The Automotive Fleet & Leasing Associations 20th Annual Meeting & Conference was held at the St. Francis Hotel in San Francisco, and attracted 362 attendees for the three-day meeting. The keynote speaker was Robert McCurry, senior vice president for Toyota Motor Sales. During his keynote address, McCurry reported that 20 percent of Toyota's total sales in 1987 were to the fleet market, which represented 126,000 cars and over 33,000 trucks. According to McCurry, Toyota is looking to increase its fleet commitment by increasing its product availability by assembling Camrys and Corollas in North America. By 1990, Toyota is projecting that 300,000 units will be assembled in North America. This should help eliminate a primary problem Toyota has had in selling to the fleet market - availability of product. In addition, McCurry said he foresees the forthcoming Lexus models adding to the importer's lease business. "We believe these cars will be popular as executive lease cars in competition with Lincoln, Cadillac, BMC, and Mercedes," McCurry said.
The conference's next speaker was Jim Rogers, president and general manager of GE Capital Fleet Services, who spoke on "Qualitivity - The Winning Approach." The first part of Roger's talk consisted of outlining the corporate makeup of General Electric and the difference strategic businesses which compose the conglomerate. In addition, Rogers spoke on the current consolidation of Gelco, D&K Financial, and Kerr Leasing into GE Capital Fleet Services. He stated that the two goals for this integration process are to make it transparent to the lessor's customers and to retain the best people and programs from the three companies. The consolidation is scheduled for completion by the end of the year with the integration of Kerr Leasing's portfolio in the last quarter of 1988.
The second part of Roger's address centered upon his observations of the fleet leasing market. Although market growth the past five years has average between 1 and 2 percent, Rogers said future growth will be faster primarily because "the restructuring of (corporate America) will move companies toward leasing." In addition, he predicted there will be continuing "competitive consolidation" within the fleet leasing industry. One factor that will contribute to industry consolidation will be depressed pricing and deteriorating returns on equity. "Return on equity that was once in the teens, is now in single digits," said Rogers. "Pricing has been on the downside for the past two years." In addition, the Tax Reform Act has contributed to depressed leasing rates. Stating that a bold and new marketing strategy is needed, Rogers said this will be achieved through alliances, acquisitions, and developing economies of scale. The key to success in tomorrow's market is to be "competitive in the back room." Economies of scale are necessary in order to achieve back room efficiency, said Rogers.
GE Capital Fleet Services' business philosophy, Rogers said, is to regard people as the company's strategic resource. "This is a people business," he said. Another ingredient to the lessor's business philosophy is balancing "quality with productivity." Rogers termed this philosophy as "
"qualitivity," which he defined as "doing things right the first time, understanding customer needs, offering solutions, being responsive and flexible, and creating an environment for innovation. The Adoption of these objectives, Rogers said, is the key to competitiveness. "This will be the differentiator between us (GE Capital Fleet Services) and the industry," he said. "We not only have to provide a high level of quality, but to do so productively."
Other Events & Speakers
This year's conference marked the first time in AFLA's history that a woman president was elected to head the organization. Helene Kamon, director of fleet operations for Wendy's International, succeeded Sal Giacchi as AFLA's president. One of her objectives as the group's new president is to increase AFLA's membership by 8-10 percent.
Other elected officers and board members for 1988-89 are: Duane Berger, regional manager Southeast for Wheels, Inc. who was named executive vice president; Bruce Weaver, commercial sales manager for Nalley Chevrolet, was elected director, dealers; Bob Lalain, national sales manager for the Auction Managed Fleet Plan at Angle American Auto Auctions, was elected director, used-car marketing; and Milo Matick, fleet manager for Al Piemonte Ford and Cathy Wiesneth, fleet manager for Mancuso Cadillac Honda, were named directors at large.
Joseph Caddell, marketing manager for Chrysler Motors, spoke on the topic, "Clichés that Drive the Future." In his address, Caddell said that product advances will not lead future developments in the automobile industry. "It's the customer who will determine future products," he said. The models that are successful are those that provide customer benefits, not product innovation, said Caddell. He predicted that forthcoming product changes will be evolutionary. Vehicle design and features will be customer driven.
A panel discussion dealing with used cars was held featuring George Dodd, president of H.M. Dodd Motors, Bob Burnett from Black Book, Clyde "Red" Hillwig from Automotive Market Report, and Stan Hoynitski from the Harrisburg Auto Auction.
Presented following AFLA's convention was Automotive Fleet's Professional Fleet Manager Award. This year's recipient was George Weimer, director of transportation services for Contel Serivce Corp. in Atlanta, Ga. In addition, Weimer was presented with a $2,000 scholarship which will be given in his name to an accredited university business school. Another AF-sponsored event was the presentation of the annual Fleet Dealer Awards, recognizing the outstanding 1987 fleet sales achievements of 42 fleet dealers. Plaques were presented to the top three winners from each of the major fleet makes.
AFLA's fall meeting will take place at Marriott's Harbor Beach Resort, in Ft. Lauderdale, Fla., Sept. 22-24, 1988.