Arval has now passed a 100,000- vehicle milestone on its fleet and MD Benoit Dilly has set out plans for the company’s further expansion.

The UK’s top five leasing firm disposed of its fuel card business Allstar to FleetCor in late 2011, and Dilly says the move helped it focus on its core activities in preparation for growth. As part of those preparations it successfully migrated to a new IT system last year.

“We were had a clean sheet after the Allstar disposal to start growing the fleet,” explains Dilly.
Arval has grown by 12,000 units in the past 12 months. The growth has come from both cars and vans, but LCVs make up a significant part of the business and, as Dilly explains, are its strength too.
“Our LCV share of our fleet is 30%, which is quite considerable, but it’s been consistent across the years,” he says.

“Our strength with vans is a key differentiator against our competitors. Vans are more complex and sophisticated because we believe there’s a higher level of service delivery.”

Dilly adds that Arval’s larger rivals have approximately a 15-20% mix of vans in their fleet by comparison.
Managing vans is part of a company’s production flow. Every breakdown of a van is a loss of revenue and so managing that process is where Dilly believes Arval stands out.

The company’s rate of growth of 1000 vehicles a month has been helped by a rise in business confidence: the economy is growing so vans are being replaced. During the difficult years, van life cycles were stretched to as much as five years.

Dilly says: “When these companies saw the first signs of economic recovery, they started thinking about replacing vehicles with something fit-for-purpose and we’ve seen that.”

Arval will be close to 6% market share by the end of this year. Dilly is aiming for 8% as the next benchmark, but he wouldn’t be drawn on a timeline.

“There are factors that depend on us, our competitors and how the market is growing. What we know is that we want to carry on with this pace of growth.”

Arval is growing in three areas within its SME and corporate business (Arval classifies this as companies between one and 1000 vehicles): new business, retaining current customers, and expanding fleets with existing customers.

Large corporate business (1000 vehicles-plus) is a different story: Arval hasn’t won a major new customer this year, but Dilly says the company has focused hard on renewals and extending contracts with the customers it already has, such as emergency repairs company Homeserve, which is a big customer. It was actually one of its drivers that took Arval’s 100,000th vehicle.

It claimed there is a single pillar behind Arval’s customer retention, and that has been the quality of service.

Dilly says: “If you don’t have the basics right in terms of service delivery, you can’t grow.
“We work with dealers, brokers and manufacturers, and if you’re not professional they will stop working with you.”

Arval measures quality each week using a Net Promoter Score system, which is based around whether clients would recommend their service.

Dilly was not willing to share figures on customer service improvement, but says the growth the company has seen shows how Arval has improved.

One way he says its contract hire customer service specifically had been improved is with the introduction of account teams to look after corporate customers. Arval puts staff responsible for orders, biddings, delivery and end-of-contract in a circle of desks to enable them to resolve any request and easily talk with each other to answer customers as quickly as possible. Arval is extending the idea of centralising its account teams to manage its SME business in the same way.

 

Telematics

Arval is still developing its telematics offering after announcing in July it was due to launch at the end of 2014.

The launch for the new product changed from a strategy to lead development in the UK, to development being given to Arval’s head office in Paris to create something that could be launched across Europe.
Dilly says: “You shouldn’t do telematics as a tick-the-box exercise. Instead of doing something at the UK level only, we’re developing a pan-European system.

“We have to launch something which is ahead of the game in terms of a value proposition if we want to make telematics successful.”

Dilly says the dilemma with telematics is that it needs to be customisable to cater for all types of customer. Some just want location services, some want more sophisticated features with mileage capture, and Arval will launch a modular product, likely with a physical black-box system, rather than a smartphone GPS solution.

Dilly is confident a new Arval telematics system will launch in the first half of next year with different pricing tiers for customers that want a light- or heavy-feature system.

‘Market-leading’ salary sacrifice

The recovering economy and jobs market brought with it a demand from leasing companies to offer salary sacrifice as a way of enticing employees.

Some of the largest leasing companies in the UK saw a lot of growth from this area of the business, but Arval is yet to launch its own product.This will change in Q1 next year.

Arval MD Benoit Dilly states Arval needed time to launch the right product.

“Salary sacrifice is a fast-growing market and we’ve been working at introducing a product for the last nine months,” he says.

“We will start with our existing customers. There is always a problem with being one of the last companies to offer it because [it’s already established]. However, it can also be a plus because you have time to listen to customers and do research on what your competitors are offering and build something which is better than what the market is offering.

“What we are preparing for Q1 will be the market leader for salary sacrifice,” he concludes.

 

Death of the factory-fit satnav?

The MD of Arval, Benoit Dilly, says that judging by its own fleet of vehicles, there is now less interest than ever in cars having satellite navigation.

He says: “People have a more reasonable view of what they want. today. A car equipped with satnav is nice, but it’s a real question as to whether it’s necessary today.

“Google maps works perfectly well.”

It’s a point manufacturers are reflecting with launches. The new Vauxhall Corsa comes with a companion smartphone app, rather than an in-built satnav, while the new Hyundai i20 comes with a smartphone dock and, again, no satellite navigation.

Although the price of the optional satnav is falling, Dilly believes customers are unwilling to pay.
Dilly says: “The exception for this is the executive cars, which still come with absolutely everything.”