linkedin_signin   login  register
 
linkedin_signin linkedin_signin linkedin_signin    
Home > China

Qigan Lu, ALD Fortune Auto Leasing & Renting: Digitisation will drive fleet and mobility management in China forward

Qigan Lu, General Manager of ALD Fortune Auto Leasing & Renting, explains the current state of the car leasing market in the largest car market in the world, China.

How many vehicles do you manage in China?
"It is currently around 3,000. These are spread across the whole of China, but with a concentration in the major cities of the east, such as Beijing, Shanghai, Shenzhen etc."
 
Is it possible to say how many fleet cars there are in China?
"The market is still extremely small, and I would say the true fleet market under long term leasing is probably around 100,000. Some companies offer long term leasing and also short term rental, but these are not really our competitors."
 
ALD Fortune has 3,000 lease cars out of the 100,000 total. Do you have any idea how large the non-leased fleet market is?
"The figures are not available, but I would estimate 500,000 to 700,000."
 
This means that the majority of fleet cars are purchased, not leased.
"Yes, but many of the large companies are beginning to de-fleet in terms of selling their purchased cars, and outsourcing instead. This trend started at the end of 2014, but the companies do not necessarily know what sort of outsourced service they want – short term rental, leasing, public transport… Some companies are giving their staff allowances of maybe 2,000 yuan a month to use for chauffer-driven cars or taxis. But this sum is far too little to rent a car for a month. So the reform has started but it hasn’t settled down yet."

What sort of customers choose full service leasing – international, Chinese…?
"Up to three or four years ago it was mostly, though not exclusively, multi-nationals. Nowadays, there is more of a mix, although some 65 or 70% are still multi-nationals. The rest tend to be mostly state-owned and large Chinese companies."
 
Is the full service leasing product you offer in China the same model as ALD Automotive offers in Europe?
"For multi-national companies we offer what they are used to – cars with maintenance, insurance and other services. One of the main differences is that in China we also offer driver services. Many international companies have personnel who don’t speak Chinese  language, and they have to rely on locals who can obviously understand the road signs and so on."
 
Which are the most popular car brands in leasing?
"Multi-nationals, large corporates and state owned companies tend to choose premium brands such as BMW, Mercedes and Audi. For sales and after-sales staff, however, more normal brands and commercial vehicles are preferred."
 
Is it the case that non-Chinese brands are preferred by both companies and Chinese people?
"Yes, this is still the case, and mainly because of quality and maintenance issues. It is also the case that while some foreign brands are directly imported into China, most of the major foreign brands have joint ventures and manufacture their cars here in partnership with local brands."
 
Many Chinese rent-a-car companies offer services. How does ALD Fortune stand apart from these?
"ALD International is present in over 41 countries and is experienced in professionally dealing with large companies and their needs. Local Chinese companies are able to service their local markets, but do not have the experience of full service leasing. We are able to use cross-parameters to work out the full costs for the client, whereas the local companies are more or less limited to the rental price and some other costs. They do not have a cost-base calculation capacity."
 
Is there professionalism among fleet managers in China?
"They tend not to be familiar with the leasing market, so we have to help them, including in model choice. We also note more attention to driver safety among multi-nationals than local companies, for example."
 
There is, therefore, a lot of potential for you.
"Yes, but if the companies opt for some form of public transport, including taxis, they will not go for long term leasing, which is our main product. But we are also trying to introduce corporate car-sharing here, especially with state-owned companies. We see this in other countries and will try and adapt it to China this year."
 
Are there any other mobility initiatives that may be tried here?
"We are looking at all-electric cars, which in Shanghai and Beijing, for example, receive free number plates. That gets over one of the main problems. The authorities are beginning to set targets for the ratio of EV’s within all registrations. We have around 150 EV’s in our fleet. The main difficulty for us with regard to electric vehicles is that there is not yet a used car market, and so the residual value calculation is not easy. But with the government incentivising electric mobility, people may be ready to turn to used EV’s for the ‘number plate’ reason in the future, however."
 
What is ALD Fortune expecting to see in 2017, both for itself and the overall fleet market in China?
"We have a clear target to grow to 4,000 cars under management by the end of the year. We believe that this will be ahead of market growth, as people are not yet familiar enough with the full service leasing product. We now have 36 offices in China with 40 sales people out of 120 in total. It is not our plan to expand branches or staff. We want to increase productivity  with the existing staff, at the moment. And we need to introduce services in line with trends on the fleet management and mobility market."
 
Do you see trends for the coming years?
"Mobility is in an innovation phase and everything related to digitisation is trendy – cars plus internet plus apps, this will be important. Things will be remotely managed. We need to make sure that our services and the relation with drivers and fleet managers are supported by digital solutions and apps. So, we are looking to make our fleet management app MyALD and our car-sharing solution work properly and in respect of the requirements from the Chinese market."

Do you have a tip for international fleet managers coming into China?
"Don’t focus only on price, but also take into account the professionalism of the service provider and the quality of offered services. Some local heroes offer prices which are simply impossible to sustain. So, carefully look at the price being offered and what this price consists of." 17/04/2017  |  Steven Schoefs

COMMENTS (0)

Registration required to post a comment Registration required to post a comment
Privacy statement | General conditions of sale | © 2016 Nexus Communication SA