ALD Automotive - The vehicular evolution: a partner for the full fleet experience
Speaking with FDE TV, ALD Automotive global chief administration officer John Saffrett and commercial and marketing director Stephane Renie discuss working with FDs, and the importance of finding a fleet management partner that understands the significance of innovation and global reach for multinational clients.
Fleet management is becoming a bigger number on the balance sheet for many companies, especially those with multinational operations, so there is a pressing need to find a mobility solution that not only provides the right geographical coverage, but also cost-efficiency. In large organisations, the finance director plays a central role in the key decision over whether to buy or lease vehicles but, in a world of growing regulatory complexity, is also becoming more involved in the choice of service provider.
ALD Automotive, which is a subsidiary of Société Générale, is a leader in the fleet management space with 1.3 million cars on the road in 41 countries, which makes it the second-largest vehicle-leasing operation in Europe. In the UK, ALD finances and manages more than 120,000 vehicles.
Established in the UK in 1958, the company helps corporate customers find mobility solutions for their employees and it has a reputation for developing innovative products for major PLCs, small businesses and individual drivers alike. Its global chief administration officer John Saffrett has seen how the role of the finance team in fleet management has grown.
"Over the years, finance directors have always been key stakeholders in the decisions organisations make about company car provision and the mobility needs of their employees," he says. "Now, they are increasingly looking at total cost of ownership rather than just the baseline rental figure, and they are working more closely with their HR counterparts to make sure they consider all of the holistic aspects of the company car provision rather than just the bottom line. That is why we have to offer a cost-efficient service to our clients that covers more than the core lease elements that companies have focused on in the past."
Cover all the bases
For multinational businesses, the complexity of fleet management grows with the number of markets in which they base their operations. It is important to use a partner that has a presence in many markets, but the chosen partner should provide a consistently high-quality product and a reliable service platform. It is not just about coverage. The right service provider must, therefore, have a global presence and intimate knowledge of how local markets operate in order to marry a consistent, company-wide strategy with the unique characteristics of each jurisdiction.
"Local presence is important for a multinational business because when it has to manage multiple relationships, the cost increases," says Stephane Renie, ALD's commercial and marketing director. "When you have a global deal, you can leverage that relationship but, more importantly, it gives more visibility, governance and control over local markets. Your preferred supplier can apply the strategy you design centrally on a local basis. Furthermore, by working with a supplier across many locations, you can develop a much smoother relationship based on trust."
An understanding of local issues also enables better management of solutions in a changing regulatory environment when there is a collaborative relationship with a service provider that can keep pace with the changing regulatory environment.
"The main challenges from a regulatory standpoint concern taxation, which is a key driver of the choices companies make between different fleet management solutions. Taxation varies from market to market and changes over time, so we have to be aware of what is happening in order to develop the best solution from a financial point of view. Accounting management standards and personal data protection will also have important implications for our clients," Renie remarks.
"For example, we are eager to develop a closer relationship with the driver as well as with the fleet manager and this interaction means not only providing more data, but also retrieving more data about how they use their cars, so there are issues around personal data protection that come with that. The key success factors go beyond getting the right deal for a customer, so we must develop a degree of collaboration and trust that allows us to provide the best advice for each specific customer," he adds.
Build relationships through innovation
ALD's desire to be closer to the driver is a key tenet of its programme for innovation, which it sees as essential to meeting the changing demands of the global market. Saffrett, who sits on the company's innovation committee with ALD senior executives from around the world, believes the company must remain agile to meet its customers' needs.
"Innovation is important for us because we are in a sector that is changing every day. You can't pick up a newspaper without reading about Apple, Google, Tesla or Uber, and they are all providing products and services in our industry that directly impact upon our clients. In order for us to compete with those companies and for our clients to remain loyal to us going forward, we have to develop our own innovative spirit," he says.
"We formed our innovation committee last year and the intention behind it is to make sure we have a shared view of the innovation challenges and initiatives across the group. As a group of change agents, we can prioritise our innovation efforts and decide where to invest our resources. Our approach is to develop those solutions as close to the client as possible, so we have moved away from a centralised model where everything is done out of the headquarters and we try to develop innovation products in local countries where they can move faster and are more in touch with clients' requirements, but we look to see how they can be shared across the group," he adds.
The traditional model for leasing companies was based on funding but then evolved to encompass other services such as maintenance, accident management and the provision of relief vehicles. Now, that model is changing again and the next generation of services will be aimed at making the product more attractive to the driver as well as the fleet manager. ALD is already doing some work on remarketing and selling used cars, which requires ecommerce in order to be successful but, above all, the focus is on the driver experience, which Saffrett believes will be the key factor shaping the fleet industry in the years ahead.
"Ten years ago, the driver experience was focused on how fast the car would drive and accelerate, and how well it handled. Today, it is all about what happens to the driver when they are in the car - how they connect with it, how they interface their smartphone with in-car technology and entertainment systems, and how they can have a seamless moment from being outside the car to in the car. All our initiatives focus on things linked to the 'connected car', which involves how telematics can add services to improve driver behaviour, fuel consumption and geolocalisation, for example, and we are also looking at car sharing based on the connected car principle," he remarks.
Leasers and manufacturers are looking to create more 'moments' with the driver, which they hope will create brand loyalty. In this, they are following trends set in other industries. Typically, a supplier in the automotive industry will only have a touchpoint with a driver ten or 15 times during a three-year contract, which is very little time to create brand awareness and loyalty, so their aim is to create a more detailed, proactive and enjoyable experience for the driver.
"The idea is that when the driver comes to the end of the contract or is looking to replace the car - or even looking at other means of mobility such as a train, tram or Uber - they will remain loyal to that brand and use it as their first choice of entry for those new products. That comes from creating moments with the driver that make life more enjoyable," notes Saffrett.
"Our brand loyalty and driver experience efforts begin with providing excellent customer service across all of our entities. Then we make sure that we make the most of every moment and we use this principle to define how we look at the leasing contract from the moment the driver is told he or she can have a vehicle to make each moment more enjoyable, simpler, seamless and less disruptive.
"We use that principle across all channels including the smartphone, which will become the channel of choice. In the era of autonomous cars, the driver will have a period of time in the car when there is no need to focus on driving, changing gear or holding a steering wheel, and that is when the work to change the driver experience gets its full power."