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Residual value problems start at procurement time

Sir – Your ‘Marketwatch’ article concerning discipline in fleet disposals (Fleet NewsNet, September 16) is all well and good, but a vital missing element is that of the procurement department.
While it is, of course, important to ensure vehicles being de-fleeted are prepared in the best possible way, it could be rather like trying to turn a sow’s ear into a silk purse. Imagine the scenario: a major leasing company pricing committee has just spent three days trying to accurately forecast residual values on every make and model of vehicle offered to its customers.
By carefully targeting the right vehicles it can enhance its competitiveness in the market, making sure that the residual values are realistic.
Then someone in procurement orders a batch of 100 cabriolets in October, due to de-fleet three years later in October. It is guaranteed that those vehicles will not make their residual value, regardless of condition, as the market for cabriolets is in serious decline at that time of year.
The same principle applies to poor colours, poor specifications (lack of air conditioning on Minis for example), manual luxury cars, side load doors on vans and even date of registration, all of which is controlled to an extent by procurement. It is vital that procurement and remarketing teams are in close contact with each other, in order to fully maximise residual values on any vehicles ordered.
By adopting such a dynamic ordering process much of the residual value risk can be eliminated, leaving remarketing departments to worry about the important issues of condition, timing and placement of the used product in the marketplace.

David Woods
XBG Fleet Remarketing

It’s not that simple

Sir – I write in response to last week’s letter from Kevin Delaney, who highlighted his concept that ‘The only reliable advice about drinking and driving is ‘don’t’.
The problem with this simplistic theory is that it is only a relevant argument if you are in fact teetotal.
What happens if you have a glass of wine with your lunch and then at 8pm are asked by your daughter to drive her to the cinema?
Does that glass of wine preclude the driver for two hours or two days or forever? What happens when you wake up after a party and jump in the car at 8.30am to drive to work, having not had a drink ‘that day’?
As with most problems in the world today, they are three-dimensional and unfortunately if you want to put forward two-dimensional rationales then you must remove time from the equation.
Most people drink alcohol at some time, so sadly Mr Delaney’s concept is more difficult than he implies.

Frank Etchells
Account director, CAP

Lock them out!

Sir – I noted the piece on Brake’s calls for tighter legislation on drink driving (New Call for Drink/Drive Clampdown, Fleet NewsNet September 2) and couldn’t agree more about the ‘morning after’ point, one that has frequently been flagged up.
It’s a really important issue for health and safety and fleet managers to consider. Have they done enough to guard against the risks the ‘morning after’ puts on them? Possibly not. Training and awareness-raising is one thing, but we all know this doesn’t work for all – it certainly doesn’t work if you don’t do it often enough. Another tool for managers – and a new one in the UK – is the alcohol ignition interlock, which requires a clear breath test before the car can be started. This could provide vital protection against morning after drivers – especially where the vehicles being used are pool cars or vans.

Simon Noble
By email

Get behind me on A47 campaign

Sir – When I wrote to your paper a few weeks ago looking for support for the dualling of the A47 from Great Yarmouth to Peterborough, I thought I would get a response. I got nothing.
If your readers, who must represent a large proportion of heavy road users, don’t think this is a worthwhile objective, then not surprisingly the Government has no difficulty saying that as we don’t want it, they won’t provide it.
Do your readers not realise that results come from action, not wishes? Drop me a contact name and company by e-mail to frank.eliel@signsexpress.co.uk so we can say there is a demand.

Frank Eliel
President of the Norfolk Chamber of Commerce

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