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Panasonic Switch to Audi Sales Fleet Pays Off

A little more than three years after adding Audi vehicles to its sales fleet, Panasonic is reaping the benefits of that decision.

May 2011, by Grace Suizo - Also by this author

Frank Memolo, fleet manager and 25-year employee of Panasonic Corporation of North America, began adding Audi models to the company sales fleet in 2007. Not only has doing so helped boost employee morale and motivated drivers to take more ownership of their company-provided vehicles, it has also provided strong resale value in the wholesale market.
Frank Memolo, fleet manager and 25-year employee of Panasonic Corporation of North America, began adding Audi models to the company sales fleet in 2007. Not only has doing so helped boost employee morale and motivated drivers to take more ownership of their company-provided vehicles, it has also provided strong resale value in the wholesale market.

At A Glance

Panasonic's addition of Audi models to its sales fleet has resulted in several benefits, including:

● Increased employee morale.

● Strong resale value.

● More ownership and better care of vehicles.

● Better overall TCO from a company standpoint.

 

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Ask any sales rep what his favorite perks of the job are, and the use of a company-provided vehicle is bound to make that list. Not only must the vehicle be one that entices the employee driving it enough so that he or she really values and takes care of it, but it also needs to promote a good overall image of the company, have the ability to perform the job, and of course, fall within the fleet budget. Makes sense - but still challenging nonetheless.

For Frank Memolo, fleet manager and 25-year employee of Panasonic Corporation of North America based in Secaucus, N.J., finding the right vehicles to meet all these requirements was a task he set out to accomplish back in 2007 when he added Audi models to his 740-unit sales fleet, about 100 of which are executive vehicles. Now, more than three years later, Memolo is starting to see the benefits of that decision.

Searching for Some Excitement

In 2007, Panasonic, which had gone through some downsizing, was looking to boost employee morale.

"I was given the task of finding out what we could give back to the employees - how we could motivate the sales force and create a little excitement in the company car program, something a little different than what we had been doing. That's when we started looking at different vehicles that were out there," Memolo recalled.

At the time, Memolo said Audi had just started the fleet program and he had met with them a few months earlier to scope out possible vehicles for executives. He and his team at the time started running some numbers on possible costing for sales programs and began ordering 2007 models in the spring.

"To try and create some excitement, we said, 'Let's try and use the [Audi] A4.' We presented it to upper management, they liked it, and we ran with it," he explained.

From the motivational standpoint, Memolo said drivers were shocked when the initial program rolled out. "The first word that came out of four of the first five people's mouths [to whom] I mentioned it was 'wow.' And the person who didn't say wow was just standing there with his mouth open. He thought his manager was pulling a practical joke on him."

Creating a Win-Win Situation

Originally, Panasonic executives were provided an allowance to purchase a vehicle of their choice. Unfortunately, it was an outdated dollar amount established a decade before and didn't take into account the increase in vehicle prices over the years - leaving many executives unable to get the same high-end vehicle once theirs reached the end of its lifecycle. Once the sales fleet program was created, Memolo added a vehicle selector for the executive program as well, using some of the Audi vehicles.

Initially, the executives were given the option of taking the dollar allowance and keeping the vehicle purchased for 48 months/65,000 miles or taking an Audi A6 for 24 months. Since its inception, he has since expanded the program to provide an option of an A6, Q5, or a "souped-up" A4.

"So they had the incentive of getting a vehicle they couldn't get under allowance, plus it's also a shorter term so they get a newer vehicle even sooner," Memolo said. "Ninety percent of the executives opted to take the A6."

The benefits for both the employees and the company have been "unbelievable," according to Memolo. "We had some [TCO] numbers [from executives] come in under $400 per month. So from a company standpoint, we're spending $400 for a benefit and the executive is happy because he or she is driving a vehicle priced $45,000-$50,000. So it really is a win-win situation. That wasn't our primary target when we rolled out the program, but it just kind of carried over into the executive program as well and has been a pleasant surprise for us," he said.

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