Fleet News

Manufacturers are finally waking up to global strategies

CAR manufacturers were left in no doubt of the holes in their global fleet strategies two years ago at the Automotive Congress Europe.

In a candid presentation, Maureen Allgood, Philips Electronics' international category manager, lease cars, told ACE delegates that manufacturers' global services remained a long way short of their promises.

At that time, demand for international deals was running ahead of manufacturers' ability to satisfy it, although today Allgood's update report is altogether more positive.

'Manufacturers have changed and got themselves much better organised,' she said.

'I am seeing proper structures with European regional offices. Where once it may have been a one-man-band, there are now proper departments able to cope with international contracts.'

This does not mean that there are no more major areas for improvement, but competition for global business has intensified.

While GM and Ford have long had dedicated international fleet sales operations, Allgood said the catch-up by smaller manufacturers had been spectacular as they appreciated the market opportunities presented by large multi-national organisations.

Philips, for example, operates 10,000 cars in Europe and a further 3,000 around the world - significant volumes for any manufacturer, large or small. But such contracts are neither easy to win, nor straightforward to manage, requiring dedicated account management facilities to ensure a win-win situation for both customer and supplier.

'One of the major issues was getting manufacturers to recognise that they could not just dictate to large organisations,' said Allgood.

'They have to put the right proposals in place to get people to change.' This has forced car makers to swallow their pride and accept multi-supplier status - 100% sole supply is simply an unrealistic ambition when serving multinational companies of the size and sophistication of Philips.

Similarly, manufacturers have a major role to play in selling a centrally-negotiated agreement into local purchasing departments. As Allgood conceded, she can open doors for manufacturers' national fleet sales teams to speak to Philips' operations, but those sales teams also need to offer superior levels of support in both pricing and value added services (such as access to demonstrator vehicles) to secure local business.

'I make sure our purchasing managers in each country are properly informed about contracts and that the leasing companies reflect those benefits in their lease rates,' she said.

Yet Allgood still identifies one particular area that remains ripe for improvement.

'The one thing that remains a problem is data. If we want to put in a claim for volume-related bonuses we have to give car makers every single registration and chassis number for every vehicle right across Europe,' she said.

'They want to find a way to make it easier, but they have not yet found it. Our manufacturer strategy is working, however, and they are seeing an increase in their share of our fleet.'

Ironically, data and fleet details present much less of a problem for leasing companies - even if gaps in a uniform IT policy still exist within their networks - yet persuading Philips' local purchasing departments to switch from their current supplier has proved more testing than the implementation of centrally-negotiated deals for cars.

The electronics giant has signed a global arrangement with two suppliers for off-balance sheet lease and fleet management agreements, and Allgood is engaged in convincing Philips' national purchasing teams of the benefits of the two appointed leasing competitors.

She is also preparing to turn her attention to the purchase of secondary supplies, such as tyres and glass, having seen the successful implementation of a worldwide fleet insurance contract, built on the back of a broader corporate insurance policy.

'Sometimes the best you can get is a good country supplier, and it does not always work to raise it to a global level,' said Allgood.

She has been pleased to discover Philips' purchasing teams that have already struck national deals for windscreen replacement or tyres, and is quick to caution any pan-European fleet decision-maker not to assume they have a monopoly of knowledge or experience.

After 20 years working in fleet management with companies such as AGFA, Thorn Security and Philips, Allgood remains excited by the strategic opportunities opening at Philips, and the possibilities of striking better fleet arrangements at an international level as suppliers finally catch up with their promises. (April 2000)

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