ALD moves to Global Fleet Services following Societe Generale reshuffle

Societe Generale has started the consolidation and reorganisation of the fleet leasing companies it acquired from Deutsche Bank with a name change.

Temsys and all the subsidiaries of ALD bought by the French bank at the start of this year, have been renamed ALD Automotive. The new name will accompany the Societe Generale logo.

This rebranding is designed to be 'higher profile' and will replace the seven or eight current brand names within the group at the moment, including Temsys (the name of the French subsidiary), ALD and Interleasing.

Societe Generale would have liked to have called its new international leasing network Interleasing, but it would have encountered difficulties erasing the name of its largest member ALD - its German subsidiary which is the number one player in the German market with strong national recognition.

Moreover, the Interleasing name is not owned by ALD group companies in certain markets, such as the UK where Interleasing is controlled by General Motors Acceptance Corporation or in the Benelux region where the Interleasing name belongs to the Athlon group.

The Interleasing brand was also the umbrella name for the network that linked ALD to the American fleet giant Wheels, a partnership that ceased at the end of August.

But Societe Generale will remain the owner of the Interleasing name in France, Germany, Spain and Portugal, which may force the international Interleasing network to seek a new name.

With a total of 298,000 vehicles either funded or managed in eight European countries and Morocco, ALD automotive has decided to participate in the worldwide Global Fleet Services network.

GFS principal members include ARI in the United States (with a fleet of 360,000 vehicles) and Orix in Asia Pacific (which has a fleet of 360,000 vehicles).

Jean-Claude Renaud, former president of Temsys and now head of the new ALD Automotive holding based in Paris said: 'Our objective is to be autonomous in Europe.' This ambition raises questions about the future participation of Lex, the GFS partner in the United Kingdom.

'We have an excellent relationship with Lex,' said Renaud. 'We are going to manage perfectly with the fact that we have two GFS members in one country. Customers will be directed towards one of the two partners depending on the type of fleet, and its needs. There will be cases of arbitration and we will operate on a gentlemen's agreement.'

The new ALD Automotive group already appears like a heavyweight player with 6% of the European market, ranked fourth behind LeasePlan (595,000 vehicles), Arval PHH (owned by BNP Paribas with 536,000 vehicles), and Avis Fleet Services (part of GE Capital Fleet Services with 375,000 vehicles in Europe).

Renaud forecasts that outside the subsidiaries of car manufacturers' captive finance houses there 'will only be three or four major players in Europe within five years'.

To be one of these 'happy few' and reinforce its position and its European coverage, ALD Automotive is going to continue its organic growth, by leaning on the support of other financial subsidiaries of Societe Generale, and its growth through acquisition.

Its priority is Benelux where it envisages an acquisition in the near future.

'We don't have to buy one of the major players. We would be happy with a company of 10,000 vehicles,' said Renaud. 'As in the UK, it will be a case of development, and we will give the company there all the tools to grow.'

But with such growth, one of the most immediate worries for ALD Automotive is the 'digestion' of its acquisitions, a point underlined by Jean-Francois Gautier, director of specialist finance at Societe Generale.

He has given the new group a target to improve its return on equity to 20% in 2004, from 11.6% today. He said it was 'essential to reduce costs' by exploiting every synergy available.

The product line-up of ALD Automotive will revolve car leasing, fleet management, and car finance for private individuals and small businesses. A unit in Paris will be dedicated to large accounts.