“In the last four years we have more than tripled our size,” states Peter Soliman. “We now cover all of Western Europe with our own offices and we have established a stable profitability. All is crystallized around four value propositions. Firstly, there is the TCO reduction through the multi-bidding concept and invoice control. Generally, we save about 10% in cost reduction and from that we take about a quarter and 75% is for the client. Over the last 15 years, we have delivered more than savings of 700 million Euros on TCO for our clients. We believe in multi-bidding full service lease contracts, we’re not pushing unbundling. Beyond TCO reduction, we offer transparency of all fleet costs across Europe. This is possible because we combine a central/single IT backbone with a local office presence. All Fleet Logistics offices use one system with one logic and one set of processes. Yet we stay very close to the local market, the suppliers, the legislation and local regulations. We don’t think it’s good or even possible to deliver European fleet management for a company from one country. You can claim to do it, but you’ll never get the same quality and level of depth, as when you have a local presence and local knowledge. Thirdly, we generally take over the administration processes and restructure them where necessary, so that there’s more efficiency and we generate more savings for the client. And finally, we firmly believe that the driver experience is extremely important. We have sophisticated driver tools (local configurator and website with policy/cost transparency), as well as customer dedicated staff to deliver a high quality service experience across the life of the vehicle.  Now we’re looking at how the integration of telematics can help the cost optimization on the driver’s side. These are the core value propositions.”

 

P. Soliman: “There were certain trends in place before the recession started and the recession emphasized those trends. One of the trends was to take costs out of indirect material, including fleet. The mentality of the large corporations changed from choosing the most opulent car, with all the equipment necessary for the driver, to the most cost efficient car in terms of mobility and thus deliver the benefits, in terms of purchasing, to the bottom line. That trend will continue for many years to come, it’s not a trend just linked to the recession. So the multi-bidding concept for TCO reduction will not lose significance in the future. Nevertheless, I do believe that there are complementary value propositions. For example, you need transparency in order to be able to develop certain initiatives or to be able to get a stronger grip on the supply chain. So transparency is an enabler for all cost reduction efforts. Also optimizing processes are an enabler, because you’re able to take the right decisions quicker and more precisely. Keeping the driver happy stays crucial, because no amount of savings can offset an unhappy/unproductive employee. All of these elements are equal, because they serve the same goal. Due to the economic situation, priorities can shift but in general cost saving reduction will stay for many years to come.

 

 

P. Soliman: “In the market where we have been present for the longest, Belgium, we serve about 10% of the market. If we extrapolate that market share over Western Europe we come to a potential well over 1 million cars for Fleet Logistics in Western Europe. Now, it’s unrealistic to believe that we can create the same market share in all the Western European markets. Furthermore, the Fleet Logistics’ model is targeting toward international and pan-European clients. The local bakery company with 20 cars is not a real target group. Nevertheless, if we achieve only 50% of what we have in Belgium, the market potential is still huge, without even adding additional markets and products. But we clearly wish to increase the market share in the existing markets with new existing products. We are also developing new products like Global Reporting which allows us to gather fleet data from all over the world and put in one specific report for a specific customer. We are continuing also to add new markets. We recently opened in Czech Republic and in Slovakia. We have put Russia and Ukraine on the map. We’re now expanding eastwards and with the Global Reporting expansion we’re looking to new markets, such as Brazil and Asia.”

 

P. Soliman: “We were all overwhelmed by the economic crisis. However, it did create even larger spreads between lease company prices. We have seen differences of up to 50 % of an Audi A6 in Germany. Between large lease companies, the crisis has helped to position multi-bidding as a sourcing platform.  But as I already mentioned, the trend of cost reduction was already in place before the credit crunch and economic crisis.

So, no, we do not fear a decline of business in good times, since we experienced significant growth even before the recession. Furthermore, even when the recession is behind us, cost focus and centralization of pan-European purchasing will not disappear - we will probably see global purchasing in the next stage.”

 

P. Soliman: “Basically, all existing and new products in fleet management can be to the rest of the world, except the US. This because of the basic mechanisms of fleet management are similar. Only the US is working with a different model. With limited effort we can translate our processes to other continents or open an office at the other end of the world. Sure, you have to deal with adaptations in terms of local tax regulations. But on the existing products, I can assure that we deliver the same degree of service quality all over the countries we’re present in.

 

P. Soliman: “Our business model leads to a valuable proposition for the customer but also for the lease company. We believe that we can be a secondary sales channel for the lease companies. We will never replace the primary sale channel, which is single source but we can be a profitable secondary one. Although the pricing in multi-bidding is a bit lower than single supply pricing, the lease company cost to serve a multi-bid customer is significantly lower. This is a function of electronic interfaces. Furthermore, we do not unbundle services, so the care of the lease company business model is not impacted.”

 

Peter Soliman: “Yes, we do see certain new competitors aggressively offering unbundling. They work differently and, if I were a lease company I would be seriously concerned by the fleet management offering focussed on unbundling. They are impacting the lease company business model. Furthermore, some of these new offerings are not transparent for the customer. They live off of kick-backs. As the market becomes more professional and transparent, they will flounder – if not fail. We look for a sustainable business model. Fleet Logistics is an independent company and we can be neutral to all suppliers. We have no advantage in systematically choosing one or the other lease supplier. We act on behalf of the customer.”

 

 

P. Soliman: “We believe that the cost focus will increase, competitiveness will increase and large companies will search for more and more transparency and squeeze more costs out. Furthermore, there will be a development of multiple operating models. If you only go back 10 years ago the model was single supply. It was a “one size fits all” approach. Increasingly, we have multiple models co-existing even within one fleet. We will see a fragmentation into different models based on the size, the scope and the strategy of the client. The days that one model fits all are gone forever.”

 

P. Soliman: “No, not for the moment. As you know the management team bought all the shares of Fleet Logistics a couple of years ago, so I see my future for a long time with Fleet Logistics. A professional joke I use sometimes when a customer or a lease company doesn’t want to work with us, is that I’ve at least 20 more years to convince that company to work with us.”