ARI Continues Its Expansion Into the European Fleet Market
On July 8, 2013, ARI announced it acquired the fleet management segment of Fleetlevel+ Services GmbH in Germany. This follows the earlier acquisition of Fleet Support Group in the UK, now known as ARI Fleet UK, in late 2011.
(Left) Carl Ortell, ARI president, shakes hands with Marco Lessacher, Alphabet CEO, at the closing dinner.
The acquisition of the fleet management segment of Fleetlevel+ Services GmbH by ARI furthers its ongoing initiative to expand its strategic global footprint. The new company will be known as ARI Fleet Germany.
Fleetlevel+ Services is a subsidiary of Alphabet International, with its fleet management division providing services in the German market for more than 30 years. The Stuttgart-based company offers a comprehensive range of fleet management services and currently serves over 100 customers with over 13,000 vehicles.
The German vehicle market has been growing consistently by around 1 percent per year. There are approximately 50 million vehicles registered in Germany, of which 10 percent are registered as company cars.
The German fleet market is dominated by national automakers, including VW, Audi, BMW, and Mercedes-Benz. The lease market is very mature with almost 60 percent of all company cars being leased. On Dec. 16, 2011, ARI acquired UK-based Fleet Support Group (FSG), which was later renamed ARI Fleet UK.
AF Editor Mike Antich recently spoke with ARI President Carl Ortell to learn more about the acquisition of the fleet management segment of Fleetlevel+ Services. The following are excerpts from the interview:
AF: Why did ARI acquire the fleet management segment of Fleetlevel+ Services?
ORTELL: The acquisition of Fleetlevel+Services’ fleet management business supports ARI’s ongoing focus to develop a strong global platform to better serve the needs of our customers who are growing globally as well.
The opportunity to expand into the German market and operate on the continent will further enhance ARI’s ability to deliver innovative, top-level fleet management services in the markets and regions that best complement our customers’ needs.
AF: How long has ARI been negotiating to acquire the fleet management business of Fleetlevel+ Services?
ORTELL: This particular acquisition has been in the works for quite some time. We have a strategy to expand and support the hundreds of multinational customers that we serve. When we did the initial study as to where we wanted to enter the European market, it was between the UK and Germany. For us, it is just another step in expanding throughout Europe.
We are working on additional acquisitions and “green field” opportunities, not only in Germany, but also elsewhere in Europe.
We now operate in two very strong economies — the UK and Germany — and that gives us a strong platform from which we can consider further expansion.
AF: How does ARI Fleet Germany compare to ARI Fleet UK in terms of size?
ORTELL: It is smaller in terms of the number of customers and the number of employees, but it actually provides more services than ARI Fleet UK did at the time we acquired them. Of course, we are bringing many of our services over to the UK now. But, all in all, ARI Fleet Germany is a smaller business than ARI Fleet UK. That said, we see tremendous growth potential in Germany.
AF: How will this unit be integrated within the ARI organization? Will it be a wholly owned subsidiary or part of ARI Fleet UK?
ORTELL: It is going to be a very complicated legal structure that will change as we continue to expand, but ARI Fleet Germany is a subsidiary of ARI, just like all of our other companies. The parent company is ARI. ARI Fleet Germany is a sister company to our UK business in terms of operations, just like it is to ARI Canada and ARIZA in Mexico.
Wherever we go, we want to have similar cultures. For example, our Partners In Excellence program, or PIE as we call it, will be a big part of what we bring to Germany. We have already brought PIE to the UK. PIE establishes and tracks fleet-specific performance goals that substantiate our promise of service excellence.
Everything we offer in North America will be brought to Europe and tailored to fit the market. We will bring new ideas and programs that have never been seen before.
We are going to bring all of our technology and all of our services that are relevant to the marketplace to Germany, just as they are being brought to the UK. Technology will also be the same throughout all of our companies, offering seamless services, as much as possible. We will do certain operations differently in each country, based on the needs of the country, customs, and traditions. However, the over-arching umbrella is ARI — whether it is ARI Fleet Germany, ARI Fleet UK, or ARI Canada — it will all be the same.
AF: Who will manage ARI Fleet Germany?
ORTELL: Craig Neuber, who had been our director of strategic consulting, will move with his family to Stuttgart and assume the title of VP of European Operations. He will report to Chris Conroy, our managing director for global operations. We are searching for the new managing director for ARI Fleet Germany.
The existing managing director is set to retire, so we have a little bit of time, but the idea is that we will hire someone to run ARI Fleet Germany. Until that time, Craig will oversee the business.
Our intent is not to have Americans run these businesses. We want people who are native to wherever we are present running those businesses. That is what we have done in Canada and Mexico and recently with the hiring of Keith Allen as the managing director for ARI Fleet UK.
We want to think globally, but act locally. Everyone says that, but that is what we are doing.
If we are going to be successful, we need to have local talent helping us to manage and lead our operations, wherever they may be. The most important factor for us is to have the right people. That is the most important part of any business foundation.