Fleet News

Face to face: Arma stretches boundaries with new Euro-style leasing

THE fleet market in the UK is often seen as the most advanced in Europe, if not the world, because of its place at the heart of company culture. If you try to name any aspect of fleet management or operation, then it has already been tried and tested in the UK, according to popular opinion.

But that is not the view of Liam Donnelly. In a claim that will boil the blood of Daily Mail readers everywhere, he believes Britain could actually learn from Europe when it comes to vital aspects of fleet management.

In particular, British leasing companies, even multi-national ones, are ignoring important innovations by their European neighbours in expanding leasing to cover the entire cost of a vehicle. So a fleet decision-maker signing up to a lease would pay for fuel and insurance within a monthly bill, effectively covering all costs.

And to prove his point, Donnelly has put his money where his mouth. In 2000 he backed the launch of one of Britain's newest leasing companies, Arma. At launch Arma, the Greek word for chariot, determined to 'stretch the boundaries of contract hire', according to its motto.

The launch was backed by its multi-national parent company, which bears the same name, to the extent that company culture successfully developed in its Dutch headquarters has been transferred lock, stock and tulip to the UK. There are no pictures of cars on the walls, nor models on desks. Instead, works of art grace any available space, an indication that the company wants to expand employees' minds, as well as its fleet size.

Arma is a privately-owned firm and since its launch in September 1989, has expanded to operate more than 19,000 vehicles in Belgium, the Netherlands, Luxembourg and now the UK, where the fleet size has grown to 900 units.

The UK operation, based in Oxford, has direct links to its Dutch parent company, allowing it to take the template for its business processes and transfer them to the UK. Indeed, while work is carried out on computers in the UK, the databases and systems they interrogate are in Holland.

Donnelly, the firm's UK managing director, said: 'We have a significant pedigree behind us, even though we are new to the UK. This is not a 'me too' product. We are offering something new to customers, which has been tried, tested and is successful in Europe. We don't just quote on a vehicle for contract hire, because that ignores the real costs involved in providing a car.'

Instead, the company has a five-point strategy for working with fleet customers. Firstly, Arma helps develop a company car policy that avoids selecting cars simply on their contract hire rate.

Instead, predicted fuel costs and insurance can be added to the equation to give a more realistic picture of what it costs to provide an employee with a vehicle. Secondly, that can be implemented on behalf of the client.

Thirdly, the firm places great emphasis on on-going driver contact, with approval from the fleet customer, to ensure that each vehicle user understands the true costs of running a car.

For example, if drivers have an accident, they will be told how much it cost the company to repair the vehicle. Depending on the service the fleet manager has asked for, drivers can also be told whether their fuel economy is meeting manufacturers' predictions and whether their car is costing more to maintain than necessary.

This is where the fourth aspect of the service comes in, which Donnelly claims is one of the most over-looked parts of the contract hire offering.

Fuel and insurance can be included in the monthly rental, based on the annual contract mileage, creating a truly fixed cost car. Drivers then fill in business mileage returns, so that if they aren't qualified to receive free fuel for private mileage, they can pay for any non-business fuel they have had.

And there are regular reconciliations to examine predicted fuel use and actual use, so that any financial differences can be settled.

Finally, regular reports provide at-a-glance summaries of the cost of each vehicle, including fuel use, maintenance, insurance and simple colour-coded exception reports. At every service, the condition of the vehicle is checked and added to the regular report, so the fleet manager knows whether he or she is facing a charge for excess wear and tear and can make any financial adjustments, while also taking action with the driver.

If fleets want more information, they just check the website (www.arma.com), which is constantly updated.

Drivers can also view web-based information about their cars. Donnelly said: 'This is the art of the possible. The problem with the industry at the moment is that people are only looking at one element of the service. We say to customers not to just work on leasing rates, when that is simply not the true cost of providing the vehicle.

'When we help create customers' car policies, we always include fuel and insurance in the cost of providing the vehicle, even if they don't take those services from us.' The new approach to business is winning support in the industry, with 20% of customers taking the insurance product and 35% opting for the all-inclusive fuel package.

Donnelly is confident of further growth, particularly with the long-term support of the parent company. His 10-year business plan sees the firm reaching a potential fleet size of 10,000 vehicles.

And the company's culture will be a vital part of that growth, he believes, based on the Arma Verpakking model, which is Dutch for wrapping.

Using the premise that 'you can't change the wrapping', it sets out Arma culture and how employees fit in, from their interaction with the customer to training and even dress codes.

Donnelly added: 'If you look at where we are different, then there are 15 to 20 areas. Although some new players in the UK market have been unsuccessful, they did not have the different product offering we have available, or the culture and backing that goes with it.'

Liam Donnelly fact file

  • 1972-75 Business degree, Strathclyde University
  • 1977-84 General manager, Grand Metropolitan (airport retail business) Edinburgh and Aberdeen
  • 1984-89 General manager, Aramark (offshore management services) Aberdeen
  • 1989-94 Managing director, Chevrom Foods (juice/coffee importation) London
  • 1994-2000 Managing director B2B, Lex Vehicle Leasing
  • 2000–present Managing director, Arma UK
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