Survey: 40% of international fleets work with Local Leasing Heroes
Looking to increase efficiency and save cost? If youre in International Fleet Management, harmonising the supply chain is an obvious target. So why work with local suppliers? Out of necessity, is the short answer but these local heroes also offer certain advantages.
Where possible, international fleet managers prefer to work with a select number of international suppliers: this keeps things simple, ensures professionalism, and offers the chance to benefit from economies of scale. But the world is big, and no supplier covers it in its entirety. If your company is present in various markets on multiple continents, chances are that it is impossible to work exclusively with fleet suppliers from this so-called ‘global’ category. Out of necessity, you turn to local fleet suppliers.
Global Fleet previously examined why working with these so-called local heroes can be an advantage to your fleet management, and how best to prepare for success when you plan to work with them.
But how many international and Global Fleet Managers actually work with these local fleet suppliers? The answer is: surprisingly many. Last month, Global Fleet organised an online survey on the subject, and no less than 41% of the respondents– all managers of multinational fleets with an average size of 10,700 vehicles – replied that they work with local fleet suppliers. Why? To secure the efficiency of their vehicle fleet, and ensure that their mobility management is in line with corporate objectives.
Genuine added value
And where do global fleet managers partner with local suppliers? The answer: on almost every continent. Of course, working with local heroes often is a must-do instead of anything resembling a positive choice - especially in the less mature markets and remote countries, where the fleet management industry is new and only just emerging. But the response from our international fleet community indicates that in Europe (especially in Germany where captive leasing is preferred, and Eastern Europe), in Asia and Africa and in South America, reaching out to local suppliers can be of genuinely added value.
So, what are the reasons for international fleets to work with local heroes? Firstly, and most obviously, the fact that the so-called international suppliers lack a geographic presence in a particular market; and not just with regard to leasing and fleet management, but also when it comes to fuel, up-fitting and vehicle equipment. Here too, the lack of suppliers with a global presence forces multinational fleets to opt for locally-based suppliers and experts. But even when international suppliers are present, it can be good to also bring the local suppliers into play – most of all in less mature or emerging markets.
Working with local suppliers need not only be driven by a negative – the absence of global suppliers – but can have a positive motivation too. In fact, half the respondents to our survey said that working with local suppliers was motivated by strategic and operational advantages. These included: local market knowledge, an understanding of the dynamics of a specific market’s economy, culture and other particularities, supplier reactivity in the market, and increased flexibility in terms of products and services aimed at local customers.
The final argument pro local heroes has to do with Remarketing. Since local suppliers know their markets best, they also have close relations with local customers, traders and dealers. This facilitates the remarketing process and can lead to optimised residual values, and eventually more attractive contract terms.
So, can working with local heroes be recommended under all circumstances? Well, every coin has two sides. Respondents list a few negatives, the biggest being: the fact that a more diversified supply chain adds complexity, not just to the overall supply process, but also to reporting and unified data provision. Other problems: the fact that it is very difficult to manage this varied bunch of local suppliers centrally – let alone secure their compliance with group-level standards of health and safety, quality and environmental care.
A final point, on the 60% of our respondents who do not work with local heroes at present: they indicate that they have no strategic intention to do so in the near future, and will only do so if the market reality in certain localities pushes them to accept and implement this option. Or – and this is interesting – they will do so if these local heroes can prove that their systems produce an efficient fit with their international, centralised fleet management systems, and that they understand the importance of decisions taken at international level.
You want to discover the fleet suppliers you can work with internationally and local. Visit our Global Fleet Directory and find the partners to meet your corporate fleet needs. | 28/07/2017 | Steven Schoefs