Arval starts in Norway: “The goal is a 2,000 vehicle fleet by 2020”
Already present in Sweden, Finland and Denmark, Arval is to complete its Nordic coverage from late 2017, with a subsidiary in EV-enthusiastic Norway. Huib ter Braak, Director of Europe & Mediterranean Area, and Frank Verver, General Manager Nordic region, explain Arval’s ambitions in Norway and the Nordics.
Why did you decide to enter Norway now?
Frank Verver: "At Arval we decided to fill in the European ‘gap’ some time ago by entering the Nordics, and Norway is the last part of the puzzle. We decided to do this in stages. We believe our offering is attractive for the Nordics market. We started with Denmark and Finland, and Sweden arrived with the acquisition of GE Capital Fleet Services."
In what way do you believe Norway is a mature market?
Frank Verver: "In Norway and the other Scandinavian markets, services – and therefore operational leasing – are key, with funding as part of these services. Norway is also mature because it is leading Europe in the transition to alternative fuels – especially electricity. We want to take part in this, sharing knowledge in both directions."
You are making a ‘greenfield’ start in Norway. Why not a merger or an acquisition?
Huib ter Braak: Both routes are of course possible, but if it is to involve a third party, something suitable has to be available – you can’t force it to happen. We have expertise in starting from scratch in new countries, and in Norway it was clear that the best option was to enter the market ourselves.
Frank Verver: "An acquisition may look easy and attractive on paper, but we know that it can take time to transfer an acquired company to your way of thinking – and so sometimes it’s just easier to start something totally new."
Huib ter Braak: "Another ‘pro’ to start with a greenfield in Norway was linked to our ambition regarding optimised processes. We are trying to reduce the number of IT platforms, with one platform serving a number of countries, for example in the Nordics."
Is your shareholder BNP Paribas present in Norway?
Huib ter Braak: "Yes, BNP Paribas has several activities in Norway. Arval Norway ispart of the Arval group."
Some leasing companies group the Nordics together. Why did you choose to have separate presence in each?
Huib ter Braak: "We find that even if the countries are grouped in theory, in practice each has its own thinking and its own culture. Secondly, each of the countries has its own tax rules, legislation and regulations. And finally, our business is a people business and a service business."
Frank Verver: "Indeed, proximity is essential. So it is better to be local and act local."
When will you be truly operational in Norway?
Frank Verver: "We are already in contact with clients and making offers, but we will be fully operational with a whole team, after Christmas."
Will your service offering be comparable to that of Western Europe?
Huib ter Braak: "Absolutely, it will be 100% the same, including our newest solutions with Arval Active Link, Arval Outsourcing Solutions, our reporting, My Arval Mobile app, consultancy …"
Will Norway be a sort of test market for electric mobility products?
Frank Verver: "Certainly. The proportion of electric vehicles is still relatively small for the Arval Group, so Arval Norway can help us increase our knowledge in this area."
How big is the overall Norwegian market?
Frank Verver: "The population is around 5 million, and the business fleet is approaching 400,000 vehicles. Electric mobility is growing faster here than anywhere else, stimulated by regulations from the government. Norway has announced that it wants to be completely climate neutral by 2030."
"The Norwegian leasing market, known here as long term renting, still has a lot of room for organic growth, although it is already well supplied. Only around one third of the business market is currently under operational leasing, which means two thirds are either acquired or under financial leasing. The good news for us is that Norway has both a desire and a need for more operational leasing."
What are your main objectives in Norway over the next couple of years or so?
Huib ter Braak: "We want to be able to say that we really lifted-off, with local- and international clients attracted, by 2020. We would like to have around 2,000 vehicles in our Norwegian fleet by this time. This will mean we have a total of 20,000 vehicles in the Nordics by then."