Thinking small has proved big for company that started life renting out premium cars. Now it has a fleet of 2,400 vehicles.
Small fleets are big business. Big for manufacturers, leasing companies and rental firms which are equally eager to court small-to-medium enterprises (SMEs) with their cars, products and services.
It is also one of the hardest markets to crack. Quantity is the maxim; it’s the cumulative effect of winning business with thousands of companies operating a handful of cars or vans that adds up to success.
This takes resource and dedication – or relationships with companies better geared to target SMEs, such as brokers.
Most leasing and rental companies have opted for a combination approach; some have put all their eggs with brokers.
The traditional broker-fleet relationship is transactional, with fleets flitting from company to company chasing the best deals.
Some brokers have sought to break this mould by putting greater emphasis on fleet management services, attempting to mirror the extended product and service portfolios of the contract hire companies.
AMT Group believes it has created the most comprehensive service yet, moving beyond its rental roots.
Offering everything (rental, short-term lease, contract hire, asset finance and ownership) from one day to five years, AMT’s new consultancy team provides free of charge advice to create bespoke solutions for fleets.
Neil Burroughs was appointed sales and marketing director in June 2016 with a remit to devise and launch the new business.
“We recognised a year ago that we wanted to penetrate the market with something new and different,” he tells Fleet News at the company’s head office in Leeds.
“Many businesses are siloed in contract hire, purchasing or asset finance and they are transactional.
“I wanted to give value back to the SME. So we launched a free, independent, unbiased service offering everything in one place. We built a management team and put in a field-based consultancy team.”
AMT was set up in 1981 as a rental provider for premium cars, and now trades from seven offices across England and Scotland.
It aims to provide aspirational vehicles at a similar price to less aspirational brands, with a fleet of 2,400 vehicles. It also brokers 1,200-1,500 cars per year on contract hire via a panel of five funders.
The rental and leasing divisions used to operate independently; now they have merged to support the aims of the consultancy operation, AMT Vehicle Solutions.
Burroughs’s claim is “the right vehicle at the best price” which has seen the company move into volume brands and light commecial vehicles to accommodate his growth aspirations.
He plans to increase the rental fleet to more than 4,000 vehicles over the next four years, while quadrupling the size of the contract hire division.
AMT Vehicle Solutions consists of four consultants, but Burroughs wants to double that number as quickly as possible.
Their role is to get under the skin of a company (see panel) to understand its operations and its short-, medium- and long-term business objectives to create a fleet solution that meets those needs.
They effectively act as a implant, visiting the customer on a regular basis to guide them and doing all the research for them.
“It’s not just about the raw facts,” Burroughs says. “It’s the soft facts – the company culture, what’s important outside of vehicles – that’s the information we gain upfront to truly understand the business.”
The initial meeting can take between four and 15 hours and comes at no cost to the business.
Something for nothing – what’s the catch?
“Our message is that this is a long-term relationship; it’s not about today,” Burroughs replies.
“Yes we have supply channels , but we have also gone into companies that outright purchase and done a full assessment and, because they have strong terms, we advise them to maintain those relationships.
“Things might change in the future and they will remember us as a trusted partner. It’s a long game; there is the potential for them to become customers for years to come.”
Most of the solutions AMT introduces result in a mix of contract hire and rental, with its matrix based on wholelife costs, flexibility, usage and operating cycles.
Flexi-rental – one to 12 months - is growing in popularity due to business uncertainty caused by current trading conditions.
Burroughs believes many SMEs have potential to realise significant savings by adopting tailored fleet solutions.
“Often SMEs give the role of acquiring and running the fleet to someone not specialised in it, for example, HR or finance, and they don’t know all the tax implications, legislative changes, emissions charges and implications of giving cash allowances,” he says.
“We help them to understand the cost and the impact on the business.”
One £100 million turnover construction firm, which has just taken delivery of its first tranche of vehicles through AMT, from the chairman’s Bentley to a number of light commercial vehicles, has made a six-figure saving on the first van deal alone.
AMT’s typical customer has between five and 150 vehicles; they have in common a lack of internal expertise.
Usually, someone has been given fleet responsibility and it has become a drain on their time.
“Often they are spending 40% of their time on fleet, but they have other plates they are managing,” Burroughs says.
“Planning ahead is an issue so they don’t benefit from the cost savings to the company or the benefit-in-kind (BIK) savings to the driver.”
Arguably one of the biggest challenges facing AMT is to change the SME cultural mind-set, which is predominantly one of self-control.
“We have to get them to recognise the complexity and risk in the market,” Burroughs says. “Our prospects don’t know what they don’t know. But we do.”
Fleets need to plan ahead to get the best deal
Planning is crucial to extracting maximum value – and the lowest price – when procuring new vehicles for the fleet.
Burroughs says: “If you need a vehicle in two weeks’ time, you won’t get the best price. If you plan ahead, you will.”
However, value is about much more than price, which is where AMT’s experience comes into play.
“What might appear cheap today might be a bad decision in three years’ time,” Burroughs says. “We have the knowledge to prevent that happening.”
He adds: “We also see leasing companies constantly evolving with their prices. We plan batch purchasing where possible to get the maximum value.”