FOR INTERNATIONAL FLEET & MOBILITY LEADERS
#92
09/2017
16 PAGES
Nexus Communication - Fleet Europe #92 - Periodic magazine - September 2017 - Deposit Office Liège X
LCV MANAGEMENT Creating efficiency for your Light Commercial Vehicle fleet • Fuel-efficient and Safe • Funding-friendly • Connected • Tailor-fitted
FACE TO FACE Lee Warner (Unilever) and Robert Hitchcock (Berendsen)
ANALYSIS Get a grip on Tyre Management
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CONTENT 2% IS TOO LITTLE
5-28
LCVs are key drivers of economic growth. The EU has about 29 million LCVs, with more than one million registered just this year. Half-year LCV registrations are up 5% over 2016. So the European LCV market is in good shape. There is a but. Diesel LCVs make up 95% of total sales in Europe. This grates with increasing legislative pressure for lower emissions. Not even 2% of all new LCVs are powered by alternative powertrains. That is disappointing – or to be less diplomatic: that is too little. And yet, Europe is the world leader in the production of energy-efficient LCVs with reduced noise and air pollution – at least compared to other regions. That lead is largely the result of legislative efforts – but let's not forget the willingness by fleet managers and their companies to innovate. They demand not just greater fuel efficiency, but also lower emissions, more safety, greater driver comfort and a nice look and feel from their LCVs. LCVs may be utilitarian vehicles, but fitness for purpose is increasingly about more than rightsizing and tailored conversions. Read all about it in our Special Dossier on LCV Management! And for the near future, may you include alternative and zero-emission powertrains in your LCV fleet. Steven SCHOEFS Chief Editor, Fleet Europe
DOSSIER LCV Management
Growth and Innovation for the EU LCV market .....................................................6 When LCV meets car .....................................10 SAIC enters EU with e-LCV .................... 12 Catch up with green tech, if you van.. 14
Tackling the last mile problem ................. 18 Upfitting: Space makers and weight savers ............................................ 20 Why LCV fleets move to leasing ..............24
38 BUSINESS
48 EXPERT
66 MANAGEMENT
“More excitement Taking stock of the ahead”, John Saffrett, Fleet industry COO of ALD Automotive
Why Category Management is hot
FACE TO FACE
“It’s all about data on four wheels”, with Robert Hitchcock, Berendsen, and Lee Warner, Unilever …………………………………………………………………………………………………30
BUSINESS
“Making the switch from TCO to TCM reality”, Jochen Schmitz, VWFS ……………………………………………………………………………………………………………………………………… 40
INNOVATION
Dash cams: from Spy-in-the-Cab to Driver Aid …………………………………………………………………… 42
MOBILITY
Taking car-sharing to a new dimension ……………………………………………………………………………………… 44 Intelligent parking with Parkbob ………………………………………………………………………………………………………… 46
REMARKETING
28 SEPTEMBER
5&6 DECEMBER
Get the best Residual Value for your LCV
IFMI WEBINAR: Cash for Car
FLEET EUROPE SUMMIT
Estoril (PT)
………………………………………………………………………………………
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ANALYSIS
Get a grip on tyres ………………………………………………………………………………………………………………………………………………………54 Tyre Management: Keep on rolling ………………………………………………………………………………………………………… 58 The rubber revolution …………………………………………………………………………………………………………………………………………… 60
20 YEARS OF FLEET EUROPE
The Automotive Technology Revolution…………………………………………………………………………………………… 62
DRIVE A COMPACT WITH IMPACT. The New Å KODA KAROQ.
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Combined fuel consumption and CO 2 emissions according to the legislation of the concerned country ry
DOSSIER
FIT FOR PURPOSE STEVEN SCHOEFS Chief Editor @StevenSchoefs
Despite local market volatility and stricter regulations LCVs are continuing to flourish across Europe. Looking at the main trends there is fuel efficiency and electrification with the manufacturers, while conversion specialists continue to expand with regard to safety, comfort, ergonomics, and lightweight materials. Fleet managers of LCV fleets embrace these trends in their goal to accelerate cost-efficiency, optimize driver behavior and increase productivity. An important asset to realize all this is the use of telematics, under the condition that it is supported and communicated throughout the complete organization, and included in the LCV fleet policy. A policy for which guidelines can be internationally-wide, but applicability needs to stay local.
FLEET EUROPE #92
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DOSSIER
Growth and Innovation for the EU LCV market Richard Worrow, Dataforce
With the support and expertise of market research specialist Dataforce, we are once again able to turn our spotlight against the True Fleet LCV market in Europe and garner some valuable insights into just how things are shaping up so far in 2017.
LCV SALES EVOLUTION JANUARY-JUNE 2017 VS JANUARY-JUNE 2016 FINLAND 25.9% AUSTRIA 13.3% BELGIUM 13.3% NORWAY 11.1%
Within the EU-16 countries we see a varied result for January to June 2017 with the majority able to generate a positive growth but with 6 countries returning a negative growth. However, the LCV Fleet market has grown by 2.4% over 2016’s comparable months with 681,000 registrations. For the EU-5 which makes up 73.6% of the EU-16’s Fleet LCV volume it has also been a mixed bag with France, Germany and Spain all managing an increase for January to June but negative growth from both Italy and the UK.
SPAIN 8% SWITZERLAND 6.9% SWEDEN 5.6% FRANCE 4.2% GERMANY 3.7% NETHERLANDS 2.9% DENMARK -0.8% POLAND -1.2% CZECH REPUBLIC -1.7% ITALY -2.4% UK -3.9% SLOVAKIA -5.6%
JANUARY-JUNE 2017 180 000 150 000 120 000 90 000 60 000 30 000
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SLOVAKIA
FINLAND
CZECH REPUBLIC
NORWAY
DENMARK
SWITZERLAND
AUSTRIA
SWEDEN
POLAND
NETHERLANDS
BELGIUM
SPAIN
ITALY
GERMANY
UNITED KINGDOM
FRANCE
0
France continues to dominate the LCV market place in terms of volume, helped by the prevalence of passenger car models (26.7%) registered and used as an LCV, with the next nearest country (UK) a little over 35,000 registrations behind. In 2016 this gap was much closer with around 22,000 registrations separating 1st and 2nd place.
FLEET EUROPE #92
DOSSIER MANUFACTURERS’ MARKET SHARE JANUARY-JUNE 2017
Others 1.1% 1.2% 2.3%
15% 3.4% 13.9%
The Manufacturers share of the EU-16 also remains fairly stable when compared against 2016, despite some minor changes. Peugeot was the largest growth brand earning an extra 0.6% share, while the Renault-Nissan alliance captures an extremely healthy 20.8% of the EU-16 LCV Fleet share.
2.9% 3.5% 5.3% 11.8% 8.5%
11.4%
9.7% 9.8%
THE ACTUAL TOP 10 MODELS RANKING +4.1%
JANUARY-JUNE 2016
35,000
+9.4%
JANUARY-JUNE 2017 -2.6%
30,000
+2.5%
+4.2%
-5.7%
-3.6%
25,000
-1.5%
-5.4%
FIAT DUCATO
+6.6%
RENAULT MASTER
40,000
20,000 15,000 10,000 5,000
PEUGEOT PARTNER
CITROEN BERLINGO
VW CADDY
RENAULT TRAFIC
RENAULT KANGOO
VW TRANSPORTER
FORD TRANSIT CUSTOM
MERCEDES SPRINTER
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The actual Top 10 models remain unchanged from last year though their corresponding ranking does. The biggest gain in ranking goes to the Volkswagen Caddy moving up from 8th to 6th place. While the biggest ranking drop came from the Citroen Berlingo falling from 5th to 7th. Mercedes Sprinter retains its #1 position as the True Fleet model of choice for the EU-16 but is being chased hard by both the Ford Transit Custom and VW Transporter in 2nd and 3rd respectively. The next nearest model is the Renault Kangoo in 4th but this is over 5000 registrations behind a podium finish and has its own chasers in the Renault Trafic (5th) and VW Caddy (6th). The remaining three are the Peugeot Partner, Renault Master and Fiat Ducato.
LCV LONG TERM RENTAL 25,000
20,000
FRANCE
15,000
10,000 ITALY
5,000
With Long Term Rental (LTR) allowing for a more flexible approach for companies and their fleets we are seeing an upward trend in this form of mobility. Since 2015, the True Fleet Long Term Rental LCV’s have seen a steady upward trend in both France and especially Italy.
FLEET EUROPE #92
2017 Q 2
2017 Q 1
2016 Q 4
2016 Q 3
2016 Q 2
2016 Q 1
2015 Q 4
2015 Q 3
2015 Q 2
2015 Q 1
0
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DOSSIER
DIESEL SHARE FOR EU LCV MARKET
100%
AUSTRIA+
96%
SLOVAKIA ITALY 92%
CZECH REPUBLIC
88%
POLAND
84%
80% 2013
2014
2015
2016
2017
100%
96%
FRANCE
92%
NORWAY BELGIUM DENMARK
88%
GERMANY
Across the EU-16 countries’ diesels share has shown all possible outcomes, with positive, negative and stable annual figures looking back as far as 2013. While both negative and stable share countries all carry a taxation involving CO2, the growth countries (apart from Austria) have no such taxation in place allowing for OEM’s to perhaps shift some capacity lost elsewhere.
84% 2013
2014
2015
2016
2017
100% UK FINLAND
98%
SPAIN
96%
NETHERLANDS SWEDEN
94%
92%
90%
SWITZERLAND
88% 2013
8
2014
2015
2016
2017
FLEET EUROPE #92
DOSSIER
Company fleets are already pushing for the EV change like Harrods in London, who has recently added a Nissan e-NV200 to its fleet.
CO2 AND TAXATION The LCV market has grown for most of the EU-16 and looks to be in another positive position. As expected we are now starting to see the trend towards lower CO2 emission vehicles not only to avoid higher taxation but to perhaps futureproof against the restrictions currently being discussed and implemented by some major cities. The OEMs themselves are already producing lower emission engines but the taxation and legislation from several European countries is starting to build in speed and momentum. Many have committed to bring down harmful emissions and/or clean up the air quality and this will likely impact on the LCV market place sooner rather than later. In addition to this trend the current passenger cars swing toward cleaner vehicle emissions could also influence the LCV market place. Currently the available selection of engines are heavily weighted toward diesel, which given the fuel efficiency and in some countries the ability for it to be deducted from the VAT makes it perhaps unsurprising, however with the current consumer sentiment, legislative & government policy changes, for just how long will this be sustained?
FLEET EUROPE #92
NEED FOR ELECTRIFICATION The question that is now entering the market is whether the legislation and possible consumer need/trend for low emission vehicles will outpace any change from OEMs in the LCV marketplace? If so, will this then lead to fleets being penalised on where they can go or on what day they can actually work. Current OEM announcements of Mild Hybrid Engines for high CO2 producing cars and SUVs would possibly lend itself to the LCV market place alongside the inevitable flow over from the EV evolution currently taking place and we have seen minor upswing in the alternative fuel market place. However, without a concerted effort from the manufacturers to implement PHEVs, Regular Hybrids or EV LCVs engines, or further expanding petrol options to their model line-ups (that meet the restrictions), the fleet operators may find themselves in a tough situation. The danger is that LCV fleet operators may be hit hard financially on a tax level or possibly in lost revenue/contracts from restrictions and their ability to complete travel to select destinations. Fleet operators will likely start to actively look to update their fleets in preparation of the continued implementation of bans in new cities or the further tightening of
restrictions from cities where restrictions are already in place. Currently the ever expanding market in online shopping is just one of the many businesses that require this LCV market to bring its products to the consumer. We see some company fleets already pushing for a change. Harrods, perhaps one of the most famous stores in the world, recently added a Nissan e-NV200 to its fleet and actually started a return to its roots (petrol engine vehicles replaced there all electric fleet in the 60s). There has been an autonomous pilot project in London which just completed its first phase and is using a vehicle called the Cargo Pod to deliver groceries to 100+ homes and even Deutsche Post is scaling up production of the their “Street Scooter� EV delivery vehicle from 10,000 to 20,000 per year by the end of 2017. So within the current situation there lies the opportunity. Should OEMs who are perhaps already sufficiently geared in the drivetrain technology begin to produce LCVs capable of long distance (for EVs) or bring in more Hybrid technology to this large European LCV market place, we can see some significant changes. Firstly to the traditional players who adapt quickest but secondly we foresee ample opportunity for a non-traditional player to enter the market and perhaps capture large share in a relatively short space of time.
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DOSSIER
When LCV meets car Dieter Quartier @DieterQuartier
The latest light commercial vehicles have little to envy to cars in terms of comfort, connectivity and safety. Moreover, some offer ever more efficient powertrains, driver apps and an extended warranty to drive down costs.
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FORD TRANSIT CUSTOM Ford pulled out all stops to bestow its revamped Transit Custom with some new trumps. One such trump is the 2.0 diesel engine, the Econetic derivative of which boasts a CO2 emission level of 148 g/km and a fuel efficiency of 5.7 l/100 km. Another one is the tablet interface of the optional Sync 3 system. You can command navigation, audio and telephone with the usual tap, swipe and pinch movements, but also by using your voice.
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Ford has also invested in advanced driver assistance systems. From now on, the Transit Custom can recognise speed limit signs and adapt the maximum speed accordingly. Its blind spot assist now also features cross traffic alert, which warns the driver during reversing for any vehicle approaching at either side of the vehicle – very handy in the case of a van, with its limited rear visibility. VW CRAFTER Volkswagen’s large van is no longer a product co-developed with Mercedes (Sprinter), but an entirely different model. Power comes from frugal 2.0 TDIs, which can be mated to all-wheel drive and even an 8-speed automatic. On the inside, drivers
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can enjoy the comfort of an AGR-certified suspension seat – with optional heating and massage function. The 230V/300W plug socket conveniently charges batteries of power tools and laptops. Safety was one of the key priorities in the development of the new Crafter. It features advanced items like active cruise control, ESP with trailer stabilisation function, cross wind assistant, rear traffic alert, AEB with City Emergency Braking, et cetera. No wonder it got elected International Van of the Year 2016. MERCEDES SPRINTER The current model has been a bestseller for over 10 years now and continues to be in high demand. In 2015, the Sprinter had its 20th birthday and its most successful year to date. Much of its prosperity is owed to low running costs and high residual values. The most fuel-efficient version of its tried and tested 2.1-diesel burns 6.3 l/100 km. Natural gas is also an option.
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Say Mercedes, say safety. The Sprinter’s Adaptive ESP improves the vehicle’s directional stability whilst taking into account its load. It also reduces braking distance by removing any water and dirt on the brakes and prefilling the system. The optional Collision Prevention Assist actively warns the driver when the distance to preceding traffic is too short.
FLEET EUROPE #92
DOSSIER
PEUGEOT EXPERT/CITROËN JUMPY/TOYOTA PROACE Economies of scale at their best: PSA, Toyota and FCA joined forces to build a midsized van that competes with the Opel Vivaro, Renault Trafic and Ford Transit Custom. The triplets feature a lowered weight and compact packaging - with a height of just 1.90 metres, low parking garages are no obstacle. As to fuel efficiency: the most frugal engine posts a 133 g/km CO2 figure, i.e. 5.1 l/100 km, setting an example to the segment.
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Also exemplary is the 5 star EuroNCAP rating – a result the midsized van owes in part to its (optional) Active Safety Brake (autonomous emergency brake) and lane assist system. Should a crash occur, you can rest assured that the occupants are as well protected as in a passenger car: 87 percent for ‘Adult Occupant’ and 91 percent for ‘Child Occupant’ are results speak for themselves.
IVECO DAILY EURO 6 The New Daily Euro 6 builds on the success of the New Daily launched in 2014. The improved engines boast a further improved fuel efficiency, with savings up to 8 percent compared to the previous Euro 5 models. The extended service intervals and long-lasting components result in additional savings of up to 12 percent, according to its maker.
NISSAN NV300/FIAT TALENTO Renault and Opel have long been working together for their LCVs. The Renault Trafic and Opel Vivaro are nearly identical twins, even though they are produced in separate factories. Recently, the one in France started producing two more clones: the Nissan NV300 (which slots between the NV200 and the NV400) and the Fiat Talento (which is caught between the Doblo and Ducato).
With the new application called Daily Business Up, the driver is always connected and enjoys the benefits of having an assistant on board. The app features a so-called Driving Style Evaluation to coach the driver in his fuel saving efforts. Moreover, it works as a business assistant helping customers to optimise their fleet efficiency and keep track of scheduled services.
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HYUNDAI H350 The South-Korean carmaker is the latest to have set foot in the European large van arena. The Mercedes Sprinter served as benchmark for the development of its H350, but some see a resemblance to the Ford Transit. Like the
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latter, the Hyundai is built in Turkey, but the development mainly took place in Germany. As is the case for its passenger cars, Hyundai offers a very competitive package in terms of quality, convenience and safety equipment and TCO. The latter finds itself favourably influenced by the generous warranty package. Customers can choose between three years and unlimited mileage, and five years with a 200,000-km limit.
7 In terms of connectivity, the Nissan can be ordered with the latest Nissan Connect system, which integrates navigation, digital radio, voice control for smartphones and a rear-view camera. Last but not least: the NV300’s warranty extends over 5 years or 160,000 km, while an oil service is required every 2 years or 40,000 km, contributing to a lower TCO.
FLEET EUROPE #92
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DOSSIER
SAIC enters EU with e-LCV Steven Schoefs @StevenSchoefs
SAIC Motor Corporation, the largest Chinese car manufacturer group, is about to set foot on the European continent. In 2019/2020, it will (re)launch the former British brand MG in Europe and around the same time, SAIC will bring the commercial vehicle brand MAXUS, formerly known as LDV, back to Europe. To create brand awareness, SAIC is already launching a full-electric LCV model for big fleets.
SAIC is the largest of the 172 car manufacturers in China. “We produce more than 6.5 million vehicles each year”, says Pieter Gabriels, Managing Director of SAIC Mobility Europe.
SAIC is for a large part state-owned and it is also on demand of the Chinese government that SAIC is preparing its entrance in Europe. Pieter Gabriels, Managing Director of SAIC Mobility Europe: “Compare it with what Huawei and Lenovo have done respectively in the telecommunication and the IT industry. We are driven to expand the Chinese automotive activities in Europe and those parts of the world where we are not yet present.” “The advantage that we have over other Chinese brands that previously tried expanding to the rest of the world, is that SAIC is a sizeable and well-established brand with a strong historical and financial background. Moreover, already today we export vehicles, like the 100% electric Maxus LCV, to markets like Australia, New Zealand, the Middle East and Latin America.”
The Maxus EV80 has an autonomy of 204 km, and a 5 year warranty scheme for the battery.
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E-LCV Maxus will be introduced in Europe in 2019/2020 as a complete LCV brand, with a brand new model and various body dimensions with different heights and lengths and multiple powertrains, amongst which of course 100% EV.
Talking about that full electric LCV, Pieter Gabriels explains that SAIC is currently introducing the vehicle with a direct but low-profile approach to the 200 largest corporate fleets in Europe. “Those fleets not only have a large number of vehicles, their company strategy is one where securing business processes and care for the environment is important.” In this way, SAIC is paving the way for the Maxus brand introduction and creating brand awareness. “This is essential, as we know that Europeans are very attached to their LCV brands. For me and my team it will be paramount to get across the USPs of our brand and our model.” The full electric LCV will have an autonomy of 204 km, and a warranty scheme of five years for the battery and three years for the mechanical part. The vehicle can be charged in normal and fast mode, both with AC and DC. Financially speaking, Pieter Gabriels mentions that the price tag is very attractive: “For a comparable electric commercial vehicle, retrofitters have a price setting of 70,000 to 80,000 euros. Our electric LCV will be priced at 45.000 euros. This means that in terms of TCO, our model is very close, not to say equal, to diesel-powered LCVs.”
FLEET EUROPE #92
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950kg Payload capacity
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2 hours Charging time
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DOSSIER
Catch up with green tech, if you van Dieter Quartier @DieterQuartier
Green powertrains are not represented to the same extent in the LCV segment as they are in the car market. Things are starting to change, however, and promising new models are in the pipeline.
When asked in November 2014 about the future of alternative powertrains for the LCV market, Steffen Raschig, the Director Commercial Vehicles of the then still GM-owned Opel stated “Within our group, we have the technology available. So if the demand changes, we can react fast. But for now, and for the next few years, we will stick with what the market wants: efficient diesel engines”. Three years later, the automotive landscape has been rearranged, not least under the impulse of a growing anti-diesel sentiment. Still, LCV-manufacturers seem less eager to commit to alternative powertrains than carmakers. The reasons are clear: range and TCO are still in favour of diesel. OEMs have therefore invested in NOx control rather than CNG or electricity (EVs or hybrids). As far as hydrogen (fuel cells) is concerned: apart from Hyundai, no OEM is investigating its feasibility. There is another aspect that makes van-makers scratch their head: batteries and tanks for compressed gas compromise the payload capacity and loading volume, but you need a lot of them to guarantee sufficient mileage and therefore uptime. Finally, all the drawbacks related to infrastructure apply to LCVs just as much as they do to cars. CNG: A SMALL GROUP OF BELIEVERS Depending on the market and the model, natural gas can cut fuel bills by 20 to 30 percent and reduce emissions of NOx by up to 80 percent compared to a modern Euro 6 diesel. The combustion of CNG also produces far less particulate matter, and natural gas powered vans operate up to twice as silently, making them more suitable for urban usage, too.
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The number of OEMs investing in natural gas remains limited, though. It seems that only Volkswagen, Mercedes, Iveco and Fiat are putting their shoulders to the CNG wheel. The arguments of the naysayers are that it remains a greenhouse gas and does not contribute significantly to the decarbonisation of transport, even when part of it is produced sustainably (biomethane). Still, the EU has chosen to invest in CNG in a bid to reach its CO2 reduction goals. To support the development of the market, it has committed itself to reduce the maximum distance between natural gas stations to 150 km across the continent. Last May, Total announced it wants to operate 350 such stations by 2022, stating that “there is a strong potential for natural gas, especially in the transport industry”. ELECTRICITY: WEIGHT, RANGE AND CHARGING ISSUES The more batteries you put in a van, the further it can go, but the heavier it gets… which compromises its range. It seems like an question impossible to solve today. More kWh also means a higher price – a problem that could be tackled by renting the battery pack, like market leader Renault-Nissan does. For now, e-mobility seems limited to short-distance, low-payload use. But a r-e-volution seems in the making. Mercedes announced that the next-generation Sprinter, to be launched by 2019, will be available with an electric powertrain and scalable battery packs. This means customers will be able to trade payload capacity for additional range, depending on their priorities. That sounds promising, but what about charging?
FLEET EUROPE #92
DOSSIER
Most car manufacturers will confirm that electric is the future while hybrids are a necessary transition technology.
Actually, induction is the final piece of the puzzle. In May, Qualcomm demonstrated its DEVC (Dynamic Electric Vehicle Charging) technology on a test track in Versailles, Paris, which is able to send 20 kW into an electric vehicle at speeds of up to 100 kph. This ‘charging on the go’ could eliminate the need for large and expensive batteries. HYBRIDS: THE 48V REVOLUTION Whether to invest in hybrid technology, combining combustion with e-power, or to skip this phase and go all-electric immediately: that remains the dilemma for many OEMs. Most of them will confirm that electricity is the future, but some believe hybrids are a necessary transition technology. Today, there is actually not a single hybrid LCV on the EU market. Ford will be experimenting with a plug-in Transit Custom (see box), but it seems that (expensive) PHEVs are not the solution of choice for the other established OEMs. With (stationary) induction already available for cars today, plugs and cables are likely to be obsoleted anyway. For the next few years, mild diesel hybrids are likely to offer the best compromise between cost and emissions and fuel consumption reduction. A small electric motor and a shoe-box sized 48 V lithium-ion battery are simply added onto the combustion engine and normal 12 V battery. According to suppliers like Delphi and Continental, this constellation offers 50 to 70 percent of the benefit at 30 percent of the cost (of a full hybrid), translating into fuel efficiency improvements of 10 to 20 percent.
FLEET EUROPE #92
VANS WITH GREEN PLANS Electricity: StreetScooter As none of the OEM products on the market fulfilled the needs of DPDHL, the company decided to build its own small postal and delivery e-van through SteetScooter, a start-up it acquired in 2014. In June 2017, the company announced a partnership with Ford for the production of a Transit-based medium-duty electric minivan. Both models will be available for purchase to third parties, too. Plug-in hybrid: Ford Transit Custom As from December 2017, Ford will start testing 20 Transit Custom PHEVs in London during 12 months. The participating fleets are city-based businesses which will integrate the vans into their day-to-day operations. A telematics system will collect data on the vehicles’ financial, operational and environmental performance to help understand how the benefits of electrified vehicles could be maximised. CNG: Fiat Professional If there is one OEM specialised in natural gas, it must be FCA. It has no less than three LCV models can be equipped with a CNG system: the small Fiorino, the compact Doblo and the large Ducato. The latter can drive up to 300 km on 37 kg of compressed gas, plus another 100 km with the 15 litres of petrol contained in the auxiliary tank.
Ford Transit Plug-In hybrid.
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With this line-up, every fleet is a winner. Mercedes-Benz Vans International Key Account Management. You should always expect your fleet to perform. And in order to meet this expectation day by day, you need an integrated mobility solution – that is tailored to you. Our International Key Account Management Team combines your individual fleet with our corresponding services – not just in your home market, but worldwide. Visit us at http://fleetsales-vans.mercedes-benz.com
DOSSIER
Tackling the last mile problem Dieter Quartier @DieterQuartier
Cities are no friends of the delivery van. Low-emission zones and congestion make life hard for deliverers and their employers. But there are ways forward.
Mercedes-Benz looks to the future of urban delivery with its electric Vision Van.
60%
IS IN FAVOUR OF DRONE DELIVERY
The last leg of delivery, ending up at the consumer's home or business, has become more challenging with cities introducing traffic restrictions, often in the shape of low-emission zones. This has a tremendous impact on the cost of delivery. It is estimated that today, up to 28 percent of the transport cost comes from the last mile, pushing companies to rethink their distribution model. And there are more factors disrupting the supply chain. E-commerce is booming, shifting market share from the B2B to the B2C segment, and customers demand everfaster delivery. According to McKinsey & Company study (Parcel delivery: The future of last mile), large e-commerce players, as well as various start-ups, have identified last-mile services as a key differentiator. In fact, the variety of delivery options and the perceived quality of the delivery service are major decision-making criteria for online buyers. THREE DELIVERY MODELS Depending on consumer preferences and drop density, the study identifies three different delivery models, also known as X2C, or ‘some form of goods delivered to consumers’: autonomous ground vehicles with parcel lockers, drones, and bike couriers. The latter would only represent 2 percent in the relatively small instantdelivery segment. The first two, however, are expected to deliver close to 100 percent of X2C items, and 80 percent of all items.
delivery requirements, will favour ‘human’ delivery as we know it today. E-vans are likely to proliferate in the coming years. Deutsche Post DHL, for instance, decided to develop and sell its own range of electric delivery vans through their subsidiary StreetScooter. MERCEDES VISION VAN German car, LCV, truck and bus builder Mercedes presented its holistic vision on the urban delivery van of the future in the shape of a concept vehicle which integrates numerous innovative technologies for final-stage delivery. The van serves as the central, intelligent element in a fully connected delivery chain and features an entirely automated cargo space, plus integrated drones for autonomous air deliveries. Deliveries with the electric Vision Van are locally emission-free. Innovative algorithms control the loading of packages, the automated cargo space management, route planning for the vehicle and the delivery drones. An automatic on board dispenser hands over the packages to the deliverer at destination. The two autonomous drones, each with a payload capacity of two kilos, have an operating radius of 10 km. Regarding drone delivery: McKinsey’s study shows that 60 percent of customers indicate they are in favour of it, or at least indifferent. Hence, there is no good reason to believe that the transformation will not happen over de next decade.
The remaining 20 percent will be taken care of by traditional delivery. Large B2B customers with high drop factors (the amount of parcels dropped per stop) and special
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FLEET EUROPE #92
REGISTER NOW 6 december 2017
estoril PORTUGAL
LEARN, NETWORK AND BE INSPIRED, BE IN ESTORIL On December 6th, the European car fleet community will come together in Estoril (Portugal). No less than 800 fleet professionals will gather to get insight on new trends impacting the international fleet management profession. This year again, the forum will be the not-to-be-missed session for all European fleet professionals.
AMONG THIS YEAR’S SESSION • Reshaping the sustainable fleet and mobility professions • Uncovering the DNA of the fleet and mobility professions of tomorrow • How to capitalize in the transforming fleet and mobility business landscape • Identifying the sustainable business model in the new fleet and mobility constellation
WHY YOU NEED TO BE THERE The Fleet Europe Forum is forward-looking, but firmly fact-based, with contributions from experts from inside and outside the industry. Yet the event is also greater than the sum of its presentations, debates and networking opportunities: this is where fleet and mobility customers and suppliers become a true fleet and mobility community, to the benefit of all present.
WHEN? The 6th of December WHERE? At the Estoril Congress Center, Portugal
REGISTER NOW On forum.fleeteurope.com
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FOR INTERNATIONAL FLEET & MOBILITY LEADERS
DOSSIER
Upfitting: Space makers and weight savers Jonathan Manning
Specialist racking firms are transforming ‘vanilla’ light commercial vehicles into sophisticated modern workplaces.
The need to save weight and optimise driver efficiency is generating innovation among specialist vehicle racking firms. The creation of carefully crafted shelving and storage arrangements within light commercial vehicles is allowing drivers to carry more equipment, transport heavier loads and make more calls, collections and deliveries during the working day.
Whether serving as mobile workshops or delivery vehicles, payloads are under pressure as the move to Euro 6 engines adds to gross vehicle weight, so the installation of lighter racking systems helps to offset OEM weight gains and starts a virtuous circle – a lower weight means less risk of overload (which can incur fines and penalties in many countries), lower fuel consumption and potentially fewer journeys. FUEL AND CO2 Lighter shelving, boxes and cases also delivers environmental benefits in terms of lower carbon dioxide emissions, said Berend Veijer, international sales manager of Aluca, the German firm which specialises in aluminium racking systems. Aluminium is three times lighter than the equivalent steel, and the lighter weight brings environmental benefits. “Weight is an issue in saving fuel, and larger companies and public authorities have to report their carbon footprint,” said Veijer.
Modul-System A new range of folding shelves for parcel delivery firms has been introduced by Modul-System this year. The company, which has its head office in Sweden, has designed the shelves with gas struts to make them easy to operate, and each shelf has a load capacity of 120kg. The option to fold up the shelves creates a wider space in the back of a van to accommodate a Euro pallet, and combined with a sliding door in the bulkhead creates a highly efficient and safe parcel delivery vehicle.
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Given the high mileage of many light commercial vehicles, even modest reductions in fuel use per kilometre can deliver significant savings to corporate bottom lines, but the efficiency gains from having meticulously organised parts and equipment are likely to far outweigh the lower cost of diesel. “There is a shortage of skilled, technical workers in most countries, so their labour
FLEET EUROPE #92
DOSSIER
rates will rise. People will have to be more efficient to present reasonable costs to their customers, so if they can have their van equipped where they do not have to search for anything, and everything is organised, it helps them to do their job more quickly,” said Veijer. There’s also the issue of the good or poor impressions that technicians will create with clients if they arrive with a smart or messy vehicle. SAFETY AND EFFICIENCY A professionally racked light commercial vehicle can also create a much safer working environment, said Thomas Johanssen, vice president, ModulSystem. He cited the advantages of a sliding door in the bulkhead of a courier vehicle as an example where driver safety and business efficiency go hand-in-hand. “If drivers have to open the door and walk around to the back of the vehicle every time they make a collection or delivery, they could be stepping into traffic 100 times a day. It also takes them a few seconds longer to walk around the vehicle, and for parcel delivery companies it’s all about speed,” said Johanssen. “But if they can walk through the sliding door straight into the cargo area they avoid the danger of the traffic and save time.” Multiplied a hundred times, the time savings could mean the driver makes more stops in a day. The same ergonomic efficiency is designed into ModulSystem’s racking products, so that the back of the light commercial vehicle is as intuitive to use as any workplace. TAILOR-MADE This focus on operational efficiency is leading more companies to customise racking to their individual needs, although industry and national differences in requirements conspire against a standardised international fit. “Purchasing managers very often try to standardise, maybe it’s a European organisation and they have the
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Aluca With an eight-year warranty behind its products, many Aluca fleet clients take the racking out of a commercial vehicle at the end of its fleet life and transfer it to the next van… and sometimes the van after that. It’s a solution that saves money and helps the environment, especially with Aluca’s commitment to manufacturing its shelving, drawers and boxes from recycled aluminium. The company’s modular system allows countless combinations of racking solutions, including its smart dimension2 drawers which pull out of the rear or side doors, optimising space and keeping the in-vehicle racking accessible.
ambition to standardise all over Europe but honestly it never works. They need to customise,” said Johanssen. “For example, in the UK you need to have the possibility for a worker to wash his hands in hot and cold water (forced by the unions). We do a lot of that in the UK, but nowhere else. Fit-out is both customer specific and market specific. We have multi-national contracts, and it’s normally a European deal, but to a certain extent there will always be customisation later. As everyone strives to gain economies of scale I believe we will also get worldwide contracts – at least one of the global parcel delivery service companies has previously run one specification worldwide. We need to customise for our customers, but we also see that customers would really like to streamline.”
management of light commercial vehicles, Modul-System works with them to create a handful of racking variants which serve more as examples than concrete proposals. Thoams Johanssen describes the company as the spider in the middle of the web, coordinating orders between dealer, leasing company and end user fleet to ensure the racking, electrics, lining, flooring and lighting transform the empty vehicle into a perfect workplace. The end goal is always the same – to create the vehicle the end-user really needs.
As leasing companies increase their presence in the funding and fleet
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THE NEW RANGE ROVER VELAR
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Official fuel consumption figures for the Range Rover Velar in l/100 km: Urban: 12.7 – 6.2, Extra urban 7.5 – 4.9, Combined 9.4 – 5.4. CO2 emissions g/km: 287–142. Please drive responsibly on and off-road.
LOWER EMISSIONS From 142 g/km CO2 BETTER FUEL ECONOMY Up to 5.4 l/100 km LONGER SERVICE INTERVALS 2 years or 34,000 km
DOSSIER
Why LCV fleets move to leasing Frank Jacobs @FrankJacobs
Leasing or buying? For cars, mature markets clearly favour the former. LCVs are a more complex proposition. Yet that is precisely why both suppliers and customers are moving to leasing as the best solution for LCVs as well.
Light commercial vehicles (LCVs) are often required to carry out highly specific and/ or demanding tasks. Many companies consequently end up buying rather than leasing their vans – even though they fully acknowledge the advantages of leasing for cars, both as benefits and as tools. So why is leasing an increasingly attractive option for LCVs? We asked a number of lease suppliers, both multi-brands and a captive, and a lease customer about their experiences.
1,000€ THE DOWNTIME COST WHEN AN LCV IS OFF THE ROAD
“BEST SOLUTION” G4S is a major international customer with an important LCV segment in its fleet. Of those, 10% are owned, 90% are leased, under a full operational lease contract: “We recently conducted a lease-versusbuy review for LCV’s and the outcome confirmed that our existing ‘leasing’ strategy, is currently the best solution for G4S”. G4S has international framework agreements with two major suppliers, which compete against local heroes where the other company is not present. With a complex and diverse fleet in more than 100 countries, G4S has historically managed its fleets locally. But given their strategic importance, and thanks to technological advances, the company has driven a more centralized fleet management approach.
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BENEFITS OVERLAP Of course, there is a lot of overlap between the benefits of leasing cars and LCVs: predictable cost, outsourced admin, plus benefits in the fiscal, operational and financing areas. That last one is crucial: considering LCVs are often highly specified, not having to worry about residual value is a great advantage. “When acquiring LCVs, companies want to benefit from leverage and expertise. That often applies most when lease companies finance and maintain the LCVs. Hence the increased popularity of LCV leasing in Europe”, says LeasePlan. “It’s not just the resale value that is protected; the client doesn’t have to do the pre-financing either”, Arval points out. “LCVs have become tools which support revenues. For instance: even for a transport company, owning LCVs is not core business; transporting goods is. With TCO increasingly key, full-service leasing has become the preferred solution for LCVs as well”. Not in the least because lease companies provide a steady supply of new, up-todate vehicles. Leasing is particularly well-suited to LCVs, argues Alphabet International, exactly because they require more expertise:
FLEET EUROPE #92
DOSSIER
Anticipating the growing interest in LCV leasing, most international lease companies have created dedicated LCV departments to serve their customers to the best.
“From selection of the vehicle and that of the equipment - in collaboration with conversion partner – to contract setting, including tailor-made services, to remarketing of the vehicles at the end of the contract”. Customers ‘professionalising’ their LCV management is a big part of the evolution towards leasing, confirms Volkswagen Financial Services, but that shift is not just towards leasing: “Rental models are also becoming more popular, especially for companies that need more flexibility”. OTHER FACTORS Of course, there are a few other factors that determine the rising popularity of LCV leasing. One is geography. Roughly speaking, Western Europe is the most mature, furthest advanced region. The same trend is noticeable in Eastern Europe; with LCV lease penetration a lot lower over there, the potential for growth is all the greater. In southern Europe, longer vehicle retention long favoured buying as a solution. Here also, things are changing. Historically, LCV leasing was more problematic for industries like mining or construction, sectors with high maintenance costs and low mileage. Buying
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remains popular here, because the companies involved think this allows them to monitor their overall cost more precisely. Also, owner-drivers with high-specification demands usually buy their elaborately fitted-out van and drive it to the end of its lifetime, because the expense of the custom-fit outweighs the advantages of leasing. Inversely, LCV leasing is more popular with large companies with a lot of vans that generate high mileage, and also have specific, but relatively standard needs for the technical fitting of the vehicles. Leasing provides an attractive all-in solution with fixed costs. DEDICATED TEAMS Anticipating the growing interest in LCV leasing, some lease companies have had the foresight to establish dedicated teams and/or structures to the emerging market segment. At Arval, a central dedicated structure oversees LCV activities in all national entities, building and cascading an overall strategy and leveraging best practices. “This way, customers find the same organization and processes in each country”.
LCV LEASING TIPS Fleet managers with LCV responsibilities may find leasing an interesting answer to their problems. But it is good to take on board these tips, provided by LCV leasing providers and customers alike: • Successful LCV leasing is a volume business. Even though harmonization and consolidation are especially hard for LCVs, work to bundle volumes at international level in order to generate cost advantages. • Consider using a single leasing provider for LCVs – big enough to offer high levels of quality, service and expertise; but also local enough to understand market specifics. • Use telematics to better understand and improve driver behaviour in LCV fleets, in which single vehicles typically are driven by a variety of drivers.
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DOSSIER
Alphabet has LCV experts in the international sales department as well as in each market, trained to assist and advise its local customers. “Considering the high potential for growth, LCVs are a great opportunity for us to grow our fleet business”. With over 30% of its international fleet consisting of LCVs, LeasePlan has an acute understanding of the need for dedicated support: “When an LCV is off the road, it typically costs the operator up to €1,000 in downtime. A company car out of service by comparison is a much less costly inconvenience”. Dedicated LCV teams at national level offer that dedicated support, built around three pillars: off-road time management, cost management and driver behaviour management.
More than 30% of the LeasePlan fleet with international accounts consists of Light Commercial Vehicles.
As for Volkswagen Financial Services, they have a Key Account Managers for LCVs in both their international sales force at HQ and the various national sales forces. “Only a dedicated international expert understands the business in full and can mirror a customer’s internal organization. Product experts within the VW Group provide support to find the ideal vehicle for the respective needs”.
RACKING – TO BUY OR TO LEASE? The same question, but with an even bigger question mark, can be asked of LCV racking: to buy or to lease? No single answer works: different circumstances call for different solutions. G4S: “We recently started including basic equipment in the lease. This greatly reduces the admin for our operational teams”. Alphabet: “From refrigerated vans to construction vehicles and tippers: specific equipment requires expertise and partnerships with conversion companies. Depending on uniqueness and value of that equipment, some companies may choose to buy; but even for high-specification vans, leasing suits most of the needs”. Volkswagen Financial Services: “Assistance systems are key to prevent damages. As such, one-stop-shopping is an advantage”.
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Arval: “The amortization of the equipment often takes much longer than that of the vehicle itself. Consequently, customers tend to buy the equipment, which relates directly to their core business, while they rent the vehicle into which it has been fitted”. LeasePlan: “Re-using purchased racking in a new vehicle may seem cost-effective, but consider that it may need to be refurbished, and that it may not fit in other, newer LCV models. Leased racking is delivered ready to use and generally comes with maintenance cost included, but must be returned. In some cases, a transfer from (leased) racking from one (leased) vehicle to the next can be arranged”. G4S: “Do not underestimate the emotions nor the unconscious bias involved, even when selecting LCVs (rather than cars)”.
FLEET EUROPE #92
The new Opel
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Fuel consumption combined 11.2–3.6 l/100 km; CO2 emissions combined 197–105 g/km (according to R (EC) No. 715/2007). Picture shows optional equipment and Exclusive trim. Availability depends on local market offer.
ADVERTORIAL
CONCEDED EDITORIAL SPACE
Good for business: a full-service LCV lease Changing consumer behaviour like online shopping has sparked demand for light commercial vehicles (LCVs) in company fleets. Selecting a fullservice LCV lease from a reputable provider like Alphabet International is convenient and good for business.
With the emergence of new business models that depend on light commercial vehicles (LCVs) to keep business running, such as online marketplaces that promise on-time, door-to-door delivery, LCVs are on the rise across Europe. Since 2013, sales of LCVs in the European Union have increased steadily at a rate of just over 11% per year. Currently, Alphabet International counts 80,000 commercial vehicles in its global portfolio and clients can select from a wide range of LCVs and OEMs weighing up to 3.5 tonnes. Companies worldwide can also tap into Alphabet’s full-service LCV operating lease offer and enjoy many benefits. FULL-SERVICE MAKES SENSE Just like their leasing contracts differ from passenger cars, LCVs also serve a different function in a fleet – and require a different service level. LCVs typically carry goods or materials, with drivers frequently entering and exiting the vehicle. As a result, the vehicles are often subject to greater wear and tear on hinges and seats. Further, to meet its professional needs, a company may require custom retrofitting on an LCV’s interior. For a full-service lease, Alphabet collaborates closely with selected external partners to provide for all these measures.
Regular service, maintenance and repair work is likewise essential for LCVs and a full-service lease agreement gives businesses peace of mind that all work is accounted for and carried out in the recommended intervals. Alphabet is also well-versed in money and legal matters, such as load limits and cooling systems, and advises clients on a caseby-case basis. The complexity of LCVs makes a full-service lease especially attractive to small- and medium-sized businesses without an in-house fleet manager. ECO-FRIENDLY LCVS Electric LCVs (eLCVs) enable noiseless delivery and occasionally gain free access to restricted zones. By conducting an electrification potential analysis (EPA) on a business’ fleet, Alphabet, provider of innovative Business Mobility solutions, determines how to best adopt eLCVs. The insights lead to tailor-made recommendations. Ultimately, a driver’s profile, including the number of stops per route and the route length, helps decide which engine type suits a business best: petrol, diesel or electric.
MORE INFO www.alphabet.com/vans
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FLEET EUROPE #92
REGISTER NOW 5 december 2017
estoril PORTUGAL
LOOKING FOR TRAINING? Are you the manager of a fleet of cars? Of a fleet of LCV’s? Does your job have an international scope? Do you feel like you could use some training to improve your skills? Then the International Fleet Managers Institute (IFMI) is what you need!
WEBINAR:
FULL DAY TRAINING SESSION:
SEPTEMBER 28TH, 2017 2:00 TO 2:45 PM
DECEMBER 5TH, 2017 8:30 AM TO 5:30 PM
Company Car versus Cash Allowance and the rise of Private Lease - which is right for your employees?
Becoming a Successful Fleet Manager in an International Framework.
WANT TO REGISTER? Visit ifmi.fleeteurope.com
FACE TO FACE
It’s all about data on four wheels Tim Harrup & Steven Schoefs
For the latest in our ‘Face to Face’ series, we brought together two international fleet managers based in the UK. Despite different fleet types, they are both aiming for the same results in terms of optimisation and future trends.
The meeting took place in London, between Marylebone and Baker Street. Quite a setting, for a number of reasons. Firstly, London is a trend-setter in terms of the environment and cars – its famous ‘congestion charge’ has been looked at by many other cities as a way of improving urban life. A topic not to be under-estimated by our fleet manager pairing… Secondly, Baker Street has several claims to fame in its own right. It was the home of Arthur Conan Doyle’s infamous detective Sherlock Holmes; it was for decades the headquarters location of iconic British retailer Marks & Spencer; and it was of course also eternalized in a song by Gerry Rafferty. It was here, in the heart of one of the busiest cities in the world, that Lee Warner of Unilever and Robert Hitchcock of Berendsen, mulled over successful vehicle fleet policies across Europe and the world.
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FLEET EUROPE #92
ROBERT HITCHCOCK
LEE WARNER
COMPANY Berendsen ACTIVITY Textile, hygiene and safety solutions FUNCTION Group Procurement Category Manager - Mobility IN POST FOR 1 year NUMBER OF VEHICLES 1,400 cars, 700 CV’s NUMBER OF COUNTRIES 16 MAIN FUNDING METHOD IN EUROPE Operational leasing REPORTS TO Director of Procurement
COMPANY Unilever ACTIVITY Consumer goods FUNCTION Global Fleet Manager IN POST FOR 2 years (11 years with Unilever) NUMBER OF VEHICLES 13,500 globally (7,000 in Europe) MAIN FUNDING METHOD IN EUROPE Operational leasing REPORTS TO Global Travel Director
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FACE TO FACE
1
STRATEGY AND POLICY
Do you have a true international fleet policy?
What have you been most proud of over the past year or two?
ROBERT HITCHCOCK Not yet. We have continued with a system which is localised, but together with HR we are working on building up an international fleet policy from the base upwards. Aspects such as safety are obviously present in each market, sometimes with very good policies – but now we will draw these together with minimum basic requirements and develop a strategy driven by centralised guidelines.
R. H. A major success is the implementation of telematics and cameras in the commercial fleet. We started in the UK. We have seen a massive and consistent improvement in the number of incidents and accidents between 60 and 70%, fuel efficiency improved, we saved 2,000 tonnes of CO2, while speeding dropped almost to zero. If you can measure it, you can improve it. We will move this out from the UK to other countries, we are trialing in Germany at the moment. It’s essential you communicate telematics as an improvement tool and not use it as a Big Brother.
LEE WARNER We now have an international framework in place. But it took time and effort. We saw the benefit of having a centralized structure that gives guidance for local entities about key elements like eligibility, supplier recommendations, CO2 and safety. We did not have a truly international fleet policy in place, so we brought this to the attention of senior management and really started driving it through. We had to get buy-in at this level and then communicate to the local markets. Then we had to align local policies with the global policy which was quite an exercise. We started the roll out with our key markets and our most difficult ones.
What has been the biggest obstacle you have faced, and how did you overcome it? R. H. Gaining information and the lack of available data about our fleet when I joined. It was not a green field area but not a mature area at all. We had to pull in information from each market, even basic date up to the level of number of fleet vehicles. Today we have a good view, although there is still progress to be made. Another issue was not engaging key stakeholders early enough in the process of change can cause substantial delays to the delivery date of the project. L. W. For me, getting agreement for the international policy and also pulling together data, which was fragmented data and had to come from the local markets. We worked on a data gathering project to have a central consolidated view, which we now have. Overcoming these and implementation problems has to be done by having the most senior buy-in possible in divisions like procurement, HR, finance, so that the local managers know it is a company policy.
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L. W. For me the success story is about the implementation of a centralized system to really track costs – especially vehicle capex – in each market, especially the emerging markets, where this was not easy before. This is now in a central location and business cases have to be presented and assessed before spend. This took about six months to roll out, but we now have a good view and control on fleet spend. Also here, it’s crucial to underline the benefits for a successful roll-out. You can’t just come in with ‘this is what you need to do because the international team are saying so’.
What extra data would you like? R. H. What I would really like is a full contract management system, so I can see exactly where we are with the cars and their operation. It’s all about having lease cost trackers, to see whether it’s rising or falling. We need to see which KPI is causing a trend. L. W. We outsource the data we receive from our suppliers to a third party, which compiles it for us on a quarterly basis. A third party has no bias, so the data is neutral. What we most need to track is those elements which are outside the pure lease cost who tend to stay fixed unless you change contracts – business and private mileage and so on, those elements which move, we have to keep on top of that. And then for contracts the markets that are early terminating or recalculating vehicles, do they know where they are heading to and what this will cost.
FLEET EUROPE #92
FACE TO FACE
2
GREEN AND MOBILITY
What green fleet initiatives have you developed? L. W. It is our international policy to have a carbon emissions reduction policy in place. So our first step was to roll out an international policy to cap our emissions. We have started to profile our drivers to get the best vehicle fit. Next steps will be to further reduce our CO2cap and mandate EV/Hybrid vehicles. R. H. We are also rolling out a CO2 cap, and working hard on driver behaviour. We are seeking EV and hybrid solutions, although this is difficult for CV’s. And we need to make sure drivers actually plug hybrids in and use them correctly.
How do you see the company car evolving over the coming years? L. W. People are no longer going to be satisfied with just a company car for 5 or 6 years. They will want to be more flexible, be able to take public transport when their app tells them the traffic is crazy. Everything is geared towards technology now and will not be focused on only a company car anymore. A mobility budget is likely to be the way things go. R. H. The market will decline unless large companies adapt their policies to alternative fuels and so on – in line with local regulations. Cash alternatives to the car might look more attractive in certain markets. We have to see where the tax situation is going to. It’s moving every day. It’s a difficult one to navigate through. The more complex it will get, the easier it will be for the younger generation to take the cash and sort things out for themselves, but also within a framework. You don’t want to have your people select inappropriate or unsafe cars.
With alternatives such as ‘cash for car’, how do you deal with safety and compliance? L. W. We have some local cash polices in place which restrict the age of the car, and obliges the employee to make a choice within certain limits. This is then governed locally in terms of safety and compliance. R. H. It is important to ensure that the local teams understand why certain rules are important, especially in terms of safety. We also have rules which say you can’t use a ‘cash car’ for certain types of travel – you have to take an approved rental car. FLEET EUROPE #92
Is there one element of mobility which you believe is the most important for you? L. W. I think potentially that car-sharing and car-pooling are the way ahead. For those who buy their own car, this is a way of getting some money back. And technology gives them the flexibility to adapt. We currently have some mobility pilots in the pipeline, which will be designed around a ‘mobility budget’ as mentioned earlier. R. H. I can’t pick out one thing, as it depends on employees’ geographical location and financial circumstances. Car-sharing may work in urban areas, but many of our plants are of course not in city centres… Therefore we tend to test new ideas in the Netherlands. What’s important is that you can built flexibility in.
In the light of all this, how do you see the future of the role of fleet manager? R. H. The whole domain is going to become more and more data driven, which will require more skills to understand. But the personal side of things will still be necessary, the way things are going, fleet management will become mobility or even information management. L. W. There are going to be different solutions developed in different markets, and this is going to make it harder to see a single way forward. Safety, sustainability and employee retention will still need to be key however, despite all the data-driven policies. Fleet or Mobility is potentially going to transition into the travel department.
What is the next big value-creator in your sights? R. H. There are many opportunities, and alternative fuels figure in this. Anything you can do to reduce the number of vehicles or improve driver behaviour and reduce amount of fuel used is cost saving. Supplier consolidation and compliance is also key alongside rightsizing and optimizing vehicles. L. W. We completed the OEM and lease tender, now we also have to look at fuel. We have started to consult on fuel procurement and usage in our key markets. We will start new tenders probably early next year.
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FACE TO FACE
3
TIPS & TRICKS LEE WARNER
ROBERT HITCHCOCK • Cost is important, but it’s not the only factor
• Have the required buy-in from senior managers
• Create a culture of value within the fleet community
• Make sure your communication system to drivers is really aligned, and only goes to the right people.
• The most effective way of reducing fuel costs and CO2 emissions is to get the driver to take his foot off the gas”
4
WHO’S WHO
I would be working within another area of procurement as it is a great way to push innovation from the market into companies. I enjoy golf and football.
I have always enjoyed travelling in Asia. I would have to say both of my parents, they have both worked very hard to get where they are and have always pushed me to better myself.
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• Don’t try and change things all in one go, advance steadily, and balance the issues, cost and value, safety…”
IF YOU WEREN’T IN FLEET AND TRAVEL BUSINESS, WHAT WOULD YOU PROBABLY BE DOING PROFESSIONALLY?
WHAT IS YOUR PASSION OUTSIDE OF THE FLEET AND TRAVEL BUSINESS? WHAT IS YOUR FAVORITE HOLIDAY DESTINATION? WHAT PERSON YOU ADMIRE THE MOST OR IS/WAS AN INSPIRATION TO YOU, AND WHY?
Some form of Graphic design.
My children, music, and football.
Cyprus.
My Nan gave me my first PC when I was 7 years old and was always teaching me life values plus how to really push myself in everything I do. So I would definatley say her.
FLEET EUROPE #92
FACE TO FACE
INSIDE FACE TO FACE Robert Hitchcock and Lee Warner first met at the ‘2016 Global Fleet Conference’ in Brussels. We brought them much closer to home for this exchange of ideas which they were both looking forward to.
Lee Warner, Global Fleet Manager of Unilever: “You really have to act on the data you receive, otherwise the problem is yours, not the driver’s.”
“We are going through a huge route optimisation project at our plants, and we will make sure the practice meets with the theory”, says Robert Hitchcock, Group Procurement Category Manager of Berendsen.
The Face to Face interview took place in the heart of London, between Marylebone and Baker Street.
Lee Warner on fuel efficiency at Unilever: “Our tests so far show a reduction of around 10% in fuel consumption.”
Robert Hitchcock: “One of the problems of Brexit could be fuel shortages, so we have to have contingencies.”
Tim Harrup & Steven Schoefs | PICTURES: Richard Faulks PRODUCTION SUPPORT: Céline Gilson (organization)
FLEET EUROPE #92
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BUSINESS
More excitement ahead Steven Schoefs @StevenSchoefs
“It was an exciting last year for ALD, but there's even more excitement ahead”, promises John Saffrett, recently promoted to COO at ALD Automotive. He's not just responsible for the operational management of the company's 1.4 million vehicles across 43 markets, he also manages its IT and digitisation efforts. This new position will allow ALD to faster develop and innovate.
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You said your management team will focus ALD's product development and innovation on five key areas. Which are they?
John Saffrett sees his appointment as proof that the fleet industry is increasingly techdriven. “All our tech development is ultimately driven by the client, so it is logical that both competences are united in one executive”.
“Firstly, the digital and connected car. We're investing significantly in our digital platforms and are establishing a centre of excellence for connected cars – also by leveraging our local entities in markets that are ahead in this field”.
What are the ambitions of ALD?
“Secondly, sharing. A corporate car sharing platform is key, but with the capacity to develop into other areas”.
“It's important to remember that there are still strong growth opportunities in our core business. There is still a need for fleet providers that can bring competition, scale, efficiency and the products that the market wants. Being a big player is a key advantage, also in the emerging markets of Eastern Europe, Latin America and Asia, where the relatively low penetration of full-service leasing is increasing rapidly. So full-service leasing is a key part of our future growth”.
John Saffrett, Chief Operating Officer of ALD.
“Which brings us to new and smart mobility. We are convinced that the core competences of today – procuring, funding, servicing and remarketing vehicles – will still be key in 10 years time, but it is our ambition to lead in the emerging fields of mobility as a service as well”.
“But ALD also believe in partnering. Partnering is in our DNA. Look at the partnerships we developed with OEMs, banks and others – Blablacar and ENEL, to name but two - over the last 15 years, giving us a great sales channel towards the SME market, or new opportunities like private lease. When you take an offer from corporate to the private market, you need a different sales approach, a different level of customer engagement, and our partnerships give us a fantastic network to do so”.
“Thirdly, flexibility. We see customers increasingly demand for contract and service flexibility. A trend that will only increase”. “Fourthly, multimodality. We already see great mobility platforms emerge in some locations, such as MaaS Global in Helsinki and Olympus in Belgium. We see a future where customers can go to these platforms to 'consume' their mobility services. In our view, multimodality means developing these platforms via partnerships. That will take time, but we want to play a key part in the mobility ecosystem”. “And finally, Travel and Payments. A true mobility provider is more than car-centric. So we're looking at e-bikes, scooters, public transport in a smart-city context, with the capacity to pay for it in a seamless way”.
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BUSINESS
As the industry changes, will your customer change as well? “Absolutely. We'll develop our range of products for consumers, for instance. And on the other hand, our services will be subscription-based: you'll pay for the trip, not the car. Suppliers will be measured not in number of vehicles, but in 'user moments'. Corporate and retail business will merge, via mobility platforms”.
When so much is happening in mobility, how do you keep track of it all? “ALD has an Innovation Committee that oversees our own initiatives, and decides where to invest. We also have an Innovation Center in Paris, which aims to develop our partnering capabilities with outside players. The net result is that we have created a very active ecosystem, picking up new ideas and developments and assessing them fairly quickly”.
Do you generally favour in-house innovation or outsourcing it? “If we believe in something and we don't have the capacity in-house, we look for
partners. There is no hard and fast rule; we take it case by case”. “The key is to think in startup mode with startup minded talent. Do it quickly, and if after three months' work it's a no, there's no hard feelings. That's a completely different process from the classic fleet industry. We've adapted our process to the faster way of developing – while still respecting legal and compliance issues”.
Finally, a question on ALD's recent IPO. Was that just your parent Société Générale's way of checking your market value before deciding to sell you off? Société Générale exactly knew and knows what we are worth. They are finance experts you know... Operationally, the IPO has changed nothing. We remain focused on excellent service to our clients. The goal of the IPO was to increase our visibility and profile in the wider mobility market, and so far that has been a success. It will allow us to set our targets even higher (see also p.48)”.
KENT BJERTRUP HEADS LATAM BUSINESS At ALD, the appointment of John Saffrett as COO, also overseeing the commercial leadership, is part of a wider reshuffle. Kent Bjertrup, who had been appointed CCO in February 2016, has been reassigned as Regional Director Latin America, taking responsibility over ALD's activities in this growth region. ALD is a key player in LatAm, with its own subsidiaries in Brazil, Mexico, Chile, Peru and Colombia, and partnerships with Autocorp in Argentina and Arrend in Central America.
• You are a start-up working in the mobility industry? • You want to learn more about the sector? • You want to understand the trends of tomorrow and hear from the biggest players in this market?
• You want to network with the best of the best in the business?
• You want to promote your idea and challenge it with the greatest minds in European mobility?
Join us in Estoril on December 6th along with 800 fleet professionals. With the start-up Lab and the start-up café, you will have the opportunity to learn, challenge, communicate, meet and promote your business with the best in the business!
Participate to our Start-up of the Year Award and you might get the chance to be on stage with the brightest leaders of the fleet industry!
Apply now
Register on forum.fleeteurope.com
FLEET EUROPE #92
FOR INTERNATIONAL FLEET & MOBILITY LEADERS
39
BUSINESS
Making the switch from TCO to TCM reality Steven Schoefs @StevenSchoefs
Last November Jochen Schmitz succeeded Knut Krösche as Head of International Fleet at Volkswagen Financial Services (VWFS). “It’s great to be back in the international fleet business”, he proclaims, promising that in 2018 his company aims to revamp the market place with a new corporate solution guaranteeing fully integrated mobility management.
Jochen Schmitz, Head of International Fleet at Volkswagen Financial Service: “The B2B customer is increasingly significant. By way of example, we are growing our international customer portfolio consistently. Retail business is stable, if not slightly decreasing, fleet business is expanding.”
“I’m convinced the leasing and fleet market has to evolve further into mobility management, in which Telematics and the integration of fleet and travel will be vital. We aim to be one of the drivers of that transition.” In March 2017 VWFS launched Fleet Connected, the Telematics solution. And next year they will roll out an integrated Mobility Management platform that will allow employees to select and follow up company car related elements, alongside complete travel management. This could include hotel bookings, flight reservations, car rental services, parking and other modes. Mobility managers within employers will be able to receive consolidated reports and invoices for the complete mobility circle of their staff. “Going from TCO (total cost of ownership) to TCM (total cost of mobility) will be a reality and we’re aiming to be the first, or one of the first, to bring it to our customers”, says Schmitz. THE MULTIBRAND OPTION Jochen Schmitz’s recent change of role from the fleet management division CarMobility to Volkswagen Financial Services means he can now lead this push from the front. “We are rolling out CarMobility to other countries to increase our fleet portfolio with fleet management services. As I’m responsible for international fleet, my division
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will be the contact point for customers and prospects of Volkswagen Financial Services outside of Germany.” This, alongside expanding with a multibrand offering across Europe, are among Schmitz’s objectives for the next years. “Europe is our home region and it’s important, by volume as well as margins. This will continue. We have a solid international team and have supplemented this by hiring local people with expertise.” COVERAGE In terms of new coverage, VWFS has recently launched fleet sales in Turkey. Despite its economic volatility and political instability, it remains one of the largest markets in Europe and shows great potential with 80 million people, a growing economy and the presence of international companies. “Outside of Europe we are planning to increase our activities in China, which remains an interesting and promising market.” Market consolidation has been a consistent feature of the automotive industry. For VWFS future expansion depends on maturity of activities. “In general we have to differentiate between our core market activities and new activities. When it comes to leasing and fleet management, no acquisitions are planned. The strategy is, however, to develop our offering with new mobility services as we have in the past.” Examples of this include the acquisition of the parking company PayByPhone from Vancouver at the end of 2016 and the controlling share in fuel and toll management specialist LogPay from the beginning of 2017.
FLEET EUROPE #92
ADVERTORIAL
CONCEDED EDITORIAL SPACE
Back in Business Just over a year ago, Toyota launched two brand new LCVs in Europe. Since then, the Hilux pick-up truck and the PROACE van available in different body style and length combinations have been re-establishing Toyota as a major LCV provider.
Since it went on Sale in June 2016, the all-new Hilux has quickly proven itself a worthy successor to its iconic predecessors, adding carlike refinement to legendary go-anywhere off road capability. With sales up 30% versus the outgoing model, Hilux is on track to reclaim undisputed leadership of the European pick-up market. The new PROACE – successor to the popular Hiace – is the first Toyota LCV built in partnership with PSA. This collaboration translates into a wider range of body and engine combinations to meet the customer’s needs. Toyota has worked closely with its French partners to ensure that rigorous Toyota manufacturing standards are met, building on the lessons from the successful joint-venture that makes the Toyota AYGO and its two French counterparts 108 / C1. PROACE: MULTI-PURPOSE, SAFE AND COMFORTABLE As with the Hilux, sales of the new PROACE are already ahead of expectations. Early buyers have been attracted by the winning combination of purposeful design, high load capacity and low running costs – thanks to class leading fuel efficiency and CO2 emissions from new 1.6 and 2.0 diesel engines. Buyers are also delighted to find that
advanced driver aids such as Autonomous Emergency Braking, Blind Spot Monitoring and reversing cameras, are also available on PROACE, making it one of the safest and most effortless vans to drive. Most customers are opting for the longer wheelbase model, which is available in two body lengths. However, an increasing number of smaller van drivers are trading up to the short wheelbase ‘Compact’ version that offers a car-like footprint and tight turning circle - which combined with a large usable load area is ideal for deliveries in congested city centres. The PROACE VERSO people carrier offers a wide choice of trim levels ranging from basic Shuttle specification to the luxurious VIP grade, which, when equipped with optional captain's seats in the rear and a smooth, powerful 180hp automatic transmission, can be a comfortable and relaxing way to travel. CONVERSION & TELEMATICS: TAILORED TO YOUR NEEDS To ensure fleet customers receive the full Toyota customer experience, the manufacturer has invested in extensive training for key retailers. Recognising the complex needs of most van drivers, this specialist network of Business Centres will guide the customer throughout the purchase process, including fit-out requirements and finance options. To make the vehicle management as hasslefree as possible, Toyota LCVs are available via a full-service leasing plan that includes all major costs in a simple monthly payment. PROACE will additionally be available with a comprehensive telematics offer, proven to reduce both running costs and downtime through driver education and maintenance alerts.
FLEET EUROPE #92
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INNOVATION
Dash cams: from Spy-in-the-Cab to Driver Aid Alison Campbell
Sales of dash cams (dashboard cameras) throughout Europe have rocketed in the last few years. The latest figures available show that dash cam sales shot up 918% in the UK alone in 2015. Initially, consumers were the primary buyers of dash cams, and arguably it was for entertainment (sharing footage on YouTube and social media) but then insurance companies got involved and now LCV (Light Commercial Vehicle) fleets are seeing the benefits too.
TIPS When thinking about what system to invest in, Wincanton’s Hanson advises the following: • Think about the benefits you want to achieve – is it safety or financial gain? • Consider the risks your fleet faces daily and how likely these things are to happen. • How many miles does your fleet drive and are those journeys mostly motorways or urban? • Also, how will you view the footage? Does it have to be instant (streamed) or will recorded suffice?
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The phenomenon is due in part to insurance companies agreeing to accept dashboard-mounted video footage as evidence in the event of a claim. “Cash-for-crash” fraud forced insurers to take drastic action. Not only have they allowed dash cam footage, they have incentivised drivers to self-install the evidence capturing equipment by reducing premiums for those who do. However, enthusiasm for the devices in some European countries has cooled, primarily due to perceived privacy breaches. Luxemburg and Austria, for example, have restricted the use of dash cams to only certain sectors and have collected heavy fines from drivers installing them illegally. WINCANTON UK-based logistics management and transport company Wincanton operates a fleet of 250 LCVs and has a mix of dash cam solutions, single channel, forward-facing, plus 360-degree multi-channel camera systems.
Carl Hanson, Wincanton’s fleet director, takes up the story: “It depends on what you’re looking for. If all you want is something to address insurance claims, then a single, forward-facing camera in each vehicle may be sufficient. But if you want to come at it from a preventative perspective, you’re going to need something that aids drivers.” In this case, the dash cams have had a positive impact: “We’ve been able to reduce our accident rate by 30%.” Hanson declares. Much of Wincanton’s LCV fleet operates within the construction industry, in built up areas where hidden obstacles and potential risks are commonplace. So, having a full, 360-degree view around the vehicle helps increase visibility of vulnerable road users and eliminates blind spots. The system enables drivers to be aware of pedestrians, cyclists, straying animals, plus it acts as a driver aid, helping with difficult manœuvring when no one is around to assist. In addition to resolving insurance claims quickly, the next stage for fleets is camera integrated telematics. Says Hanson: “Cameras record events but telematics is about avoidance and prevention. It has to support driver engagement positively.” He is keen to point out the importance of linking the rollout of dash cams into an overall safety and behavioural change program. FLEET EUROPE #92
INNOVATION
Dash cams have their place in LCV fleets but they must be viewed by fleet managers and drivers as an aid.
“Get drivers involved and demonstrate the safety benefits for them and not merely the ‘Spy-in-the-cab’ scenario.” He says. Hanson also highlights another important issue to consider - complacency. “The thing to watch out for is that drivers get used to the cameras and in some cases quickly forget about them and regress into old habits. Any improvements in their driving could be short-term. Telematics gives you the ability to monitor driver behaviour over the long-term.” It also provides the data needed to make informed decisions about where, when and what action needs to be taken. But like all technology, telematics is only a tool. It provides the data but if that data is not acted on, long-lasting driving habits cannot be changed. The positioning of cameras needs to also be thought through carefully. They tend to move, or be knocked by drivers or other in-cab personnel, which could deactivate the recording function. THE AA Under its brand name RoadHawk, TrakM8 offers a multi-camera system that can deliver high-quality streamed video and audio using the cellular network. It also supports GPS and G-Force data.
FLEET EUROPE #92
UK-based vehicle recovery company The AA runs a fleet of 3,000 LCVs, mostly Transit and more recently Custom and Courier-types. The company relies on a telematics system supplied by TrakM8 but no dash cams currently, although they are beginning trialled. Why so late to the table? Stuart Thomas, Head of Fleet and SME Services, The AA, explains: “We were early adopters of telematics technology. Our fleet is complex and we carry a lot of equipment. It is comprised of very specific, specially kitted out vans that have beacons and we need to know when they are on and off. We have recovery trailers in the van and we need to be alerted as to when they are deployed and when a driver is towing, how long he has stopped for, where he is.” “Our need for telematics data has always been far stronger than the insurance issue for us. However, now that integrated dash cam and telematics systems are available, we are beginning to trial them so this may change.”
accident happened at around 2pm on Thursday, you can request that exact footage, say 10 minutes either side of that. It negates having to watch hours of video to reproduce and analyse collision data.” BERENDSEN London-based provider of textile maintenance services Berendsen, which operates a 680-strong mixed fleet in the UK, claims to have cut carbon emissions by 2,000 tonnes a year by introducing a fleet and driver efficiency programme underpinned by OptiDrive 360 and TomTom Telematics’ integrated telematics and fleet camera solution. The system scores and provides feedback to drivers on a range of performance indicators (fuel consumption, speeding, harsh braking and steering). Dash cams have their place in LCV fleets but they must be viewed by fleet managers and drivers as an aid, not a spy or source of entertainment.
Andrew Tillman, fleet strategy director at TrakM8, has been selling dash cams since they first launched and strongly believes that for LCV fleets telematics/ dash cam integration is a “no brainer”: “Instead of having to collect an SD card, with this system you can access footage from a specific date and time so if an
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SMART MOBILITY
Taking car-sharing to a new dimension nology
g tech carsharin
eyless n t to o ls nageme Where k a m t e e fl n o v a ti v e meets in
Steven Schoefs @StevenSchoefs
Click! Swipe! Drive!
Car-sharing platforms Koolicar and OpenFleet are the brainchild of Stéphane Savouré and his business partner Alexandre Bol. The concept has attracted 250,000 private members via peer-to-peer solution Koolicar and many s tion allow companies and public entities via OpenFleet. With the e applica prehensiv This com their staff; : to er ag ice rv an ility se fleet m ob m w ne convergence of private and business useles; with regard to to offer a ing vehic eady exist ss to its to use alr ated acce tant/autom ins ide ov to pr have smart mobility, both platforms value for corporates. 24/7; real-time motorpool, thanks to ⊲
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s operation to optimize use. on supervisi
The founders started looking at the possibility of a simple to use, yet technological strong system for car-sharing between individual owners back in 2009. y idea as At the time, this was a m totallybnew et s art s e fl r u o y le Auto’Lib not yetr v in existence. They Make was g ou ehic nectinat ya completely automated were conlooking nFleetease ofpooluse time service inewhich at the at anywas to Op motor te of your fleet use tional sta ur nc yo fu g of in g centre. was By track There rstandinno technology which de un r tte drivers rough a be ol for your wasTh either iendly totechnically or economically A user-fr viable for such a service at the time, so they developed their own technology that would enable a low-cost service.
Alexandre Bol, co-founder of carsharing services OpenFleet and Koolicar.
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TOTALLY AUTOMATED that is not well utilised and generates m enfleet.co www.op enfleet.com Where Koolicar stands apart from other unnecessary costs. Car-sharing p a corinfo@oon Inc. nologies ‘private’ car-sharing schemes is in the porate level helps a company to utilise PVP Tech the 303 St - Suite rt Einstein be Al S H4 40 fact that it manages the car totally, and vehicle fleet in an optimal71way and toQCget 2C1 Montreal, Canada SAS et le nF pe the system collects all the information a better hold on the vehicle fleet and its O St du Hazard 2 s lities rsaillemanagement.” about the The goal of OpenFleet is to Municipause of the car automatically. 78000 Ve es Compani France The automated system makes it possienable fleets to be better used and to need ble to rentRentaal car for as little as one hour, fewer cars. Operators without needing to meet the owner. The system checks all the parameters of the Evolving legislation in Europe, and also rental, and enables entry to the car, in in France will make the rethinking of which the key is to be found. The Koolicar vehicle fleets important. Companies will car-sharing platform is strictly ‘pay per have to establish mobility plans for the use’, there is no subscription option. And, employees, including bikes, car-sharing, importantly, the moment a rental starts, parking facilities and other mobility the car is insured by the Koolicar insurer. modes… and also the increased pressure This is included in the fee. on fines and fine management will lead to a mobility mindset in which car-sharing OPENFLEET, TARGETING B2B will have its place, believes Alexandre Bol. Where Koolicar targets private customers, also companies and public institutions To conclude, the mission of the start-up have interest for smart mobility solutions. companies Koolicar and OpenFleet is “As their challenges regarding traffic and to become a distinguished player in the mobility are the same, the solution is simimobility domain. Today Koolicar and lar, the technology is the same, and so we OpenFleet are available in France, but as launched OpenFleet, dedicated to corpothe technology knowledge is in-house, rate car-sharing”, says Alexandre Bol. both systems can be easily duplicated and rolled out internationally. The brand name is different, but the system uses the same technology. “Many companies are confronted with a car fleet FLEET EUROPE #92
Carsh for fle
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SMART MOBILITY
Intelligent parking with Parkbob Steven Schoefs @StevenSchoefs
Maybe you don’t know Parkbob yet. The Austrian startup won ALD Automotive's Startup Challenge last June. Parkbob is an intelligent parking solutions provider, and will now sign a contract with ALD Automotive worth at least €20,000 to have its solution tested and piloted.
Founded in 2015, Parkbob has developed a solution using data from connected cars that can identify the free parking spaces around town. The system is also aware of the various rules to which those spaces are subject (i.e. short or long duration, residential parking only, etc). Based on previously collected data, the solution also predicts how long they will remain available. The Parkbob app is free for users, but also offers a more sophisticated version for B2B use.
France, Parkbob will be launched in Paris in the second half of the year.
24 CITIES "We aim to help drivers make the right decision when parking, by informing them on parking regulations and tariffs, available spaces, but also restrictions and possible fines", says Christian Adelsberger, CEO of Parkbob. Parkbob currently has a presence in 24 European cities and boasts a database of 250,000 parking spaces. The company does not want to reveal the size of its customer base. Not yet present in
The Startup Challenge challenged tech companies to rethink Urban Parking, one of the most pernicious issues in modern mobility. In total, 63 startups from 20 countries contributed their products and/or services to the challenge. Parkbob will be tested in an as yet to be confirmed market – possibly Austria or Germany – in controlled, limited circumstances. If successful, the app could be added to the myALD offer.
PILOT For ALD Automotive, the Startup Challenge is proving an effective way to stay up to date with new developments in automotive technology and quickly roll them out for tests in real-market conditions, to establish whether the applications can provide a genuine added value for ALD customers.
Parkbob currently has a presence in 24 European cities and boasts a database of more than 250,000 parking spaces.
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FLEET EUROPE #92
ADVERTORIAL
CONCEDED EDITORIAL SPACE
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A BATTERY AUTONOMY INCREASED UP TO 270 KM NEDC* New Kangoo Z.E. has a new higher energy density battery thanks to its 33 kWh “Z.E. 33” battery. In real-world use as a delivery vehicle, this corresponds to a range up to 200km on a single charge, in summer. The battery’s storage capacity has been increased without any change to its bulk so the vehicle’s load carrying is unchanged with 650kg. The new ultra-energy-efficient motor and optimized electronic battery management system reduce electricity consumption during road use. The incorporation of a heat pump is an innovation. As the world’s first LCV, New Kangoo Z.E. enables reducing the use of electric resistors that consume both power and range. New Kangoo Z.E. can be heated or cooled in advance when plugged in. FLEET EUROPE #92
FASTER AND EASIER TO CHARGE New Kangoo Z.E. has a new charger which is twice as powerful as before (7kW: 32A, 230V AC charger) and enables a faster charging of the battery in only 6 hours. It is even more user-friendly, a one-hour lunch break allows enough time to add a 35 kilometer-top-up, helping professionals to optimize their working days. In addition, the Easy Connect services, with connected apps, make charging easier at the different points in Europe. TAILORED SOLUTIONS In order to meet your specific requirements, New Kangoo Z.E. offers a wide range of versions and conversions with 2 lengths. A network of 400 approved converters is available in 29 countries. So you can adapt your Kangoo Z.E. according to your business needs.
PERFECT LCV DESIGNED WITH OPTIMUM LOADING CAPACITY (UP TO 4.6 M³) The loading area offers a generous volume between 3m³ to 4.6 m³ depending on the versions, and two or five seats / crew cab versions. BUY IT OR JUST RENT IT Renault Pro+ offers the opportunity to either acquire the New Kangoo Z.E. or lease it according to your needs, and that is the same for the battery. *NEDC: New European Driving Cycle, the European standard for emissions and fuel consumption monitoring.
MORE INFO Yann.Le-Strat@renault.com
47
EXPERT
Taking stock of the Fleet industry Frank Jacobs & Steven Schoefs @FrankJacobs & @ StevenSchoefs
More than €1.3 billion: that's how much ALD Automotive's Initial Public Offering (IPO) netted last June. ALD's parent company Société Générale rightly claimed a success, but it is not the only one to benefit. Entering the stock market is good for ALD itself, for its customers – and for the Fleet industry as a whole. The billion-euro question now is: Who will be next? LeasePlan? (*)
ALD is not the first fleet supplier to be listed on the stock exchange – earlier examples include Europcar and Sixt in Europe, and Orix in Asia. But it is the first from the small club of large, global players that includes captive companies like Alphabet (BMW) and Volkswagen Financial Services, and non-captives like Arval, LeasePlan and Athlon. And seeing that the IPO was such a success, it seems likely that it won't be the last. AS ADVERTISED So, in which ways was the IPO a success? Firstly, for the reasons as advertised. The stated aims of taking ALD to the stock market were to access new funding for ALD's future development and to create visibility for the company. With a price set at €14.3 per share and a total of 92.9 million shares offered, the IPO raised €1.33 billion in capital. This money goes to Société Générale, which may choose to invest part or all of it in the future development of ALD. In the fast-moving mobility space, visibility is an essential quality. By going public, ALD comes under the scrutiny of investors and has to conform to accepted standards of transparency. This will make it into a known quantity on the market, a standard point of reference in mobility.
Full service leasing is profitable, mobility is exciting: it is an excellent time for the giants of the fleet industry to go public.
SECONDARY CONSEQUENCE But, as a secondary consequence, the IPO's success also makes it easier for ALD itself to raise the funds for its future development,
(*) Just before sending this magazine to print LeasePlan announced the start of a strategic review, including a potential Initial Public Offering.
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FLEET EUROPE #92
EXPERT
either by issuing obligations or by appealing directly to the market for fresh capital of its own. Both via the capital raised by this IPO and by making future funding easier, ALD now has the means to ensure its rapid development, either organically or by acquisitions (or both). Less explicitly mentioned – both before and after the IPO – were the benefits for Société Générale itself. It is no secret that Société Générale needed fresh capital to achieve the positive results it desired. But the IPO also was a test case: checking up to see what its mobility subsidiary is worth. Société Générale was both prudent and clever to initially put up only 20% of ALD on the market (the additional volume was generated by exercising the over-allotment option). A larger share could have depressed the price; but the volume was still large enough to generate a sufficient return. CAREFUL COMPROMISE That careful compromise has had beneficial effects on the overall valuation of ALD. With 23% of the 404 million shares floated on the stock exchange at €1.33 billion, the total price tag for ALD Automotive can be extrapolated at €5.78 billion. That's interesting to know, should SG decide, at some moment in the near future, to put ALD – or a significant chunk of it – up for sale. The flipside of the funds raised for Société Générale's gain is that banks, pension funds and other institutional investors together now own more than one-fifth of ALD, a company operating in a specialised environment. A casual observer may fear this could lead to a loss of focus on ALD's core values and core business. Rather, the reverse will happen. Not only is an increase in funding likely to accelerate the development of future products and services, the transparency required of publicly-listed companies can only have positive effects on efficiency and productivity. Those two effects, reinforcing each other, ultimately are good news for ALD customers, who can look forward to more and better services in the field of fleet and mobility management.
FLEET EUROPE #92
CHALLENGER TO PIONEER Just 15 years ago, ALD Automotive had the status of 'challenger' in the highly competitive fleet and lease industry. Only in the last decade did it achieve leadership on a par with other, longer established multinational fleet suppliers. By floating (part of) ALD on the stock exchange, Société Générale took a calculated risk. That risk has paid off, and is likely to further enhance the global profile of ALD. By establishing that it is possible to raise substantial amounts of money on the stock exchange while maintaining a strong overall value, the company is blazing a trail that others are likely to follow. Accessing this dynamic source of funding will unleash a mighty force of creative transformation, enabling ALD – and those who follow it – to become giants of the diversified space that mobility will occupy in the future. MOVING METAL Mobility is no longer about moving metal from A to B; it is about combining the different philosophies of short-term and longterm rental; integrating sharing concepts offered by Uber and others; taking on board the exciting mobility opportunities pursued by the Amazons of this world; and much more. In short, mobility is exciting, even sexy. That, fundamentally, may be why now is an excellent time for the giants of the fleet industry to go public – because investors are eager to participate in building this brave new mobility world of tomorrow. And if this and future IPOs generate the funding and the visibility for these companies to grow to the next level of innovative services and products, their clients can only benefit.
Mike Masterson, CEO of ALD Automotive, rings the Paris Stock Exchange bell on 16 June 2017. ALD officially is a public listed company.
23%
OF ALD ON STOCK MARKET
92.9
MILLION SHARES OFFERED
€
14.3
€
1.33
PER SHARE
BILLION RAISED IN CAPITAL 49
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REMARKETING
Get the best Residual Value for your LCV Frank Jacobs @FrankJacobs
Light commercial vehicles need to be fit for purpose, and optimising them for their eventual remarketing may seem like a leap too far into the future. But industry analyst and consultant Dean Bowkett (Bowkett Auto Consulting Ltd.) has a number of observations and tips that may just radically improve the RV of your LCVs – and thus the TCO of your fleet.
Dean Bowkett: “Car RVs generally reflect the general Economic Sentiment Indicator produced by the European Commission, while LCVs are closer aligned to GDP forecasts.”
Brand strength, model, current used value for the model (or its closest predecessor): the basics for setting the Residual Value of LCVs are similar to cars. But, says Dean Bowkett, there are some specifics: “Car RVs generally reflect the general Economic Sentiment Indicator produced by the European Commission, while LCVs are typically closer aligned to GDP forecasts”. Which means that companies are more willing to replace LCVs in times of industrial growth.
“Used-LCV buyers often want vanilla vehicles, that is to say: straightforward white panel vans, for example”, Bowkett says. But used LCVs were often fitted for very specific first uses, with expensive refrigeration units or hydraulic lifts, to name but two applications. “The cost of refurbishing tired or worn-out equipment can be off-putting to prospective buyers, meaning the seller often has to remove some of this equipment and repair holes and other modifications that resulted from the original fitting”.
TYPES OF GROWTH The type of growth often helps determine the type of LCV most in demand: “Housing booms increase the demand for larger LCVs and tipper trucks. Consumerdriven booms increase the demand for vans like the Transit Connect and smaller”. Impending restrictions on diesels in urban areas are likely to influence LCV RVs, as are any future legislative changes on payloads, axle limits and such.
THE COLOUR FACTOR Perhaps surprisingly, colour is a factor in van RVs too. Especially if those are the very recognisable and/or highly intrusive company colours of the previous company. Stickering also accelerates depreciation, as bleaching of the rest of the body colour may leave their contour of any logos clearly visible even if removed. “That is why I recommend to clients to have their van wrapped instead of sprayed or logoed. A wrap is much cheaper than the combined cost of the initial spraying and the necessary refurbishment afterwards. Plus, a wrap actually protects the paintwork underneath from weathering and chipping. That better protection results in a better RV”, Bowkett knows.
Above and beyond those general factors for calculating RVs of LCVs is the more important – and more specific – issue of the ‘requirement gap’ between the first owner and the subsequent potential buyers. The bigger the difference between those needs, the larger the (negative) impact on RVs. FLEET EUROPE #92
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REMARKETING
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Stickering LCVs could accelerate depreciation, as bleaching of the rest of the body colour may leave their contour of any logos clearly visible even if removed.
RESIDUAL VALUE TIPS In parting, Dean Bowkett expands on a few ways in which LCV fleet managers with an international dimension to their job can secure good RVs for their LCVs:
• “As mentioned: always consider
how long you will own the LCV and where its next home is likely to be”.
• “Also consider the least destructive way to make the van fit for your company’s needs but also easy and relatively cheap to convert back to a standard vehicle. For instance: wrap, don’t respray; and make equipment installed in the van removable with minimal damage”.
• “And finally, keep an eye out
on trends beyond your own borders. Is a particular sector of another country’s economy growing faster than your own? If so, then your used van may be worth exporting”.
As mentioned above, the popularity of certain types of (used) LCVs is closely linked to booms in certain types of economic activity. Interestingly, there’s often a clear geographic angle as well: “The resurrection of the construction and building industry in Spain has pushed up the demand for Medium V6 Panel Vans. The rise in online shopping is also driving up demand for Small V5 panel vans in the UK. In France by contrast, high employment cost is holding down economic growth and consumer confidence. Investment in replacement LCVs is therefore low, which is holding down values”. More even than for corporate cars, diesel remains firmly entrenched in the company LCV segment. Some obvious reasons include diesel’s high torque and pulling power, plus the durability of the engine – positive attributes for fleet workhorses. “However, we are starting to see a growth in the demand for battery-electric and hybrid LCVs, particularly for inner-city use. Here, the low cost of running is a bonus and the still-limited range of typically around 100 miles - Nissan ENV200 for example is 105 miles under the New European Driving Cycle test - is not a problem”, says Bowkett. EV BREAKTHROUGH If demand is still restricted, it is for similar reasons that are holding back the breakthrough of EVs in general: unavailability of charging infrastructure, for instance. “Until local authorities start providing
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large-scale charging infrastructure across towns, with charging points accessible to businesses, then demand will remain hampered”, Bowkett predicts. But the analyst is seeing some movement already, especially at the small end of the LCV segment, with car-derived vans and other small LCVs increasingly sought in petrol or hybrid rather than diesel versions. He also points out that diesel LCVs bought today will get on the secondhand market in 4 to 5 years – meaning their next lifecycle will be affected by the city diesel bans set to come into force in Paris, Madrid, Athens and other large European cities from 2025 onward… no more than eight years from now. “However, due to diesel’s torque and durability, it will remain the only logical powertrain for larger LCVs and even the bigger HGVs for the next 10 years or more”, according to Bowkett. So, how will the RV for the various LCV segments evolve over the next few years? “Basically, RVs on smaller diesel vans will fall as demand moves to petrol, hybrids and EVs. Medium and larger vans should remain relatively stable, as longer miles driven and usage retain the need for diesel engines. However, some risks remain in countries like Italy, where a banking crisis could tip economic and consumer confidence into reverse, seeing RVs for all cars and commercial vehicles falling again”, Bowkett summarizes his extensive research.
FLEET EUROPE #92
REGISTER NOW 5 december 2017
estoril PORTUGAL
GET READY FOR THE REMARKETING OF THE FUTURE The automotive industry is currently undergoing a rapid, massive transformation. Driven by technology advances and cultural shifts, the industry is moving towards a shared, connected, post-fossil and autonomous future. The future challenges and opportunities of remarketing will be examined in a number of carefully honed sessions, featuring industry experts.
THE PROGRAMME WILL BE BUILT AROUND 5 SESSIONS: 1. THE BIG PICTURE: WHAT DOES THE FUTURE HOLD FOR INTERNATIONAL REMARKETING 2. PRESENT AND FUTURE CHALLENGES 3. INNOVATION AND INSPIRATION 4. TO DIESEL OR NOT TO DIESEL - BRINGING THE FUTURE OF FUEL INTO FOCUS 5. B2C AND B2E: BUSINESS MODELS OF THE FUTURE
WHEN? The 5th of December WHERE? At the Palacio Hotel, Estoril (Portugal)
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FOR INTERNATIONAL FLEET & MOBILITY LEADERS
ANALYSIS
Get a grip on tyres Jonathan Manning
All season tyres are changing the face of the new and replacement tyre market.
Significant changes in the tyre market are helping corporate fleets to maintain vehicle uptime. While long established tyre qualities such as mileage, reliability, and durability remain of paramount importance, the growing popularity of all-seasons tyres is helping fleets to avoid the twice yearly downtime of changing from summer to winter tyres and back again. Goodyear estimates that the all-seasons market now accounts for 5% of tyre sales across Europe, following high double digit growth since 2012. The tyre giant forecasts that these tyres will account for 10% of all sales by 2020, boosted by regions which have a gentler winter, with fewer days of sub-zero temperatures.
5%
= SHARE OF ALL-SEASONS TYRES IN EU TODAY
10%
= SHARE FORECAST ALL-SEASONS TYRES BY 2020 54
Martijn De Jonge, Goodyear’s brand director consumer PBU EMEA, said, "Consumer demand for All Seasons tyres has increased across Europe, and we expect this to grow in Europe in the next five years. There is a growing awareness and understanding of the importance of having tyres which can handle unpredictable changes between wet and dry conditions, sudden temperature changes and can even cope with snow." In addition, an increasing number of vehicle manufacturers are now fitting all-season tyres as original equipment to their cars, with 10 OEMs, including Audi, Citroen, Fiat, Ford, Opel, Renault, Seat, Skoda, Smart and Volkswagen specifying Goodyear Vector 4Seasons Gen-2 on 27 platforms. NHS BLOOD AND TRANSPLANT Earlier this year the 45-strong NHS Blood and Transplant fleet in the UK changed its tyre policy to an all season approach, selecting Michelin CrossClimate+ tyres for its Ford Focus estate rapid response vehicles.
Larry Bannon, national fleet manager at NHS Blood and Transplant, said, “When we get a call we have to deliver regardless of the weather conditions. Not reaching our destination because our tyres have let us down simply isn’t an option. If we don’t get there with our vital blood supplies, lives are at stake. We’ve never needed dedicated winter tyres because the primary routes to hospitals are the first to be gritted or cleared of snow. However, it’s reassuring to know that we can now count on our CrossClimate+ tyres to keep us moving should we face unexpected weather, or journeys on untreated roads.” Key to the organisation’s change of policy was real-life test data from the fleet which showed the CrossClimate+ tyres can deliver at least the same mileage and performance as the original equipment tyres found on the fleet, despite their added winter capability. And for fleets operating vehicles in harsher winters, a single set of replacement tyres with the three-peak-mountain with snowflake (‘3PMSF’) mark (the symbol of winter-capable tyres) also proves cheaper than a dual set of summer and winter tyres, a key consideration for fleet with an eye on their total costs of ownership. Tom Edwards, sales manager, national accounts car fleet, Continental Tyre Group, said, “Fleets with a professional tyre management system in place will focus on lowest cost/km. With the growth of on-line shopping in addition to the traditional trade sector, ensuring vehicles are fitted with tyres that are robust, reliable and offer high mileage are the key area of focus. Cost is a consideration of course, but premium tyres remain as offering the best overall value.”
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ANALYSIS
Earlier this year, the NHS Blood and Transplant fleet changed its tyre policy to an all season approach.
The TCO benefits of premium tyres mean many fleets, especially larger operations, pursue a policy of replacing premium-with-premium, if not like-for-like tyres, negotiating beneficial purchasing terms with the principal tyre brands. It’s an area where leasing and fleet management companies are also key influencers, alongside retailers and fast-fits, many of which have connections to tyre brands. With effective approval and compliance systems in place, “fleets will aim to achieve 95%+ of their specified brand fitment,” said Edwards. “Business models differ from fleet to fleet. Each fleet will tend to have three brands which will be accepted for fitment by two or three retail partners. Most retailers will have a wholesale arm which will service direct to customer business. Fleets look more to consolidate their tyre brand policy rather than their service provision.” As a rule of thumb, bigger fleets are more likely to consolidate their spend through tyre manufacturers; smaller fleets mainly through tyre dealers and service networks; and leasing customers fleets through their
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leasing companies, according to Dirk Rockendorf, marketing director, Kumho Tire Europe. With the cost of tyres facing inflationary pressures due to increases in raw material costs – Bridgestone and Michelin have both raised the price of their tyres in the replacement market by up to 8% earlier this year – there is much that fleets can do to ensure the longevity of their tyres. Chief among these are regular tyre inspections to check correct inflation levels and identify any uneven patterns of wear. TYRES AND SAFETY The charity Tyresafe estimates that 35% of tyres are driven at least 0.55bar (8psi) below the vehicle manufacturers’ recommendation, rendering the tyres vulnerable both to damage and wear, compromising the handling of the vehicle, and increasing rolling resistance with a negative effect on fuel consumption. This state of affairs has seen fleet tyre inspections, originally developed for heavy goods vehicles extend into the van sector.
+8%
= AVERAGE TYRE PRICE INCREASE IN 2017
15 to 20%
= IMPACT OF TYRE ROLLING RESISTANCE ON FUEL CONSUMPTION 55
ANALYSIS
The cost of tyres is facing inflationary pressures due to increases in raw material costs.
DID YOU KNOW? During normal driving, the rolling resistance of tyres accounts for between 15% and 20% of fuel consumption, and the difference in performance between the best (A-rated) and worst (G-rated) tyres can be as much as 7.5% for cars.
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“Regular fleet checks (including weekends and bank holidays are becoming the norm) as part of agreed KPI's are in place to limit vehicle downtime by identifying any potential tyre issues before they occur,” said Edwards. “In the commercial sector, where Continental operate their Conti 360 network, Continental will be the party agreeing the fleet inspection frequency. It is not uncommon to agree to inspect a van once ever four weeks to ensure the tyres on that vehicle are fit for purpose. When van tyres are fitted to commercial fleets via our C360 network there is always a focus to get the vehicle back on the road, usually within two hours.”
Looking ahead, the development of hybrid and electric cars is bringing new pressures to bear on tyre manufacturers to develop tyres with minimum rolling resistance to extend their range. Falken has jut unveiled its all new ECORUN A-A (A-rated for both fuel efficiency and wet grip) and due to be sold by authorized Toyota Germany dealers as a replacement tyre for the company’s Prius III models. The ECORUN A-A is made from ultra-refined natural pure rubber (the most expensive raw material in tyres); a compound that reduces the build-up of heat and therefore improves both rolling resistance and tyre life.
FLEET EUROPE #92
Don’t let a puncture turn her sweet dreams into a nightmare. Bridgestone DriveGuard tyres
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*Driving distance after a puncture may vary depending on vehicle load, outside temperature, and when the Tyre Pressure Monitoring System (TPMS) is triggered. Bridgestone DriveGuard tyres are classified Wet Grip A in EU labelling. DriveGuard tyres are currently not available for vans, and are only available for cars equipped with a TPMS. Please refer to www.driveguard.com for more information.
ANALYSIS
Tyre Management: Keep on rolling Jonathan Manning
Online appointments and authorisation combined with mobile fitting have dramatically reduced driver and vehicle downtime due to tyre replacement.
Three demands dominate the supply and fit of replacement tyres to the company car and light commercial vehicle market: uptime, uptime, uptime. A relentless focus on minimising the dead time while tyres are fitted has seen the development of ever more sophisticated services for fleets, from online booking to out-of-hours assistance. But these developments take place against a background of more complicated supply arrangements due to the proliferation of tyre types and sizes, and the replacement of spare wheels with space saver tyres or puncture repair kits. Time was when a garage or fast-fit tyre depot could cover most bases with the tyres it carried in stock. Or it could use the spare wheel for an instant solution, giving the driver time to return for a planned tyre replacement. Today, however, the scale of complexity facing fleet operators and their suppliers is well illustrated by the pledge of French tyre service company Allopneus that it can deliver more than 25,000 types of tyre from over 70 manufacturers within 24 hours. According to one industry expert, “The top 100 tyre sizes account for about 95% of the market. But there are probably 1,200 sizes for the remaining 5%.” PRO-ACTIVITY This increases the responsibility on fleet drivers and managers to take a pro-active approach to tyre management, making appointments for tyres to be replaced, rather than arriving at a workshop unannounced. Fast-fit operators, such as Euromaster and Kwik Fit are helping with
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this process, conducting tyre inspections in client car parks to identify tyres approaching the end of their tread life as well as those that need replacing due to damage. In the UK, ATS Euromaster has announced plans to expand its mobile inspection service for national fleets, “gathering information that will allow more accurate demand forecasting to improve tyre stock availability.” The fitting of tyres is becoming increasingly mobile, too, making the process more convenient for the driver and minimising vehicle downtime. In France, Allopneus has partnered with ALD Automotive to offer the leasing company’s customers a mobile tyre fitting service. And a mobile offering is a key element of ATS Euromaster’s service to Arval clients in the UK, where the tyre specialist runs a mobile tyre fitting fleet of 820 vans for the truck, van and car markets. The company’s UK rival, Kwik Fit, has 200 mobile tyre fitting vehicles alongside 600 service centres, and has recently launched Mobile7, a seven days per week mobile service running from 8.30am to 8.30pm within the M25, the orbital motorway around Greater London. There are plans to roll out the service to other metropolitan areas this year. Andy Fern, fleet sales director, Kwik Fit, said, “Mobile fitting is a very interesting proposition for fleets, and the reason for that is downtime.” FLEET EUROPE #92
© Marc Josse - Euromaster
ANALYSIS
The inspection and fitting of tyres is becoming increasingly mobile, minimising vehicle downtime.
A total of 40% Kwik Fit Mobile bookings are now for evening time slots, giving fleet and private drivers the chance to have tyres replaced at a more convenient time and location, whether the office car park or the driveway at home. Kwik Fit has 1.4 million company cars and vans on its tyre management service and has launched Fleet Web Booking to allow drivers to book appointments either with a tyre centre or mobile van, via smartphone or computer. Simply by entering their vehicle’s registration number and postcode, the Kwik Fit database will verify that it is a vehicle under tyre management and will validate booth tyre size and customer brand preferences against the fleet or leasing company’s designated policy. “Customer feedback has highlighted the importance of a ‘fit first visit’ fix, but that has become increasingly difficult due to tyre choice complexity so Kwik Fit has launched Fleet Web Booking to resolve the issue,” said Fern. “The cultural change of drivers advising of their tyre requirements in advance, so availability can be assured when they arrive at the centre - or alternatively book a Mobile appointment - rather than simply turning up at and hoping the appropriate tyres are in stock, aids business efficiency.”
include vehicle checks – Norauto and Midas have just announced a partnership with peer-to-peer car hire company Drivy to inspect cars in order to reassure hirers of the vehicle’s roadworthiness. They also involve ambitious plans to add service and maintenance work to tyre replacement. Euromaster wants to double its volume of standard maintenance work in France from €40 million in 2016 to €80 million euros in 2020, and has developed an online service book, called MasterControl, where fleets can keep a record of maintenance carried out and scheduled work due according to OEM service intervals. The system includes the option of the automatic authorisation of work, according to individual fleet policies. Looking ahead, it will be interesting to monitor how rapidly these fast-fit companies can develop their networks and services across Europe. Euromaster is already present in 17 countries; Kwik Fit is expanding from its UK and Netherlands strongholds into Hungary and Italy; and Mobivia, parent of Norauto, has recently acquired ATU, which has 577 centres in Germany and 25 in Austria, as well as Feu Vert in Poland, doubling its network to 39 outlets, and increasing its footprint to 615 centres in nine European countries. Fleets and leasing companies have never had such choice in the supply and fit of replacement tyres.
DID YOU KNOW? The majority of van tyres are replaced due to kerb damage rather than reaching the end of their natural tread depth life. This is prompting some fleets to change their policy and specify mid-range replacement tyres, but it could be a false economy according to Andy Fern, fleet sales director, Kwik Fit. “You can fit a cheaper van tyre, but its damage resistance will not be as high as a premium tyre. A premium van tyre is a scaled down from a truck tyre, whereas a budget tyre is scaled up from a car tyre, so there’s a big difference in shoulder protection.”
NEW SERVICES Such service developments are part of a wider trend for fast-fit companies to expand their service offerings. These FLEET EUROPE #92
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ANALYSIS
The rubber revolution Jonathan Manning
Much of the most innovative work in the automotive sector is devoted to tyres.
They may be black, round and, at first glance, boring, but tyres are at the forefront of some of the most innovative technological solutions in the automotive industry. As the only contact between vehicle and road, the tyre plays a critically important role in vehicle safety and fuel economy, and is the most heavily regulated part of a car. But its performance can be seriously compromised by driver neglect. Incorrect inflation and poor wheel alignment can accelerate wear and undermine the millions of euros spent on the research and development of tyres. If uneven tyre wear is detected early then the problem can normally be resolved by ensuring the correct air pressure or realigning the wheel, but if undue wear and tear is ignored, the life of a tyre can be reduced by half or even two-thirds. Yet no matter how many times fleet managers ask drivers to check their vehicles’ tyres regularly, there’s an overwhelming
suspicion that few ever pay any attention to their tyres until something goes wrong. New technology, however, is set to give fleet managers a more detailed picture of those hoops of black rubber, thanks to remote tyre diagnostic systems. PIRELLI Pirelli is about to launch its new Connesso system, which embeds a sensor in the tyre that connects to a control unit. This in turn links to a smartphone app, which is connected to the Pirelli Cloud. The result is a solution that can record and transmit tyre pressure, temperature, static vertical load and mileage, so that a driver and fleet operator could feasibly receive alerts that a tyre on one of the company’s vehicles is under or over inflated. Sophisticated algorithms will also be able to process this data to predict when a tyre needs replacing because it’s approaching its wear limit. The wonderful world of connectivity will then see the app book an appointment in a convenient workshop for a replacement tyre. Tyre pressure monitoring systems already exist, especially in the HGV world, but Connesso has the capacity to work when the vehicle is both moving and stationary, even when the tyre is warm and the pressure has risen through driving. During trials of the system, Ashley Davies-Payne, Pirelli’s market development and operations manager, cyber operations, said he had been able to telephone a fleet operator and tell him that a wheel on one of his trucks was over-inflated.
The Pirelli Connesso system links a sensor in the tyre to a smartphone app, which is connected to the Pirelli Cloud.
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Pirelli is likely to offer the system to fleets on a subscription basis, and the sensor can be transferred easily between tyres when they are replaced.
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ANALYSIS
3D-printing of tyres. The Vision concept of Michelin responds to this new technology.
MICHELIN Looking further ahead, Michelin has unveiled a concept ‘twheel’ (tyre-wheel combination) where a honeycomb structure replaces air inflation. The 3D-printed Vision would mean no issues with under or over inflation, and no punctures or blowouts, and the tread could simply be replenished by a 3D printer. “We've profited from our research on airless tyres to understand how to distribute the load carrying capability so that you have enough rigidity to carry the load, enough to steer the vehicle, and maintain stability, and yet not too much rigidity in order to maintain comfort," said Terry Gettys, Michelin's executive vice president of research and development. KUMHO The shape of leaf cells rather than lungs inspired the design of these radical concept tyres from Kumho, because, you guessed it, there’s no air pressure or inflation involved. South Korean manufacturer Kumho calls the tyre the ‘Birth of Nature’ (BON), thanks to an architecture inspired by the bone structure of the natural world. The futuristic design may look like a tyre constructed from Lego pieces, but the BON’s complex honeycomb structure provides both stability and rolling efficiency, without the need for inflation. Kumho has already won Germany’s Red Dot and iF Design and America’s International Design Excellence Awards for the BON.
Nature’s bone structure inspired the design of Kumho’s airless BON tyre.
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THEMA
3
THE AUTOMOTIVE TECHNOLOGY REVOLUTION
20 YEARS BEFORE THE TURNING POINT DIETER QUARTIER
The past two decades have seen technologies across the technological spectrum come together to make mobility cleaner, safer, more comfortable and more efficient. It is this convergence of technologies that enables cars to move into the next era.
when they finally caught up, they had enhanced the concept by adding stronger batteries that could be charged externally (plug-in). Renault-Nissan decided to skip this step and go all-electric at once – a brave but costly strategy that might pay off in the long run.
Looking back on the mechanical evolution between 1997 and 2017, not many things have changed dramatically under the bonnet of conventional combustion-engine cars. Most efficiency-enhancing and emissions-reducing innovations already existed, namely variable valve timing and valve lift, turbocharging with intercooler, exhaust gas recirculation (EGR), direct fuel injection, et cetera.
Communication and infotainment
The past twenty years, most of these powertrain technologies have been finetuned at most, optimising their benefits. The real innovations are to be found in the realm of alternative power, communication and ‘autonomy’. And it is these innovations that will take the car to what it is expected to be in a few years’ time: electric, connected and autonomous. The power(train) to innovate Concerning the introductory statement: there are two major exceptions. The first is the common rail (1997), a high-pressure injection technology that exploits every drop of fuel to the full and today can be found in every single diesel engine. The second has to be the dual clutch transmission (2003), combining two semigearboxes, each with their own robotised clutch. The advantages over a classic automatic transmission are a lower weight, less energy losses and faster shifting. Nonetheless, the true powertrain revolution resides in electrification. The hybrid Toyota Prius laid the foundation of low-emission vehicles back in 1998. Other carmakers were reluctant to follow, but
An innovation that was at the basis of mobile phone integration into our cars is Bluetooth (1997), the Ericsson-developed open communication standard. It is just unthinkable today to not be able to call handsfree while driving. Since its introduction, technology has evolved considerably, allowing you to listen to music and use apps via your car’s central display. The latter would not be what it is today without the generalisation of satellite navigation systems. Already in the early nineties did BMW offer such a device on its 7 Series, but it was not until the year 2000 that the U.S.A. made a more accurate GPS signal available for civilian use, paving the way for a true revolution – both amongst OEMs and on the aftermarket (TomTom, Garmin, et cetera). The way to autonomy Two trail-blazing innovations in this area were introduced by active safety pioneer Mercedes-Benz: radar-based cruisecontrol (1999) and autonomous emergency braking or AEB (2006). Radar sensors enabled vehicles to sense their surroundings and adapt the selected cruise speed to a slower preceding vehicle. The next step was the integration a braking function that could mitigate the severity of an impact when the driver failed to respond to the collision warning system. As technology evolved, cars were eventually able to prevent an accident from happening altogether. The rest is history.
CELEBRATING
Fleet Europe's 20th Anniversary together with
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201 5
Fuel cell vehicles (FCEVs) Toyota and Hyundai start selling their hydrogen-based fuel cell electric vehicles.
2 011
Plug-in hybrid vehicles (PHEVs) Chevrolet/Opel launch the Volt/Ampera, followed by Volvo (V60) and Mitsubishi (Outlander).
2006
Autonomous emergency braking (AEB) The first self-braking car is introduced by Mercedes-Benz (CL-Class with Pre-safe brakes).
2003
Dual clutch transmission (DCT) VW introduces a fast-shifting, fuel-saving and performance-enhancing automated transmission.
20 00
20 08
Electric vehicles (EVs) The start of the electric revolution, with Tesla, Mitsubishi and Nissan leading the way.
Satellite navigation (GPS) The U.S. make a more accurate GPS signal available for civilian use, starting a true revolution.
Mercedes-Benz introduces an intelligent cruise control with distance control.
1999
Radar-based cruise control
1998
Hybrid vehicles (HEVs) Toyota launches the Prius, with a combustion engine supported by an electric motor and batteries to improve fuel efficiency.
1997 FLEET EUROPE #92
1997
BluetoothÂŽ Wireless communication technology allowing handsfree calling, listening to music, mirroring of apps.
Common rail Alfa Romeo (156) introduces a Boschdeveloped system that would change diesel engines forever.
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Carsten KWIRANDT, HEAD OF MARKETING AND BUSINESS DEVELOPMENT AT ALPHABET INTERNATIONAL
To me, the first innovation that marked the industry is unquestionably satellite navigation. Tedious planning and avoiding traffic by listening to the radio suddenly became a thing of the past. The vehicle itself transformed into a business tool, reducing the driver’s time on the road and saving fuel, thereby becoming a lever to reduce TCO. What seemed like a gadget, actually turned not only into a commodity, but a fully-fledged technology platform.
The second milestone that started a revolution is e-mobility. Between 2010 and 2013, electric cars suddenly created an entirely new business around them – think of charging points, charging cards, et cetera. To ensure EV adoption, you need to provide your customer a 360-degree approach, e.g. add-on mobility (a conventional car for a few days), providing a home charging solution, and so on – something Alphabet successfully developed in the shape of AlphaElectric.
“The vehicle itself is transformed into a business tool”
Hans DEN HOLLANDER,
MANAGER CAR FLEET EMEAR AT CISCO SYSTEMS INTERNATIONAL
“One out of eleven cars in our European fleet is either hybrid or electric”
Without a doubt, electrification has been en will increasingly become important for our company. What started five years ago, is now gaining momentum on certain markets. Most every carmaker has a plug-in hybrid in its line-up and it seems that they are now pulling out all the stops to get their electric vehicle ready, e.g. Volkswagen with the I.D. sub brand, and Mercedes with EQ. And let’s not forget about the upcoming Tesla Model 3 and Volvo’s electrification strategy.
Today, one out of eleven cars in our European fleet is either hybrid or electric – a percentage that is bound to increase rapidly over the next years. We will keep on stimulating our employees to go for low-to-zero-emission vehicles, for instance by installing charging stations at the office and applying split-billing for electricity charged at home. With more models entering the full-electric scene and prices coming down, our fleet’s carbon footprint will surely continue to decrease.
Marcel DE RYCKER,
MANAGING DIRECTOR AT INTERNATIONAL WARRANTY SOLUTIONS As OEMs are consolidating, the fierce run on volumes and market shares has moved to a precise strategy on profit per unit, discarding unprofitable models or analysing all distribution channels to achieve a sound mix that remains profitable. Moreover, modern software, interfacing and telematics have allowed for an improved and centralised fleet management forcing a strong focus at OEM level on cost of ownership, or even cost of mobility (TCM) including environmental considerations.
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Especially the latter aspects have initiated the electric revolution, with OEMs developing and launching various hybrids and EVs, stimulated by governmental incentives. The industry has never been more competitive, requiring high investments across the entire spectrum – from supplier to dealer. Innovations will spawn at a tremendous rate, eventually becoming as ‘normal’ as power steering, ABS or air conditioning. Let’s embrace them!
“Innovations, we should all embrace them!”
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IMAGINING THE NEXT 20 YEARS Nobody knows how we will be getting around in the year 2037, but the following technology trends – in descending order or maturity – will surely shape the future. 48-V mild hybrids A cost-effective solution to make combustion engines more fuel-efficient. Renault (Scenic), Audi (A8) and Mercedes (S-Class) are among the first to use it. It is basically the addition of an extra electrical system (working at 48 instead of 12 volts), a small electric motor and a compact battery to an existing powertrain. Experts believe 25 percent of all new cars sold globally will be equipped with it by 2025. In Europe, this percentage will surely be higher.
fore make better use of their time. The amount of online services is expected to skyrocket. Carmakers are currently at level 3 autonomy (limited “eyes-off” driving), with level 4 (fully autonomous in most conditions) and level 5 (“steering wheel optional”) expected to be ready by 2019 and 2021, respectively. Inductive charging on the go Two things are today holding back the proliferation of electric vehicles: their high price and the lack of convenience (range, charging). This could change when EVs can be charged while driving, or waiting at the traffic lights, making use of buried coils to inductively top up the batteries. This way you don’t need large expensive batteries, and neither do you need to park your car and plug it in to be able to travel onwards.
Autonomous driving Artificial intelligence, 5G connectivity, Internet of Things, robotics, et cetera, will make our car a third living space. As the vehicle takes control of itself, drivers become passengers and can there-
SPECIAL
Taxi-drones and flying cars
bought Terrafugia, the developer of a car that transforms into a light aircraft by folding out its wings. Airbus and Italdesign presented an autonomous “drone-pod” during the 2017 Geneva Motor Show. Dubai signed a deal with Volocopter to develop a one-man autonomous air taxi. Time will surely fly…
“3D transportation” is currently being researched by 15 companies, and not just small enterprises run by dreamers. Last July, Chinese conglomerate Geely
CELEBRATE 20 YEARS OF FLEET MANAGEMENT WITH US IN OUR UPCOMING MAGAZINES. DON’T MISS: Fleet Europe °93 – October 2017 Embrace safety and telematics by enhancing driver behaviour Fleet Europe Special – November 2017 Fleet Management in Benelux and France: The retrospective on a fleet management innovation Fleet Europe Directory 2018 – December 2017 The three waves towards Smart Mobility Management
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Why Category Management is hot Steven Schoefs @StevenSchoefs
Fleet procurement for multinational companies is evolving. It used to be about Technical Purchasing, and now it is focused on Strategic Sourcing. But the future is called Category Management, says James Jin, Global Fleet Procurement and Operation Director at pharma giant Merck.
James Jin, Global Fleet Procurement and Operation Director at Merck, is a big believer of Category Management.
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Merck has around 8,700 vehicles in EMEA, 6,000 in North America, 3,600 in Asia and 3,400 in Latin America. So James Jin is responsible for a global fleet of more than 20,000 vehicles. “Category Management has been accepted as the norm within multinationals now.”
Multinational companies today have understood that this is not enough. In a lot of markets, especially the more mature ones, the deals already are as good as they will get. What needs to be done now is to go after hidden costs and thus help to improve the company’s entire value chain.
TCO CONCEPT In the beginning, fleet procurement was about Technical Purchasing. The focus was on the invoice, meaning on the immediate cost. This left the fleet manager with little influence or power. Then, fleet procurement evolved towards Strategic Sourcing. “Integrating Strategic Sourcing into the purchasing side of the business, as in fleet, followed from a simple sales reflection. Companies realised: On the sales side, we have a plan and a strategy to optimise our performance as best as we can. Why don’t we do that on the purchasing side as well?”
How? For instance, by gathering together those activities and/or commodities with similar characteristics into a single category – for instance, Travel and Fleet – and then to apply Category Management.
In Strategic Sourcing, the focus was extended from the invoice to the TCO. “What can we do to reduce cost? The answer is to use the TCO concept as a basis, using it as a yardstick for decisions, and as the crucial element in contracts. This means setting up projects with a clear start and finish, and preparing well in advance in order to rally the market and negotiate the best possible deal.”
To perform Category Management up to a standard of excellence, you must learn to deal with a lot more stakeholders, to understand all the business needs involved, and to make decisions that are supported by the entire business.
CONTINUOUS IMPROVEMENT “The transformation into Category Management has already happened”, says James Jin. “What is ongoing now is the continuous improvement of and within Category Management, even better to respond to and satisfy the business needs of the company”.
“We treat our suppliers, including our fleet management and leasing providers, like we do our own employees – they are FLEET EUROPE #92
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an extension of our own fleet team”, says James Jin, who had two pieces of advice for suppliers:
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Fleet Management is really about Data Management. Through technology and connectivity, data is becoming available in ever greater abundance. The crucial improvement is in how this data is used: “I’m hopeful that suppliers in the near future will come to us with directions for improvement, based on data and data analytics from our own fleet, and from comparing our fleet with those of other customers of theirs”. The tools and solutions need to be deployed globally. OEMs, leasing companies and other suppliers are globalizing and expanding their coverage. It is recommended that they deploy the solutions they have developed for mature markets in emerging and new countries as well: “Our people in Asia know what our people in Europe and the U.S. use, and they want the same solutions, as we
are working with the same suppliers. So making these solutions globally available and accessible is a must”.
ALIGNING BUSINESS NEEDS WITH SUPPLIER REQUESTS: 1. The Assurance of Supply: the supplier needs to have the capacity to deliver, whatever the volume, time or geography involved; 2. Quality: the supplier needs to offer a product that meets the customer’s expectations of quality, with very little variation over time; 3. Service: the supplier must not only guarantee standard levels of product delivery but also of the services associated with it; 4. Cost: although much attention is focused on cost, and despite the fact that it is an essential element, most multinational organisations are well equipped to manage spend, making this less of an issue. 5. Innovation: the supplier must support and inform the customer on which innovations to implement and how to perform better over time.
COLOPHON
Fleet Europe Taxation Guide 2017 The best tool to decide on the right taxation choices for your corporate fleet. All you need to know is in this guide!
EDITORS Steven Schoefs – Chief Editor sschoefs@nexuscommunication.be Céline Gilson – Project Coordinator cgilson@nexuscommunication.be
Julien Domken – International Key Account Manager jdomken@nexuscommunication.be
CONTRIBUTORS Alison Campbell, Tim Harrup, Frank Jacobs, Jonathan Manning, Dieter Quartier
Virginie Emonts – Sales and Marketing Assistant vemonts@nexuscommunication.be
EXPERT Richard Worrow (Dataforce) Cover: Cible Pictures: ©Shutterstock ©ThinkStock - Richard Faulks
Vincent Degives – Marketing Manager vdegives@nexuscommunication.be
Aline Verpoorten – Internal Sales Assistant averpoorten@nexuscommunication.be Laura Petit – Sales and Marketing Assistant lpetit@nexuscommunication.be
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