The Wheels brand is now one of the largest fleet management companies (FMCs) in the world with a wealth of managerial talent.
The new Wheels, formed from the legacy companies Donlen, LeasePlan, and Wheels, has a much greater scale with enhanced investment capacity and differentiated capabilities to serve its clients globally.
The combined company:
- Manages more than 800,000 vehicles.
- Has $7 billion of assets in the U.S. and Canada.
- Employees more than 1,900 employees.
With the merged entity dramatically larger than each of the three legacy companies, the Executive Leadership Team (ELT) of Wheels determined the best strategy was to create two new leadership roles – one focused on existing clients and the other focused on company growth.
Wheels Leverages Combined Strengths of Legacy Companies to Benefit New Clients
To learn more about these two newly created positions, AF Editor Mike Antich interviewed Laura Jozwiak, newly named Chief Client Officer, and Ricardo Fonzaghi, newly named Chief Growth Officer.
Below are excerpts from this wide-ranging discussion:
AF: I’d like to start the interview with you, Laura. As a chief client officer, can you expand on the importance of client relationships, which is central to your role, and how they affect the company’s overall performance?
JOZWIAK: Thank you for having us today, Mike. We’re both excited to be here together and so we thank you for the opportunity to talk about these new roles because they’re new to the organization. It's important for our clients to understand why these roles were created and the value that the roles bring to them.
As the Chief Client Officer, my focus is on the client. In the past, I had both client and new business opportunities. So did Ricardo who also had oversight of both existing clients and new business opportunities. I think this really says a lot about who we are as a company and where we’re going that we’ve decided to take this focus and have someone on the executive leadership team solely focused on our clients while Ricardo will focus on company growth.
When you think about who we are as a company this makes a lot of sense – we are a company made up of clients and the employees who serve our clients.
My role is to be able to identify and develop client-focused strategies to deliver better results than we were able to do through the three legacy companies alone. By taking the combined learnings and capabilities that we are now able to share with each other, we’ve already seen where we’ll be able to do some things quite differently within the market and we are looking forward to continuing to do so.
AF: Let’s go deeper into that. What are you doing to ensure client retention? And secondly, what are you doing to drive satisfaction among the legacy clients beyond what you just mentioned?
JOZWIAK: I want to continue to practice what all three companies have always done, which is to be very focused on client retention by ensuring that we understand what’s important to the client and deliver on those results. First and foremost, we are not distracted, we are focused on our clients. We have plenty of other people who are dealing with building the future of our business. But the client-facing teams will remain dedicated to staying focused on our clients.
That’s very important because it is our priority to keep our clients businesses moving and we do that by providing to them every day what they expect to receive and we deliver the services that they pay us to perform.
So, to that point, it’s not like there is anything different we need to do. We will stay focused on listening to our clients, understanding their needs, being there as they evolve and evolving with them, and ensuring that we’re delivering on those results.
AF: Let’s turn the conversation over to you, Ricardo. What is your vision of your new role and what are the expectations of the responsibilities associated with driving growth in your business?
FONZAGHI: It's a very interesting question. As Laura said we each had the responsibility for both clients and growth in the past but the reality is that this new company is massive and we should approach things differently because of our renewed and continuous responsibilities to our clients and our branding promise of doing our best all the time.
The challenge of growth is very exciting considering everything that I’ve done throughout my career. We must always grow personally and business-wise and invest heavily for it to be accomplished. Our team now includes an unbelievable pool of talent with growth embedded in its DNA.
But putting a team together was just the first step. Now, assuring that we align the strategy for the growth of our company is going to be extremely important. And, as I said, the expectation is very simple: we’re going to continue doing what we have always done for the clients, which is basically listening to them and implementing the strategies that need to be in place for them to be successful.
At the same time, we’re going to create and develop new capabilities that will allow us to continue growing in the marketplace. This is not a 10-year plan. This is already happening and will continue over the coming years.
JOZWIAK: I want to add that we have a pretty powerful team. We are working very collaboratively arm in arm. Ricardo is responsible for growth and bringing on new clients that will value what we have in our proposition and I’m responsible back to Ricardo and to the whole organization to do what’s right by supporting and retaining clients. And not only that but to create raving fans and great referrals.
This is a small but very important industry and we thank all of our clients for always being great references for us. Our role is to create stronger client satisfaction to support Ricardo with growth. So this is a symbiotic partnership where we help each other. We’re able to stay single focused, but also be very collaborative.
FONZAGHI: I always liked the word “symbiosis.” It basically means living together and benefiting from each other, so this is what we’re doing for the benefit of our clients.
AF: Ricardo can you elaborate on the specific benefits that new clients will receive from the integration of these three companies into a single entity?
FONZAGHI: I love the question by the way, because within a couple of hours after the acquisition closed, Laura and I were both challenged by a client, and we had to work together to find a solution. And basically Laura said, “Well, we have some things that can help you.” If you look at the operational capabilities of the three companies, each one of them has always had an edge on competitiveness in some areas of fleet management, which is very interesting.
For example, as legacy LeasePlan, some vehicle models are available to our clients on a basis of need.
Wheels has a product feature that I fell in love with, which is basically a pool management solution that is 100% digital, very easy to manage and will be extended to LeasePlan and Donlen legacy clients. As for Donlen, their garage management solution is outstanding. It is incredible how we can build value on each of those services to our combined portfolio of clients.
And as I said before, we’re not stopping here. We’re building new capabilities as we speak. We have five different ongoing projects, which will create the edge that will continue differentiating us from our competitors. Because we are a very large company, we have a lot of leverage in terms of a combined fleet of 800,000 vehicles and we can use that leverage to battle for better services, quality, and even better conditions for our clients. And that’s what we have already been doing.
AF: Now that ALD has completed its acquisition of LeasePlan, how do you anticipate that development will affect your ability to effectively serve and meet the needs of your existing clients?
JOZWIAK: Wheels has been engaged in a global alliance with ALD for over 13 years. And from the perspective of LeasePlan USA, it was a part of LeasePlan. So each of us come from a high knowledge base of understanding the importance of global fleets, where our strengths are, and how we’re going to be able to take advantage of NewCo (which is what the combination of ALD and LeasePlan is temporarily called).
We now have by far the largest global coverage of any fleet management company on the Earth. We have a very strong position with the Wheels and ALD alliance and the global support that we gave our clients. We are now learning from what LeasePlan Corp. was able to do and how to bridge that together to make that alliance even stronger.
We’ve been working with the ALD NewCo senior leadership team as they’ve been going through the close. Recently, Ricardo and I were at the NewCo sales convention in Paris. It’s a very real daily partnership and it’s extremely important that we continue that and build upon it for our global clients.
FONZAGHI: From my side, I worked for LeasePlan International for 10 years, which taught me about many different fleet cultures. One thing I learned is that global fleets can create leverage to clients that will help them offset some of the challenges that they are facing in situations like vehicle shortages, price hikes due to inflation, and shortage of workforce.
Honestly, I have seen the global fleet proposition of creating leverage as a way out of those situations. We’re now an alliance with more than 3 million vehicles. That’s a force that must be recognized as one of the drivers of the fleet world. When I was in LeasePlan International, it was an interesting life competing against ALD. We saw ALD grow from 10 countries to 30 countries very quickly. And that DNA has now joined forces with LeasePlan. I’m glad to be part of it!
AF: What is your fleet industry forecast? Where do you foresee the industry being at the end of the calendar-year 2024?
FONZAGHI: The end of the 2024 calendar-year is a long shot and things change fast in this new world, some of it could sound like wishful thinking but here’s what I see could happen by then:
- More readily available vehicles.
- Pricing stabilization.
- More stable workforce market.
- Not as many acquisitions happening in the industry as we have had in the past three or four years with the cost of capital continuing to be on the higher side.
- Focus on consolidation and harmonization of fleet services and programs.
- Fleet managers will look to us to help them optimize the utilization of capital, which I think is going to be very important in an environment where the cost of capital has been extremely high. They will look to us to find alternatives to reduce costs. When I say optimizing capital, I’m referring to the cost of leasing itself, meaning better ways of managing depreciation of assets. When I’m referring to cost reductions, I’m referring to selecting the right vehicles for the job, so they can find savings opportunities during its lifecycle.
Honestly, from here to the end of 2024, I feel that it will continue to be a “rollercoaster” market, but we’ll start slowing down the madness.
JOZWIAK: Yes, I agree. The only thing I would add is my hope that we will now get past of the beginning stages of electrification programs that our clients are having and get to something more mature.
We are already leading in this segment with thousands of units under management and collecting hundreds of millions of miles that are translating into valuable data that we are using to learn and work towards a future state that will benefit our clients. We are all still in the early stages of electrification and the infrastructure required to allow all fleets, in all geographics to fully utilize.
It doesn’t matter how much we want it, we need governments, we need municipalities, we need electric companies -- we need everybody to participate in it. And I’m hoping by the end of 2024, there will be more conversations to help guide us all forward, faster.
I am looking forward to our third year of publishing the EV Readiness Index for the U.S. market to see how this is all coming together and if the scores by state are improving as we need them to.
AF: As a new company comprised of three different legacy companies, how will the new organization differentiate itself from its primary competitors?
FONZAGHI: I love the fact that we will have to differentiate ourselves by showcasing our strategic initiatives. One differentiation will come with the creative way that we will look at leasing services for the three legacy companies. It’s an interesting step that we will help optimize the utilization of capital for our clients.
At the same time, we will focus on specific operational products that will allow us to create the edge of competitiveness needed for our success. It is what I call ambidexterity, being able to exploit what we have while exploring new initiatives with equal ease. Building value and the differentiation necessary to not only survive in the marketplace but to thrive.
JOZWIAK: I think that’s excellent. What I would add is that we can move faster than anybody else. This is because all three legacy companies have come together and are sharing openly and honestly all of their features and individual services, what works and what doesn’t work with our organizations. So the differentiator that I see is we’re moving faster and becoming very agile.
And we’re able to take advantage of our integration, which isn’t a bad word as we are using it in a way to build a better future. This merger is not a bad thing. It’s essentially an opportunity to transform and do it right, which of course is what we’re going to do.
So it’s allowing us to not just look at what our customers need today, what is the market need, what do our clients need 5, 10, or 15 years from now – that’s what we’re building today and that's the strategy work that Ricardo’s talking about, which we won’t share with you today.
Typically, a company will say, here’s your IT budget – what are the five projects you want to do? What makes us different is that we have a list of 60 projects and we can do all 60. We can do that because we have the resources and the opportunity to look at everything we have and transform it into something better.
FONZAGHI: I’ll give one more example. We are a long-term investment for our parent company, which is a very strong organization and knows well that the only way that they can achieve their objectives is by pushing our business to differentiate itself from our competitors.
We will do this by creating value for our clients. That is our motivation to always be the best fleet management partner available in the marketplace.
Industry Forecasts for 2024
- There will be greater availability of vehicles from OEMs.
- Some pricing stabilization with lower inflationary pressures.
- A more stabilized employment market with less workforce constraint pressures.
- Fewer fleet industry acquisitions than experienced in the past four years due to the higher cost of capital.
- The hiatus in industry acquisitions will allow fleet management companies to re-think the way they do business.
- Greater desire on the part of clients to consolidate fleet services and programs.
- Initiatives to optimize the utilization of capital.
- Implementation of alternative funding strategies to reduce leasing costs with better depreciation management.