50 Years of Successful Fleet Management Innovation
On Feb. 23, 1963, LeasePlan began operations as an asset financier in Amsterdam, The Netherlands.
Now, 50 years later, LeasePlan is the biggest car leasing and fleet management company in Europe with almost 1 million vehicles under management, and more than 1.3 million vehicles worldwide.
“The original idea at the outset was to offer asset finance, as we were part of a bank. We were not originally in fleet leasing or management,” said Vahid Daemi, CEO of LeasePlan Corporation.
According to Daemi, the first milestone was, after a few years, when the board of Shell wanted its cars financed. The next milestone was the introduction of a new product called “open calculation.”
“The story here is that one of the company founders used to go to customers and they would ask him, ‘How do we know we are getting the best price from you?’ ” Daemi said. “It was decided to open up the calculation to them, and show them how we arrived at our contract prices. We then decided to share with the customers any benefits made — so, if we get it wrong, it’s our cost, and if there’s a benefit we share it with the customer.”
The third milestone was when the company decided to become international and go outside The Netherlands. So, Belgium came next. “It wasn’t easy at first to know whether this was the right move, but it worked and so we decided to continue down this route,” Daemi said.
LeasePlan USA is also excited about the 50th anniversary. “Being a part of LeasePlan’s 50th anniversary is very special to LeasePlan USA, but not just because of the number of years,” said Jon Toups, chief sales and marketing officer for LeasePlan USA. “It’s about being part of a truly international organization that is able to leverage its global experience and expertise to bring local solutions to fleets across the globe. It’s about an organization that genuinely cares about its employees, its clients and its communities whether they are in Chicago, Atlanta, or Amsterdam. And, it’s about celebrating this milestone with 6,000 of our colleagues that all share the common goal of ‘making it easier to LeasePlan.’ ”
Today, LeasePlan is present in 31 countries, recently launching activities in Russia. Excerpts from an interview between Fleet Europe magazine and Daemi as well as Jose Luis Criado, managing director for LeasePlan International, follow:
Fleet Europe (FE): How does being one of the biggest leasing company affect how you operate?
DAEMI: The biggest risk companies can have is thinking they’re the best. Then there is only one way to go — down. We are continually looking to become better at what we do. I value competition. It keeps us sharp. We never think that being the biggest makes us the best. So, I never say we are the best, but I always say we are in a strong position.
FE: In what way does LeasePlan differentiate from its competitors?
CRIADO: Through a combination of global experience, local expertise, and on-the-ground service support as well as our broad offering of harmonized services and our experience with global cost-savings initiatives.
FE: You are currently managing around 1.35 million vehicles — are there plans for more?
DAEMI: Some markets in Europe, such as Spain and Greece, have been shrinking, but LeasePlan has either maintained or increased market share. Our overall numbers may be smaller, but the market share is bigger. I do not believe the market is going to return to where it was quickly, but there are signs of recovery. Companies are ordering new vehicles again and there are other, less mature markets that offer potential. But, this does not mean that our product will remain the same. Future generations will be looking for mobility solutions rather than car leasing.
FE: LeasePlan has always been at the forefront of innovation. How do you see this evolving further?
DAEMI: I see car leasing as a service, and there is always room to improve service and make it more efficient. Product innovation comes from trying to serve the customer better. We deal with everything in a customer’s mobility — payroll, fines, and even a single card for all mobility including bus, metro, etc., in the Netherlands.
FE: What is your opinion on bundled services in operational leasing?
DAEMI: Some customers have gone down the unbundling route and have found it can lead to difficulties when integrating services. The minute there is a problem, everybody blames everybody else. I believe in benchmarking the total solution. Customers want to know they are getting the most cost-effective solution.
FE: Some in the industry say LeasePlan’s open calculation model has led to customers demanding even more transparency?
DAEMI: Possibly, but why worry about this? Transparency is important. Nobody is proposing that suppliers should operate at a loss. If a customer sees that a new supplier is operating at a loss, trying to gain new business, they will start asking how this business will be financed. Our industry should embrace transparency, not shy away from it.
FE: How do you see the future success of full-service leasing?
CRIADO: There is a move toward centralization, global fleet management, and outsourcing. This trend requires flexible end-to-end service solutions that allow companies to focus on their own core business, while securing the maximum benefit of their core suppliers’ expertise.
Next to that, there is a need to provide the right level of control and transparency, and to deliver a consistent service experience across different countries or business entities. Given these requirements, it’s no surprise that we see an increasing development of full service leasing solutions, including our open calculation offering.
FE: You have just moved into the Russian market — what’s next?
DAEMI: We are looking at the Asian and South American markets. With China it is a matter of timing. We moved into India early, and the business is running very well now. In South America we are in Brazil and in Central America we are in Mexico, and we are looking to further build our presence.
FE: What do you see as the ‘next big thing in fleet’?
DAEMI: Car usage is going to be more important than car ownership. We are seeing the SME market embrace this. Mobility, including car-sharing, is developing. Change will happen slowly, as will the integration of electric cars. Looking a very long way ahead, the focus will be on the individual, not the vehicle. This will be a fundamental change. The service will be provided to the driver rather than the company. So the contract may no longer be linked directly to the company but to the employee.
CRIADO: Telematics and efficient reporting systems are gaining momentum, particularly with large international fleets. Clients have greater visibility. Fleets’ value will advance from a commodity pricing focus, to one on overall value and service. There will be a move away from transactional relationships to strategic partnerships.”
About the Author
Steven Shoefs is the editor of Fleet Europe magazine, which is published by Nexus Communication. He can be reached at [email protected]. Bobit Business Media, publisher of Automotive Fleet, and Nexus Communication have partnered in producing the Global Fleet Management Conference, held in Phoenix, Ariz., in 2013, and will be held in Brussels, Belgium, in 2014.