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Mann predicts company car provision faces big changes

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After almost 40 years working in the UK’s contract hire and leasing industry, Andrew Mann says that the way the sector has evolved during his career will be “put in the shade” by developments in the next five years.

Mann (62), who will bow out as managing director of JCT Vehicle Leasing Solutions at the end of the year, said: “The company car will remain for some time to come, but the landscape will change immeasurably.

“We will ‘whistle’ through our smartphones for a car to rush us from A to B. The number of cars on the road will reduce as they are used more efficiently. There will be more vehicle sharing and that will require slightly different business models.”

Forecasting that the Government’s autumn statement on Wednesday, November 23, “will be interesting”, when it is anticipated announcements will include whether salary sacrifice car schemes have a future, he said: “We cannot fight progress, but it will require great dexterity on the part of the leasing industry.”

In addition to the possible closing of the door on salary sacrifice car schemes, the fleet and leasing industry must grapple with a further tightening in company car benefit-in-kind taxation, the potential launch of air quality zones in town and cities nationwide, the introduction of connected and autonomous vehicles and alternatives to petrol and diesel company cars against a background of ever-quickening technological progress across all sectors of industry and commerce impacting on fleet and transport operations.

Mann, who started his vehicle industry career in February 1979 with Avis Car Leasing in Slough as the company’s first sales trainee, said: “We don’t talk to each other enough today and we do too much talking through electronic media.”

Confessing to “struggling with the whole concept of modern communications”, he continued: “We live in a physical world and there will continue to be a need for people to move around cost effectively and efficiently and automotive transportation will be necessary. But it will be delivered more efficiently.”

Mann progressed his career at Swan National Leasing and Appleyard Vehicle Contracts, and in October 1988 became the second employee, as sales manager, of the leasing and fleet management business launched by independent Yorkshire-based car retailer JCT600.

He was subsequently promoted to sales director as the company expanded and in 1996 was appointed managing director in succession to Nigel Stead, who had held the post since launch.

Mann, during his career at the company today known as JCT600 Vehicle Leasing Solutions having been launched as JCT600 Contracts, has seen it expand into a business predominantly serving the SME sector with a fleet of 7,000 vehicles and employing 45 people.

He recalled in the early days standard contracts were two years and 40,000 or 50,000 miles on a Ford Cortina, Ford Escort or Morris Marina with company bosses typically at the wheel of a Jaguar XT 6.

“If a car got to 100,000 miles it was a miracle, but now we write 100,000-mile contracts over three years verging towards four years without a backwards glance,” said Mann, a long-serving member of the British Vehicle Rental and Leasing Association’s leasing committee and a former chairman of its residual value and remarketing committee.

Looking forward, he said: “The consultancy aspect of the work of leasing companies will become increasingly important.

“Over the next five years they will have to work ever more closely with vehicle manufacturers while continuing to provide the service that they do and working with clients who quite often don’t know one car from another because that is not their job.”

Whether the number of contract hire and leasing companies and vehicle manufacturers remain as now in a rapidly changing world remains to be seen, but he said: “Ever since I started in the business I felt that the leasing companies didn’t have a right to exist, but had to fight to exist.

“The fact they have survived through names changes and acquisitions and mergers is because they are good at looking after fleet customers and being the intermediary between them and the vehicle manufacturers. Motor manufacturers are quite good at looking after individual customers.

“The increasing ‘Uberisation’ of vehicle usage may well be conducted by the leasing sector because it is good at determining one vehicle’s worth against another and one contract’s worth versus another and doing so in a human fashion…or maybe people may want to deal with robots.”

Since launch JCT600 Vehicle Leasing Solutions has grown organically and its parent company remains ambitious for it to expand further, perhaps to 10,000 vehicles in the next four years.

Mann, who in retirement may be retained in an advisory capacity by the company, said: “Business in the sector is getting tighter and tighter and more competitive to the advantage of customer so to retain profitability more business must be won.”

He believes JCT600 Vehicle Leasing Solutions will continue to pursue an organic growth strategy, but with regards to an acquisition added: “It is just possible that if the right opportunity at the right price came along my successor and the management team could be tempted.”

That successor is sales director Paul Walters, who joined the business in December 2014 and has more than 26 years vehicle leasing industry experience.

Mann concluded: “While I’m sorry to be leaving, having been here since the start of the company, I feel that I’ve probably contributed as much as I can. My colleagues, both in the company and in the wider JCT600 group, have done a great job working with me to build a thriving stand-alone business.  We’ve always been customer focussed and have worked hard to provide high quality services at cost-effective rates.”

 


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