European fleet users are experiencing the same problem that every developing industry faces-the coming of maturity.
European fleet users are experiencing the same problem that every developing industry faces-the coming of maturity.
Fleet operations in Europe are basically no different than those in the United States. I spent a month touring Europe, talking to fleet users in London, Paris and Rome. Maintenance problems in London are no different than those experienced in New York City. Cost control procedures in Paris are the same as those practiced in San Francisco. Searching out new business-and keeping the old-is the same for Rome and Chicago fleet operators.
The major difference is that in Europe, operators are going through the same growing pain stage that U. S. operators experienced several years ago. The bulging muscle of long-term leasing, for example, is just now being flexed in Europe.
W. L. Selway, director and secretary of Godfrey Davis Ltd., England's largest rent-a-car firm, told Automotive Fleet that within four years half of the company's volume will be generated by long-term lease business. Godfrey-Davis, an affiliate of Avis Inc., currently operates 3,500 English-made cars.
Selway, a 33-year veteran in the rent-a-car business, or as they call it in England, car hire field, attributes the tremendous growth of leasing in England to the United States.
"You Americans seem to be born and bred to leasing," Selway said. "Leasing here first got its impetus from American firms with branches in England," Selway explained. "Now it's spreading to English companies."
The Godfrey Davis lease plan is a counterpart of the American-invented full maintenance program. All maintenance, including oil change, tire and battery replacement and mechanical breakdowns are part of the lease package. Insurance is not included, Selway explained, because premiums vary according to use and area of operation.
"Hire operators do not claim that to hire (lease) is necessarily cheaper than to own, but they do claim that it is convenient and certainly costs no more," Selway said. "Too many company executives undoubtedly spend far too much time and energy running their own transport when it could be put out to specialists at no extra cost, and thus leave themselves free to devote their whole energies to selling their products."
Selway said that leasing in England is gaining in popularity with small business firms and professional people as well as large companies.
"Professional men are particularly attracted as they are not usually mechanically minded and in any ease have neither the time nor the inclination to have their heads continually under the bonnet (hood)," Selway said.
Like their American counterparts, Godfrey Davis uses depreciation as one of its major selling points in promoting leasing. Unlike their American counterparts, the firm has another strong argument to use- the English purchase tax.
The English purchase tax is similar to a sales tax except that it fluctuates more and is much higher. The purchase tax is revaluated at the time the government sets the budget. A reduction in the purchase tax on new cars, for example, usually results in a further depreciation of used car prices by the amount that the purchase tax has been reduced on new cars.
Car leasing and car rental are probably less expensive in England than anywhere in the world. Selway attributes this to low depreciation which he calls "artificial" because of a "short supply of new vehicles" and because "of the very keen competition."
"When depreciation on the pre-war scale does come about, as undoubtedly it must, then the strong possibility is that the cost of renting a car will rise," Selway said.
Lease Features
Godfrey Davis offers 26 different models for lease. The charge for the lowest priced model, a de luxe Ford Anglia, is $813 for the first year. If the call's leased for two years, the rental drops to $784 for the second 12 months. On a three-year lease, the charge is $490 for the third year.
The most expensive model offered for lease by the company is a Humbler Super Snipe with an automatic transmission-a luxury item in Europe. It leases for $2,226 the first year, $1,162 the second year and $518 the third year.
All prices are based on a maximum mileage of 18,000 miles per year. Heaters are included with all cars.
As an attraction for large; fleets, the company offers a quantity discount of 2 1/2 per cent for 25 cars or more; 3% per cent for 50 cars or more; and 5 per cent for 100 cars or more.
To stimulate business after the tourist season-from September to May-cars are offered for a 12-week period at pro rate of the annual rate plus a fee to cover insurance. The Anglia, for example, is leased for $218.
While leasing is gaining momentum at Godfrey Davis, short term rentals still generate the largest volume of business.
Operating out of a $980,000 main headquarters near Victoria railroad station and the airport bus terminal, the firm has more than 200 outlets scattered across Great Britain. There are 1.1 offices in London. Selway said the company's headquarters was the first building ever to be built in England for the sole purpose of running a rental operation.
"When we built our headquarters we gave instructions to the architect that no locks were required for the reservation department," Selway said. "The hire operator has to provide a full service around the clock, and in order to provide this he has to have chauffeurs, shunters and receptionists working on a shift basis. This ensures the quick turn-around of cars the business requires."
The lowest off season rental rate at Godfrey Davis is $3.50 per clay plus 4 cents a mile for a Ford Anglia or a Morris Minor 1000. The weekly rate, which includes unlimited mileage, is $36.40. All rates include insurance and oil but not gasoline. The user is liable for the first $28 damage unless he pays a premium of 70 cents per day. In season rates-from June to Sept. 30-are slightly higher.
Like many American rent-a-car operators, Godfrey Davis doesn't charge its customers for renting a car in one city and leaving it in another. Unlike American operators, the company doesn't put much stock in operating at the airport.
"Some of the smaller firms have outlets at London Airport," Selway said, "but they don't generate much business. Most of the air passengers take the bus to the airport bus terminal and our main office is near the terminal."
Rigid Preventive Maintenance
The most recent innovation by the company is the issuance of its own credit cards which are honored at all of its outlets across Great Britain.
Despite the tremendous tourist business in Great Britain, Selway says that the backbone of the company's business is business and professional people.
"The pleasure and weekend hire will look after itself," Selway said. "It is to the businessman that we make our first appeal.
"No amount of coaxing or reduced prices will influence the pleasure motorist during the bad weather in the winter months, whereas business journeys have to be made and a car is probably the only means of transport for making a number of calls in a concentrated time."
Godfrey Davis, which is a publicly held company, operates its own used ear lot. Selway estimated that approximately 20 per cent of the company's cars are, disposed of through the used car lot; the remainder of the cars are used as trade-ins. Cars are disposed of about every two years.
The majority of the maintenance and repair jobs are carried at the firm's main headquarters. Like other fleet operators, the company insists on a rigid preventive maintenance program. Cars are lubricated and the oil changed every 30 days. Brakes are refined well before they begin to show signs of wear.
"Good maintenance is the key to our showing a profit," Selway said.
