10 golden rules of company car choice lists
Changing suppliers and rationalising a company car choice list is a major undertaking. To guide fleet decision makers through this process, Thibault Alleyn, MD Consulting & Analytics, FleetVision (pictured above), and Thorsten Bertram, Global Process Lead & Group Director International Customer Relations, Fleet Logistics, offered the following advice at the Fleet Europe Summit:
- Use car lists wisely. Standardising vehicle selection, so every employee of a similar grade drives the same car, can bring huge purchasing and administrative advantages (for example, reallocating cars is much easier). But don’t ignore local preferences and the scale of the administrative effort required to introduce this.
- Know what you need. Investigate the mileage patterns of your vehicles, their usage (daily and weekly) and consider any mandatory options, such as safety equipment, to ensure any new car choices will be fit for purpose.
- Take people into account. Identify any clusters around certain driver needs, look at recent order history and survey drivers to ensure any new company car choices fit with market trends. Don’t ignore the people perspective in car lists.
- Adjust to context. A variety of external factors can impact the way cars are received and their fleet suitability, so make sure you are aware of WLTP emissions, local tax treatments, vehicle image perceptions, and the extent of dealer networks in different countries. Be prepared to allow local exceptions where these are more effective and efficient.
- Procurement issues. Take into account your buying strategy - will you be sourcing a single vehicle or batch ordering; dealing with a local or a global supplier; standardising vehicles to the same make and model or simply harmonising to the same manufacturer? The answers to these questions can make a big difference to the success of contracts, and increasingly, said Alleyn, FleetVision is seeing more flexibility in supply arrangement if there is a good business case.
- Reassess contracts periodically. Car choice lists are not set in stone, and require monthly checks to ensure different model variants are still available; three to six month checks to potentially accommodate new drive trains; and six-monthly feedback sessions with suppliers. Alleyn also recommends completely renegotiating supply contracts every two to three years.
- Stay informed. Use external sources such as lease companies, OEMs, fleet management companies and the media to keep up to date with fleet trends, tax changes, market evolution, vehicle availability and delivery times, and movements in residual values.
- Define your TCO. To compare apples with apples, so to speak, it’s important to use a consistent set of data to calculate total cost of ownership, such as lease rates, services, fuel costs, and (in)direct taxation. Moreover, don’t overlook other costs such as internal fleet management, end of contract vehicle return charges, as well as positives such as any periodical rebates from suppliers.
- Dare to experiment. Avoid ‘big bang’ commitments to new products and services, but take baby steps to trial different power trains, longer and shorter lease durations, new brands and models, and even mobility alternatives
- Monitor compliance. Checking that supply agreements are honoured and that local companies respect the corporate car list is important in evaluating the success of a new arrangement. It’s also vital to measure actual TCO against forecast TCO.