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The rise of international fleet management

In December 1997, the very first edition of Fleet Europe magazine was published. On the cover: Michel Moonens, fleet manager of Digital. He had just set up a European fleet strategy for 22 countries, with one major car manufacturer and two leasing companies.

Twenty years ago, international fleet management was a great idea whose time had come. Up until then, multinationals managed their vehicle fleets on a country-by-country basis. But their search for economies of scale and harmonisation led to a fleet management revolution the effects of which still reverberate today.

These days, international fleet management is the reigning paradigm in the international fleet industry. But not more than a quarter century ago, nobody had heard of it – and there really wasn't an international fleet industry – although a few visionaries predicted its benefits.

For already then, multinational companies like Federal Express, TNT, Johnson & Johnson, Xerox and Bristol Meyers Squibb were requesting internationally structured contracts and framework agreements, mostly for some bigger countries within Europe or to harmonise main European fleet markets with the US national protocol. In fact, it's very hard to pinpoint the start of the fleet management internationalisation process – but we think we have a good candidate with the 1986 RFQ by Astra (now AstraZeneca) to Volvo.

On the car leasing and fleet management side, LeasePlan was quite early to embrace international business, not just by expanding operations into a dozen European countries by the mid-1990s, but even by opening up shop in the Americas and Australasia. The Netherlands-based fleet company had a head start, but competitors like Arval, ALD and GE Capital Fleet Services (today part of the Arval-Element Alliance) started catching up soon after 2000. On the manufacturer side, Renault, Volvo and Ford were early adopters of a structured European and international fleet approach.

The internationalisation of fleet management gathered speed in the new millennium. Fleet suppliers rapidly expanded their operations into new markets by establishing new subsidiaries, making targeted acquisitions (remember the acquisition of ING Car Lease by Alphabet in 2011), or building partnerships with local heroes.

They moved into Eastern Europe and beyond. International fleet management expanded to cover Latin America, the Asia-Pacific region and the entire world – to become truly global fleet management. Today, LeasePlan is present in more than 30 countries, ALD has a presence in 42 markets, and the Arval-Element Alliance covers 50 markets. And simultaneous to the rapid geographical expansion, there occurred an equally swift exchange of best practices, new technologies and increased efficiencies. Also the car manufacturer’s interest in car related services and leasing has remarkably increased: Last year  there was  both the sale of Athlon to Daimler Financial Services and the launch of a new PSA Mobility brand ‘Free2Move’ with a proper multibrand lease pillar.

Right now, we are on the cusp of yet another revolution in the fleet industry: technological progress is about to deliver huge strides forward in new mobility modes – from car-sharing over telematics to autonomous driving – great ideas whose time has now come. It's a future that feels as new and promising today as international fleet management must have felt back at the close of the 20th century.

No way back

The internationalisation, or better globalisation, of fleet management is not at an end. There are lots of opportunities to be grasped, in unserved markets and market segments, through new technologies, by both fleet suppliers and fleet customers. But change will not be linear: new developments in mobility and technology will transform the fleet industry beyond recognition. The only thing we can be certain of, is that the fleet future will be very different from the present.

For the international fleet suppliers, there is no way back. The international business represents nearly half of their portfolio, in some cases even more. The globalisation will continue, with large corporate customers acting as trailblazers into new markets.

However, progress will not be smooth everywhere. There are limits to growth. Some are infrastructural. For example, in some less developed nations in Africa, it is extremely difficult, if not at present impossible, to set up a nationwide network of service and maintenance stations. In Asia, it could be the very low cost of local labour that prevents the large international lessors from setting up a proprietary network – because it would be prohibitively expensive by comparison. And in any case, the potential pool of benefit car users will be relatively small in emerging markets, because wages are low.

Although some in the industry may still see them as threatening the status quo, new, alternative mobility modes may be the answer. These solutions will eventually permit to offer transport at a much lower cost, be it via car-sharing, two-wheel mobility, private lease concepts, or other (multimodal) solutions. And that will open up interesting possibilities, also in potentially fast-growing emerging markets.

New mobility solutions are a global issue, but are trialled and introduced according to local circumstances. Fortunately, Think global, act local is a motto by now well familiar to global fleet managers.

In the coming years, they will be the first to put technological progess into practice, thus shaping not only the future of global corporate mobility, but of global mobility per se.

COMMENTS (1)

A long way from 1997 to 2017.... and much more to come from globalisation and innovation. We can foresee an interesting future ahead of us! Pascal Serres
 2017-06-20 15:06

CV Bloggers

Steven Schoefs
Nexus Communication - Chief Editor - Fleet Europe

For the past three years Steven Schoefs has been Editor in Chief of Fleet Europe. In this role he is responsible for the editorial content Fleet Europe's magazine, its website www.fleeteurope.com and the annual Fleet Europe Forum & Awards, the platform for sharing and exchanging knowledge among decision makers and peers in the fleet industry, held at a different location in Europe each year, and attracting over 500 fleet managers, owners, experts and others with an interest in fleet At the heart of his editorial philosophy is the quality of content and the search for new fleet management developments and trends, whether it is in terms of product, services, legislation, mobility issues or market evolutions. Steven also coordinates the International Fleet Managers' Institute (IFMI), a platform for sharing and exchanging knowledge among peers in the fleet industry. He is also involved in strategic and budget issues and for managing the team of company and freelance journalists. Steven has always worked very closely with Caroline Thonnon, the Business Development Director and herself a recognised authority on the fleet business.

Steven Schoefs blog will focus on key trends and developments within the European fleet market and the automotive market, as well as on the evolving role of the international fleet manager.

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