Astellas Pharma sources its cars from six manufacturers – Volkswagen Group, BMW/Mini, Mercedes-Benz, Volvo, Toyota/Lexus and Ford – which includes 11 brands. Each country can put as many or as few as it likes on the options list, with their decisions based on cost, brand appeal and what competitors are offering.

“We centrally agree the European contracts with the manufacturers, negotiating terms for each market and each model. We call them benchmark terms and issue them to the leasing companies and each country,” says Zammit.

“We spend a lot of time and effort on the relationship with the manufacturers. We have a European account manager for each and we hold two or three review meetings a year to review the previous 12 months.”

Transparency is a crucial element of the relationship and it works both ways. At each review meeting, Astellas Pharma shares its data with each manufacturer in terms of the cars it bought, and the profile by manufacturer, model and country.

“We say to the manufacturer ‘we bought 100 of yours but 200 of theirs’. In many ways, the market decides the cars our employees drive, but if cars are competitively priced, they will be more attractive and, therefore, more likely to be chosen,” says Zammit.

“I can’t guarantee volumes but I can be open and show them what happens. We have realistic contracts that are in line with expectations, especially on volume.

“And our review meetings are an opportunity to explain if we haven’t hit those targets. This helps them to understand our business and for them to devise a strategy for each market.”

He also uses the review meetings to discuss any issues over quality or delivery times, and to understand the model launch plans, particularly when it comes to run out strategies.

Zammit has created a total cost of ownership template based on  estimated mileage as he looks to move the European business away from a monthly lease calculation. But there are regional differences to consider.

In the UK, for example, where Astellas Pharma has 150 company cars (plus 180 cash takers), CO2 is linked to tax so drivers are more aware of low emission cars and voluntarily drive down average emissions.

In other countries where CO2 is not such an issue, such as Turkey, it is not a priority. However, the company still recognises its responsibility to address environmental concerns across its European markets.

Stage one in the new fleet strategy, which Zammit calls “the first big bang”, is now complete – moving the business to two leasing companies and restricting the car list; he is now in the process of the “second big bang” which includes extending lease periods and re-appointing some manufacturers to the choice list.

Mercedes-Benz was the first beneficiary – the end markets wanted another premium option – followed by Toyota Lexus to provide an Asian brand (Astellas Pharma is a Japanese pharmaceutical company).

The European fleet historically operated “to a guideline” of a minimum three-year replacement cycle subject to mileage conditions, typically 180,000km (112,000 miles).

“Leasing companies always have a cut-off point over which there is a severe impact on residual values and SMR costs,” Zammit says.

“We are now increasing our operating cycle to four years or 180,000km in line with industry standards.”

Switching from three to four years will reduce costs, potentially by around £80,000 a year on a 50 to 60 car fleet, depending on brands and mileage. In the UK, the savings will hit six figures.

Residual values are not affected, but SMR costs do need to be taken into consideration, including an extra service and MOT.

However, funding the car over an extra year spreads the cost which is where the savings are generated, according to Zammit.

So does he believe that the company now has costs under control? “It would be naïve to say yes. Costs change on a daily basis – it’s a dynamic market,” Zammit replies.

“Interest rates are low at the moment so we have them under control, but in the next 12-18 months they will increase and then we have to assess whether it is still cheaper to lease or do we start buying.”

Fleet costs have certainly dropped since Zammit took control. Management fees have fallen by one-third in some countries, profit margins on interest rates have risen and vehicle discounts are higher.

And there’s more to be done, including looking at unbundling some aspects of the leasing agreement including insurance which is part of the contract in many mainland European countries.

“We are also looking to increase productivity, enhance our services and reduce cost,” Zammit says. “We would rather try a solution and see if it works than do nothing. If it doesn’t work we assess why and move on. We will have enlightened ourselves and can look at other options as we look to continually improve.”