Fleet News

Clayton outlines GMAC's bold plans

GENERAL Motors Acceptance Corporation Financial Services may have been the last major manufacturer captive finance house to enter the pan-European multi-marque leasing market, but the scale of its entry has left no one in any doubt of its ambitions.

GMAC had fallen behind the competition, with Ford Credit driving forward its multimarque fleet strategy through Hertz Leasing, DaimlerChrysler Services developing its vehicle leasing portfolio through debis Car Fleet Management, Renault Credit International advancing through Overlease, and BMW Financial Services through Alphabet.

But GMAC's acquisition of Interleasing UK (previously Arriva Automotive Solutions) gave it the instant critical mass of 70,000 vehicles on lease or fleet management, and valuable expertise in one of the more mature European fleet markets.

GMAC also has multimarque ventures under the Master Lease brand in Germany, where it operates a fleet of 20,000 vehicles, as well as smaller operations in Austria, Greece, Italy, Portugal and Spain.

These report into Hans Hopman, head of GMAC's mainland European fleet markets, and he in turn reports into Len Clayton, the new chief executive of both Interleasing UK and Master Lease.

'We are looking to be in every European country, although early entry to some is more critical than others,' said Clayton.

'We have a tremendous ambition to expand full service leasing around the world, and enormous resources to do it.'

He suggested Eastern European markets were high on the company's agenda as the European Union opens its doors to Hungary, Poland and the Czech Republic, but added that GMAC was considering acquisitions and new start-up ventures across mainland Europe.

Wherever GMAC is represented or opens offices, two guiding principals apply: independence from General Motors the manufacturer; and a commitment to a multimarque approach.

'GMAC sees its objectives as different to those of GM,' said Clayton. 'Our primary products are finance and full service leasing. GMAC is a standalone business and has moved from being a sales and marketing weapon to assist GM products reach the market, to become a company that provides financial services to anyone that wants them, so why limit ourselves to one make of vehicle?'

He said Interleasing and Master Lease would treat General Motors and its dealers in the same way that the leasing companies treated any other manufacturer, applying the same vendor management programme.

'We will not countenance any discussion with General Motors on our residual value forecasts any more than we would with any other manufacturer,' said Clayton. 'This is a truly independent business and both parties have to realise that it's healthy that way - any change could destroy General Motors' relationships with other leasing companies.

'And customers must view our advice and counsel as independent - we need to be able to switch customers from General Motors product to another manufacturer if that is best for the customer.'

To emphasise this freedom and independence, new Master Lease operations will establish separate standalone businesses away from GMAC and GM offices.

Human resource, technical functions and treasury resources will be specific to Master Lease, even to the extent of duplicating GMAC facilities, to ensure new operations develop product and IT strategies that directly meet the needs of their markets.

Compromising product development merely to take advantage of existing GMAC infrastructure and resources would soon prove a false economy, according to Clayton.

He added that local Master Lease companies will also be free to select and develop their own IT, but emphasised that there would be a high degree of commonality among the group's systems.

'IT development should not be done centrally. It must be local to meet local needs and deadlines,' he said.

'But you could commonalise databases, so everyone used Oracle for example, or establish a maximum size for local area networks.'

The essential element, he added, was the ability to produce management reports to the same format, and the creation of common communication systems with customers. Interleasing and Master Lease will apply a similar philosophy to product development and business processes, with local operations sharing best practices.

These may, however, lead to different conclusions in each country. In procurement, for instance, the mechanisms for setting up agreements, applying performance indicators and measuring success can be common between countries even if the choice of supplier remains local.

And while Master Lease operations on mainland Europe may benefit from Interleasing UK's buying power for commodities such as tyres, Clayton believes local management control of local suppliers in many instances delivers more benefits than the automatic exploitation of bulk purchases.

In a similar vein, Interleasing has exported its lease rental pricing model to Master Lease companies, although local modifications mean this does not produce the same lease rates in each country.

This application of a common approach creates a transparency to centrally negotiated supply contracts, even for customers who want to be invoiced in local markets. 'Customers are saying they want their fleets invoiced locally, but want us to provide centralised consolidated reporting, generally in Euros or Dollars so they can make a comparison between their units,' said Clayton.

'We are now seeing an increase in demand for co-ordinated pan-European supply from our big customers who want a consistent approach to their fleets.'

Having left the global Interleasing alliance in January, Interleasing UK is under pressure to re-establish its own international network, this time under the GMAC umbrella, although Clayton insisted the company had not lost any customers because of its new situation.

In the long term, however, his vision is clear. 'Success is not a massive geographic spread with no penetration. Success will be six key markets where we are growing and threatening to become dominant, and then we will investigate opportunities for expansion through acquisition and green field launches,' he said.

'Master Lease is capable of growing into the 30,000 vehicles next year (from 27,000 at present).' (August 2000)

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