“We will consider every possibility: organic growth, acquisition, so yes, why not? It’s not a plan, just an opportunistic approach.”
That’s Benoit Dilly’s response to the idea of consolidating with another leasing company – something the industry has become rather used to of late. The new man at the helm of the UK’s fifth-biggest leasing firm took the reigns from former managing director Bart Beckers on 1 September, as Beckers moved internally to the new role of chief commercial officer in Paris. Dilly is happy with the shape that the business is in, but thinks it needs to be bigger and swallowing up more of the market.
“The plan is to grow,” he explains to BusinessCar at the company’s UK headquarters in Swindon. “I believe there are opportunities for growth in the market. We have five-point-something percent market share – I would be happy with 7-8%. We believe we have everything we need to grow.”
There are already measures in place to step up the firm’s services to its fleet customers. It comprises a complete reorganisation of what Dilly describes as the “middle-office” services – procurement through to end of contract and everything in between – and moving specific staff onto account teams to deal with individual business customers, rather than having them spread across multiple accounts.
A 20-year-plus veteran of the BNP Paribas Group – that’s Arval’s parent company – Dilly acknowledges the recent work the company has done on the technology front, such as introducing a free online calculator that can work out whether it makes better financial sense to use an employee’s own car or rent a vehicle for a business trip, and it’s work on alternative fuel vehicles (see panel ‘Electric vehicles on your fleet – a practical guide’).
“This market needs to be creative about embedding new technologies – it absolutely has to be for the benefit of the customer. The rental calculator is a good example – it works, it reduces the time spent on these things, it’s good.”
He hinted that there is more to come in the immediate future too, but also mentioned his reservations about overdoing it with new tools and pieces of technology: “We always need to be careful, though, to create innovative products but ones with tangible benefits to the customers, not just for the sake of it.
“If it can deliver results in terms of less time spent on certain things by our customers, [and] less cost, then yes. But not just for the sake of it.”
The same goes for electric and alternative-fuel vehicles. Despite Arval’s very public trial of the ex-Olympic BMW Active-e, among other such vehicles, and all the moves it is making into the electric car market, Dilly doesn’t think it’s a good idea to force fleets into them.
“This is something we need to have a look at and be at the front of. In terms of acceptance of the customers, it’s too early to say. Our customers need to decide for themselves whether they want to take that on. There is a feeling that this should be a market for our customers but it’s not tangible for all of them yet. There is still a strong addiction or habit for normal cars.
“I don’t like the phrase ‘educating customers’. Everyone uses it but I think we don’t educate customers; we give them some ideas and they use them as best they want to manage their concerns. I find education a little bit harsh to be honest. I wouldn’t dare to say we are here to educate our customers. I’m not sure they would be very happy with that – you will never catch me saying it. We help them to sort out their problems.”
He adds that corporate social responsibility (CSR) is probably the strongest incentive for businesses to go down the electric route – even bearing in mind the theoretical cost savings – and that requirements for big businesses to report and publish their CO2 outputs won’t necessarily shame them into action.
“Probably the more important point has been to do more of this because of the CSR impact of it. That’s a very important part.
“Yes, they need to report [on CO2 levels], but reporting doesn’t make you change your mindset. What makes you change your mindset is your responsibility, or your feeling that you are responsible for something, or eventually the financial impact of it. It’s here we want to be able to provide good information and good advice. We are probably more CSR-aware and sensitive, so we can pass this message through our consulting team to our customers.”
As for the leasing industry as a whole, Dilly thinks it’s in rude health: “After two weeks in the role, it’s a bit hard for me to say, but the market is in good shape. It’s a well-organised market and basically delivers what people are expecting. It’s a financially healthy market and almost all of our competitors are very professional in what they do.”
He does, however, think the shape of traditional contract hire is changing to a degree. He anticipates more of a deviation from the standard-issue three-year, 60,000-mile lease in future, with a marked shift towards shorter contracts, such as the 84-day-plus Minilease contracts the firm introduced earlier this year.
“The needs of our customers are changing. If they have contractors for one year, they may need cars for one year. If they have a contract for six months, they may need cars for six months. The thing is, it’s not for us to say ‘you need to enter into a [long-term] contract with us’ – if they have a need for six months then we need to be able to offer them six months. Working flexibility is something that is changing very fast, especially in difficult times, so we need to adapt our offer to that.
“It’s not always the case, as three-year contracts still make up the bulk of our business. I think the demand [for shorter leases] will increase in the coming years, exactly for the reason I’ve just given. I’m not sure the companies are very happy with that because it’s more administrative work for them and it is, to a degree, a bigger stress to manage, but we have to go with it.”
On the whole, Dilly thinks the industry does the basics well enough, but it needs to get better at going the extra mile.
“As an industry, contract hire is good at delivering on the basic services, but then we need to be better at sorting out problems. [Customers] want the industry to be better at helping them to solve problems and issues,” he says.
“Not everyone around the contract hire industry – car manufacturers, insurance companies, accident management companies – delivers 100%, all the time on SLAs [service level agreements]. It would be a dream to believe that they would, but we will find any suitable solution to manage what is a non-performing provider.
“What they want is to feel less pain in outsourcing their fleet management.”
“With some businesses we do a survey where we try to measure the amount of effort the customers considers he has made by working with us. It’s very interesting because there is a direct connection between ‘you work very well but it is painful’ and the loyalty of the customer. We need to be simple to deal with because our business is embedded into their daily activities.”
Electric vehicles on your fleet – a practical guide
BusinessCar revealed Arval’s plans to roll out an electric and alternative-fuel consultancy service for fleets in our 9 July issue and we’ve since been able to sit down with the firm’s consultancy team to get the full lowdown on the programme.
The three-man consultancy team, which comprises regular BusinessCar blogger Mike Waters, Paul Marchment and Tony Grove, has extensively tested as many current alternative-fuel vehicles as it can lay its hands on, the criteria being that they have to be on sale now and have ‘proper’ alternative-fuel drivetrains, so low-capacity petrol engines such as Ford’s Ecoboost and Fiat’s Twinair units are out of the question. The upshot was a 29-page piece of literature known as the Arval Alternative Fuel and Technology Car Review, which is about to be updated itself, with the aim of having a full-on EV consultancy service up and running at some point in 2014.
The firm is also running a technology day at its headquarters in Swindon on 8 October with a suite of alternative-fuel vehicles available for attendees to drive plus updates about the alternative-fuel side of the industry.
The company is planning on more if the first one is successful. It is also deliberately limiting the number of places, so everyone who goes gets a proper chance to drive the cars, as Mike Waters explains: “It’s doing it in an environment where there isn’t a fight to get into the car, or if you’re not bang on time for your test drive slot, then you’ve had it,” he says in reference to the numerous other, large-scale motor shows and technology exhibition events.
He continues: “It’s a natural part of what we do. As the market for new technologies develops, they won’t be new technologies, they’ll be standard. There won’t be a case where you have diesel-only policies any more. Fleets will instead be trying to meet drivers’ needs.”
Marchment adds: “We need to get customers into the cars. Half the battle is getting them testing the car and using it.”
Marchment also notes that Arval has been looking into the longer-term solution of hydrogen vehicles: “We’ve spoken to the manufacturers and we’ve said, look, seriously, we can use this technology because we can run in between the two offices [head office in Swindon and another office in Birmingham, where there are hydrogen fuelling stations located nearby] but we’re struggling to get the product at the moment. There are products out there but it’s just a case of getting hold of them.”
