Jo Tacon, editor of sister
publication Motor Finance, talks to Jon Mackney, head of
consultancy at Arval, the fleet lessor owned by BNP Paribas fleet,
about technology, vans and the green revolution.
Go deeper with GlobalData
There is a revolution in terminology underway in the fleet
world.
It is becoming increasingly difficult to talk
simply of “fleet leasing companies”, with every company worth its
salt now offering much more than mere leasing.
Arval, the fleet company owned by French bank
BNP Paribas, is a good example of this lexical shift.
“We prefer to talk about fleet management
rather than just leasing – it’s important not to be a bank-owned
lessor that focuses on selling leasing, irrespective of what is
best for the customer,” said its head of consultancy, Jon
Mackney.
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By GlobalDataThe fleet company is the fourth largest in the
UK, with a directly funded fleet of nearly 78,000 vehicles, and a
managed fleet of 125,000. Internationally, Arval manages a fleet of
602,000, which helps considerably when negotiating volume discounts
with manufacturers.
Arval has its UK headquarters in Swindon, with
850 of its 960 UK staff based in the Wiltshire town. It also has a
maintenance centre in Birmingham that employs a group of technical
staff, in the main qualified auto engineers.
Having BNP Paribas as a parent has been a
source of much comfort through the stormy waters of credit crunch
and recession, and has allowed Arval access to funds at relatively
low cost throughout downturn.
Another advantage highlighted by Mackney is
that the bank has invested “significant sums” in systems and
technology for its leasing businesses, over a long time frame,
giving Arval a stable platform from which to make future plans.
Technology
A key area of development for the
company has been that Arval’s software can be used to show
customers and prospects how slight changes in fleet policy can have
a large cumulative effect on total fleet costs, while taking
predicted driver sentiment about changes into account.
A simple red/green ‘traffic light’ colour
system flags up areas where the proposed policy could have
potentially deleterious effects on cost, driver satisfaction and
environmental impact.
The advantage of a true cost of ownership
approach, Mackney says, is that it “involves all stakeholders” –
from the finance department to HR.
Once a fleet policy has been agreed on which
satisfies all involved, two documents are prepared: a partner plan,
which sets out three-year objectives including projected cost
savings, and a business review, which is carried out on a regular
basis throughout the year to check that predicted efficiencies are
being achieved.
Van policy
As a customer service measure, Arval employs a
system called Rectify which date-stamps any incoming customer
communication, and records how customer queries are resolved, which
allows the fleet provider to keep a close eye on how customer
service teams are working, Mackney added.
Meanwhile, in Arval’s van division, LCV manager Tony Grove
expects CO2 emissions to become as important an
issue as they are for cars in terms of tax, with EU targets on the
horizon.
“Van operators will go green, working down from
corporate customers,” Grove says. “Fuel management is crucial to
van operators, too – if it costs white van man £80 [€89] to fill up
his tank with diesel, that is a big hit to the pocket, and if he
can reduce that, he will do.”
Another change has been that its van “customers
have focused on cost savings achievable within their van fleets
over the last two years”.
According to Grove: “This has led to a cut in
excess capacity, as there is no point running a van that is larger
than you require.”
Playing the fuel card
Apart from its leasing and fleet
management services, Arval is well-known for its fuel card, which
is the market leader in the UK.
Over 1.3m of its cards are in circulation,
either branded as Arval or issued on a white-label basis. Its cards
are accepted at 98% of the UK’s fuel stations; 7% of all retail
fuel is bought using an Arval fuel card, amounting to a total of
63m such transactions per year.
Fuel cards can be used by fleet managers to
track fleet vehicles’ miles per gallon ratings, and carbon
emissions, which is increasingly important as clients look to
control fuel costs and burnish their environmental credentials at
the same time.
The consultancy service, which Mackney heads
up, is also an important piece of the overall fleet management
offering. It has carried out 380 consulting ‘missions’ over the
last four years, identifying £27m in savings for clients, which
works out to “an average saving of £652 per vehicle per year”,
Mackney said.
Mackney is confident about the future for
Arval. The fleet company is trialling electric vehicles and keeping
its customers up to speed with developments in all areas of fleet
operations.
With the backing of BNP Paribas and a strong
focus on customer service, Arval looks like it will be in the fleet
management and leasing market for a long time to come.
