Lloyds TSB has ended months of speculation following its purchase of HBOS by announcing the merger of the two leasing operations, Autolease and Lex, to create Lex Autolease.
The business will manage a fleet of 360,000, comprising around a quarter of FN50 vehicles, and handle accounts for almost 30,000 company fleets.
It will be headed by group managing director Nigel Stead.
There are already the first whisperings of concern that such a massive leasing provider may be unable to provide the levels of service fleet managers need.
They fear an organisation the size of Lex Autolease will not be capable of offering a quality service at all levels.
Stephen Gill, procurement contracts manager at the University of Plymouth, which has a sub-50 vehicle fleet on contract hire from Lloyds TSB Autolease, said the merger could bring advantages as well as disadvantages.
“The main thing is will it bring savings through economy of scale and will we therefore get a better deal?” he asks.
“And as with all big organisations, they are slower to react to problems.”
Stead acknowledges their concerns, but believes they can be easily allayed.
“We might be a big company getting bigger, but we won’t forget the needs and requirements of the smaller companies,” he told Fleet News.
“A big company is capable of meeting their needs. We will be judged on our ability to deliver.”
He added: “The decision on whether to integrate or not took two considerations into account: what’s best for the shareholder and what’s best for the customer.”
Both are expected to benefit from cost synergies the enlarged organisation is likely to enjoy.
Customers will also benefit from the sharing of best practice, with Stead taking the best processes from Lex and the best from Autolease to form a business he describes as “industry leading in every respect”.
With solid funding from the part taxpayer-owned Lloyds TSB, Lex Autolease has a sound financial footing to develop the business.
But it will face intense competition from smaller leasing companies which spot the opportunity to rip away some small fleet accounts.
Ultimately, though, while many fleets talk about wanting the best service, most are primarily concerned with price and, in this respect, with its unrivalled buying power Lex Autolease will have a slight edge.
Vehicle manufacturers will continue to raise prices this year due to margins eroded by the strength of the euro against sterling, but they remain open to volume-based deals with a handful of key partners – and Lex Autolease has the biggest key.
The full interview with Nigel Stead is in this week's issue of Fleet News