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Paul Wondergem (BP) et Paul Herremans (Philips) :
“Lease firms give us more spontaneous advice”
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 International lease firms are very knowledgeable about the national markets. They are also well-informed about local know-how concerning other topics, such as ‘mobility management’ and ‘green fleets’. That is why internationally operating fleet managers especially expect advice from the lease firms. However, they feel such advice is not given often enough and lacks spontaneity. They are therefore calling for a more proactive approach. Interview with two experienced fleet sourcing professionals.
How do European fleet managers organise their commission internationally ? What topics and challenges are they faced with ? What expectations do they have from lease firms ? Two leading fleet managers expound their views. Paul Herremans, Global Commodity Manager Lease Cars, Car Rental with Philips General Purchasing and Frits Wondergem, Car Fleet Manager Europe with Indirect Procurement & 6 Sigma of BP have the floor.
To what extent can the European car policy be harmonised ? On the other hand, what things had better stay local?
Paul Herremans: "Fleet management at Philips used to be purely 'country driven'. In 2003 we started with the introduction of a new approach. We combined our purchasing power internationally, so we have ever since been able to obtain better terms. In addition, we try to join forces in domains where this makes sense. For instance, we run a car-brand policy, with the choice limited to cars from six 'preferred' groups of manufacturers. Each country may choose its own subset from this package. It may for instance prefer a manufacturer from its own country. On top of this, the car policy is no longer set by separate criteria such as the purchase price, etc. Today the policy in each country is based on the TCO (total cost of ownership), including fuel costs. What counts is the 'full operational lease rate'. At Philips it fluctuates on average from 7,000 to 9,000 EUR a year"
Fritz Wondergem: "Currently, BP is also working out a pan-European car policy. Internationally, we also work with a limited number of groups. Our choice was partly inspired by the existing partnerships we have with them as a fuel supplier. Furthermore, at BP the 'full operational lease rate' is our only standard in all European countries. 'Outright purchasing' is not part of our core business and consequently does not fit in our policy. At BP the TCO is between 9,000 and 10,000 EUR a year, including 'short rental' and damage."
What international car policy do you apply in the choice of car types?
P. Herremans: "Cars must be chosen from the list of preferred brands and the chosen types should be representative. We prescribe the purchase of a diesel car in countries where this makes sense from an economic perspective. This may be different from country to country. The Scandinavian countries are not diesel countries and in Holland the threshold of annually driven kilometres is much higher than that in typical diesel countries like France and Belgium. Most countries apply the rule that convertibles or SUVs must not be chosen. Furthermore, safety and comfort are important selection criteria at Philips."
F. Wondergem: "For us, too, the current types are saloons or estate cars. We do not accept convertibles, SUVs or coupes either. But I do find there is currently a blurring of categories going on in the market. This is raising questions. What category is a convertible with a steel top ? As far as the choice for diesel cars is concerned, at BP the minimum threshold of 25,000 km a year applies. Finally, the safety of the car comes first for us."
Can you tell some more about other rules that you apply in your international policy?
P. Herremans: "We invariably opt for fuel cards with their associated facilities concerning fuel management and reporting. This is part of our policy of 'full outsourcing'. This is why we conclude a pan-European deal with a single fuel supplier. Besides, we run several national contracts with fuel companies. The problem is that if you opt for a single brand you won't have sufficient coverage of the fuel station network in each country. For the insurance of our cars we also concluded a European deal. We do our own insuring for our own damage, however."
F. Wondergem: "It goes without saying that we as a major oil company only operate with brands and fuel cards of our own group. These are the BP and Aral brands. As far as insurance is concerned, we work with several large brokers, because this allows us to save substantially on the policies. Our own damage, finally, we insure ourselves, too."
How does your organisation deal with the private use of the cars?
P. Herremans: "For private use there are no general rules, but all countries permit reasonable private use in line with the local (fiscal) legislation and labour conditions."
F. Wondergem: "At BP we do not have general rules for the private use of the car either."
FEU: What are your standards for the payment of fines?
P. Herremans: "For the fines the standard is, of course, that the motorists pay them themselves."
F. Wondergem: "At BP, too, the international rule applies that the motorists have to pay fines themselves."
What part do the lease firms play in creating green fleets ? Can their customers impose demands in this area?
F. Wondergem: "Lease firms are familiar with the local legislation in each country and are definitely able to play an advisory role. They may for instance generate surveys of CO2 emissions per quarter, both per car and per entire fleet. On the basis of such reports we can work out our policy and for instance exclude certain types."
P. Herremans: "The most efficient means is still for the company to refrain from opening its front door and allowing environment-unfriendly cars in via the car policy. The budget limits of the car policy also play a controlling role. For instance, a driver with a budget of 600 euro will be automatically penalised by higher costs of use if he does not opt for an economical car."
Can hybrid cars be a solution?
F. Wondergem: "Hybrid cars are on our lists of permitted models, but unfortunately their supply is not large enough for them to have any significant impact on the car fleet."
P. Herremans: "Studies of the TCO of hybrid cars show that their total cost is considerably higher than that of conventional cars. True, they use less fuel, but depreciation is higher and their residual value is lower. Besides, this market segment is facing an availability problem for the fleet market."
What possibilities concerning online fleet management are today offered by the lease firms through the Internet ? What do you feel they should offer?
P. Herremans: "The online tools are available in most countries. They have become very important and are now an essential part of the lease product. By online ordering the fleet manager can save a lot of time in the shopping route. Drivers may compose their ideal car configuration by using a tool that automatically satisfies the car policy conditions. The online standard reports are very useful, too. All we have to do is control the exceptions and to communicate with the relevant motorists. Of course, each country should keep its own fleet manager, because the supplier needs to be dealt with.
F. Wondergem: "Over the past five years the lease firms have made great progress in online fleet management. The challenge however is how to control that management from a 'multi-supplier' situation, i.e. when you are working with more than just one lease firm. BP very clearly indicates what format the lease firms must use for reporting."
What do international fleet customers actually expect from lease firms ? The same service throughout Europe or the best service available in each country?
F. Wondergem: "Apart from order monitoring, managing maintenance and repairs and the other operational services, we particularly expect lease firms to give advice on how to cut down on the TCO. This advice should be given spontaneously, but many firms fail to do so. On the European level this is even more important. 'Empowerment' of the account management is therefore required."
P. Herremans: "The lease firms should in fact be more proactive. Their role as advisers in particular is often performed with too little dynamism. For instance, when a new car model is launched and certain versions or option packages have a favourable TCO (such as a 'metallic' version), the lease firms should spontaneously give advice. They have an important informative task in this sense."
Do you see an evolution in the occupation of the internationally operating fleet manager?
P. Herremans: "Fleet management is increasingly becoming part of the total 'mobility management' segment. For instance, when a business traveller makes a trip from Brussels to Paris it may make more sense to travel by Thalys than to make the trip in the company car."
F. Wondergem: "There is in fact an evolution going on from fleet management to 'mobility management'. But in this area, too, the approach and possibilities differ from country to country. Again, this requires advice from the lease firms."
Interview: Caroline Thonnon and Luc Franco
| 01/01/2007 |
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