with a relatively low residual value so they can buy the vehicle at the end of the lease.” Mr Serres believes the buy-back option is mostly a psychological argument, especially if the residual value equals

Finance lease is often offered by banks, which is convenient for small business owners. the market value. “The only advantage is that the driver already knows the vehicle, so he knows exactly what he is buying.” Customers that choose not to buy their vehicle at the end of their lease, can find it useful to be able to return a vehicle and not pay its residual value.

EVs in finance lease The future of mobility is electric, that’s something no one will dispute. At the same time, there’s growing demand for flexibility in mobility schemes. How can both trends be reconciled with finance lease? Mr Helven is convinced the importance of finance lease in managing electric fleets could grow. “Electric vehicles require far less maintenance than ICE-powered cars,” he said. “At the same time, usage-based insurance is growing. Fuel cards are no longer required and can be replaced by charging cards or a credit card. So, operational lease could lose some of its importance. Connected and electric vehicles solve part of the complexity that is a key driver for operational lease.”

Mr Helven believes this could boost the attraction of finance lease, particularly if fleets move away from the one-carper-employee scheme. “There will still be cars, but they will be shared. That moves you close to asset management, which is a good match with finance lease.” Mr Serres believes that operating lease will be the winner long term: “I think it makes more sense to evolve towards flexible financing solutions and finance lease is not flexible at all.” Both experts however agree finance lease is here to stay, but only time will tell whether it will grow its share of the car financing market.

“Finance lease can make more sense for shared fleets of EVs.” Yves Helven

FLEET EUROPE #106

“Finance lease is an alternative to pure credit with a number of added advantages in terms of risk management,” said Pascal Serres. “The lessor remains the owner of the asset. In the case of traditional credit, the customer has ownership of the vehicle, making it harder to recover the vehicle in case of non-payment.”

FINANCIAL MODELS

LEASE YOUR LCV Benjamin Uyttebroeck

@uytteb

LCV leasing has been around for a long time, but some companies still prefer to buy their vans outright. What benefits does each model offer?

LEASING OR BUYING RACKING “In many cases, our equipment is included in the lease,” said Thomas Johansson, Vice President, ModulSystem. The alternative, buying it outright, has a considerable financial impact as it requires an investment that can easily be worth 20% of the vehicle’s value. Life expectancy of LCV racking far outstretches that of the van it is installed in. The most fundamental difference between both models lies in the vehicle’s ownership. If you buy a van, you are its owner and it belongs to you absolutely. This also means you can keep it for as long as you like. At the same time, you are also responsible for all vehicle-related costs like maintenance, insurance, taxation. If you buy a van with cash, you should be in a strong position to negotiate a good price, particularly if there’s an older van you can trade in. However, this means the owner has to fork up the full price at once. Getting a loan is one way around this.

Another way of avoiding paying a lump sum is leasing. In that case, ownership of the vehicle stays with the leasing company and there are mileage restrictions you need to respect. Leasing, however, offers many advantages. At the end of the lease, your company can simply return the vehicle and swap it for a new one, ensuring that your fleet is always relatively new. There are no maintenance costs to pay and many lease packages include breakdown cover, so there are no unexpected costs and there is no hassle when a vehicle breaks down.

Nevertheless, life expectancy for racking far outstretches that of the van it is installed in. “Our products have a standard 3-year warranty,” said Mr Johansson, “but they can in some cases be used for 10 years or longer. Recently, we had a customer in Belgium with a racking we manufactured around 1994 that he wanted to move to a new vehicle.” In most cases, however, vehicles are sold on with all racking included. This avoids the hassle of removing and possibly reinstalling it, and it often has a positive effect on residual value.

TURKEY GIVES GREEN LIGHT TO LCV LEASING

FLEET EUROPE #106

The Turkish government passed a law that makes it possible for companies in Turkey to acquire light commercial vehicles through operational leasing. Previously, companies were limited to buying vans outright.

Inan Ekici, President, Tokkder: “I expect up to 20% growth a year.”

The ban was introduced in 2009 as a way to allow the authorities to keep track of corporate rolling stock. However, it also put a damper on economic development as a whole and on the Turkish leasing industry in particular. The relaxed rule is expected to boost the country’s economy, but it is limited to companies transporting their own goods and still doesn’t allow companies that transport goods for someone else (and not for themselves) to get an LCV under operational lease.

Inan Ekici, president of Tokkder, the Turkish vehicle leasing and rental association and Deputy General Manager of Otokoç Otomotiv, one of Turkey’s leading automotive enterprises, expects to see up to 20% growth a year. “But it depends on the economic conditions, which are not excellent at the moment: Turkish companies have a liquidity problem and interest rates are too high.”

SCHINDLER LIFTS UP CARGO BIKES @uytteb

Lift and escalator manufacturer Schindler is in the process of reviewing its mobility policy. Guillaume de Subercasaux, Global Category Manager Indirect Spend, told Fleet Europe about its policy for vans, electric vans and cargo bikes.

Guillaume de Subercasaux is reviewing Schindler’s mobility policy.

a van managed by leasing company Y? Schindler is currently in talks with Sortimo and various leasing companies to come up with a cost-effective solution.

Electric vans Schindler has started introducing electric vans to its fleet. “Leasing vehicles, whether they be passenger vehicles or light commercial vehicles, offers many advantages,” said Mr de Subercasaux. “Managing the fleet is taken out of your hands and the risk of residual value is externalised. It also offers us better prices for service and maintenance.”

Racking Managing racking solutions added to vehicles is mostly done on a country-specific basis. In some countries, a Sortimo team come to a Schindler location to install the racking. In others, the leasing company delivers the vehicle with racking already installed. However, the racking is never included in the lease price and it is bought outright even though Schindler is looking at ways to change this. Racking systems can easily be installed in two consecutive vehicles and this longevity raises questions in terms of management. Who removes the racking? Who installs it in the new vehicle? Should it be included in the first van’s lease or spread over the lease of two vans? What happens if racking from a van managed by leasing company X needs to be reinstalled in

In light of redesigned city centres with pedestrianised streets and traffic restrictions for diesel-powered vehicles, Schindler is looking at alternative ways of getting its technicians to their job sites, mostly within city centres. “We have started buying electric vans,” said Mr de Subercasaux, “and we expect to add many more in the coming months and years.” As most technicians work in a relatively small geographical area, range is not an issue. Charging is a challenge, though. Not all technicians have a house with a garage or a driveway and public charging infrastructure is often lacking. “This is the main obstacle that’s holding us back at this moment,” said Mr de Subercasaux.

SCHINDLER

21,000

vehicles globally

14,000 in Europe

(mostly in Germany, Switzerland, France, Spain)

60%

passenger vehicles

vans

15%

sales team

80%

At this moment, 10 Schindler technicians go to their job sites by bike. Feedback is overwhelmingly positive but participating technicians could be biased as they volunteered for the trial. Nevertheless, Schindler is expecting to add many more bicycles.

technicians’ vehicles

management

Bikes “As part of a full mobility review, we’re also adding bikes and cargo bikes to the mix.”

40%

In Europe 95% leased

non-leased (in certain Eastern European countries)

FLEET EUROPE #106

Benjamin Uyttebroeck

FINANCIAL MODELS

WHO WILL WIN THE BATTLE FOR THE FUTURE OF LEASING? @Frank_J_Jacobs

The leasing game is changing profoundly. Newer, more flexible forms of leasing are gaining ground. How will it affect the players of the game? Seven experts predict winners and losers - or rather: winning and losing strategies.

Multiple paradigms are shifting at the same time: ICE to EV, ownership to usership, car-isking to multimodal mobility. How is this impacting the ‘traditional’ lease industry?

FLEET EUROPE #106

Bart Beckers (Chief Operating Officer, Arval): “Especially the shift to usership has a positive impact on leasing. It means that, after SMEs, now private individuals are finding their way to full-service leasing. That trend will accelerate further, due to uncertainty around EVs, and especially around the remaining lifecycle of ICEs; and due to the rise of multimodal mobility, where the individual vehicle will remain the central pivot for some time, even if it may very well become a smaller one.” Danielle Maassen (Manager Business Strategy and Market Intelligence, Alphabet): “We see a shift from traditional operating and finance lease to user-chooser models of private lease, motivational

lease, subscription models and sharing. As a result, our customers are evolving from corporate fleet decision makers to include their employees, and more. That’s why customer demands are changing. From an industry perspective, I believe leasing and/or mobility providers must team up in order to succeed.” John Saffrett (Deputy CEO, ALD Automotive): “All these new products have operational leasing products at their core. They require the ability to finance, service and manage residual values. Private lease, ridehailing and even peerto-peer carsharing all are new customer experiences overlaid on old lease practices. For traditional lease companies,

that’s very good news: it means their expertise is increasingly valuable.” André Schreuder (Fleet Development Manager, Toyota Financial Services): “The industry is quickly moving away from traditional finance and must adapt to fast-changing customer needs, especially with custom-made mobility financing products.” Pascal Serres (Expert, Global Fleet and Managing Director, Moby-D): “There is an incredible shift under way, for the time being dominated by private leasing. It’s a huge opportunity, but also a major disruption. Before, the market was neatly divided: multibrand players serviced corporate business, captives focused on financing dealer and retail

Hans Kolff (Director International Sales, Business Lease): “In this new paradigm, we believe in our multi-brand proposition. We think it’s about high quality and customisation: providing a customised mobility solution that keeps drivers happy and driving. Providers able to offer such flexible environments are mostly multibrands, as that is the more effective way to incorporate TCO, market specifics and market trends.” John Saffrett: “Captives are inherently dependent on the quality of their OEM’s product. Multibrands aren’t and focus more on developing products and services – the ability to manage maintenance and repair, offer daily rentals, etc. That requires scale which cannot be built overnight. For captives, that can prove challenging.” Knut Krösche (Managing Director, Volkswagen Leasing): “What’s important is not whether the lessor is multibrand or captive, but whether it’s able to meet the various mobility needs of its customers. We feel very well positioned to do so.”

Bart Beckers, Chief Operating Officer, Arval

Knut Krösche, Managing Director, Volkswagen Leasing

André Schreuder: “We believe that as a captive, we can provide tailor-made offers together with our brand partners Toyota and Lexus that support the needs of our fleet and private customers, for both new and used vehicles.”

In the emerging new mobility ecosystem do captives have the advantage over multibrands, or is it the other way around? Danielle Maassen: “It really depends on who can leverage expertise and experience from their entire organisation. Non-captives seem faster at adopting change. Captives may be slower to move, but they can put more power behind their moves, with the benefit of their mature backers.”

Pascal Serres, Expert, Global Fleet and Managing Director, Moby-D

How should lease players adapt their existing financial models? Or should they be prepared to adopt wholly new ones? Bart Beckers: “Arval’s strategy for the coming years includes numerous growth levers across various segments and distribution channels, but always focused on bundling relevant mobility services

Danielle Maassen, Manager Business Strategy and Market Intelligence, Alphabet

FLEET EUROPE #106

business. But the multibrands’ growing appetite for private lease will cannibalise the captives’ financial product.”

Pascal Serres: “The captives will have to counter the offensive by the multibrands by offering full-service leasing. In my opinion, the German captives are maybe ready. The French ones have yet to see the opportunity. And the Asian and American brands are nowhere. I see the multibrands gaining market share over the next few years. But then, perhaps in three years’ time, the OEMs will strike back. They have more extensive networks, deeper pockets.”

FINANCIAL MODELS

in function of client/driver combinations. While the vehicle will remain key for some time to come, we see these bundles becoming more flexible in terms of duration and type. Increasingly, sharing and other mobility solutions will be added to the bundle.”

John Saffrett, Deputy CEO, ALD Automotive

Danielle Maassen: “Alphabet has shifted from a full-service lease company to a mobility company to serve our larger customer base. Our strategy is to be at the forefront of change and to deliver innovative products to meet the needs of our customers. In addition, we are open to partnerships with key mobility players to boost our offering.” Hans Kolff: “Our ‘Innovation Lab’ is solely dedicated to creating new products and services based on customer needs, which the customers can then seamlessly integrate into their portfolios. This way, we’ve developed private lease for employees, carsharing platforms for existing fleets, used-car leasing, etc.”

André Schreuder, Fleet Development Manager, Toyota Financial Services

FLEET EUROPE #106

Hans Kolff, Director International Sales, Business Lease

John Saffrett: “First off, we keep the engine powering our core business – our expertise in financing, servicing and remarketing vehicles – running as smoothly as possible. On top of that, we’re also focusing on five product development areas: our digital capabilities, flexibility and multi-modality, e-mobility, building a mobility platform for Mobility as a Service, and travel and payments. Change won’t happen overnight. But we are developing our fully-digital private-lease capability in 11 countries, to name just one example.” André Schreuder: “We are focused on developing and providing new financial solutions to our customers across Europe, which supports our hybrid as well as fuel-cell (hydrogen) product.”

In the long run, who will win the race for the future, captives of multibrands? Or will that perhaps no longer be a useful distinction in the future? Bart Beckers: “Most captives are caught in the middle: historically, they supported volume build-up for their OEMs, but

the future is in maximising utilisation and delivering services in a multimodal environment. Most OEMs do understand they must focus on customer service and multimodality, but only time will tell whether they can combine that with the investment required by the energy transition. But we may also see OEMs turn into companies more like multibrands, in an attempt to get the best of both worlds.” Danielle Maassen: “We don’t believe the distinction between captive and non-captive will determine the degree of success. Rather, it will be the fast adapters and fast deciders that will win the race.” Knut Krösche: “The captive and non-captive areas will become increasingly blurred. Fleet customers especially demand a singlesource, multi-brand capability. As a global player, you have to meet this demand. That’s why we have the medium-term goal of achieving a 15-20% share of foreign brands in Germany. In other countries, we’re already further ahead. In the end, those captives will prevail who will be able – together with their parent companies – to develop strongly integrated mobility solutions.” Hans Kolff: “We see others joining the race – new players who are neither traditional captives nor multibrands. Ultimately, the winners will be companies able to adapt quickly while maximising customer satisfaction.” Pascal Serres: “In the long term, we’ll have a few very big companies – positioned between OEMs and service companies – offering asset management. A hypothetical example: Amazon selling car usage. They wouldn’t be building, nor funding or servicing the cars, merely offering someone else’s products (a car, a funding solution and the service). It’ll be a bit like the airplane industry today: because planes are so expensive, only a few big companies produce, finance or operate them. In 20 years, it will perhaps be as exceptional for individual people to own a car as it now is to own a plane.”

FINANCIAL MODELS

THE FUTURE OF LEASING IS STILL BRIGHT @StevenSchoefs

“Leasing companies are expanding their attention from large fleets to SMEs and smaller fleets, which is new, because today, confronted with a more mature and saturated large fleet market, every contract counts,” says Mr Knubben. “Another trend is the growing popularity of fleet management solutions, consultancy provided by leasing companies without the actual financing of the vehicles. So, we still count on a healthy growth in our sector, although more in new client segments.”

How do you see the emergence of private leasing in Europe? “It is remarkable how private lease has rapidly gained popularity and is now offered in almost every country. Today, it’s the product that drives the success of car leasing. In Belgium, for example, the concept is growing steadily, although the product hasn’t penetrated the market yet to the same degree as we have seen in pioneering countries such as the Netherlands or Denmark. Its success in these countries is partly the result of the standards that their respective authorities put in place together with the leasing sector concerning issues such as end of contract damage, in order to position private lease as an honest consumer alternative. It’s an initiative

that should be taken in other countries also, because consumer trust is an absolute condition for private lease to be successful.”

Private leasing makes leasing companies enter the B2C-market. Do you see a shift from B2B to B2C? “Not really. The B2B-segment remains quite stable. B2C is an extra market that provides supplementary growth. Of course, political decisions can result in rapid changes, but that remains to be seen.”

What is the impact of IFRS16 on the popularity of full service leasing with multinational companies? “Accounting changes have no impact on the real benefits of leasing solutions. Fleet lessors are providing practical support to help their customers prepare their first accounts using the new rules. So, it’s still early days, but we don’t expect any significant impact for multinational companies. It could be different if Europe’s small and medium-sized companies had to follow similar rules, as the accounting could represent an unwelcome extra administrative burden, but fortunately that’s not being proposed at present.“

Is your sector prepared for the move towards mobility? “That really depends from company to company and even more from country to country. Some of them are really innovative and develop new services and partnerships, others remain more traditional. The possibility to innovate is often driven by the existing national regulatory framework, underlining the need to have strong national sector representation. For example, in markets where company car taxation keeps on increasing, it is more

According to Richard Knubben of Leaseurope the private leasing concept will play a significant role in the vehicle finance environment.

difficult to sustain a healthy profit and devote more resources to launch new services.”

How will Brexit impact leasing companies? “For leasing companies outside the UK, we do not expect a real impact, because the second hand market for European end of contract leasing vehicles does not lie in the UK. Of course, British leasing companies are facing uncertainty and are working closely with their supply chain to minimise disruption and confusion for customers. Our UK member, the BVLRA and FLA are providing guidance on these issues.”

“Private lease is driving the success of car leasing today.” Richard Knubben (Leaseurope)

FLEET EUROPE #106

Richard Knubben, Deputy Director-General at Leaseurope, the European association of leasing and rental companies, shed his light on the recent evolutions in the leasing market.

NEW ENERGIES

THE TURNING POINT CALLED GENEVA @DieterQuartier

Rather than an explosion of visionary concepts, the 2019 Geneva International Motor Show was quite down-to-earth. Its relevance is questioned by the OEMs, who are forging new partnerships as they transition to electric and shared mobility.

Electrification for the masses is around the corner, with the Peugeot e-208 as a promising newcomer in the B-segment. Like the IAA in Frankfurt and the Mondial de l’Automobile in Paris, the Geneva International Motor Show (GIMS) is an institute that struggles to justify its raison d’être. For car manufacturers there are less expensive – and arguably more exclusive and effective – ways of presenting new vehicles.

FLEET EUROPE #106

Nonetheless, the 2019 Geneva motor show was worth our visit because it still gave a taste of what is cooking in the OEMs’ kitchens as they transform from carmakers to mobility providers. The new strategic relations that are being forged make for lively discussions amongst the different stakeholders – from leasing companies and fleet owners to suppliers and media. And of course, there were some interesting novelties, especially in the e-range, like the Peugeot e-208, the Polestar 2, the Honda ‘e’ and the Seat El Born.

Change is in the air

This Polestar 2 is a Sino-Swedish alternative for the Apart from electrification Tesla Model 3 and makes its way to Europe in 2021. en masse, four phenomena made the 2019 GIMS different from the previous editions. First, stage. Have we reached the point in the the ‘lesser gods’ – brands that usually innovation curve where after the initial have a smaller booth, like Mazda and buzz, things slow down before they Subaru – now had room to display all really take off? Or do OEMs feel the their cars and then some, taking up public is tired of vague or unrealistic the space that would otherwise be left promises and had rather see concepts empty by the no-showers. that are nearly production-ready? Also, the ‘big’ premieres – at least for the fleet industry – were ‘small’ cars, like the Peugeot 208 and the Renault Clio. The Germans are clearly reserving their important launches for Shanghai this month or Frankfurt in September. Thirdly, there was a flagrant lack of visionary mobility concepts. No VTOL (Vertical Take-Off and Landing) prototypes like the one presented by Airbus and Italdesign two years ago, no self-driving shuttles appearing on

Finally, manufacturers are reconsidering how they treat each other and how to communicate in a world that evolves towards MaaS (mobility as a service). Central in this evolution will be the autonomous, electric and connected cars.

New alliances forging As a case in point, arch rivals BMW and Mercedes suddenly seemed BFFs with their booths literally flowing over in one another and a giant display

Stuttgart and München will be working together on mobility services and autonomous driving, to be precise. Not because they really like each other, but out of necessity – they must scale up and take a joint R&D approach to spread the costs and accelerate the roll-out. That’s the only way to beat the non-automotive competition (Waymo, Uber, Didi, Lyft, and so on) and direct rivals. Recently Ford and Volkswagen also announced an industrial partnership, one that stretches far beyond self-driving technology. Talking about Volkswagen, the German brand said in Geneva it would be sharing its modular electric platform with whomever wants to use it, with the goal of scaling up production and driving down costs. That could help out FCA, which has a lot of catching up to do. Still, rumour has it the Italian group is in talks with PSA, which is on the hunt for new brands.

The hard 95g/km target Massive electrification is the only way for OEMs to achieve Europe’s volume-weighted CO2 target of 95g/km. Looking at recent figures from Jato Dynamics, most brands need to step up their game – to express it mildly – to avoid monster fines. The best pupil of the class of 2018 is Toyota. The Japanese carmaker posted an average below 100g/km for the first time since tracking of the average CO2 emissions began. It owes this remarkable performance to the fact that last year, 60% of its registrations were within the hybrid range. Nissan also deserves kudos for its results, in which the successful electric Leaf has played a big part. At the other end we find MercedesBenz, which posted a worrying 139.6g/km for its 2018 car registrations – up 10.5g/km from 2017. The conclusion here is not that Mercedes builds less efficient engines or bigger cars than before, but that it used to be very diesel-focused and saw many customers switch to petrol. Also, WLTP dropped the axe on a few CO2-friendly entry-level diesel models.

The year of the EV But 2019 is the year of the EV, if we may believe the car manufacturers we interviewed at the Geneva Motor Show. The EQC should help Mercedes shave a few grams off the 2018 number. The same goes for the new plug-in hybrid models that are or will be available in the C Class, E Class and GLC, to name the most important ones. A similar story develops at Audi, where all eyes are on the e-tron, which will get the support of plug-in hybrid Q5s, A6s, A7s and A8s. But these cars will not represent big enough numbers to talk about mass electrification – or electrification for the masses. A car that may mark the beginning of just that is the new Peugeot 208, which will be available immediately as a battery-electric vehicle. It features a 50-kWh battery yielding 340km of range and a charging capability of 11kW AC or 100kW DC – halving the time needed to top up.

TOWARDS 95G/KM AND A GREENER FLEET Watch the video Fleet Europe made at GIMS 2019 on the 95g/km target and what OEMs are doing to help fleets reduce their carbon footprint, including interviews with Cédric Douls, VP International B2B Sales at PSA Groupe; Axel Just, Senior Manager Fleet Sales Europe at Audi; Jochen Hermann, Head of CASE and eDrive development at Daimler; and Christophe de Beaumont, Europe Corporate Sales General Manager at Nissan.

CONNECT YOUR FLEET, REDUCE YOUR FOOTPRINT Learn how connected cars and telematics can save business miles and CO2 emissions with this video Fleet Europe shot at GIMS 2019, featuring Mike Whittington, Vice President, Global Sales Operations at Polestar; and Olivier Marion, Fleet Finance Director at RCI Banque.

TOP 20 BEST-SELLING BRANDS RANKED BY AVERAGE CO2 EMISSIONS

Av. CO2

(g/km)

2018

2017

Position

2017

1. TOYOTA

99.9

101.2

2. PEUGEOT

107.7

104.5

3. CITROËN

107.9

105.5

4. RENAULT

109.1

106.6

5. NISSAN

110.6

115.8

6. SUZUKI

114.2

114.9

7. SKODA

116.7

115.9

8. SEAT

116.9

118.0

9. VOLKSWAGEN

118.8

119.5

10. FIAT

119.2

115.6

11. KIA

120.4

120.1

12. DACIA

120.8

116.9

13. HYUNDAI

123.3

122.0

14. FORD

123.7

120.8

15. OPEL/VHALL

125.6

123.4

16. AUDI

127.6

124.3

17. BMW

128.9

121.8

18. VOLVO

130.0

124.3

19. MAZDA

135.2

131.2

20. MERCEDES

139.6

129.0

(-1.4)

(+3.2)

(+2.4)

(+2.5) (-5.2)

(-0.7)

(+0.8) (-1.1)

(-0.7)

(+3.6)

(+0.4) (+3.9) (+1.2)

(+2.9)

(+2.3) (+3.3) (+7.1)

(+5.8)

(+4.0)

(+10.5)

Source: JATO

FLEET EUROPE #106

highlighting the new-found friendship between the two.

NEW ENERGIES

WATER CAN POWER YOUR NEXT CAR Benjamin Uyttebroeck

@uytteb

Batteries are fully electric vehicles’ Achilles’ heel. Adding a hydrogen system to the mix avoids that weak spot but it doesn’t solve range issues and it is costly. An IsraeliAustralian company has developed a new hydrogen mix that solves the puzzle, offering zeroemissions, long range, and low cost.

ELECTRIQ~CAR: HOW IT WORKS

Electriq~Fuel Tank

Electriq~Switch

Electriq~System

Fuel Cell Stack

Existing Hydrogen Fuel Cell

Motor

Power Control Unit

The company is called Electriq~Global and their Electriq~Fuel is comprised of 60% water. The other 40% is a chemical mix, primarily a salt chemical (BH4). The fuel reacts with a catalyst (Electriq~Switch) to release hydrogen on demand. Spent fuel is captured and taken back to a plant to be replenished with hydrogen and water for re-use (Electric~Recycling).

FLEET EUROPE #106

Electric~Global’s technology can use low-purity industrial hydrogen that is a by-product of other chemical processes, such as the production of chlorine or steel, and that is now often wasted or torched. If renewable energy is used to recycle Electriq~Fuel, they have a valid claim to offer a zero-footprint technology.

Profitability “I’m a strong believer in such technologies,” said Mark Pecqueur, automotive technology researcher at Thomas More university. “The main problem is

that you need to work on a huge scale to make the chemical processes profitable. The Israeli geopolitical context gives the country an additional impetus to find ways to store energy without resorting to fossil fuels, so I believe they could be successful.” According to Electriq~Global, their ecosystem requires very little specialised infrastructure, unlike battery-electric vehicles and compressed hydrogen technologies. The company’s goal is to offer Electriq~Fuel at all petrol stations, which should require little modifications to petrol station pumps. Roy Kerem, Business Development Manager, Electriq~Global, said: “We are teaming up with refineries and industrial plants that produce hydrogen as a by-product to jointly develop fuel recycling sites. The company also wishes to team up with gas transporters and downstream partners to build the fuel distribution infrastructure.”

Mr Pecqueur confirms Electriq~Global has a valid business case: “As long as batteries need rare earth materials, hydrogen definitely has a future. There are laboratory tests with groundbreaking new battery technologies, but those are not market-ready, in contrast to hydrogen. This is particularly true for lorries or aviation, applications where batteries are hardly an option.”

Prototypes Mr Pecqueur’s view on hydrogen’s future is mirrored by Electric~Global’s initial market focus, which is on large vehicles like lorries, buses, logistics vehicles, trains but use in passenger vehicles is certainly a possibility in a later stage. Prototypes are in development at this moment and the company already has an e-bike demonstrator. Road testing for the first vehicles is set to start later this year.

CONNECTED

CONNECT TO EXPERTISE @DieterQuartier

Data-driven services and solutions can grow your business, maximise efficiencies and support you in achieving your strategic goals. Connecting your fleet is therefore a must, but so is doing it the right way. Getting a 360-degree view on the market as well as field input from experts is crucial to make an informed decision and get the return your company needs. That is why Fleet Europe is organising its first-ever Connected Fleets Conference, a must-attend event for Fleet & Mobility Managers, CFOs, CPOs, CIOs, COOs or HR Directors representing multinationals, leasing and rental companies and carsharing operators. Getting to know the multi-layered playing field, understanding the technology and the possibilities, determining the right KPIs and exploring the suppliers is at the heart of this highlevel event, which has the ambition to make you a better technology buyer.

Tap right into the source Electrification, mobility and connected tech development will accelerate the amount of vehicle data produced. How to build a telematics roadmap, become a better technology buyer and leverage what you need for your fleet? The Connected Fleets Conference in Brussels is where you will find your answers.

F L E E T E U R O P E CONFERENCE 2019

On 15 & 16 May 2019, the Van der Valk Hotel near Brussels Airport will be a hotspot for corporate decision makers responsible for buying telematics services, data mining solutions, and innovative vehicle fleet management technology. With a special focus on mobility management enablers, data-driven insurance and tech innovations, this first ever Connected Fleets Conference will bring you both disruptive and added value insights to generate efficiencies with your vehicle fleet and mobility programme.

Sharing best practices “Connectivity leads to the need for data management. Electrification, mobility and autonomous tech development will accelerate the amount of data produced. All the data generated from a connected fleet can be overwhelming and perceived as a threat,” explains Steven Schoefs, chief editor of Fleet Europe. “However, when mined, analysed and leveraged in the right way it can be turned into fleet management efficiencies.” The focus of this high-level event is on learning, creating a global vision and sharing best practices. Of course, you will have plenty of opportunities to network with peers and suppliers. At the end of the conference, you will better understand how to map your technology needs, how to achieve the desired ROI and how to convince the different stakeholders.

FOR MORE INFORMATION ABOUT THE COMPLETE PROGRAMME AND REGISTRATION:

FLEET EUROPE #106

On 15 & 16 May 2019, Fleet Europe organises for the very first time a high-level event for international decision makers looking to understand, buy and implement connected technology for their fleets.

SHARED MOBILITY

FROM ZERO TO A FULLY SHARED FLEET Fien Van den Steen

Donâ&#x20AC;&#x2122;t say shared mobility to shared mobility. When it comes to corporate fleets, there are various degrees for sharing, so pick the one that suits you most. Phase Degree of sharing

Car ownership

No shared mobility

Some shared vehicles

Shared within the company

External shared fleet

Multimodal fleet

Some employees have their own company car. They can sign up for a shared programme, such as carpooling together to work, or having their car be part of the shared company pool when they are not using it.

Employees do not have their own company car. The entire fleet is part of the pool of shared vehicles.

Employees do not have their own company car.

In addition to shared cars, the company adds other shared mobility options, such as bikes, scooters, public transit or ridehailing.

1 car for every employee.

Employees can use the vehicles according to availability.

As such the fleet manager does not only offer shared mobility, but mobility as a service. The company can opt for its own services or work together with external service providers.

FLEET EUROPE #106

Fleet ownership

The company owns or leases the fleet. Some employees have an assigned vehicle.

The company owns or leases the fleet. No employees have an assigned vehicle.

The company has no company-owned or -leased fleet, but uses the fleet of an external shared mobility provider.

Classic leasing Fleet management model.

The company can choose to create its own shared mobility platform in which the shared cars are listed. This platform can vary from basic (a couple of cars, managed by the fleet manager), to a well-developed platform, depending on the particular needs of the company.

The company can use a corporate platform, created from scratch, or use the tailor-made, white label platform services from an external shared mobility platform provider.

The company collaborates with an external shared mobility provider and uses its fleet.

Good to know

Before you can start shared mobility, you need to: 1. have a solution for key management, and

To avoid hassle within the shared fleet, make sure to establish keyless access to the cars.

The degree of cooperation can vary from merely using the fleet, to giving all car-related issues out of hands, such as insurance, fuelling, and maintenance. As such, the fleet manager can focus on dispatching, which can be done by using the platform of the shared mobility provider.

The company owns or leases the fleet. All employees have an assigned vehicle.

Currently this is the most used model. Under pressure of the shared economy, traffic and parking restrictions, shared mobility is on the rise. Moreover, some employees already prefer a shared vehicle rather than one parked in front of the door.

2. gather insights in driving patterns and needs.

Further on, if you prefer an electric shared fleet, make sure to take the charging management into account â&#x20AC;&#x201C; which can be set up by dedicated platforms.

IN CASE OF MOBILITY AS A SERVICE

Degree of sharing

No shared mobility

Some shared vehicles

Shared within the company

External shared fleet

Multimodal fleet

Vehicle and fleet ownership

The company has or leases its own fleet of bikes / scooters / … which it assigns to its employees based on 1-on-1 principle.

Company has a fleet of bikes / scooters / … which are assigned to particular employees, but they are available to be used by other employees as well.

Company owns a fleet of bikes / scooters / … which can be used by all employees.

Company does not own a fleet but uses the fleet of an external mobility provider. This can be a bike sharing service, a scooter sharing service, another mobility service provider, or a combination of various providers.

Phase

Employees do not have their own vehicle. The shared fleet can be managed by the fleet manager whether or not in cooperation with an external mobility platform provider.

The company can choose to use its own tailor-made platform, the white-label platform of a MaaSprovider, or outsource the entire MaaS service to an extern company.

GET READY FOR THE INVASION OF THE TRIKES

The UK government has announced plans to invest £90 million in new mobility solutions and outlined 9 core principles for the future mobility of passengers, goods and services.

They’re called rickshaws or tuk-tuks in Asia, where they’re often the dominant mode of transport. Electric versions of these handy tricycles (‘trikes’ for short) could be the future of last-mile delivery, and take over the streets in Europe.

Read about them online:

Read more on:

FLEET EUROPE #106

THE 9 PRINCIPLES OF FUTURE URBAN MOBILITY

MAAS

WHEN FLEET AND BUSINESS TRAVEL MEET Jonathan Manning

The growing momentum behind the mobility revolution is bringing corporate travel and fleet managers closer together.

Goodbye total cost of ownership. Hello total cost of mobility. The arrival of big data is giving companies an unprecedented opportunity to investigate their cost bases, and analyse not simply the price of a journey but also its value in terms of return on investment. The result is an emerging scenario that challenges the business case for maintaining a company car fleet, with its associated high fixed costs. The alternative is a pay-on-use policy for business travel that selects either the cheapest or most time efficient or most productive mode of transport for every journey. “These days there’s a much more holistic view when you look at the overall efficiency of the way a company and its teams work, and how they put their people in front of customers,” said Paul Tilstone, managing partner of Festive Road, the travel management company.

FLEET EUROPE #106

The true value of travel “There’s a greater use of data to try and analyse what the return on investment in travel brings to an organisation and to determine whether travel directly contributes to top line revenue and conversely to understand what the impacts of cutting travel is on the top line.”

This type of analysis enables companies to identify which customers merit a visit, and which are more cost effectively served via telesales or online channels. More importantly, it creates an environment where the costs of a company car are directly compared with those of alternative modes of travel, and aligns the fleet department more closely with the business travel department. “If you take a holistic view of your business, your culture and the reasons why people travel, and look at the modernisation of ground transportation and all the different options, from hire car to Uber to taxi to long-term fleet and grey fleet, there are definitely options to combine that perspective with business travel and create a policy and processes and procurement procedures that benefit the organisation,” said Mr Tilstone. But, he warned, you can’t just merge fleet and travel functions together and automatically expect lots of benefits; success requires a long term perspective, even if the trend is clear.

Fleet and travel are merging Vinzenz Pflanz, senior vice president corporate sales, Sixt, said corporate fleet and travel departments are definitely growing closer together.

Paul Tilstone, managing partner, Festive Road, sees a clear trend to combine the modernisation of ground transportation with business travel.

cost of a journey,” he said at an ACFO webinar last autumn. Mr Pryor believes the transition from fleet to travel will be demand-led by employees, and the role of the company is to make this transition seamless. “Ultimately, as a business, we do not mind how people get to their destination as long as we know the total cost of a journey and we believe the journey is undertaken safely and in the most cost-effective way,” he said.

Younger employees want new solutions Speaking at the same event, David Oliver, procurement manager, Red Bull UK, said the propensity of the company’s younger city-based employees to question ‘the need and cost of company cars’ and their enthusiasm for companies like Uber and Airbnb, was helping to shape the services that Red Bull will offer to its staff.

“While fleet has been mainly with a high involvement of HR in the past and travel was more related to procurement we saw that the allocation of the fleet department moved a lot to procurement,” he said. “And with that move, starting years ago, travel and fleet came under one roof. The logical next step is that you have a kind of mobility manager, where you have fleet and travel under one person. We see a big trend towards merging both commodities into one.” As big data reveals the bottom line costs per mile of both fleet and business travel, there’s no escaping the threat it poses to traditional company cars. In their place, employees could be offered a mobility budget which they use to pay for their business trips,

undermining the default ‘car first’ decision that prevails in many companies.

Total cost of mobility High quality and meaningful information is vital for John Pryor, fleet and travel manager at Arcadia Group, and chairman of ACFO, the association of UK fleet managers, as he focuses on the total cost of a journey, not simply the headline cost of a rail ticket, flight or a car’s pence per mile figure. “We have policies and processes in place, but true mobility management comes down to collecting data relating to fleet and ground transportation, air, rail and hotel bookings and expenses payments - parking, tolls, subsistence plus individual items. All of that added together gives the business the total

Red Bull is a big advocate of public transport, which when used correctly, “affords a safe and cost-effective service,” said Mr Oliver. The key is to “empower employees to make the right decision about how they travel from A to B. Most organisations would be mad to keep fleet and travel expenditure apart.”

“You can’t just merge fleet and travel functions together and automatically expect lots of benefits.” Paul Tilstone (Festive Road)

FLEET EUROPE #106

Business travel and fleet are both working closely with procurement departments.

The company already uses data to undertake “end-to-end trip analysis” on key business routes with the support of its travel company, “to see what we are doing; how much it is costing us: and then it is up to us to see if it fits our policies.”

SAFETY

FROM SPY IN THE CAB TO GUARDIAN ANGEL Mark Sutcliffe

Since last year, all new cars and light vans sold in the EU are equipped with on-board telematics systems which could be used to monitor drivers’ behaviour behind the wheel. This mandatory technology could also save their lives. Since March 2018, all new cars and light commercial vehicles sold in Europe must incorporate an eCall button which allows the driver to seek emergency assistance in the event of a serious accident. Essentially, this means that all new cars, by default, have the necessary connectivity for telematics and tracking fitted as standard. As well as making telemetry systems cheaper and easier to install, it will be increasingly difficult for drivers to refuse installation of some form of telemetry. The measure – which was initially opposed by the UK Government on costs grounds – works by automatically alerting the local emergency services in the event of a serious accident. Onboard sensors can detect the severity of the accident, the fuel type of the vehicle (increasingly important as more vehicles will be electrically driven in future), the number of passengers and the exact location.

FLEET EUROPE #106

The measure is predicted to have the potential to reduce fatalities on EU roads by around 10% per year by cutting emergency services response times by half as emergency services will be alerted automatically even if the casualties are unconscious.

Privacy concerns Privacy concerns delayed the introduction of the technology, but eCall only transmits data that is absolutely necessary when an accident occurs.

Information only leaves the car in the event of a severe accident and is not stored any longer than necessary. Now the ¤100 system is installed in all new cars, it paves the way for the introduction of an increasingly standardised and uniform suite of additional safety devices which could make European roads still safer over the next decade. In a paper published last year, the European Commission called for a halving of the number of serious injuries by 2030 by making greater use of a ‘Safe System’ approach to minimise

the potential for accidents caused by human error. In February, MEPs backed the introduction of much more stringent vehicle standards to make it mandatory for vehicle manufacturers to include the latest safety measures including Automated Emergency Braking, Intelligent Speed Assistance and Lane Change Warnings. The European Parliament also wants highways agencies to upgrade roadside safety infrastructure – for example – ensuring road markings are consistent and clear enough for lane departure warning systems to work effectively.

Autonomous vehicles It is the potential for the next generation of cars and vans to communicate with each other and roadside technology that could have a dramatic impact on road safety over the next decade. While privacy concerns continue to be voiced, these proactive accident avoidance systems will minimise the scope for human error and pave the way for the broader adoption of autonomous vehicles. Road safety campaigners have identified excessive and inappropriate speed as the number one cause of deaths and serious injury and are prioritising the introduction of Intelligent Speed Assistance, which detects the prevailing legal speed limit from road signs and restricts the vehicle to that limit unless the driver overrides it. ETSC communications manager Dudley Curtis said: ”Intelligent Speed

Assistance could be a game-changer because speeding has such a large effect on the number and severity of collisions. In the near future, vehicle-to-vehicle and infrastructure-to-vehicle communications could enable early warnings of temporary speed restrictions ahead due to road works or weather events, which could also help improve safety.” “We think fleets should be focusing on technologies already available that can prevent collisions, serious injuries and deaths today. Requiring all fleet vehicles to be equipped with automated emergency braking with pedestrian and cyclist detection, intelligent speed assistance and seatbelt reminder systems in all seats would be a great start.”

Mobile devices Ironically the communications technologies that underpin proactive safety devices are believed to have contributed to a plateauing in the rate

of accident reduction across Europe since 2013. Distraction from mobile devices is implicated in a significant proportion of serious road accidents and road safety campaigners want a crackdown on the use of mobile devices while behind the wheel. Several countries including Ireland and Italy have considered increases to fines or the number of penalty points for drivers caught driving while distracted. The UK doubled its fines for distracted driving in 2017 and Traffic Safety Netherlands has called for distraction to be punished as heavily as drink driving. Innovations such as Apple’s default ‘Do Not Disturb While Driving’ and similar apps for Android devices are likely to have a greater role to play in restricting company car drivers’ in-car phone usage in future.

A ROADMAP TO SAFER HIGHWAYS Mark Sutcliffe

The technology that underpins these four proactive safety systems is already available. Making them mandatory on new cars could save thousands of lives every year. The European Transport Safety Council (ETSC) has identified a number of safety measures which can be adopted almost immediately that would have a significant impact on the number of fatalities and serious injuries.

– automatically apply the brakes. They can’t always avoid a collision but the severity of the impact is often reduced.

Intelligent Speed Assistance (ISA)

Autonomous Emergency Braking (AEB) Already available on some cars, these systems use radar and/or lidar sensors to warn when a collision is imminent and – if the driver doesn’t react

Attention Assist Lane Departure Warning/Assist These systems vary slightly: the basic system warns the driver via an alarm or a vibration on the steering wheel when the vehicle veers close to the edge of the motorway lane. More advanced systems are now capable of nudging the vehicle back into line without any input from the driver.

Uses sensors to monitor the driver’s eye movement and if they show signs of fatigue or drowsiness, tells them to take a break before continuing.

FLEET EUROPE #106

Inappropriate speed is the leading cause of fatalities and serious injuries on the road, yet observation of legal speed limits remains poor. These systems use in-car telemetry or in some cases, geo-fencing to prevent vehicles exceeding the legal speed limit.

LAST MILE

PARCEL DELIVERY COMPANIES TAKE TO THE SKIES Benjamin Uyttebroeck

@uytteb

As more consumers turn to the web for their shopping than ever before, the number of delivery vans is growing, too. At the same time, traffic congestion and regulation limit their mobility. The solution may lie in delivery drones. Last December, London Mayor Sadiq Khan had to ask online shoppers not to have parcels sent to their offices because delivery vans were clogging up the UK capital’s streets. Christmas shopping may be behind us today, traffic congestion isn’t. It should come as no surprise that delivery companies are looking for alternatives to van deliveries, like

An Amazon drone taking off from a launch platform during testing.

FLEET EUROPE #106

Regulation In many areas, drones are not permitted to fly over people, seriously limiting their usability. Often, regulation requires a direct line of sight, meaning the pilot needs to see the drone at all Mercedes-Benz and Matternet use a van as a mobile drone launch platform. times. Flight speed and elevation are also drones. Drone deliveries have been frequently restricted. Environmental tested in various places worldwide. In concerns (bird strikes) and noise polluits production site in Friedrichshafen, tion are also concerns with regard to Germany, automotive parts supplier ZF drone operations. is operating automated drones to fly spare parts from one part of the site to Using drones doesn’t necessary the other. Each drone can carry a packexclude other means of transport. age of about 5kg but excluding the Together with Matternet, Mercedesgrippers and the transport box, that Benz is conducting trials with drones leaves about 3kg for the actual cargo. that use vans as their launch platform, allowing the van to drive to a central Most cargo drones that are being used location and launch one or more drones today have a cargo limit between 2kg to cover the last mile. and 5kg. Battery life for electric drones is limited, and prices for non-electric In a more sci-fi-sounding scenario, simidrones (with ICE or solar powered lar projects are possible by swapping the engines) make them less ideal for van for an airship. Amazon filed a patent immediate deployment. for this technology but no concrete tests have yet been undertaken.

SHIP NOW, ORDER LATER Delivering packages faster isn’t only a matter of delivery technology, it’s also a matter of big data. An interesting example of big data is Amazon’s anticipatory logistics system, which should enable virtually instant deliveries. As sameday deliveries are no longer enough to stand out from the online crowd, Amazon wanted to do even better. One way to do that, is to predict what customers will order and to ship the product closer to their home before they actually hit the Add to my basket button. Amazon has filed a patent for its anticipatory logistics system, which is based on a series of data like historical purchase patterns, consumer preferences gathered through surveys and browsing data. The company’s slogan: “What you want, before you want it.”

A C O M M O N V O I C E T O W A R D S T H E M A R K E T, PA R T N E R S A N D S U P P L I E R S

The Car Remarketing Association Europe (CARA) established by key players in the used car market industry 6 REASONS TO JOIN CARA 4. Network with decision makers.

1. Get unique industry insight. CARA is a forum for top remarketing execs to

As a non-profit, CARA offers a unique forum to

share their views and knowledge.

engage with the industryâ&#x20AC;&#x2122;s top deciders. 5. Create synergies to benefit your business.

2. Help develop industry standards. CARA creates and improves standards and shares

In the multi-faceted world of remarketing, CARA is

best practices for the European used-car trade.

the place to bundle and defend shared interests.

3. Learn about digitisation and new market trends.

6. Give the industry the voice it needs and deserves.

CARA aims to understand and enhance new

CARA is committed to defend the industryâ&#x20AC;&#x2122;s interests,

remarketing business opportunities.

in Brussels and elsewhere.

To get more information about the association or to become a member, please visit our website www.cara-europe.org

REMARKETING

A REMARKETING DREAM COME TRUE @DieterQuartier

Over 250,000 cars sold in its first year, an average transaction time of 8 minutes, an NPS that reached a staggering 73 in February: looks like LeasePlan’s independent marketplace for used cars is thriving. What’s the secret of this success? We asked CarNext.com’s Managing Director, Ewout van Jarwaarde. It has been a phenomenal year for CarNext.com. In one year it has sold more high-quality used cars than any other platform in Europe. Apart from Car-as-a-Service for new cars, parent company LeasePlan believes that the market for 3-4 year old used cars is structurally growing. It has invested heavily to get CarNext.com up and running in 22 countries with a total of 33 delivery stores. Still, the focus is on online. The role of the delivery stores, which are located in big cities, is more than just handing over the car, though. “Most customers look for a car online, but a number of them still rely on a physical sales person for the last piece of advice before making their decision. The delivery stores are an important extension to the digital platform,” says CarNext.com Managing Director Ewout van Jarwaarde.

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Online matchmaker “We created Carnext.com about a year and a half ago with the aim of disrupting the old-fashioned used-car market, leveraging all the data we have but fundamentally focusing on changing the customer experience. The usedcar market is notoriously opaque to customers. That is what we want to change with CarNext.com by offering them full transparency on the cars they buy or lease from us,” he adds.

The important aspects here are high-quality and accessibility. “We are acting like matchmakers: we sell vehicles from LeasePlan’s European Car-asa-Service fleet, but also from the fleet of trusted third-party suppliers, such as OEMs, other leasing companies, rental companies, large operators and dealerships, and make these vehicles available to the consumer at the other end of the marketplace,” CarNext. com’s MD explains. The fact that everything happens online gives CarNext.com extra control over the customer experience. Last February, the company received a Net Promotor Score of 73. That says it all, really. Remarkably, between adding a car to their basket to purchasing the car – the average transaction time for a customer is just 8 minutes. CarNext.com grew with 14 new locations in 2018, allowing it to scale up its B2C operations, with close to 50,000 cars sold B2C, which is 65% more than in 2017, while B2B sales totalled approximately 200,000 last year.

Used car leasing CarNext.com’s Used Car-as-a-Service proposition also grew by 150% to 8,000 cars in 2018, reflecting the growing demand for subscription services in the high-quality used car segment. Used-car leasing is definitely a trend in 2019, says van Jarwaarde.

Ewout van Jarwaarde (CarNext.com): “The delivery stores are an important extension to the digital platform.”

“If we look at the customers that are interested in leasing a used vehicle, most of them are looking for flexibility. They don’t want to be stuck for three or four years, but lease for a shorter period of time. The second aspect is price: with used car leasing you can offer customers a much better price-quality trade off. Instead of a new BMW 1 Series you can drive for instance a 2-year-old BMW 3 Series. Finally, a used car is available immediately – there are no delivery delays. Combine that with a hassle-free online offering with all services included and it is very easy to see why used car leasing is such a big hit.” There doesn’t seem to be a geographic difference in the success rate of used car leasing, incidentally. The phenomenon is quite recent and grows equally fast in the different countries where CarNext.com is present. Interestingly, the CarNext.com offer

CarNext.com grew with 14 new locations in 2018.

New opportunities Electric vehicles are still more expensive than ICE cars. Also, EVs depreciate more during the first 12 to 24 months than conventional cars, as Autovista data shows. It stands to reason that used EV leasing is the perfect solution to make electrification more accessible, but is it? “Used car leasing allows you to benefit from the initial depreciation, whether it’s a conventional or an electric car. We notice a strong demand for recent EVs, but the number of used electric vehicles that are hitting the market is still very limited,” replies CarNext. com’s MD. Apart from electrification, B2E is equally trending in the fleet industry. Does used car leasing offer opportunities here as well? “We are currently focusing on SMEs, which are looking for shorter duration and the right price for the right car, and on private individuals. We see an increasing interest from the bigger companies as well, but they are still holding on to the traditional 3-4 year leases,” he reckons.

New horizons How well CarNext.com is doing financially is still a secret. The company is managed as a separate business with its own dedicated management team. LeasePlan intends to separately report CarNext.com’s financial results in the course of 2019. Remarkably, in a recent press release LeasePlan announced a review of strategic alternatives for its CarNext.com business. The review is still in a preliminary stage and no decisions have yet been reached. Does that mean that CarNext.com is for sale? As to convince potential buyers, LeasePlan’s 2018 annual report mentions that “As part of a global and independent player with a long operational track record and digital focus, CarNext.com benefits from key competitive advantages. These include scale; wider remarketing and partner support networks worldwide; a larger and more predictable supply of high-quality used cars; and more options to steer these used cars to the most valuable channel at the end of the initial lease contract (B2C or B2B, domestic or cross-border, buy, lease or subscribe).” According to industry experts that have asked to stay anonymous, it would be very surprising if LeasePlan puts CarNext.com for sale on the market at this point in time.

8,000

leased cars

50,000

B2C customers

250,000 total cars sold

8 minutes

average transaction time Net Promotor Score (NPS) of

73 33

delivery stores in

countries

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for used car leasing will expand from mainly ex LeasePlan vehicles to cars sourced at other leasing companies, rental companies and OEMs.

AUTONOMOUS

THESE COUNTRIES ARE READY FOR A SELF-DRIVING FUTURE Benjamin Uyttebroeck

@uytteb

The question is not whether but when self-driving cars are coming. Whenever they may arrive, driverless cars will have far-reaching consequences on traffic and infrastructure. How ready are European countries for our self-driving vehicles of the future?

In its survey Autonomous Vehicles Readiness Index, KPMG looked at which countries in the world are most prepared for autonomous vehicles. Top of the list are the Netherlands but Sweden, Germany and the UK also hold a spot in the top 10. It is important to note that list is not composed of the 20 countries that are most ready for AVs. Instead, these are the 20 countries KPMG assessed for its survey, ranked according to their preparedness. These countries were selected based on economic size and progress in adopting AVs. KPMG indicates there is a high correlation between economic development and AV readiness but the countries leading its ranking all have the following in common:

• Governments

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willing to regulate and support AV development • Excellent road and mobile network infrastructure • Private-sector investment and innovation • Large-scale testing powered by a strong automotive industry presence • A proactive government that attracts partnerships with manufacturers. Here’s an overview of the main European countries in the AV Readiness Index.

The Netherlands (1) KPMG attributes the Netherlands’ Number 1 spot to its excellent road

network and its extensive electric vehicle charging network. The Dutch are less accepting of AVs than consumers in many other countries, but that may be due to their satisfaction with the current state of mobility. Somewhat surprisingly, the country’s position as a leading bicycle nation is expected to hinder AV introduction in cities as cyclists’ unpredictable behaviour is complicated for self-driving cars.

Sweden (4) Volvo has entered into an AV partnership with Uber, a safety initiative involving Autoliv and Ericsson and research giving self-driving cars to real people for trials on a selected route near the Volvo HQ. Sweden has a high share of electric cars on the market even though it has far fewer charging stations than the Netherlands. The country has one of the highest scores in terms of policy and legislation. Since the summer of 2017, companies can obtain permits to conduct AV testing on public roads.

United Kingdom (5) The UK has good scores on industry partnerships and research and development hubs but has fewer AV patents

than other leading AV nations. On consumer acceptance, it rates higher than most other countries in the index, although few people live in regions where AV testing takes place. Its relatively low fifth place is due to one of the lowest scores for 4G coverage and the road network that needs considerable upgrades. Britain is third in terms of number of charging stations, but the Netherlands’ lead is so strong that this number gives a misleadingly positive impression.

Germany (6) Unsurprisingly for the country that embodies the European car industry, Germany performs strongly on industry partnerships, research and development and road infrastructure quality.

WHAT COUNTRIES ARE READY FOR A SELF-DRIVING FUTURE? 4

SWEDEN

THE NETHERLANDS

7 CANADA

RUSSIA

5 UNITED KINGDOM

GERMANY

3 UNITED STATES

15 SPAIN

AUSTRIA

19 MEXICO

CHINA

JAPAN

UNITED ARAB EMIRATES

13 FRANCE

SOUTH KOREA

INDIA

SINGAPORE

17 BRAZIL 14

AUSTRALIA

NEW ZEALAND

Source: KPMG

Spain (15) Spain scores high for its AV-specific legislation, including a legal framework allowing AV testing on public roads. Nevertheless, Spain ended up on the lower half of the index as KPMG researchers did not find any AV technology companies based in the country and very few relevant patents. Spain also has a limited electric vehicle charging network although road and mobile infrastructure is generally good. Spaniards also ended up in the last place for consumer acceptance of AV technology.

Russia (18) The Russian government has set up a $10 million fund to subsidise the AV industry, but infrastructure, legislation and industry readiness is generally non-existing. Yandex, an internet company, and lorry maker Kamaz are among the few companies working on AV technology. Russia also performs rather badly on road quality and infrastructure, with poor 4G coverage and a very low density of electric vehicle charging stations to boot.

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as it has a specific government department and it has funded various research projects. However, the World Economic Forum gives it a relatively low score for the effectiveness of Uber is testing self-driving Volvo SUVs. its law-making. The survey also notes the high quality of Austria’s mobile and road networks, although charging stations are still Nevertheless, consumers are less keen, lacking in many places. Consumer and legislation could discourage drivacceptance is low. ers from entering a self-driving vehicle since the driver may be liable for France (13) damages, even if an accident is caused Both Renault and PSA are working by the vehicle. with start-ups and local authorities on AV pilots and various companies like KPMG also mentions poor 4G coverValeo, Transdev, Safran are also investage and a middling rating for teching in self-driving technology. Navya and nology rating. The government has Easymile are just two of the newer AV funded various test beds and Germany companies that are building their names. is second after Japan in terms of AV patents per capita. French consumers are fairly enthusiastic about AV technology but the counAustria (12) try has a rather low score on people’s The Austrian government and industry technology use. France is credited players have set up a jointly-funded AV with having good road infrastructure research centre, planned to accelerate but 4G coverage is poor and charging Austria’s self-driving future. The counstations are few and far between. try scores well on policy and legislation

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