Analysis
18 Jan 16

Portugal: Successfully managing expectations

With support from fleet managers and automobile brands, Portuguese companies have well-defined fleet policies. But the figure of an integral fleet manager almost never exists.

In Portugal, the largest fleets belong to telecommunications or other large companies, often synonymous with a company’s presence on the stock market.

These are the companies that most often adopt a professionalized management model, an option that determines criteria for granting vehicles to employees. It warrants mention that this has been a long road, in an attempt to eliminate bad habits of fleet management that dominated the country some years back.

In Portugal, a car was seen as an indication of social status. A company car was a perk, as it is today, but it was practically untaxed. Until 2008, taxes were just 5% on acquisitions under 40 thousand Euros. Today, this is no longer the case. Taxes are in line with what is practised in other countries. This makes vehicle assignment increasingly more rational.

Less perk car assignments


Many companies no longer assign a car as a perk, or, when they do, they do so only for the highest positions. It is a matter of fact that not only have vehicle categories been dropping, but increasingly fewer professional positions are entitled to a company car. One clear example is in IT consulting firms, where increasingly fewer employees are entitled to a car.

In more industrial sectors, such vehicles cannot be done away with. However, there are more and more cases of companies seeking to rationalize vehicle use, such as by car-pooling with several units.

With this level of professionalism, fleet policy has become a common topic of conversation. Not only have fleet managers been creating increasingly complex documents, but they have made employees aware of such policies in general. Purchases themselves have come to be determined by this document, which is almost always drafted jointly with the Human Resources department. One point that is put into writing but is not always well accepted by employees is the definition of vehicle by category, often detailed down to the optional equipment and colour.

 

Fleet management support


In spite of all this work and level of professionalism, rarely do fleet managers devote all of their time to this. Most Portuguese fleet managers are professionals connected to their companies’ financial management, to purchasing, to the board of directors itself or even to HR or administrative roles.

Support from fleet management companies becomes essential, which explains the success of companies with their clients. For the person responsible for managing a company’s vehicles, it is often merely a case of defining strategy and negotiating with suppliers.

Professionals who are able to devote 100% of their time to fleet management do so with a passion and with quite advanced knowledge of the automobile market. They appear in fleets of great size and complexity, or because the company’s strategy is to directly manage all services related to vehicle use.

And the challenges they face are numerous. On the one hand, they have to respect employee ambitions about the cars they will be assigned. On the other, they have to negotiate with suppliers and these can be difficult negotiations – everything can always be better negotiated, as is often said.

But the greatest challenge is how unpredictable costs are, managers say. Taxes levied on company vehicles are extremely high. And, if this year doesn’t change, it would be the first in four years...

Hugo Jorge

 

Image: Due to taxation, vehicle assignment has become more rational with less perk cars in the Portuguese fleet market.