Fleet News

Award-winner’s profile: Kwik-Fit Fleet

AS far as welcome presents go, the gift that greeted Mike Wise in his first week as acting head of Kwik-Fit UK was something of a double-edged sword.

According to the computers churning out the figures at its headquarters, business at the firm hit an all-time record for July, just as Wise took the helm.

As an opening fanfare to your arrival, it’s great, but how do you follow that? With more of the same, according to Wise.

Speaking at the firm’s headquarters in Edinburgh, he said: ‘The organisation has got a very positive team behind it at all levels. I have been visiting the key centres over the past few weeks and I am very impressed. This is vital, because people don’t plan to buy a tyre. It is a distress purchase and if your staff make the experience pleasant, then that is a really important factor.

‘My role is running the organisation and there will be a lot of new challenges ahead, but there will also be a lot of opportunities.’

Wise’s move to the top job came swiftly after the announcement that Kwik-Fit parent firm CVC Capital Partners had acquired the AA in a £1.75 billion deal. It made the purchase in conjunction with private equity group Permira Advisers.

Following the purchase, Kwik-Fit chief executive Tim Parker moved to take up a similar role with the AA.

As a result of Wise’s move, Nigel Davies, Kwik-Fit Fleet’s director of corporate accounts, has taken interim responsibility for fleet business along with Chris Higgins, Kwik-Fit Fleet’s finance director.

Other senior management changes at Kwik-Fit included finance director Ken McGill taking over responsibility for the company’s European businesses and Kwik-Fit Financial Services. Its director Paul Boulton, who will report to Wise, will continue to head up retail operations.

Wise added: ‘We have to drive sales and profit forward, but at the same time ensure service levels remain the highest in the industry.’

Wise certainly has the pedigree for winning, arriving from a successful term at the head of Kwik-Fit Fleet during which the firm regained its crown as Best Fast-Fit Company in this year’s Fleet News Awards.

The judges were glowing in their praise, saying: ‘A significantly overhauled business now focuses on its core proposition of providing key fast-fit services, based around tyres, batteries, exhausts, shock absorbers, brakes and safety checks.

‘It sets high standards for customer service, invoice accuracy, customer satisfaction, parts delivery and follow-up calls.

‘Its outsourcing services, including management and safety checks, have secured major industry support and it is sole supplier to Motability, Europe’s biggest fleet. Furthermore, its Business Drive card sets the standard for simplified purchasing.’

Wise added: ‘It was really good for us to win. I believe it was down to the enthusiasm and professionalism of the fleet team. Whatever the size of the fleet they are dealing with, they always try to exceed expectations.

‘We also don’t forget that the centres have to deliver the service. So if a fleet manager wants to change tyre brand, then you need discipline in the service network nationwide to ensure that policy is delivered in the service bays.’

It is certainly proving successful, with growth expected to be a double-digit percentage this year, following a record year last year (see article below).

Although the fast-fit industry is incredibly competitive with very tight profit margins, it is also in the rare position of benefiting from both economic growth and recession.

When the economy is booming, people tend to buy more cars and cover more mileage on business, which leads to increased demand for tyres. But in recession, they keep cars for longer, which in turn leads to more tyre demand further down the scale.

Whatever the economy holds, Kwik-Fit already has much of its plan in place. Wise said: ‘We are running a lot of pilot projects at the moment, including making the customer experience that much better.

‘We will be concentrating on the core and revitalising the network to build on our success.’

Among core areas of growing importance is tyre management, with about 750,000 vehicles now under contract to Kwik-Fit.

Safety checks are also a key area that will provide opportunities for expansion, backed by its sponsorship of a major risk management report, released later this month (Fleet NewsNet, July 1).

Among the fleets using the pioneering service is the Inland Revenue, which has fortnightly safety checks for its 900-strong pool car fleet and is also making the service available to its 2,100 company car drivers.

Interim safety inspections of the pool fleet in particular are vital since vehicles are used by numerous employees, often for a series of short journeys on the same day with different drivers.

Inland Revenue pool cars are located at 260 offices across the UK and Kwik-Fit Fleet was brought in to carry out the checks.

Wise added: ‘This is becoming even more important with duty-of-care requirements. It is a huge responsibility for companies to make sure their employees are safe on the road. ‘It is also part of a wide-ranging solution that makes our services unique.’

The firm is also preparing for future challenges that technology will bring, such as the growing use of run-flat tyres and tyre pressure monitoring systems in vehicles.

Wise added: ‘A top-to-bottom review of the whole company following CVC’s acquisition resulted in a total focusing on fast-fit activities and the disposal of operations that did not fall into this category.

‘That re-energising of our entire focus on core activities has resulted in a string of major contract wins. But we are not complacent. Innovation and service delivery will continue to be the linchpin of our success going forwards.’

New contracts help boost fast-fit firm’s turnover

KWIK-FIT Fleet has recorded record business volumes in the first half of 2004. Turnover was £65.1 million, up 19.2% year-on-year, helped by major recent contract wins.

Among them was the signing of a five-year £30 million solus contract to manage the repair and replacement of tyres across the 400,000-strong Motability Operations fleet.

There has also been a two-year extension, to December 2005, of the 100,000-vehicle Lex Vehicle Leasing contract.

It is also running a multi-million pound tyre management authorisation and invoicing contract with multi-marque fleet finance company Alphabet.

There is a three-year deal with Bank of Scotland Vehicle Management to provide the majority of its tyre repair and replacement business, along with all tyre authorisation.

Other contracts include a three-year pan-European tyre repair, replacement and management contract with LeasePlan, covering 680,000 cars and a deal with GE Capital Fleet Services covering more than 60,000 vehicles.

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