The past year has been marked by a strong consolidation among multi-marque car leasing companies in France.

First, Arval (itself, a result of the merger between Paribas and BNP) took over Europcar Lease before merging with PHH; then LeasePlan (owned by ABN AMRO Lease Holding) took control of Dial, and finally, Temsys (part of the Societe Generale group) acquired ALD, which trades as Interleasing in France.

These three important mergers have had major repercussions at the companies involved. Staff have had to move, the duplication of certain services (such as local sales operations) has been reduced, while new departments have been recruited (particularly call centres).

In addition, management teams have been overhauled, IT systems, platforms and procedures have been redesigned, and sales presentations have been rewritten.

'The transition period has been characterised by hesitation among the players, identifiable through a relative fall in quality and activity,' according to independent specialist Edouard Rance.

Fourteen months after Arval absorbed Europcar Lease France - whose brand name was 'returned' after a few months to its owner Volkswagen - the new Arval PHH France admits it has not yet finished the integration project, even if the most difficult issues are now behind it.

'Customers no longer know where to send tender documents,' said Rance. In theory, three major leasing companies should have disappeared, but this has not yet happened.

One fleet, for example, sent a tender document to a leasing company and then received a reply from the firm this lessor had just taken over.

Another fleet, which had chosen a leasing company after a tender process, had to postpone its first orders for six months to allow the leasing company time to reorganise its IT systems.

These abnormalities came on top of the problems created by the enormous outsourcing contracts awarded by France Telecom and La Poste, which forced the largest French leasing companies to take on board huge volumes of vehicles in relation to their original fleet sizes.

'This has led to a number of disappointed customers who are now looking to deal with smaller leasing companies offering a more personal touch,' said consultant Bernard Roland.

The trend was confirmed by Yves Rousselle, director general of ING Car Lease, which is still a small leasing company in France (managing a fleet of 5,000 vehicles), but which is enjoying a sharp increase in its market share.

'Clients are paying more attention to, and are more receptive to, our message,' he said. The radical reduction in the number of large leasing companies has had one further consequence: upward pressure on lease rates. Mid-sized leasing companies that had been the most aggressive on price have now been absorbed into wiser leasing companies.

(July/August 2001)