European fleet management provider Fleet Logistics is looking at expanding into other regions, including Africa, South America and Australia, as it continues its carefully controlled global expansion. The company finished 2015 with a contracted fleet of 180,000 units and is budgeted to finish at around 197,000 vehicles under contract by the end of 2016.
However, the company said it is adamant that this year will be one of consolidation, of process refinement and development in new IT platforms and systems. Any growth will come from expansion into countries where its clients already have operations, along with a number of new business wins, but it is not planned to be at the same rate as the previous 12 months.
When it comes to expansion, areas already earmarked include Sub-Saharan Africa where a number of new countries will be serviced from a hub in South Africa, the precise location of which has yet to be determined.
In South America, new countries include Brazil and Argentina, serviced from the existing hub in São Paolo in Brazil.
The company currently operates a hub system in Singapore from which it provides fleet management services to an array of countries including India, Thailand, Pakistan, Indonesia, Philippines, Japan, South Korea, Vietnam, Bangladesh, Malaysia, China and Taiwan.
Further expansion in the Asia-Pacific region, including the fleet management markets in both Australia and New Zealand, will be facilitated via the Singapore hub, according to the company.
Fleet Logistics Chief Commercial Officer Gianni Granata, Ph.D., explained that the company currently had two operating models which it was using in different regions of the world to suit the needs of clients in these areas.
“Our core business model offers consultancy, professional fleet management including multi-bidding, state of the art reporting and forecasting tools, and we employ this in the main countries in Europe in which we operate,” he said. “Our second business model offers a reduced version of the above, less in depth with a reduced product offering but on a global basis in countries where we are operating for the first time. The operations we run from our Singapore hub are an example of this second business model and we would also use the same approach for any moves into new countries such as Australia and New Zealand. We use a similar approach in Southern America, although we could see our operations in Brazil migrating from business model two to model one as we become more established there and the economy recovers.”
Fleet Logistics recently announced it had made its first tentative move operationally into the U.S., working with a large international chemical company with a global fleet of around 8,000 vehicles in a first U.S. pilot project.
The project was progressing well, said Granata, but he stressed that the U.S. would not be a targeted destination for Fleet Logistics.
“We have huge respect for the US fleet management market and for our customers there – many of whom have their global headquarters in the US – and our American partners,” he said. “But given the complexity of the market and its scale we do not see ourselves playing a major role there.”
Granata said that 2016 would focus on consolidation and investment in the business. And he said a degree of corporate reorganization was taking place to better reflect the company that Fleet Logistics had evolved into.
“We will no longer operate in three regions in Europe nor do we see the need for the role of Chief Regional Officers, as we have become much more of an international player, playing on a world stage,” he said. “So, instead, we will devolve more power to the countries themselves, including P&L responsibility. And we will create a new management team with a global focus in our head office in Munich, which I will lead, to concentrate on sales, systems development and quality standards,” he said.
The one exception to this new structure will be in the largely Germanic-speaking countries of Germany, Austria, and Switzerland, along with the Czech Republic and Poland, which will continue to be managed by Arnd Martin, the legal MD for the region.
“There is already an organizational connection between these countries with operational benefits and cost advantages, so it made sense to keep them together under one MD,” said Granata.