117 06/2020
FOR INTERNATIONAL FLEET & MOBILITY LEADERS
NEW ENERGIES
FINANCIAL MODELS
The EV package that suits your fleet
Why fleet management will stay vital
SAFETY
SAFETY
How to reduce insurance costs
Nexus communication - Fleet Europe #117 - Periodic magazine - JUNE 2020 - Deposit Office X
Tim Albertsen, ALD
Marco Lessacher, Alphabet
Selecting the ideal driver training programme
Alain Van Groenendael, Arval
Gero Goetzenberger, Athlon
Tex Gunning, LeasePlan
LEASING STRATEGY IN THE NEW NORMAL • Leasing company CEOs share their plans for the future • Lessors’ geographical scope and presence • How you should choose your leasing partners
FLEET EUROPE SUMMIT
DUBLIN 17-18 NOVEMBER 2020 summit.fleeteurope.com
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FINANCIAL MODELS 6-23
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10 The geographic scope and strategy of international leasing companies
New Normal: what has changed, what did we learn from the pandemic
After several decades of relatively safe and predictable growth, vehicle leasing companies have entered an era that requires a more diverse strategy to keep the shareholders satisfied.
FINLAND 22.691
NORWAY 17.325
SWEDEN 31.246
RUSSIA
ESTONIA
22.542
1.601
LATVIA 1.894
18 How major fleets choose their vehicle leasing partners
DENMARK
IRELAND
2.544
25.180
9.242
UNITED KINGDOM 157.457
NETHERLANDS 75.226
POLAND UKRAINE
185.974
81.479
LUXEMBURG 14.680
4.879
CZECH REPUBLIC 26.793
AUSTRIA
FRANCE 553.237
14.136
GERMANY
BELGIUM
With millions of euros at stake, fleet and procurement managers set a wide range of criteria for potential partners to meet.
LITHUANIA
SWITZERLAND 5.268
ITALY
194.870
8.339
SLOVAKIA 5.489
HUNGARY 15.576
SLOVENIA 2.381
CROATIA 7.562
ROMANIA 11.280
SERBIA 3.946
BULGARIA 4.047
PORTUGAL 23.697
SPAIN
119.517
GREECE 4.666
TURKEY 12.448
12
Who’s leading in vehicle leasing?
SAFETY/ AUTONOMOUS 24-37
26 What fleet scenario do you pursue in the New Normal? Ensuring fleet safety is no longer simply about traffic incidents and safety equipment. It is also about planning for post-lockdown recovery. Scenario planning can help determine the road to tomorrow.
22 Why fleet management remains vital
32 Why video telematics belongs in vans and cars The trucking business has long discovered the added value of video telematics. Large delivery van fleets are starting to show interest too. The next step could be company cars, even if privacy concerns are a tough nut to crack.
34 How to successfully reduce insurance costs
24
As fleets search for savings in all areas of expenditure, insurance premiums are an obvious place to start.
10 key steps to an international fleet safety policy
COLOPHON PROJECT COORDINATOR: Céline Gilson
SALES: David Baudeweyns, Elke Leën, Daniel Savigny, Aline Verpoorten, Estelle Remacle
EDITORS: Benjamin Uyttebroeck, Dieter Quartier, Yves Helven, Frank Jacobs
EVENTS: Vincent Degives, Virginie Emonts PUBLISHERS: Caroline Thonnon, Thierry Degives
CONTRIBUTORS: Daniel Bland, Shane Curran, Jonathan Manning, Anne Özdelen, Alison Pittaway, Mark Sutcliffe
PICTURES: ©Shutterstock
FLEET EUROPE #117
CHIEF EDITOR: Steven Schoefs
LAYOUT: Cible - www.cible.be
MARKETING: Sven Van Rossum, Benoit Delisse
TO CONTACT OUR TEAM: FirstletterfirstnameLastname@nexuscommunication.be 4
NEW ENERGIES 38
EV package deals: for your e-convenience To optimise the use and convenience of an EV, a domestic smart wallbox and a payment solution for public charging can be included in the lease contract. To offer the best solution on every level, lessors are teaming up with e-mobility service providers.
SHARED MOBILITY
28 How to establish the ideal driver training programme
40
Sharing: a new business model for leasing providers Leasing companies understand the shift from existing business models based on dedicating assets to a single user, to new services that are built around the sharing of assets – in our case cars or bicycles.
Discover more news, features and analyses in the Fleet Europe ecosystem on our website
30 A look at safety innovation: don’t stop me now
PREPARING FOR THE NEW NORMAL… Preparing for the New Normal, that’s the theme of the 8th edition of the Global Fleet Conference, the first virtual conference we’re organising. Today, it’s become a universal theme that concerns the whole Fleet & Mobility community in Europe. May and June are the months lockdown is coming to an end, giving rise to hope the pandemic will not return and your business will take off again in the fastest and strongest way possible. A business that will evolve, surely. Through a series of surveys, 10-minute podcasts, webinars and debates, the Fleet Europe community is already sketching the outlines of this New Normal.
36 Safety first approach shapes EU autonomous vehicle evolution
It’s textbook because it has been shown time and again: crises lead to innovation, creative forces, new energies. Together with you and our teams we will try in the following weeks and months to understand, describe, anticipate these evolutions. And we have to be bold: let’s meet for the Fleet Europe Summit in Dublin on 17 and 18 November. With or without a facemask, with or without a handshake. But with heart and soul, an innovative spirit, alert intelligence and much-needed solidarity.
Thierry Degives & Caroline Thonnon Co-CEOs & Publishers Nexus Communication
38 EV package deals: for your e-convenience
FLEET EUROPE —
THERE’S A PUNCTURE• WAITING WITH www.fleeteurope.com Fleet Europe Magazine • @Fleet_Europe • FleetEurope • contact@nexuscommunication.be YOUR NAME ON IT Fleet Europe is published by CONTINUE DRIVING FOR 80 KMNexus AT UP Communication SA - Parc Artisanal 11-13, B-4671 Barchon (Belgium) - T +32 4 387 87 71 - Fax +32 4 387 90 63 1) Fleet Europe is registered and copyrighted trademark. Reproduction rights (texts, advertisements, pictures) reserved for all countries. Received TO 80 KM/H documents will not be returned. By submitting them, the author implicitly authorizes their publication. HELP CUSTOMERS CONTINUE THEIR JOURNEY HOW IT WORKS:
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FLEET EUROPE #117
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FINANCIAL MODELS
FROM COVID-19 CRISIS TO NEW NORMAL Frank Jacobs
COVID-19 is an emergency unlike any in living memory. But humanity is resilient and inventive – and the same goes for the fleet and mobility community. Here’s a short overview of our industry’s response to the global pandemic, and our contribution to the emerging ‘New Normal’. In mid-March, it became clear that the measures needed to stop the spread of the coronavirus would inflict unprecedented economic pain. Fleet and mobility professionals had more reason than most to worry about the fate of their industry.
From A to B While other industries swiftly smoothly shifted to teleworking, lockdowns effectively shut down core business: moving people goods from A to B.
and the our and
Even harder hit were some of the most innovative segments of our ecosystem: those relying on the sharing principle, for instance. In times of mandated ‘social isolation’, few people feel confident about carsharing and ridesharing – or car rental and public transport, for that matter. These sectors reported drops in business of up to 90%. But even from the beginning, there were some silver linings. Delivery services reported an unprecedented upswing, as people in lockdown started ordering food, groceries and other necessities online.
FLEET EUROPE #117
Grim reading Nevertheless, the forecasts for the impact of the crisis on the industry offered grim reading. OEMs, already squeezed by CO2 requirements and about to roll out a vast array of EVs, warned they could face massive damage – especially if the market, suddenly more cautious, would revert to petrol and diesel instead of going for electric.
COVID-19 has reshuffled the economic, social and mobility reality. For fleet managers and multinational companies the aspect of Employee Welness is one that will not dissapear. There is no playbook for a crisis this unprecedented and unexpected. But what our community can do, is learn from each other. That’s why Fleet Europe and its sister platform Global Fleet launched a new editorial concept. ‘Spread the idea, not the virus’ offers a forum to industry experts and professionals, to share, in blog form, their experiences, thoughts and best practices with the wider community. In the weeks and months since its launch on 18 March, the forum provided insight into a broad array of issues of interest to fleet and mobility industry professionals: from developments in the delivery industry and the HERE
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consequences of travel restrictions over the impact on the leasing industry to calls for leadership, support and innovation among industry players. The ongoing series remains an excellent forum to find – and contribute – vital lessons for survival in these trying times.
Lemonade from lemons As the crisis progressed, more and more companies decided to take the lemons they were given and make lemonade, either by adapting their offer to benefit their customers with the special situation they faced or by using their capabilities to help society at large – or both.
Turn off the emissions Electric driving shouldn’t be a hard choice. That’s why all Volvo models are now offered as plug-in hybrids with up to one year of compensated electricity*, making driving on zero emissions possible on a daily basis. In other words – your drivers can choose to go electric, simply by switching to pure mode. VISIT THE PLUG-IN HYBRID RANGE AT VOLVOCARS.COM
EVERY PLUG-IN HYBRID COMES WITH UP TO ONE YEAR OF COMPENSATED ELECTRICIT Y * *Volvo covers charging costs for up to one year when purchasing a new plug-in hybrid. Offer applies to all drivers of Volvo plug-in hybrids valid for orders placed between 16th October 2019 until 30th September 2020. Only applicable if the car is kept for at least 12 months. Available on all Volvo on Call markets. Contact your Volvo dealer for local terms and conditions. Official figures for the Volvo Recharge range: WLTP 228-35g/km CO2. WLTP all-electric range combined 38-59 km. Figures shown are for comparability purposes; only compare CO2 and equivalent electric range figure with other cars tested to the same technical procedures. The Volvo Recharge range are plug-in vehicles requiring mains electricity for charging. These figures may not reflect real life driving results, which will depend on a number of factors including the accessories fitted, variations in weather, driving styles and vehicle load. Models may vary depending on market.
FINANCIAL MODELS
Example: one company is offering free carshare vouchers to medical professionals, helping them to get to and from their frontline work in hospitals. Another company is offering free online driver training modules to its customers. A few are offering contactless procedures for vehicle inspection. And so on.
must be said, were horrible: vehicle registrations were typically down by 90% or more, for instance. In early April, an estimate showed the crisis cost the Belgian car industry around €3.7 billion per week. And according to one estimate, German fleet registrations could go down by 50% for the entire year.
In time, fleet and mobility managers came to realise that the extra time now available in lockdown was an opportunity not to be wasted. In day-to-day operations, very little time is available to do strategic thinking. That is exactly what could and should now be done – to plan for the post-lockdown world. This is the ‘New Normal’: back in business, but still limiting risk. Aware that the risk of loss has increased, but also that unexpected opportunities may arise.
Other figures were more hopeful. Also in early April, the first used-vehicle prices in the Netherlands to be published post-crisis proved extremely resilient, with residual values hardly buckling under the pressure.
IFMI Masterclass At an IFMI Digital Masterclass and various other formal and informal formats, fleet professionals agreed that this was the time to review mobility policies, examine ways to electrify their fleets, look into mobility budgets and other alternatives to the classic company car. Corporate mobility will look very different coming out of lockdown from going in. And it looks like taking the time for strategic thinking has borne fruit. Despite the fact that oil prices have nosedived – making diesel and petrol cars momentarily more attractive again – a Fleet Europe survey has found strong determination among fleet buyers to pursue the electrification of their fleets. Also in other respects such as multimodality and connectivity, it seems the present crisis will serve as an accelerant for existing trends in corporate fleet management, rather than a brake.
FLEET EUROPE #117
Speculative data While most of the world’s economies were in lockdown, most of the data flying around was speculative. But some countries had ‘looser’ lockdowns, allowing some insight into the workings of the economy under extraordinary stress. Some figures, it
By the end of April, industry attitudes had shifted from despair to hope. An end to the lockdown was coming into sight, and the crisis was used as a catalyst for much-needed change. Some of the change was along existing trend lines. Take for instance the city of Milan, which used the crisis as an opportunity to create a car-free zone in its urban centre – an initiative which is already resonating with other major agglomerations. Others involve more unexpected trends, like the sudden growth of videoconferencing and homeworking – which are sure to leave a permanent imprint on mobility trends post-crisis.
increasingly positive. More and more suppliers are launching products and services tailored to the New Normal (to help their customers maintain the appropriate distancing and sanitation levels, for example). Both suppliers and customers are focusing on employee wellbeing – crucial in times of heightened anxiety. And last but not least, the Global Fleet Conference 2020 has been de-canceled, and moved from Rome to… online (where all the action is nowadays). For decades, because of its synonym with perfect vision, 2020 was a year that figured in predictions, projections and prognoses. As it turns out, nobody could have foreseen the major shift our industry has undergone. But that only makes the rest of the year – and the decade – all the more exciting to explore. The situation remains fluid. By the time you read this, a lot will have changed.
Positive vibe At the start of May, more data became available from markets coming out of lockdown, like Germany and Austria. Again, the signs were positive, with used-vehicle sales at volumes between 80% and 90% of pre-crisis levels. In Denmark, they even exceeded 100%. Yes, the pandemic and the lockdown have caused significant economic harm. But with lockdowns fading and activity resuming, we are finding pent-up demand eager to fill the void left by months of inactivity. Boom may soon erase the negative effects of bust. There will be exceptions of course: public transport and shared mobility will remain tricky propositions for the time being. Let’s not kid ourselves. The recovery is fragile, tentative and reversible. Nevertheless, at the moment I’m writing this – end May – the vibe is
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BACK INTO THE NEW NORMAL To catch up and keep up with the developments in the fleet and mobility industry, scan this QR code. It will take you straight to our ongoing coverage of our industry’s change from crisis mode to doing business in the New Normal.
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CONCEDED EDITORIAL SPACE
ADVANCED TELEMATICS PROVIDES OPPORTUNITIES EVEN IN A CRISIS Data is the lifeline for fleets, particularly in times of uncertainty. Developing efficiencies creates opportunities, as businesses continue to innovate to the norms of social distancing with new business models. Telematics can also be used to improve processes, utilise assets, and sustainability within fleets plus much more. The powers that utilising Geotab’s data offers to fleet managers
Improving efficiency
telematics. The Geotab open platform for fleet management helps reduce costs in many ways. To start, track and work on the following goals to save costs in different areas: reduce fuel usage, track and decrease CO2 emissions, monitor EV energy usage and charging and cut down on miles driven with smart routing.
• Create rapid touchpoints meetings with your employees to meet about objectives • Create custom rules and measure asset utilisation through reports that measure deliveries, fuel and maintenance • Fleets utilising Geotab routing, event triggered rules and engine data reports can enable contactless deliveries, optimise fuel spend and add/ decrease vehicles based on usage and performance Although productivity looks different for every business, take the time to plan out your goals.
Asset utilisation With the COVID-19 crisis, some drivers may have taken vehicles home due to shop or office closures. Knowing which of your assets are being used when, and to what capacity is a great way to reduce costs. Ask yourself questions
such as: Are our drivers safe and practicing good hygiene? Can we implement contactless deliveries?
Although this year is unquestionably challenging for many, work closely with your employees. Roll up your sleeves, build for a better future and come out stronger than ever.
With telematics, managing vehicle utilisation and answering these questions will give a clear indication into the use of assets. Reports can help unveil which vehicles are hardly used, overused, or in maintenance. Automated rules that alert based on this activity will help to keep your fleet well balanced from a replacement cycling standpoint and also quickly point out areas of opportunity to re-deploy vehicles into other, or new areas of business.
Sustainability and new models within fleets Reduce costs by increasing your company’s fleet sustainability using
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More info
www.geotab.com
FLEET EUROPE #117
The most important thing is to ensure employees are getting the support they need. Keep an open door policy, and at the same time, remind everyone how important it is to stay productive. A few tips include:
FINANCIAL MODELS
GROWING A LEASING COMPANY Yves Helven
It will be fascinating to watch how fast and how seriously vehicle leasing companies are going to make the switch from an asset driven car-centric business model to a model that is built on flexible usage of smart mobility services.
FLEET EUROPE #117
After several decades of relatively safe and predictable growth, leasing providers have entered an era that requires a more diverse strategy to keep the shareholders satisfied. The nature of the investor has always been a determining factor for the type of growth the leasing company is aiming for: OEM-owned providers will support the growth of the brand, bank-owned businesses typically are a bit more risk-averse and adopt expansion strategies that hedge potential losses. As we are entering the realm of the digital circular economy, away from the produce-use-dispose cycle, leasing companies need to adapt. Mobility is not an isolated trend, it is rather the automotive translation of what is defining 21st-century business models: digital, on-demand, transaction-based. The question is how the leasing industry is transitioning to the new model?
“We go where the client wants us to go” Leasing companies can grow in different directions. The more traditional
ways are geographical expansion, acquisition, optimising operations and gaining competitive market share. Inventing new products or services (mobility) and addressing the needs of a new type of customer (SME or consumer) are more creative growth strategies. Obviously, the leasing supply chain combines the creative with the traditional, always in function of the customer profile. Big businesses are no disruptors and will typically not aim to dramatically change the behaviour of their clients. It is unlikely for a leasing
10
company to offer mobility services in a traditional market, but they will jump on the mobility bandwagon if and when there’s sufficient demand from the customer base. Similarly, leasing companies will expand to new (emerging) markets only when client demand is secured and the risks related to the entry into a new country are mitigated. Again: “We’ll go where the client wants us.”
Global and massive The evolution of the leasing supply chain from, say, the 80s of the last
GEOGRAPHIC EXPANSION (IN ALPHABETICAL ORDER)
Alphabet has decided to expand through partnerships with strong local players, such as UNIDAS in Brazil and Auto Plan in Norway. Athlon operates in 11 European countries with proprietary offices but is present in more than 20 markets with partners. Recently, Athlon re-entered the Turkish market through a partnership with local hero Hedef Filo.
century to 2020, was very much about growth through acquisition and gaining competitive market share. Those who have been in the industry for a long time will remember how many leasing providers they could choose from 30 years ago when sourcing for company cars. Small and mid-size local players with operations of 20, 30 people and a total fleet size of less than 10,000 vehicles were common and could be fairly good. Gradually, mergers and acquisitions redesigned the landscape, providers became bigger and more professional. The trend of regional providers started, and the job of the fleet manager transitioned from a local scope to an international scope. The regional providers became European providers, much to the liking of European fleet managers and their procurement counterparts, who loved the idea of reducing the number of suppliers and improve pricing through volume.
Fast forward to 2020. All the usual suspects in the leasing supply chain are global and they are massive — a handful of players have exceeded the 1 million vehicle threshold and are present across multiple continents. Some of them are still scouting emerging markets, optimising what potential is left of geographical expansion, others are turning to other growth strategies to please the shareholder.
Mobility In the 2019 Global Fleet Manager Survey, when asked “From which supplier do you expect corporate mobility solutions?” fleet managers across the world said that they expect their leasing provider to take the lead. Admittedly, most of the providers have ventured into the mobility arena, but they can hardly be said to take a prominent, leading role today. Nevertheless, mobility and digitisation are high up the strategic agenda. Once again, the client is now actively asking for it.
Digitisation Next to growth-oriented strategies, leasing companies can also increase returns by optimising their operations. Traditionally, the fleet and leasing business is FTE-heavy, operating at a rather high car-to-employee ratio. Using new technologies to increase
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Arval is consolidating its global footprint through the alliance with North American leasing group Element. Focus of the partnership is on Latin America, with operations in Colombia, Brazil, Peru and Chile. Leasys, with its 300,000 vehicles, might be a (relatively) smaller player in the leasing ecosystem, but their ambition reaches well beyond the 8 countries in which they are offering services; their goal is to add another 5 countries and grow their fleet size by 50% within 2 years. LeasePlan: the company is present in 32 countries globally with a big focus on Europe. In each country LeasePlan operates under the LeasePlan brand without an alliance partner.
the number of cars per FTE contributes directly to the baseline and, eventually, adds to the dividends. LeasePlan puts its NextGen Digital Strategy forward to achieve this goal. Their objective is to become the world’s first fully digital car-asa-service provider. CarNext.com is one example of how digital transformation can activate new platform profit centres for the lease industry. LeasePlan does not exclude partnerships in their new digital model.
Diversification Leasing companies have done well in the last few years and revenues have been growing steadily. This clearly does not come from one single strategy, especially as the pressure on residual values is increasing constantly. It’s clear that, moving forward, leasing providers will have a much more diversified product and service offering, whilst closely monitoring and conquering new markets and new types of clients. FLEET EUROPE #117
ALD has opted for the joint venture model to expand in the Nordics and works with Nordea Finance. The JV allows ALD to address the needs of international clients in the northern regions, but at the same time to expand to SME clients, a specialty of Nordea. The JV model was also applied to Asia, where ALD will be offering services in Malaysia and Japan first.
FINANCIAL MODELS
WHO’S LEADING IN LEASING? Céline Gilson, Frank Jacobs, Steven Schoefs
ALD, Arval, Alphabet, Athlon and LeasePlan: all different, but sharing one trait. These are the Big Five. Together, they control more than half of Europe’s vehicle leasing market. To the voices of their top executives, add those of three essential challengers, and you get a pretty good picture of the outlook and strategies of the continent’s major lease players. FINLAND 22.691
NORWAY 17.325
SWEDEN 31.246
RUSSIA
ESTONIA
22.542
1.601
CEO
LATVIA
Tim Albertsen (since March 2020)
1.894
Shareholder:
Société Générale (80%; the remainder is listed on Euronext)
Global presence:
2.544
25.180
9.242
UNITED KINGDOM
2.235 million vehicles
LITHUANIA
DENMARK
IRELAND
157.457
% International business:
NETHERLANDS 75.226
POLAND UKRAINE
185.974
BELGIUM
>500 international clients, >400,000 vehicles, >20% of the overall fleet
14.136
GERMANY
81.479
4.879
CZECH REPUBLIC
LUXEMBURG
26.793
14.680
% LCVs in total fleet:
AUSTRIA
FRANCE 553.237
not disclosed
SWITZERLAND 5.268
8.339
SLOVAKIA 5.489
HUNGARY 15.576
SLOVENIA 2.381
ITALY
CROATIA 7.562
194.870
ROMANIA 11.280
SERBIA 3.946
BULGARIA 4.047
SPAIN
PORTUGAL
119.517
23.697
TURKEY
GREECE
12.448
4.666
OUTSIDE EUROPE Tim Albertsen, CEO, ALD
FLEET EUROPE #117
What’s your main strategic objective for 2020, both in Europe and beyond?
Algeria
4.087
Canada
14.000
Argentina
950
Chile
4.045
Australia
55.000
China
2.384
Brazil
32.939
Colombia
2.141
Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador, Puerto Rico, Panama
“We’ll continue to adapt our traditional full-service leasing offer to support new mobility capabilities, such as digital platforms, connected cars, MaaS, e-mobility, flexible offers and multi-modality. We believe this will generate significant growth in the coming years and position us to be a leader in mobility.”
where we’ve seen our private lease fleet increase by 30-40% each year to 153,000 vehicles at the end of 2019, surpassing our three-year target. Private lease now represents 8.6% of our total fleet and we expect it to remain a key growth driver, supported by a state-of-the-art, end-toend digital retail solution.”
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020?
With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future?
“As vehicle ownership and usage continue to diverge, we see higher demand for outsourced mobility. This is particularly true in the retail market,
“Whether carsharing or ridehailing, at the heart of new mobility systems is always a vehicle fleet. We believe our 12
5.100
India
14.872
Peru
2.237
Mexico
24.025
South-Africa
36.000
Morocco
10.823
USA
334.000
New Zealand
25.000
existing competencies in running fleets efficiently, our scale and our coverage mean we’re well-positioned to provide these services in the future.” “For some years now, we at ALD have been building new capabilities in the form of platforms, services and products that allow us to build strength in these new areas. So in any future projection of the industry, we see ourselves playing a central role as the engine powering the mobility products and services that our partners – and we – want to offer.”
FINLAND NORWAY SWEDEN RUSSIA
CEO Alain Van Groenendael (since January 2019)
DENMARK
IRELAND
Shareholder:
UNITED KINGDOM
BNP Paribas (100%)
NETHERLANDS GERMANY
Global presence:
BELGIUM
• Arval global leased fleet (end Dec. 2019): 1.298 million vehicles • Element-Arval Global Alliance: more than 3 million vehicles
CZECH REPUBLIC
LUXEMBURG
SLOVAKIA AUSTRIA
FRANCE SWITZERLAND
% International business:
>200 international clients, >7% of overall portfolio, increasingly within the Element-Arval Global Alliance
% LCVs in total fleet:
POLAND
HUNGARY ROMANIA
ITALY
SERBIA
SPAIN
around 20% and rising
GREECE
TURKEY
OUTSIDE EUROPE
What’s your main strategic objective for 2020, both in Europe and beyond? “Our first objective is to deal with the current challenge of Covid-19 by accompanying our customers in this post-lockdown phase with our new multimodal offer “The Journey Goes On”. Besides, we will of course prep for Arval Beyond, our new strategic plan, which will be deployed progressively across our geographies. Full-service lease and mid-term rental, both for professional and private customers, will remain our core business.” “But we also aim to offer more holistic mobility solutions for the employees of our corporate clients and invest further
Ecuador*
Australia*
Eswatini*
Mozambique* Namibia*
Botswana*
Ghana*
New Zealand*
Brazil
India
Peru
Canada*
Japan*
South Africa*
Chile
Lesotho*
Thailand*
China*
Mexico*
United States*
Colombia
Morocco
Zambia* *Under the Element-Arval Global Alliance
in flexible offers and add-on services based on the connectivity of our vehicles. Plus, we remain committed to growing our share of EVs at twice the pace of the market.”
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020? “According to our 2019 Arval Mobility Observatory Fleet Barometer, we can expect the rising trend in operational leasing to continue, with 26% of companies stating that they intend to develop this financing method in the near future –three percentage points up over the 2018 result. This intent is strongest in France (44%), Germany (42%) and Belgium (37%).”
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With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future? “We aim to stay ahead by being a mobility integrator, offering our customers flexible solutions and seamless experiences, every day and in a responsible way. Our new tagline – ‘For the many journeys in life’ – reflects this new business model. We acknowledge that multiple mobility options are possible. And we open our brand to other options than car leasing: not just carsharing, bikesharing and ridesharing, but also autonomous shuttles, for example.”
FLEET EUROPE #117
Alain Van Groenendael, Chairman and CEO, Arval
Argentina*
FINANCIAL MODELS
CEO
NORWAY SWEDEN
Marco Lessacher (since July 2019)
RUSSIA
Shareholder:
BMW Group (100%)
Global presence: 717.000
% International business:
DENMARK
IRELAND
app. 100 international clients
UNITED KINGDOM
% LCVs in total fleet:
NETHERLANDS
POLAND GERMANY
15%, set to increase
BELGIUM LUXEMBURG
CZECH REPUBLIC AUSTRIA
FRANCE
SLOVAKIA
HUNGARY
SWITZERLAND
ROMANIA CROATIA
ITALY
SERBIA BULGARIA
PORTUGAL
SPAIN
GREECE
TURKEY
CYPRISS
OUTSIDE EUROPE Australia
Marco Lessacher, CEO, Alphabet
What’s your main strategic objective for 2020, both in Europe and beyond?
FLEET EUROPE #117
“Firstly, we’re focusing on our existing innovations, all of which will become even more relevant in the coming months – i.e. AlphaElectric and AlphaCity, which offer state-ofthe-art car solutions; and AlphaFlex, our mobility budget. Additionally, our AlphaGuide app will add new functionalities. Secondly, we’ll focus on products like AlphaRent, providing more flexible and sustainable mobility.”
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020? “The what stays the same, because there will always be a need for vehicle
Brazil China
leasing and fleet management. It’s the how that will change. Our own Europewide survey in 2019 showed that the younger generation needs flexible mobility and is increasingly willing to lease. So there’s a big potential for new, emerging products – taking into account the differences between markets.”
With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future? “Lease companies are changing from fleet suppliers to mobility providers, just like fleet managers are becoming mobility managers. Now, tech giants and start-ups are entering our competitive space – and mobility
14
providers are starting to collaborate with them. So it’s important to stay agile and closely monitor the increasing complexity of customer journeys – which involve data collection, bundling of services and standardisation of customer communication. AlphaFlex is a mobility budget that offers corporate carsharing, rental and taxi services, ridesharing and public transport as add-ons to traditional corporate fleet product. And on-demand mobility is also getting added to the mix.”
CEO
SWEDEN
Gero Goetzenberger (since December 2016)
2.500
RUSSIA
Shareholder:
Daimler AG, operated by Daimler Mobility AG (100%)
Global presence:
IRELAND
405, 500 vehicles
UNITED KINGDOM
% International business:
15.500
“increasing”
NETHERLANDS 115.000
POLAND 90.000
BELGIUM
% LCVs in total fleet:
10.500
GERMANY
55.000
LUXEMBURG
around 20% and rising
2.000
FRANCE 75.000
CZECH REPUBLIC
AUSTRIA SWITZERLAND
SLOVAKIA
HUNGARY ROMANIA
1.000
ITALY
20.000
PORTUGAL 2.000
SPAIN
17.000
TURKEY
OUTSIDE EUROPE USA (through a network partner: Donlen)
What’s your main strategic objective for 2020, both in Europe and beyond? “Our key objective for 2020 is to support our customers in manoeuvring through the current corona crisis. With our remaining capacities, we continue to drive our digitisation agenda. Additionally, we’re preparing further development of the product portfolio to more flexible offerings.”
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020? “We’ll have to see which impact the current pandemic has on the fleet business. In general, it should accelerate the trend towards more usage, and more flexible solutions. Additionally,
The numbers indicated represent only the vehicles in Athlon’s own portfolio; where Athlon works with a local partner, the country is mentioned, but without numbers.
customers are getting more used to online activities, further driving the demand for more digital offerings. Also, the outsourcing of fleet management helps our customers focus on their core business, which is essential – especially in times of crisis.”
With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future? The trend from ownership to usage is transforming the automotive industry and creating new opportunities for Athlon. We are investing in new solutions, specifically new rental and subscription business models, which will offer more flexibility to our customers. This comes with an improved,
15
digital customer journey. Obviously, this also requires increased digitisation of our processes.” “In addition, we’re working closely with Mercedes-Benz on transforming online connectivity into both new products and cost savings for our customers. We’re also helping to reduce fleet emissions by focusing on alternatives to combustion engines. We continuously broaden our know-how so we can advise our customers on how to integrate EVs into their fleets.” FLEET EUROPE #117
Gero Goetzenberger, CEO, Athlon
FINANCIAL MODELS
CEO
FINLAND
Tex Gunning (since September 2016) NORWAY
Shareholder:
SWEDEN
LP Group BV, an international consortium of institutional investors (100%)
RUSSIA
Global presence: not disclosed
DENMARK
IRELAND
% International business: not disclosed
UNITED KINGDOM
% LCVs in total fleet:
NETHERLANDS
POLAND GERMANY
22%
BELGIUM LUXEMBURG
FRANCE
CZECH REPUBLIC
AUSTRIA SWITZERLAND
SLOVAKIA
HUNGARY ROMANIA
ITALY
PORTUGAL
SPAIN
GREECE
TURKEY
OUTSIDE EUROPE
FLEET EUROPE #117
Tex Gunning, CEO, LeasePlan
Australia
Mexico
Brazil
New Zealand
India
USA
Malaysia
What’s your main strategic objective for 2020, both in Europe and beyond?
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020?
“We have the ambition to be the world’s first fully-digital Car-as-a-Service (CaaS) company, and in 2020 we’ll continue implementing our NextGen Digital LeasePlan strategy to accelerate growth and become a digital service integrator. Also this year, we’ll continue to lead in the transition to electric and other alternative powertrains, towards our goal of achieving net-zero tailpipe emissions by 2030.”
“The long-term trend from ownership to usership continues to drive leasing. Although we find ourselves in unprecedented times due to the COVID19 health crisis and the disruption it causes, leasing remains a cost-effective and prudent option for many clients. This is especially true given that leasing does not require large upfront capital outlays from customers. For this reason, and despite recent developments, we continue to see significant growth opportunities in the CaaS market.”
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With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future? “Digital tech is transforming the CaaS industry, enabling incumbents to improve service while lowering cost – as well as encouraging the development of new platform businesses based on existing CaaS competencies. Take CarNext.com, for example.” “Through our NextGen Digital strategy, LeasePlan is transforming from an analogue into a fully digitally-enabled business, delivering digital services at cost. This will help us capture growth opportunities in the SME, Private and Mobility Provider markets.”
What’s your main strategic objective for 2020, both in Europe and beyond?
Shareholder:
Autobinck Group (100%)
Global presence:
32,300 vehicles. Active in the CEE region (Czech Republic, Hungary, Poland, Romania, Slovakia)
International business: more than 30%
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020? “We’re active in Central Europe, which has a huge potential for further growth. We’ll continue to deliver a high
What’s your main strategic objective for 2020, both in Europe and beyond?
CCO Jochen Schmitz, Head of International Fleet (since November 2016)
Shareholder:
Volkswagen Group (100%)
Global presence:
Subsidiaries in all continents
International business:
145,000 multinational contracts in portfolio at the end of 2019 (+20% year-on-year)
“Our aim is to be the world’s largest fleet provider, with a total portfolio of 30 million contracts by 2025. Our first focus markets for international fleet growth are the UK, Spain, France, Italy, the Netherlands and Belgium. Key element is closer integration with VW Group brands.”
Federico Sanguinetti, Head of Sales, European Markets (since July 2018)
Shareholder:
FCA Bank S.p.A. (100%); FCA Bank is a joint venture between FCA Italy S.p.A. and Crédit Agricole Consumer France
Global presence:
The Big Five (DE, FR, UK, SP, IT), Belgium, Netherlands and Poland; and by the end of 2020, also Denmark and Portugal
International business: not disclosed
“Increasingly supplementing vehicle leasing and fleet management will be new, more flexible solutions. One solution does not exclude the other. What is important is that providers can manage various mobility solutions form a single source.”
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020? “Vehicle leasing will remain an important and essential pillar of corporate mobility in 2020.”
What’s your main strategic objective for 2020, both in Europe and beyond?
CCO
With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future?
“Thanks to our presence in eight European countries, we’re among the top mobility players of the continent. We aim to reach 13 markets in the next two years, growing from 300,000 to 450,000 vehicles, which will put us in the top four of the major rental players in Europe.”
How will the popularity of vehicle leasing and fleet management in Europe evolve in 2020? “Certainly, the fight against COVID-19 will have an impact. But we foresee even more vehicle sharing, and even less ownership.”
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With smart mobility evolving fast and start-ups disrupting fleet management and leasing, how do you see the industry’s future? “We’re digital – and innovation-oriented, so we’ll keep using technology to make our services more accessible and more in tune with customer needs – following trends such as digitalisation, dis-ownership and the subscription economy.”
FLEET EUROPE #117
CCO Hans Kolff, Director of International Sales (since April 2018)
“Our goal is to develop offers our clients can seamlessly integrate into their services portfolio with minimal disruption, such as private lease for employees, full operational lease of a used car, mobility budgets and carsharing platforms for an existing carpool.”
level of service, combined with innovative products. So, we can both meet the rising demand for vehicle leasing and fleet management, and explore opportunities in mobility.”
FINANCIAL MODELS
HOW MAJOR FLEETS CHOOSE THEIR LEASING SUPPLIERS Jonathan Manning
With millions of euros at stake, fleet and procurement managers set a wide range of criteria for potential partners to meet.
Partnership and price are the two principal criteria that major fleets prioritise when selecting international leasing companies. Faced with only a handful of genuinely global leasing suppliers, each with a similar range of services, fleet decision makers are looking to appoint companies with whom they can work to improve internal efficiencies and drive down their fleet costs. The minimum entry requirements for leasing companies competing at this level are global coverage; consistent level of services; and accurate, uniform data supply and reporting in all of the major markets where clients operate vehicles. Suppliers must also be able to deliver competitive total costs of ownership, not merely in lease rates, but also in minimising additional charges, such as early termination fees, end of contract damages and excess mileage.
Fleets are looking for leasing companies to be partners and not simply the cheapest supplier.
FLEET EUROPE #117
Additional support But the relationship is not all about price. Fleet and procurement departments are also looking for assistance to minimise their carbon footprints, electrify their vehicles, reduce benefit in kind tax bills and, increasingly, introduce mobility solutions.
the company gains a new set of suppliers, both manufacturers and finance providers. Without careful supervision, this situation can lead to a proliferation of suppliers, diluting an international fleet’s purchasing power and delivering inconsistent data and reporting.
As one international fleet manager told Fleet Europe: “If suppliers can’t supply you with consolidated reporting, then what’s the point?”
This explains the relatively frequent procurement initiatives launched by fleets to consolidate their spending with just two or three international leasing companies. These tenders also provide an opportunity to apply pressure on suppliers to extend essential products and services across all countries where they operate, even fledgling markets. Dedicated score cards rank potential suppliers on
Rationalising suppliers The challenge is that companies operating at a pan-European or global level are frequently acquiring or merging with new businesses in local markets. And with each acquisition or merger
18
several criteria including geographic capability and product range; consultancy; contractual terms, such as mileage pooling and early termination charges; and even areas such as ethical sourcing. The tender also presents a chance for detailed communication between a centralised fleet team and its national fleet managers, identifying which services (such as fuel cards, insurance, replacement vehicles, and pre-lease vehicles) are ‘nice to have’ and which are ‘must have’.
Comparing prices Pricing, total cost of ownership and performance tracking are never far
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FINANCIAL MODELS
an international fleet of 22,000 cars and vans. “We rely on them for analyses and benchmarking, and we ask them for an efficiency roadmap. Now they are bringing solutions, such as mobility options, and that’s something we really value. We work at a global level with leasing companies so they can develop solutions and then we conduct local pilots.”
As a result, the two partners would explore the impact of downsizing vehicles, or adopting new engine technology to cut fuel bills, or how best to pay for maintenance to achieve the savings target, creating a relationship in which both parties were equally invested.
Space for local heroes Mr de Subercasaux has overseen a reduction in the number of Schindler’s leasing companies from 15 to four global partners, but the business still leaves space for its national affiliates to work with a ‘local hero’ if it can beat the service levels and prices of the global partners.
Guillaume de Subercasaux, Global Category Manager Mobility, Schindler
from the agenda, although they are difficult to assess given the potential for lease rates to fluctuate on a monthly basis and the temptation for new suppliers to supply unsustainable introductory prices in a bid to win the business. One solution is to request as part of the tender a matrix of lease rates, based on a mix of age and mileage contracts, for just a handful of vehicles, and to compare these to the prices of live orders with incumbent suppliers. A new bidder that is either too cheap or too expensive is easy to eliminate from the process. Rather than compete directly on price, the tender process is also an opportunity for suppliers to suggest alternative strategies and solutions that could save the fleet money, showcasing their consultancy skills ahead of their cost-cutting ability.
FLEET EUROPE #117
Partners not suppliers Worldwide lift and escalator specialist Schindler prioritises partnership with its four nominated international leasing companies. “We don’t want to have suppliers but partners,” said Guillaume de Subercasaux, Global Category Manager Mobility, Schindler, which has
He promotes the global contracts, where Schindler has been able to leverage its buying power to negotiate advantageous service level agreements in areas such as penalty-free early termination and mileage pooling, which makes life easier for local affiliates. But each new vehicle contract must be put out to tender with at least two leasing companies (including one of the global partners) to ensure competition. The cheapest lease rate wins the business.
International fleet managers are not looking for the best leasing supplier, they are aiming for a best-in-class partner.
Sole supply benefits At a national level, Siemens UK found that a policy of working with a single leasing supplier for its fleet of 3,000 cars and 1,500 light commercial vehicles fostered transparency in the relationship in areas such as profit share opportunities. It also provided an incentive for the leasing company to develop new services that would cement its partnership and make it indispensable, said Paul Tate, independent consultant and former Commodity Manager, Fleet at Siemens UK. “We would always ask where are the inefficiencies in our set-up and what should we be doing differently,” said Mr Tate. He would also set the leasing company (Lex Autolease) a savings target of 3% per year, a strategy which was only achievable through policy change, not negotiating cheaper procurement terms for the same number of the same vehicles.
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Paul Tate, independent consultant and former Commodity Manager, Fleet at Siemens UK
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FINANCIAL MODELS
WHY SPECIALIST FLEET MANAGEMENT REMAINS VITAL Jonathan Manning
Leasing companies offer an increasing selection of fleet management services but for large, international fleets the expertise of a specialist fleet management company can be essential.
First, a quick question: what is the difference between full service leasing and external fleet management? The distinction between the two has blurred as leasing companies have developed outsourcing solutions from acquistion to disposal, via funding, tax, maintenance, insurance and fuel. This cradle-to-grave service would appear to limit the scope for fleet management companies to intervene, yet the same vehicle life cycle viewed through the lens of a fleet management company reveals countless opportunities to improve efficiency, reduce cost and enhance service.
Avoid conflicts of interest The fundamental difference lies in the independence of fleet management companies, said Ross Jackson, CEO of Traxall International, “because otherwise how do you know if your interests are being put to the fore?” As specialists in asset management, leasing companies have an incentive to identify asset management as the solution, added Mr Jackson.
FLEET EUROPE #117
“Whereas with an organisation like ours we are always looking at how you take 1000 vehicles and turn them into 900 vehicles, or making sure that spare vehicles are reallocated rather than renting replacement vehicles. If we had an interest in the asset that’s probably not something that would have as much focus,” he said.
Ensure price competitiveness Moreover, given different local residual value forecasts, and especially widelyanticipated volatility in lease pricing after COVID-19, Mr Jackson said it
is impossible for international leasing companies to be the most price competitive supplier in every country where they operate, let alone on every vehicle. “The most effective solution is to have several leasing companies in competition. It’s statistically proven time and again that this is the most dynamically efficient model and it substantially reduces and spreads risk,” he said. “As well as sweating the asset in life, we focus on acquiring the vehicle at the right price for the client every time. That is our most important competitive advantage.” Multi-supply agreements leave fleets free to work with the most competitive suppliers in local markets, while their fleet management company consolidates and removes the headache of multiple data feeds. “We have the systems, people and structure to manage complex supply chains, to make sure KPIs are achieved and ensure things happen when they are supposed to happen,” said Mr Jackson. Even the most disciplined globally-scaled organisations are at danger of their international fleet deals unravelling if service delivery falters or prices spike in local markets. Country-by-country expertise allows fleet clients to unbundle service offerings, such as insurance or maintenance, where appropriate alternatives exist.
Deliver data integrity But the more international a fleet and the more diverse its acquisition
22
Ross Jackson, CEO of Traxall International
Traxall International:
22 countries 188,000
managed vehicles
400+
clients across multiple markets (Source: www.traxallinternational.com)
methods and service mix, the greater the challenge in ensuring data integrity, said Thibault Alleyn, Managing Director, consulting & analytics, Fleet Logistics. The introduction of IFRS accounting rules, for example, revealed the numerous different reporting platforms and ways that leasing com-
Thibault Alleyn, Managing Director, consulting & analytics at Fleet Logistics
Fleet Logistics:
50+ countries 180,000
contracted vehicles
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Dedicated fleet management companies can help fleets to develop, introduce, monitor and adjust strategies in multiple areas and on an international basis.
Plus, from one leasing company to another, and within the same leasing company across countries, there are quite large deviations in data quality and consistency of delivery,” said Alleyn. “In general, quality is on a downward trend so we need several loops with our team to get it corrected. Our customers expect clean data delivered in a systematic way, not only to make strategic decisions or negotiate with suppliers, but also for accounting purposes, payroll administration and tax. Fleet and mobility decision-makers need fully clean, ontime and reliable information.”
Turn insights into strategy He added that best-in-class fleet management service providers integrate advanced analytics to ensure accurate dashboards and reports, and consultancy to translate these insights into strategy.
“We advise clients on strategic measures, for instance around cost optimisation or fleet electrification and then provide dashboards to monitor the effects of those changes and allow steering along the way if we start to see deviations,” said Alleyn. He sees the role of an external fleet management company to be an extension of the client fleet department, in terms of data aggregation, strategy definition, roll-out support and ongoing supplier control. This includes working closely with stakeholders and the supply side, from concept development to day-to-day handling and monitoring.
(Source: www.fleetlogistics.com)
sidual value forecasts and lease rates, at a time when fleets are going to be looking to cut expenditure. “There will be companies that are taken over by others. And each takeover means at some point fleet integration and harmonisation work in terms of data, strategy, procurement and policies,” said Alleyn. “Where we come in is to provide a neutral view and external expertise on what is the most suitable operational set-up and supplier mix, country by country, and to facilitate the management of change, and then ensuring ongoing control after implementation.”
Support in a time of crisis These responsibilities look set to intensify as the global economy wrestles with the impact of the coronavirus. Not only will businesses face mergers and takeovers themselves, but their leasing suppliers are likely to take significantly different commercial positions on re-
23
FLEET EUROPE #117
panies could provide what, in theory, was a common standard.
customers worlwide
SAFETY
10
KEY STEPS TO AN INTERNATIONAL FLEET SAFETY POLICY Benjamin Uyttebroeck
@uytteb
No one is against safety but putting in place an effective safety policy can be tricky. We list 10 key steps to ensure fleet safety is more than idle talk. In most companies, regardless of where they are located, driving is likely to be the most dangerous activity employees undertake in the course of their working week. Risk levels may vary widely from country to country, but the human and financial costs of collisions are universally dramatic. No surprise then that many multinationals establish a global fleet safety programme. Implementing such an ambitious policy is fraught with difficulty, but there are common themes between successful programmes.
1
Understand the fleet landscape
Each company is different and there are no off-the-shelf policies. For your policy to be efficient, you need to understand how vehicles are being used and who uses them. Importantly, you also need to know the movers and shakers in the company as you will need to get them on-board.
senior management 2 Ensure buy-in
FLEET EUROPE #117
A lasting safety culture starts at the top. Every layer of management, from the global CEO to national company bosses and local managers, has to support the commitment to fleet safety. At the same time, drivers should never doubt the company’s attitude to safer driving. Operational requirements, e.g. the number of stops or visits a driver is expected to perform, should not conflict with safety rules.
3 Build a business case
A global safety programme will devour time and resources, so build a business case to justify the investment. And don’t forget to focus on the positive consequences of a safer corporate environment for both employees and the company itself. Elements in the business can include the financial benefits of fewer accidents (lower repair costs, cheaper insurance, improved fuel economy, avoiding productivity loss and damaged cargo); duty of care responsibilities and legal compliance; and honouring corporate social responsibility to staff and the wider community.
4 Adopt a team approach
Every relevant department has to respect the safety programme of different departments besides Fleet. HR has a say over topics like eligibility, Sales and Operations may have operational expectations, Finance has to foot the bill. Companies with highrisk activities in particular, e.g. in the oil or mining industries, will also have a dedicated Safety department, which should also be on board.
5 Accept local differences
Setting a single global programme for safety improvements is doomed to failure. But laying solid foundations that driver safety is critically important and that business decisions should support this, should be a unifying, global theme.
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The overarching principles, purpose and style should be the same regardless of geography. Differences in local realities, however, require a safety policy that allows for technicalities to be differrent. For instance, drivers who need to drive on dirt tracks in the outback of Australia or in rural parts of Africa may find it useful to follow off-road driving training. Other differences need to be taken into account as well, like road conditions, behaviour of other drivers, dealing with law enforcement and local attitudes to mobile phone use and drink driving.
6 Use technology
Telematics systems provide fleet managers with data about driving behaviour and they can be complemented with a dash cam that record what’s happening in front of the vehicle and even a second camera to register the driver. There are also ways to block smartphones when a vehicle is moving.
An efficient safety policy can prevent the headache of dealing with accident damage, or worse.
7 Train your drivers
Driving training should address behavioural issues, increase defensive driving skills and encourage people to engage in e-driving. Your drivers already know how to handle their vehicle, but do they know how to do it safely and sustainably? Driver training can be offered online, in one-on-one coaching or in group sessions. Dedicated technology companies also offer short modules on driver’s smartphones that are linked in real time to that driver’s behaviour.
8 Carrot not stick
productive than punishing poor performance. Drivers need to understand that the safety programme is designed to protect and not persecute them. Set measurable targets, such as an improvement in fuel economy (from a gentler driving style), or a reduction in incidents of harsh acceleration and braking (from telematics data). Some companies run league tables that reward the best-performing drivers.
10 No finish line
There’s no finish line in a risk management programme. It’s a constant campaign to reduce risk and keep safety as the highest priority within the corporate culture. Use all available data to measure the effectiveness of the policy, and keep striving to reduce the number of collisions and claims, both locally and globally.
9 Select safer vehicles
Vehicles in Europe typically meet high safety standards, and vehicles in Asia and South America are now often better equipped, too, even though they may still not include all safety options. The Global New Car Assessment Programme urges fleet buyers to go for vehicles that score a five star rating. In Europe, the Euro NCAP car safety assessment standard also looks at pedestrian safety and driver assist technologies. There is a reason for that, so include these parameters in your vehicle benchmarking.
Drivers must engage in this process, and rewarding good behaviour is more
25
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FLEET EUROPE #117
Such technological features can help reduce accidents, which in turn leads to lower damage repair costs. In general, companies that implement telematics record a strong drop in damages and incidents of speeding, making the business case clear. However, communication is vital if a company wants to avoid accusations of 1984-style Big Brother.
SAFETY
WHAT FLEET SCENARIO DO YOU PURSUE IN THE NEW NORMAL? Jonathan Manning
Ensuring fleet safety is no longer simply about traffic accidents and safety equipment. It is also about planning for post-lockdown recovery. Scenario planning can help determine the road to take for the future. Scenario planning is a business tool that lets decision makers stress-test different strategies against different visions of the future. It offers an alternative way to test new strategies and ideas. The uncertainty of business life in the New Normal creates a number of widely divergent scenarios for the future of fleet. What is certain is that
FLEET EUROPE #117
1
cost cutting will become the main priority of fleets. Scenario planning does not provide concrete answers. Nor does it determine whether it is better to implement strategies that perform reasonably well in a wide variety of scenarios, or commit to a policy that performs exceptionally well in just one scenario.
2
Three scenarios None or all of the elements in these three scenarios may actually happen, but answering the ‘what if’ questions will help to identify weaknesses in current planning and lead to stronger, more resilient policies.
3
THE GREEN SCENARIO
THE DIGITAL SCENARIO
THE COST SCENARIO
Go green – companies emerge from coronavirus lockdown with a renewed commitment to environmental goals and find that access to financial support from governments is closely linked to reducing carbon emissions.
Online society, online economy — the coronavirus lockdown prompts a fundamental shift in the way businesses and private individuals buy products and organise their corporate and personal life. Digital communication is all around. Shopping shifts online and delivery becomes central to the retail experience.
Cost cutting chaos – the economic impact of the coronavirus pandemic forces companies to adopt drastic cost-cutting measures.
• Businesses downsize their fleets, operating fewer vehicles and restricting them to essential journeys. • Businesses bring forward their carbon neutrality deadlines to 2025. • Grants and subsidies are only available for zero emission electric vehicles, leaving plug-in hybrids unsupported and expensive. • A massive Europe-wide expansion in renewable energy makes electricity a cheaper power source than petrol or diesel. • The low traffic volumes, cleaner air and reliable journey times during the COVID-19 lockdown encourage authorities to introduce tougher congestion charging and lower emission zones. • More employees work from home, reducing the need for company cars. • Workplaces shrink, cutting the need for office EV charge points. • Employees expect multi-modal travel solutions for business trips. • Mobility as a Service becomes a key feature of employment contracts, playing an important role in staff recruitment and retention.
• Employees become more tech-savvy than they already were. • COVID-19 has forced fleet managers into a more pragmatic and decentralised fleet management with digital tools helping them to execute their role. • Retail space and location become less important than warehouse space and location. • Businesses need freight consolidation centres to gather packages prior to last-mile delivery. • Logistics and delivery firms start to share warehouse and hub facilities. • Customers expect green delivery options, demanding bike and electric van deliveries. • On-demand mobility will grow as the need for professional miles will become more punctual rather than constant. • Punctual delivery times become a vital USP – customers expect to track deliveries minute-by-minute in real time. • Cities impose limits on how many deliveries each building can accept during the day.
26
• Fleet renewal is suspended. Vehicle holding periods extend, contract mileages rise, service and maintenance challenges increase. • Non-essential vehicles are sold or used as pool cars because they are cost-effective. • Perk company cars disappear from employment contracts. • Price becomes the most important factor in sourcing new vehicles, leading to a possible resurgence of diesel sales as oil prices remain low. • Fleets look to leverage their buying power through a single supplier – only a small number of OEMs have ranges capable of satisfying all fleet operational needs. • Long-term, fixed cost supply agreements become essential as fleets operate under strict budget controls during the corporate recovery.
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NEW
1) DriveGuard technology enables drivers to continue driving for 80 km at up to 80 km/h. Driving distance after a puncture may vary depending on vehicle load, outside temperature and when the TPMS is triggered. 2) Bridgestone recommends to fit by 4 to experience full advantage of DriveGuard technology. 3) TPMS - Tyre Pressure Monitoring System, is equipped as mandatory on every new car model produced from 2014.
Bridgestone Europe For your nearest Bridgestone Authorised Dealer, visit our website www.bridgestone.eu
SAFETY
DON’T ACCEPT ACCIDENTS AS UNAVOIDABLE Benjamin Uyttebroeck
@uytteb
Zero road deaths — that’s the ambitious target the European Union wants to achieve by 2050. Improving driver behaviour is an obvious way to work towards that target and one that needs to be addressed by fleet operators.
be a thing of the past,” said Gillian Nieboer, Regional Marketing Manager, Samsara, an IoT solutions company that provides safety solutions for vehicles. “More conservative companies see accidents as unavoidable, but we believe each accident is one too many.” “What started out as a simple tracking system, has become a smart camera system,” he said. There’s either one camera watching the road ahead, or a two-camera set-up with the second one pointing at the driver. Gillian Nieboer, (Samsara): “Accidents should be a thing of the past.” The EU’s Vision Zero target will require serious effort of lawmakers, who can mandate additional safety equipment to be fitted as standard on new vehicles. By May 2022, for instance, Intelligent Speed Assistance will have to be installed in new vehicles sold in the EU. This system will provide a driver with feedback when the speed limit is exceeded, based on maps and road sign observation.
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In earlier drafts, lawmakers pushed to include a speed limiter but that did not make it into the final regulation. It remains to be seen whether drivers will be impressed by the system’s feedback, and whether they will actually slow down. This touches upon the weak spot in road safety: drivers and their behaviour.
A thing of the past In 2018, 25,100 people died in accidents on EU roads. “Accidents should
“This way, you can tell whether the driver is paying attention, looking out of the window or even whether they’re wearing their face mask.” The latter feature was requested recently by a US health care provider. Adding cameras improves safety because drivers often modify their behaviour when they know their vehicle has on-board cameras. But there’s more — cameras also provide insights into what’s happening. “Vehicle data already indicated whether a drive had braked harshly,” explained Mr Nieboer, “but now we can also see why they did that.” In many cases, it may not be a case of reckless driving but simply a necessary action to avoid an accident.
Eliminate distraction “Worldwide, around 25% of all vehicle damages can be attributed to distracted drivers,” said Paul Hendriks, Sales and Marketing Manager and owner of SafeDrivePod. That’s why his company has come up with a solution to eliminate the number one source
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Paul Hendriks, (SafeDrivePod): “We eliminate the number one source of distraction for drivers.”
of distraction behind the wheel: the smartphone. SafeDrivePod isn’t only a company name, it’s also the name of a small, coin-sized pod that can be mounted in any vehicle. In conjunction with a smartphone app, the pod detects when the vehicle is moving and shuts off access to apps while driving. It’s a matter of not trusting the cat to keep the cream. You can ask drivers to refrain from using their smartphone but you’ll probably be more successfully when you’re making smartphone use physically impossible. “Our solution has a very appealing return on investment,” said Mr Hendriks. “Our customers report around 25% fewer damages to their vehicles.” In 2016, SafeDrivePod won the Fleet Europe Fleet Industry Award.
Distraction, particularly from smartphones, is an important contributor to accidents. SafeDrivePod blocks smartphones when vehicles are moving.
Importantly, it is not limited to a particular kind of vehicles and can be used in cars, vans, trucks and even bikes.
Operational requirements Technology can take away temptations to take more risks behind the wheel, but the role of operational policies should not be underestimated, said Andy Cuerden, Managing Director, eDriving. “We reinforce the message that there should never be any conflict between operational requirements and the individual driver’s own safety. Even in the strange times we find ourselves in now, with our increased reliance on delivery fleets, their safety should never be compromised.” In other words: don’t push drivers to squeeze in more visits or deliveries in the same workday. Through a patented risk management programme, eDriving helps companies
“A lot of what we do is try and influence and reinforce behaviour,” said Mr Cuerden. “We don’t only focus on high-risk drivers. Instead, we recommend to also talk to low-risk drivers at least once a year, even if it’s just for a pat on the back.”
Over-reliance Technology can help improve driver behaviour and reduce risk but it can also have a downside when drivers become over-reliant on it. A number of studies suggest drivers sometimes rely too much on Advanced Driver Assistance Systems, leading to an increase in accidents. A Dutch study showed drivers without ADAS have a 14% chance of being involved in an accident each year. With ADAS, that risk becomes 23%. What’s more, repairing cars with ADAS features tends to be more expensive.
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THINGS TO KEEP IN MIND ABOUT DRIVER BEHAVIOUR • Make sure operational requirements do not conflict with driver safety. • Drivers will be more risk-averse if they know they’re being monitored. • Banning smartphones reduces risk. Technology to make smartphones unusable while driving helps drivers respect such bans. • Driver behaviour needs constant attention and training. • Do not only focus on bad behaviour. Your safety policy needs a carrot as well as a stick.
“At the end of the day, it’s still the individual driver who’s driving the vehicle,” said Mr Cuerden. “It is the individual’s responsibility to keep himself and everyone around him safe.” Driver monitoring systems can help ensure they don’t disregard this responsibility. A system that gives instant notifications in particular can improve certain behaviours as they happen.
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Andy Cuerden, (eDriving): “We don’t only focus on high-risk drivers.”
reduce collisions, injuries, licence violations and TCO, for instance by using Mentor, a smartphone app that collects and analyses driver behaviours most predictive of crash risk. It helps remediate such risky behaviour by providing interactive micro-training modules directly to the driver’s smartphone.
SAFETY
SAFETY INNOVATION: DON’T STOP ME NOW @DieterQuartier
Volvo will be working together with Luminar to provide Lidar and perception technology, paving the way for future active safety developments.
Will COVID-19 put safety second and cost-saving first? It depends on which stakeholder you ask, but competition between OEMs will keep driving technology forward, until one day we may reach zero road casualties – and even fully autonomous driving.
OEMs are taking measures to save costs. Not to please shareholders, but simply to survive. That means a reduction in the number of models and variants, but also cuts in strategic development areas such as new mobility and autonomous driving. The road towards self-driving cars is built with advanced driver assistance systems (ADAS), which get ever smarter and capable of managing more and more complex tasks in ever more situations. It stands to reason that corona will put a brake on their development. Some carmakers are pushing ahead regardless, to stay true to their DNA and deliver on their brand promise.
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Tesla: Full Self-Driving Capability The Californian EV maker not only prides itself on its battery technology and top-notch infotainment, it also claims to have the most advanced automated driving suite on the market today. An ADAS package called
Autopilot comes standard om every Model 3, Model S and Model X. It enables the car to automatically steer, accelerate and brake for other vehicles and pedestrians in the same lane; Basically, its adaptive cruise control with stop&go functionality combined with what EuroNCAP calls “AEB Pedestrian” – a combination that the premium Germans invoice at €1,000 or more.
Volvo: Luminar Lidar integration
More controversial is what Tesla calls “Full Self-Driving Capability”. For roughly €5,500, you get a Tesla that can change lanes on motorways, and enter and exit motorways by itself – plus the promise that soon it will be able to stop for a traffic light and a stop sign. You still have to push the accelerator pedal to cross the intersection, though. The FSD supplement also readies your car for a future in which fully autonomous driving is legal and safe, thereby expanding its self-driving capability from the motorway to practically everywhere.
The Swedish OEM recently announced a partnership with Luminar for the integration of Lidar and perception technology in SPA2 vehicles. The partnership will deliver Volvo’s first fully self-driving technology for motorways – you could call it level 3 autonomy – and paves the way for future active safety developments.
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Vision 2020 is how Volvo sees the foreseeable future in terms of safety: ADAS combined with ultra-high protection in the event of a crash should together mean the end of people getting killed or seriously injured in a new Volvo, starting in the early 2020s. That is when Volvo introduces the SPA2 platform, which will be inaugurated by the next-generation XC90.
Luminar’s technology is based on its high performance Lidar sensors, which emit millions of pulses of laser light to accurately detect where objects are by scanning the environment in 3D,
THE COST OF SAFETY Advanced Driving Assistance Systems (ADAS) are designed to prevent accidents. Still, recent studies blame the technology for a big jump in the average cost of accident repairs.
creating a temporary, real-time map without requiring internet connectivity.
assistance systems that the driver is still ‘active and aware’.
Cars based on SPA 2 will be updated with software over the air and if customers decide to opt for it, the Highway Pilot feature that enables fully autonomous motorway driving will be activated once it is verified to be safe for individual geographic locations and conditions.
The buttons integrated into the steering wheel spokes now also function capacitively. This reduces the mechanical operating surfaces to a maximum. The seamless control panels, which are divided into several functional areas, are precisely integrated flush with the spokes.
Mercedes-Benz E-Class: you can touch this
As with a smartphone, touches are recorded and evaluated via capacitive sensor technology, which enables intuitive operation via swiping gestures and pressing of familiar symbols. The high-quality materials have been selected in such a way that operation is possible even in an interior heated up by sunlight. The system automatically recognises where the finger is at any given moment.
Having ADAS is one thing, knowing whether the driver is in control another. The legacy E segment saloon and estate from Stuttgart introduces a new generation of steering wheels with capacitive hands-off detection. A two-zone sensor mat is located in the rim: the sensors on the front and back register whether the steering wheel is being held. No more steering movement is required to signal the
It’s an evolution that cannot be stopped – even if we could, we should ask ourselves if we can put a price on saving a life. Thanks to AI, the car will recognise risks and intervene before the driver even realises what is going on. Moreover, sensor-fusion – the use of multiple types of sensor for the same application, e.g. cameras, radar and Lidar – enables a ‘redundant monitoring system’ so that regardless of the driving conditions, the car gets the right information to operate safely.
For a supplement of roughly €5,500 excluding VAT, Tesla aficionados buy the OEM’s promise that their car will eventually have “Full Self-Driving Capability”.
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Sensors on the front and back of the rim register whether the steering wheel is being held, thereby informing the car that the driver is ‘present’.
On top of that, according to consultancy firm Deloitte, electronics installed in a car today – not just for safety, but also for infotainment, comfort, engine management, and so on – account for 40% of its total cost. With the arrival of ever more ADAS and automated driving using cameras, radar, lidar and so on, the cost is expected to represent 45% by 2030.
SAFETY
WHY VIDEO TELEMATICS ALSO BELONG IN VANS AND CARS @DieterQuartier
The trucking business has long discovered the added value of video telematics. Large delivery van fleets are starting to show interest too. The next step could be company cars, even if privacy concerns are a tough nut to crack.
The integration of cameras to enable various video-based solutions in commercial vehicle environments is one of the most important trends in the fleet telematics sector, says IoT market research provider Berg Insight. In their recent report, they found that the installed base of active video telematics systems in Europe was less than 0.5 million units in 2019. The active installed base is forecast to grow at a compound annual growth rate (CAGR) of 16.1% to reach about 1 million video telematics systems over the next four years. The first industry to realise the added value and cost-saving potential of the technology was the trucking business, followed by passenger transport providers (buses). In recent years, the technology has been trickling down to Light Commercial Vehicle (LCV) operators as well as the Ubers and Lyfts of this world. Some believe the next segment to open up to the technology is passenger cars. Not to coach drivers, but to avoid wrongful insurance claims.
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Insurance-driven “The initial concern is insurance and claims costs,” explains Damian Penney, VP of Lytx Europe. ”Until recently, large corporates that operate trucks and LCVs have not typically prioritised installing cameras in their fleet’s passenger cars. One reason is the lower incident risk – company car drivers are less involved in collisions than van drivers, which makes for a less convincing business case.”
“Still, as the costs of running a fleet are rising, companies are looking for ways to manage their expenses. They want to use video telematics in a reactive way – to see what happened and what caused the collision – rather than trying to proactively change behaviour by coaching the driver. The ability to see what happened in the past helps to improve driver safety and reduce insurance claims which can result in a significant saving. For example, our data shows that, using Lytx’s video telematics, we help fleets reduce claims costs from between 50-80%,” says Mr. Penney.
Privacy versus lives Privacy does remain an issue and it’s not uncommon for drivers to be wary about camera technology – especially if cars are not used strictly professionally, but also for personal trips. However, once drivers learn about the experience and benefits – including how video can be used to exonerate those who find themselves in a risky situation where they were, in fact, blameless – many insist on having a camera installed. “In addition, videos are only captured when something happens. If no incident or risky behaviour occurs, then no video is captured – and safe driving can be rewarded. Lastly, you can also manage the amount and the type of data it captures,” Mr Penney explains. “We’ve seen that, when our customers involve their teams early on in
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Damian Penney, VP of Lytx Europe: “We are very happy to talk to our competitors, because that’s the way forward.” the decision process, they’re much more likely to get driver buy-in. One of the ways this can be achieved is to work with drivers to shape a safety programme which provides a sense of ownership and accountability, which you’re less likely to get if drivers simply have a programme imposed on them by management. Instead, you see engaged drivers who are supportive and have an opportunity to see the safety and claims benefits of video telematics.” One of the biggest benefits for drivers is that video footage shows the truth, which in many cases demonstrates
©Lytx
The true added value of video telematics resides in its capability to expose a lot more risks than telematics alone – and far more proactively so.
Exposing risks OEMs are also keen on grabbing a piece of the blooming video telematics business by offering their own connected video hardware and platforms. “They have some catching up to do – they are vehicle builders, not tech companies after all. What matters when choosing a provider is the quality of the video data plus the ability to cope with complex algorithms and to make decisions ‘on the edge’ – not in the cloud, but decisions as they happen.” Here, artificial intelligence is a true game-changer. It is able to interpret video data and determine whether certain behaviour is risky or not. “Technologies like Machine Vision and Artificial Intelligence (MV+AI) means we can identify whether somebody picks up their phone, whether someone drives through a stop sign or whether they are wearing a seatbelt or not. This level of actionable insight into driving behaviour can only be achieved through large quantities of high-quality data. At Lytx, we review around a million videos per week,” explains Mr Penney.
“The true added value of video telematics resides in the fact that it exposes a lot more risks than regular telematics could ever do – and far more proactively so. That might be scary at first, but it also allows you to prevent more incidents from happening.“
Future outlook Today’s telematics market is pretty crowded, but consolidation is already happening, whereas smaller players might not survive the challenging times we are currently facing.
< 0.5 million The number of units of active video telematics in Europe in 2019
‘‘One thing that’s becoming increasingly important to fleet managers is that they can go to one place for their data. In the future, this may mean that suppliers will have to work more closely to serve their customers, who want one dashboard to monitor everything they need. APIs today are very good. We at Lytx are very happy to talk to our competitors, because that’s the way forward.” Mr Penney concludes.
WHAT IS VIDEO TELEMATICS? A definition can be found on Geotab’s website: “Video telematics combines vehicle data and driving data to provide more context around any incident footage while transmitting the video evidence in real-time over a cellular network.” Lytx formulates it as follows: “Simply put, video telematics combines video data, computer vision technology, and vehicle data to deliver insights that telematics alone cannot.”
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that they are not at fault. Knowing that everyone can clearly see what’s happened spares drivers any fear of wrongful claims that could damage their driving record, and of stress or worry about uncertainty or grey areas.
DOSSIER SAFETY
TITRE SUR 2 LIGNES @?
Intro
HOW TO REDUCE INSURANCE COSTS Jonathan Manning
As fleets search for savings in all areas of expenditure, insurance premiums are an obvious place to start.
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The high fixed cost of fleet insurance will find itself in the crosshairs of businesses as companies emerge from the economic damage caused by COVID19. In broad terms, this leaves fleets with two options: either negotiate lower premiums on current policies; or accept more risk to cut premiums. With premiums based on claims history, fleets should be in a stong negotiating position for 2021, given the lengthy accident-free period while vehicles were in lockdown. However, these improved terms are likely to be short-lived. Insurance premiums have been rising since the Solvency II regulations came into force for insurance companies in 2016, and vehicle repairs have become more expensive due to the complexity of fixing Advanced Driver Assistance Systems.
Pressure on premiums Insurers will also be under pressure to raise premiums in order to compensate for the loss of millions of new motor policies this year due to the collapse in new cars sales across Europe during the pandemic. And heavy losses on insurance lines (e.g. life) hit hard by COVID-19 will intensify pressure to raise prices on all policies, including motor. “We were already in a climate of premium increases and we will get a big increase on top of that,” said Eelco van de Wiel, managing director, fi insurance. Even if fleets do succeed in negotiating cheaper premiums for 2021 as a result of lower claims this year, the savings will be shortlived unless they are accompanied by successful risk management
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strategies. If claims costs in 2021 return to 2019 levels, then premiums in 2022 could exceed pre-COVID-19 levels.
Self-insurance solutions An alternative route to lower insurance costs, but with the potential for longterm savings, is to self-insure. The first and easiest step towards self-insurance is to increase the deductible (excess) for own-damage claims. For larger fleets, recurring own damage repair costs are so predictable that this is more of a budget than a risk, said van de Wiel. “We see fleets increasing deductibles from €500 to €5,000,” he said. “That reduces your premium a lot.” This is not, however, a strategy for the feint-hearted, and van de Wiel outlined
“It’s not a fit for companies looking for certainty,” said Mr van de Wiel.
Do your homework Preparations for self-insurance also require detailed data collection from the past five years on every accident – its date, the amount paid, the sum reserved, the type of insurance cover – as well as accurate figures for the fleet size. “You need to be tenacious and rigorous to get the source data, and not just what the leasing or insurance company reports. Then you can calculate claims cost for every car over last five years. It’s very predictable,” said Mr van de Wiel. This same robust approach is necessary, he added, to ensure the design of the self-insurance strategy meets the individual needs of a fleet. Do not accept an off-the-shelf solution from a leasing company or insurer. “The question is whether the structure that you have, your claims history, risk profile, risk appetite and your objectives are best in class. Do the design of the programme independently and challenge your current suppliers,” said Mr van de Wiel.
Reduce risk Finally, self-insured fleets need to tightly manage the claims and repair process – or outsource this to an accident management company. Only by minimising vehicle downtime and repair costs, and resolving claims as quickly as possible can fleets ensure that the savings from self-insurance are not outstripped by higher expenses elsewhere.
TRADITIONAL OWN DAMAGE INSURANCE VS SELF INSURANCE VAT (100% recovery)
Insurance premium tax Fleet profit
Cost savings with self-insurance
Insurance profit margin Commission Costs
Stop loss premium + Insurance premium tax Service fees Costs
Losses
Losses
Traditional Motor Own damage insurance
Self-insurance Source: Aon
Where do self-insurance savings come from?
advanced ‘eco’ platforms, said Eric Scrayen, owner of Solves BV.
Self-insurance delivers savings in three primary areas: insurance premium tax (IPT), commission paid to brokers, and the profits of the underwriter.
“When an accident happens you have very different parties that need to be informed, and they need to take action,” he said. “You have the insurance company, the insurance broker, the fleet manager, the driver, the accident management company, the roadside assistance company, the courtesy car company, the repairer, the loss adjuster and so on. In the more mature markets they work on eco platforms where once the elements of the accident, car and driver are put into the system, everyone can see the information in real time and receive a push ‘notification’ when they need to act.”
IPT on motor insurance policies ranges from 42.9% in Denmark to 33% in France, 19% in Germany, 12% in the UK, 6% in Spain and 0% in some eastern European countries. Unlike VAT, IPT cannot be recovered. As a rule of thumb, Motor Third Party Liability (MTPL) accounts for about 40% of a comprehensive insurance policy, and own damage, legal and roadside assistance represent about 60% of the policy. So fleets can save 60% of their IPT bills even if they continue with their current MTPL cover. Lower premiums also mean lower commissions paid to the broker or underwriter.
Self-insurance infrastructure But a successful self-insurance policy does depends on the maturity of a country’s motor insurance sector, including its repair management, claims management and accident management services, as well as
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Without these automated processes, the management of claims can be complicated and administratively burdensome.
Focus on risk reduction Arguably the greatest saving from self-insurance comes from the greater focus that fleets place on their own driver and vehicle safety when the company itself is responsible directly for the cost of any damage to its own vehicles.
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four key areas to consider before self-insuring own-damage claims, starting with corporate attitude to risk. While self-insurance should prove cheaper over a long period, it is still vulnerable to spikes, which means it will not be cheaper every year than current premiums.
AUTONOMOUS
SAFETY FIRST APPROACH SHAPES EUROPEAN AUTONOMOUS VEHICLE EVOLUTION Mark Sutcliffe
In spite of all the hype about autonomous vehicles, the prospect of level 5 self-driving vehicles coming soon to a city near you remains some way off. By 2030, it’s possible that we will see autonomous cars allowed to operate on some open roads, but for the time being, the evolution of Connected and Autonomous Vehicles (CAVs) in Europe is characterised by caution. However, there are certain aspects of autonomy that are already being deployed on the roads of Europe – while others will become commonplace and even mandatory over the next couple of years.
Self-parking cars Self-parking cars first appeared on European roads almost a decade ago, when Volkswagen Group unveiled new technology that could scan for a parking space before taking control of the steering wheel and manoeuvring the vehicle into the space. Since then, many of the major OEMs have incorporated similar technology as an optional extra or – on more expensive models – as standard equipment.
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Although they can take the stress out of parking in sought-after on-street locations and busy car parks, self-parking cars aren’t really an autonomous game-changer… yet. Some experts believe the next level of self-parking cars – as Tesla’s Summon technology hints at – could be the key to reducing urban congestion. Some studies in the USA suggest that up to a third of vehicles cruising around the typical city are actually looking for a parking space. If the car could drop its occupants directly outside
©Waymo’s autonomous vehicle trials in the US are focusing on linking passengers with public transport hubs in Phoenix, Arizona. their destination before heading off autonomously to find a parking slot, this could dramatically reduce urban congestion. Tesla Summon only works over distances up to 70m and there are some well-publicised ongoing issues with the technology, but it signposts one of the most practical applications of low-speed autonomous vehicle technology that could prove useful in the medium to long term.
Driver assistance safety features The EU has mandated a suite of driver assistance devices which employ partial autonomy to reduce accidents which will become compulsory on all new cars sold in Europe from 2022.
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The European Transport Safety Council (ETSC) spearheaded the campaign for the introduction of the following connected and autonomous driving aids, which received the green light from MEPs last year. Intelligent Speed Assistance (ISA): in-car telemetry or geo-fencing to draw the driver’s attention to the legal speed limit. Autonomous Emergency Braking (AEB) radar and/or lidar sensors warn of an imminent collision and – if the driver doesn’t react – automatically applies the brakes. Lane Departure Warning/Assist alert the driver when their car veers out of
a motorway lane and – in some cases – nudge the vehicle back into line without any input from the driver. Attention Assist monitors the driver’s eye movement and if they show signs of fatigue or drowsiness, tells them to take a break before continuing. These innovations are part of a wider road safety initiative which places connected and autonomous vehicle technology at the heart of a concerted effort to halve the 25,000 fatalities recorded every year on the roads of Europe. Over the next five years, they are expected to play a significant role in shifting consumer perceptions to autonomous technologies and demonstrating the positive impacts partial autonomy can deliver.
An autonomous Renault Zoe and driverless pod in the Paris-Saclay autonomous vehicle trials.
Driverless shuttle buses
For example, Google offshoot Waymo is working with Phoenix’s Valley Metro public transport system to ensure its autonomous shuttles provide firstand last-mile travel to Valley Metro customers. A Waymo spokesperson said: “With the partnership with Valley Metro, we’re exploring mobility solutions that use self-driving technology to better connect travellers with the city’s existing buses and light rail. Working together, we’re exploring how self-driving vehicles can fill transportation and mobility gaps for riders across the Greater Phoenix area and help support the local infrastructure that already exists.” In Europe, many of the current CAV trials on public roads involve driverless shuttle buses or ‘robo-cabs’ rather than private autonomous vehicles. Renault teamed up with global public transport provider Transdev and a number of technology partners to trial an on-demand shared mobility service in the Normandy city of Rouen
to evaluate autonomous vehicles on the open road. Using four electric Renault Zoe cars and a Lohr i-Cristal autonomous shuttle bus, the Rouen Autonomous Vehicle Lab allowed subscribers to hail a vehicle via a smartphone app at one of 17 stops along a 10km route in Rouen’s Technopole du Madrillet business park. The new phase of testing is taking place in the suburb of Saclay, southwest of the capital, where five AVs will supplement the existing Saclay Plateau transportation systems. In the UK, the Government-supported Autodrive Project trialled a range of autonomous vehicles in Milton Keynes and Coventry over a three-year period. The trial’s pavement-based Aurrigo self-driving pods are a new class of vehicle that blurs the lines between public and private transport providing last mile solutions for both passengers and parcels.
5G network More widespread availability of 5G will make it easier for connected cars to communicate with roadside infrastructure for managing vehicle
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speeds on smart motorways and – in the longer term – vehicle to vehicle connections that could facilitate collision avoidance devices. 5G connectivity could also be used to bill motorists for using toll roads or levy variable congestion charges for entering cities. Last summer August, the EU unveiled an action plan to manage the cross-border rollout of 5G so that its benefits are felt as widely and quickly as possible. The EU supports three Public-Private Partnerships which will set up 5G trials across more than 1,000km of highway – including four cross-border corridors: Metz-Merzig-Luxembourg, Munich-Bologna via the Brenner Pass, and Porto-Vigo and Evora-Merida, between Spain and Portugal.
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After some well-publicised fatalities involving CAVs in the USA, there has been a subtle shift in the direction of autonomous innovation from private cars to public transport solutions.
NEW ENERGIES
EV PACKAGE DEALS: FOR YOUR E-CONVENIENCE @DieterQuartier
FLEET EUROPE #117
Most lessors are teaming up with local partners to best match the market’s requirements.
To optimise the use and convenience of an EV, a domestic smart wallbox and a payment solution for public charging can be included in the lease contract. To offer the best solution on every level, lessors are teaming up with e-mobility service providers.
Unlike a conventional car, an electric vehicle – whether it is a plug-in hybrid or a battery-electric one – comes with an ecosystem around it. In other words, making e-mobility work for your employees largely comes down to providing the tools they need to charge their vehicle, either at home, at the office or at a public charger. Rather than talking to charging infrastructure and e-mobility service providers directly, some corporates expect their leasing partners to provide an all-in solution. No wonder that lessors have been investing in
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this care-free solution, which usually involves a partnership with energy providers. For all parties involved, such solutions can be a stepping stone towards a widespread fleet electrification.
Arval, Engie & EDF: towards green energy and V2G Arval and BNP Paribas have signed strategic partnership agreements with companies like Engie and EDF, as well as developed fully integrated EV solutions including packaging of the recharging infrastructure, charging and billing services and reporting.
Ready to move you further The way to sustainable growth Our dedicated consultancy services, solutions and partnerships will help you face the challenges of global environmental change and urbanisation to future-proof your business.
NEW ENERGIES
“Bundling green energy in our EV packages is the next step, as well as starting to test and learn in the area of Vehicle to Grid solutions,” says Bart Beckers, Chief Commercial Officer at Arval. Even though it is still in its infancy, V2G is indeed an element to already consider right now as it can drive down TCO considerably as the EV “lends” its battery for grid balancing.
Alphabet: following the market closely In addition to the suitable e-vehicle or plug-in hybrid, Alphabet’s range of services now also includes solutions for intelligent charging management. “It also covers the integration of renewable energies and measures to balance out peak loads and simple billing solutions in the company and at home,” explains Markus Deusing, Chief Commercial Officer, Chief Marketing Officer Alphabet International. “Our offer is market-specific since the local requirements are very different. In our best practice markets (e.g. Netherlands and Germany), we have integrated high level services into our core offer: consulting & assessment, pre-defined installation cost, billing and payment of energy consumption, and charging hardware financing.”
Volkswagen Financial Services: all under one roof
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VW FS’s so-called MEB Consulting focuses on the whole electrification process of a vehicle fleet. “We go to the customer with our in-house experts, analyse the fleet situation, the existing usage profiles and possible infrastructure requirements. We then either pass on the findings to the VW Group brands or make our recommendations,” clarifies Jochen Schmitz, Head of International Fleet at Volkswagen Financial Services. “When it comes to charge cards, we work closely with our subsidiary LogPay, which offers an integrated fuel and charging solution with the Charge&Fuel Card. In Germany, customers can access 98% of the charging points. The solution will be rolled out in European markets before the end of this year. In addition, customers have the option of obtaining a corresponding green
electricity tariff and wall boxes via the Volkswagen subsidiary Elli.”
solution,” clarifies Marchel Koops, Chief Commercial Officer Athlon.
Business Lease: learning on the go
“One specific example is the charging cable versus the wall box. In some markets PHEVs are more popular than electric vehicles. Depending on the driving patterns, a charging cable with built-in tracking to provide the reimbursement process might make more sense than offering a wall box.”
“We offer packages with charging systems and access to the charging network into the lease product. The request is still quite scattered, there is no one-size-fits-all solution on the market and every customer has a different requirement,” explains Hans Kolff, Director International Sales at Business Lease. “It is up to us to offer a one-stop shop solution that we can manage. Together with our partners we are offering such services and experiences from the past – Business Lease was the first in the Central European region to have Teslas in its fleet – do help us a lot. The more experience you get, the better you can adjust the product to the requirements of the customer and we have learned a lot as we moved forward.”
Leasys: “hybrid” offers Leasys is getting ready for the electric revolution. “We are currently developing innovative rental offers that give our current and future clients the chance to get closer to the electric world without fear or reservation,” says Federico Sanguinetti, CCO at FCA’s leasing and mobility solution provider. “We have also created, through the “hybrid” offer, several products in our portfolio, in order to give the client the same benefits as usual plus more, all included in our offers. We are also about to launch a new product which will interact with the services linked to the charging, both private and public, of vehicles in collaboration with the main energy providers in Italy.”
Athlon: local partners, tailor-made solutions Athlon works with different partners that can give them and their customers top-notch service locally. “We provide our customers with solutions to charge at home (including the reimbursement), at public charging stations and if needed at the office. Due to the different needs of our customers we might even have several partners to be able to offer the perfect tailor-made
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ALD: partnership with E.On and ChargePoint ALD has developed a comprehensive ALD Electric offer with a holistic approach to electric vehicles. It is composed of 5 key services which facilitate customer decision making and helps alleviate anxiety related to EV adoption. These include consultancy services, test driving services, smart charging infrastructure, and reporting and payments. “We have progressively partnered with charging infrastructure and support providers to jointly develop and market digital enhanced mobility, financing, and energy services to facilitate and accelerate the transition to e-mobility. These include recent partnerships this past year with international private energy company, E.On, and ChargePoint,” highlights John Saffrett, Deputy CEO, ALD.
The customer is always right. More and more fleet managers expect their leasing company to offer an integrated fleet electrification solution.
ADVERTORIAL
CONCEDED EDITORIAL SPACE
KIA XCEED AND CEED SPORTSWAGON
PLUG-IN HYBRID VERSIONS REVEALED For the first time, Kia Motors is applying its low-emission plug-in power technology to the Ceed family. In all-electric mode, these vehicles have a range of around 60 kilometres.
Plug-in Hybrid variants, the systems incorporate new functionality to help owners locate available charging points in their vicinity, or en-route to their navigation destination.
7 year warranty The Kia XCeed and Ceed Sportswagon Plug-In Hybrid benefit from Kia’s unrivalled seven-year, 150,000-kilometre warranty as standard, extending to cover the new powertrain’s battery pack and motor. The new Kia XCeed and Ceed Sportswagon Plug-In Hybrids offer a compelling alternative to conventional petrol and diesel models. The new powertrain combines an 8.9kWh lithium-polymer battery pack, an 44.5kW electric motor, and an efficient 1.6-litre ‘Kappa’ four-cylinder GDI (petrol direct injection) engine. The powertrain’s total power and torque output is 141ps and 265Nm, enabling the Ceed Sportswagon to accelerate from 0-to100 kph in 10.8 seconds, and the Kia XCeed in 11.0 seconds. Kia is targeting an all-electric range of around 60 kilometres for both vehicles, enabling drivers to complete
the majority of daily drives and short commutes on electric power alone. Standard regenerative braking technology allows the new Plug-in Hybrid models to harvest kinetic energy and recharge their battery packs while coasting or braking, further enhancing the overall efficiency of the powertrain.
The screens can also show relevant information relating to the powertrain, displaying remaining charge levels in the battery and energy usage graphics. Furthermore, owners can use the touchscreen system to schedule when their vehicle should charge when plugged in at home, enabling owners to take advantage of cheaper off-peak energy tariffs. Both infotainment systems offer Apple CarPlay and Android Auto as standard, while the optional 10.25-inch touchscreen navigation system features Bluetooth multi-connection, enabling occupants to connect two mobile devices at once.
More info
UVO Connect Both cars offer Kia’s 8.0-inch touchscreen infotainment, or an optional 10.25-inch touchscreen infotainment and navigation system with Kia’s UVO Connect telematics. Unique to the new
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https://www.kia.com/eu/business
FLEET EUROPE #115
Both new models feature their own distinctive design features to differentiate them from other petrol and diesel models in the Kia XCeed and Ceed Sportswagon line-ups. Each car has a new closed ‘tiger-nose’ grille at the front of the car to aid aerodynamic efficiency, and Sportswagon models feature distinct ‘eco plug-in’ exterior badges.
SHARED MOBILITY
SHARING: A NEW BUSINESS MODEL FOR LEASING PROVIDERS Yves Helven
Leasing companies understand the shift from existing business models based on dedicating assets to a single user, to new services that are built around the sharing of assets – in our case cars or bicycles.
For a few years already, the leasing supply chain has started to add sharing services to their core value proposition, however without anticipating a massive shift from the traditional lease contract to on-demand models.
FLEET EUROPE #117
The origin of sharing
Corporate car and bikesharing Corporations have started to offer shared solutions to their employees initially to cater for new generations or simply because shared cars and bikes added a layer of flexibility to the dedicated leased company car.
Economies based on sharing resources and assets are older than those dedicating assets to single users - business or consumer. The industrial revolution created a new type of consumerism that, especially in the West, has dominated all the way into the 21st century; it’s a linear economic model that can be described best as a linear “produce-use-dispose” economy.
Recently however, the corporate client is looking at shared from a different angle. Fleet managers have done a great job, over the last decades, finding the best deals for OEMs, leasing, fuel, insurance… The reality however is that the total cost of ownership of a car fleet has been rising and the potential for cost optimisations has dramatically decreased.
The understanding that natural resources are limited has, starting in the last decades of the 20th century, facilitated a new business model based on recycling or re-using; this is the circular economic model, also described as “produce-use-reuse.”
Furthermore, there is simply less need for professional miles. Salespeople, for example, do a big part of their jobs digitally, rather than by visiting clients. Major brands switch entirely to online business models and need less people on the road. As a result, the average business mileage is now much lower than it was in the 80s or 90s. Consequently, there’s less need for dedicated cars.
Add technology plus the impact of Asian economies to the mix and we end up with digital, on-demand and shared services. Asia plays a much bigger role in this evolution than we might expect from a Euro-centric point of view. On-demand and sharing have always played a major role in Asian economies; in addition, Asia has adopted the internet and connectivity first on mobile devices, skipping the stages of the personal computer. So, for the fastest growing economy, on-demand was the key from day one. The West has followed suit.
Shared is, in other words, a great savings tool and is justifiable by the shift from analogue to digital business models.
The supply chain Who is supposed to offer shared solutions to corporate clients? Fleet managers have answered this question in the 2019 Global Fleet Manager Survey: the leasing company. The leasing industry
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however captures the opportunity but is reluctant to switch to business strategies that generate less money. As a reminder, leasing companies need scale to be profitable: revenue comes from volume, not only from the leasing contract itself. Most leasing companies offer shared solutions, but continue focusing on their core business, nonetheless. New suppliers have seized the opportunity to offer either assets-to-share or software-to-share-asset solutions. These solutions have some success in some geographies; micro-mobility in particular has gained massive popularity with urban travellers. Carsharing works moderately well but cannot cope with the scale and service offering of short-term rental companies. Even more importantly, the new supply chain is consumer-oriented rather than focused on corporate clientele, which leaves the leasing companies with the opportunity to fill the gap.
Hopefully we will see an increase of the offering of shared services, because fleet managers see their leasing company as the number 1 partner in shared mobility.
WHAT’S ON OFFER TODAY? Arval joined the MaaS Alliance in 2019 and believes firmly in the future of mobility as an offering. Out of the participants to their Mobility Observatory Fleet Barometer, a corporate survey, 23% had already used carsharing solutions. Arval proposes a carsharing solution to its clients via web and mobile; it allows the user to book, open and close vehicles.
The main leasing companies have developed sharing solutions that are gradually being enhanced and rolled out across Europe. An overview (in alphabetical order):` ALD is growing its MaaS offering by consolidating existing solutions and adding technology platforms on top of these. ALD Move, a MaaS app, was launched in the Netherlands recently, partnerships with companies such as MaaS Global are in place and ALD Carsharing is already live in 6 countries. Alphabet joins the mobility market through its AlphaFlex offering (a mobility budget solution) and the AlphaCity car and bike sharing platform. Alphabet has extended its client base for mobility solutions to customers outside of the traditional corporate world: hotels, business parks and residential areas can join the platform.
Leasys recognises that we are in the subscription economy era and aims to provide mobility “from one hour to a lifetime.” Several programmes, such as Jeep Miles (the client pays per kilometre), BeFree (flexible lease solution) and CarCloud (mobility subscription) will transition the company to a mobility provider. Leasys has also launched U Go, a peer-to-peer carsharing programme, and I-Share / I-Link, software platforms to enable carsharing.
Athlon offers mobility services in a monthly-fee model via its ChangeMyCar and Athlon Flex products. In addition, Athlon Share is a corporate pool-car sharing solution for employees without a dedicated company car. Bike and scooters are offered as part of Athlon’s leasing offering.
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LeasePlan’s NextGen digital platform will be hosting a multitude of mobility solutions. At the same time, collaborations with major mobility suppliers are already in place and specific software is being developed to offer corporate clients the possibility to share vehicles within their fleets.
www.kia.com
Niro has never been so trendy.
available as
electric
hybrid
plug-in hybrid
Introducing the new Kia Niro family. Available as electric, hybrid and plug-in hybrid. It’s time to update the way you drive. The new Kia Niro family has a redesigned new look and comes with three engine options: full electric, hybrid and plug-in hybrid. But that’s not all. Add to that an extra-spacious interior and a 7-year warranty, and you’ll find plenty of reasons to say that there’s nothing like a Niro.
*Max. 150,000 km vehicle warranty. Valid in all EU member states (plus Norway, Switzerland, Iceland and Gibraltar). Deviations according to the valid guarantee conditions, e.g. for paint and equipment, subject to local terms and conditions. The WLTP combined cycle range for the e-Niro is 455 kilometres (282 miles) for the long-range 64 kWh battery pack, and 289 kilometres (179 miles) for the standard (39.2 kWh) battery pack. The specified driving range values were determined according to the legally prescribed measurement procedures (EU) 2017/1153. The above values have been tested in the new WLTP, Worldwide Harmonized Light vehicle Test Procedure, test cycle and converted back to NEDC, New European Driving Cycle, in addition measured according to the RDE, Real Driving Emissions method.
