The Car and Truck Fleet and Leasing Management Magazine

U.S. Corporations Retool Car Fleets to Go Green

June 29, 2007

NEW YORK CITY -- Corporate America is starting to look at the millions of cars it owns or leases for traveling salesmen, executives, and technicians as an area where it can cut down on greenhouse gases and save money on increasingly expensive gasoline, according to the Christian Science Monitor.

• Abbott, a large pharmaceutical company, has shifted 20 percent of its fleet to green status – more fuel-efficient vehicles. In analyzing its carbon footprint, the company found 4.5 percent of its emissions in the US came from its 6,500 vehicles.

• Last month at an expo of the National Association of Fleet Administrators (NAFA) in Houston, managers of corporate fleets waited in line for test rides in hybrid vehicles and cars that use alternative fuels. It was the first time in the 46 years of the expo that NAFA has featured a "green zone."

• Hertz Corp., owner of one of the largest automobile fleets in the nation, said it would buy 3,400 hybrids, an investment of $68 million, over the next two years. Enterprise, with the largest U.S. rental-car fleet, will have more than 3,000 hybrids this year.

According to the Christian Science Monitor article, this shift in corporate thinking is relatively new but has the potential to make an impact. Automobiles that are part of the corporate fleet have double the miles of the family vehicle. In the case of rental-car companies and executive car services, the mileage can be even higher.

Whether the shift in thinking is for the public-relations value or because it saves money, companies are suddenly trying to change their ways.

"In January, we tried to do a story on what companies are doing to turn their fleet green, but we couldn't find many who were willing or able to talk about it," says Phil Russo, executive director of NAFA, as quoted in the Christian Science Monitor article. "But at our meeting in May, we asked people what had happened, and they said, 'This is part of our corporate mandate: We're trying to turn green.' "

In a survey earlier this month by PHH Arval, one of the largest fleet-management services in the United States and Canada, 45 percent of fleet managers said their interest in the environment had grown significantly in the past year.

"One of the things that came out of the survey is that companies are struggling. They feel like there are not a good variety of vehicles that meets their needs and is available," says Karen Healey, who is in charge of PHH's green initiatives.

This is certainly what some car-rental companies have found. Over the past several years, Hertz has had only 50 to 100 hybrids in its fleet. "We are Toyota's largest customer in the world…. Basically, they didn't want to sell us any, and we just had to beg," says Frank Camacho, vice president for marketing at Hertz, as quoted by the Christian Science Monitor.

Indeed, hybrid orders have been difficult to fill, says Bill Kwong, a spokesman for Toyota in Torrance, Calif. "We have had very limited production," he says.

But with production of hybrids increasing, Toyota is now willing to sell Hertz 1,000 vehicles this year, with the fleet growing by another 2,400 in 2008, Mr. Camacho says.

Enterprise says that it, too, would buy more hybrids if it could get them. Instead, it has found it easier to acquire some 41,000 "flex fuel" vehicles that can run on various combinations of ethanol and gasoline.

"If we find a station selling E85 (85 percent ethanol), we will group the cars close to the fueling station," says Pat Farrell, the vice president responsible for the company's environmental platform.

At Abbott, the impetus was a challenge from Miles White, the company's CEO, to improve its environmental performance. As part of this effort, says Bob Accarino, director of global environmental affairs, the company asked for employees to volunteer for a more fuel-efficient vehicle.

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