Return to tender: Why going regional now is a better option than the pan-European approach

After a decades-long slumber, inflation is back. But inflation is doing something else: it’s amplifying a trend towards regionalization of fleet management – and fleet tenders – across Europe.

In international fleet management, there’s a strong trend towards the bigger playing field. Multinationals often organize their national fleets on a regional, continental and if possible, even global scale. Because greater scale provides opportunities to rationalize, to economize.

That works best in a world in which not just fiscal and economic policies, but also cultures and trends are converging. The EU is perhaps the most effective example of such an environment. But even in the EU, regional differences persist. The monetary policy of “Euroland” is set by the ECB in Frankfurt. But the EU has plenty of member states, mostly in the east, who retain their own currencies, and with it their full monetary as well as fiscal autonomy.

Pro-active banks

As inflation rises, central banks are becoming more pro-active than they have been for years, adjusting interest base rates to defend the economies of their countries. In Poland, the name of that interest base rate is WIBOR, in the Czech Republic it’s PRIBOR, and in Hungary BIRS.  And so on.

As inflation and interest rates differ across Europe, the argument for regionally tailored fleet management increases. There is a noticeable trend to launching fleet tenders on a regional level (say, Central Europe) rather than on a pan-European one. Why? Several reasons:

   Corporate fleets get an outcome customized to a particular region’s monetary and fiscal situation.

   Regionally focused fleet management allows a company to create local “ambassadors”, who in turn generate local support for any given direction.

   Local preferences for services or certain brands, show that a different approach tailored to the region creates more support to foster the company policy amongst employees.

Supplier models

Some fleet supply models even explicitly cater to the advantages of regional tendering and management, by specifically selecting two suppliers: a pan-European one, and a regional one.

However, the recent rise in inflation is not the only reason East and West are divergent within Europe, nor the first. “One major difference is the attitude towards electrification,” says Business Lease International, which specializes in Central Europe. “As electrification accelerates in Western Europe, it faces a different pace in Central Europe. Right now, while electrification is gaining market share, that is really widening the gap between how one should tender for and manage fleets in, say, Poland and France.”

The different speeds at which EVs are introduced are a sign of wider cultural differences. Another example is Mobility. “In some progressive Western European markets, a mobility budget would be a status symbol, whereas a petrol-guzzling luxury vehicle as a company car is now frowned upon. In Central and Eastern Europe, where there is still a strong preference for the freedom of having your own vehicle, it’s still very much the reverse.”

Its own pace

Things are changing in the wide swath of Europe from the Baltic to the Black Seas, but each market has its own pace and its own dynamic. “That’s why it is so important for our customers that we, as specialists in Central Europe, can advise them on how to streamline their operations in these countries, for example in terms of powertrains or car policy.”

In fact, Business Lease proudly claims to have shaped the corporate vehicle leasing market in Central Europe. “When we entered the region in 1996, the only option available was financial lease, which represented the majority of the corporate fleet market. Now, operational leasing is widely accepted as an effective way of managing a fleet.”

Decades later, Business Lease is well and truly at home in Central Europe,  where it is among the top five of the largest lease companies.

Elias Drakopoulos

“Our aim is to be the most customer-centric mobility management company in the Central European region”, says Business Lease CEO Elias Drakopoulos. “We’re doing this by knowing our customers best and being the go-to expert for Central Europe.”

In a divergent fleet environment, that is precisely what customers are looking for.

How to index your car policy

Vehicle leasing prices have changed significantly. Many fleet managers wonder these days whether to review their car policy in order to align it with the current market, or perhaps wait a little longer until markets stabilize. What is the actual cause of the fact that the current car policy budget doesn´t fit with the changed market? In many countries, multiple causes can be pointed out, such as higher investment value or inflation.

We may carefully presume that the figures will not go back to where they were, any time soon. What is the impact on your lease price?

Price indexation

To make the complexity of the current price developments more tangible, Business Lease has developed an Index which monitors the behavior of your Car Policy categories. With categories we mean the job levels and the corresponding lease price that the employee is eligible to have. The so called Car Policy Index enables Business Lease’ clients to adjust their Car Policy categories based on actual facts from the market.

All developments at a glance

The result is a dashboard with graphs which simply can be filtered by year or brand and giving insight in the development of the monthly lease rate. Besides that, it also displays the development of list prices, interest rates, cost of maintenance and dealer discounts – all per car policy category.

The Car Policy Index will be operational as of 1 September 2022 in all Business Lease offices (Poland, Czech Republic, Slovakia, Hungary and Romania).

Additionally, the Fleet Europe platform has hosted a live webinar on September 28 2022, which was moderated by Steven Schoefs, followed by a Q & A session with the audience. A recording of the webinar is available on YouTube here.

Contact us

Whether you’re thinking about revising your car policy or you need to budget your fleet costs for next year, engage with the Business Lease International team for an open talk, via e.korver@businesslease.com.

After Corona: A checklist to optimize your fleet management in the ‘New Normal’

A recent study shows 32% of employees are still working from home (WFH). This single statistic illustrates the long-lasting effect the pandemic has had on how we work and move. That’s especially important for fleet managers. Here’s a checklist to help you make the most of the ‘New Normal’.

Even as Covid-19 fades from memory, there’s no going back to the ‘Old Normal’. Some of the changes we made to deal with the emergency will stick. For fleets, the most drastic change is WFH.

Lockdowns forced us from the office and onto Zoom or Teams. It turns out that this can be quite efficient: less time spent on driving, less money spent on fuel. WFH is now part of every company’s mobility culture.

But are fleet managers fully on board with this ‘New Normal’? Or are they still managing fleets like it’s 2019? Here are 6 things to consider.

1.    Scan fleet size and usage

More WFH means less need for mobility. Is your fleet still the right size? Perhaps you could do with fewer vehicles. And are the ones you have still fit for purpose? Perhaps you need fewer benefit cars, or more LCVs.

These and other essential questions can be answered by a fleet scan. Because managing a fleet starts with knowing how it operates. Business Lease offers a range of QuickScan tools – including for the hot topic of E-mobility – and will help you interpret the results to optimize your fleet composition and usage.

2.    Adapt car policy

Based on different mobility needs and altered fleet circumstances, you’ll need to adapt your car policy to the ‘New Normal’. Which brands and models should be included (or excluded) from your policy? Should you include options such as short-term rental or used-car rental?

Questions like these are especially relevant as continuing delivery delays radically affect availability and affordability of vehicles across various markets. Responding to market needs, Business Lease will be launching a Car Policy Index on 1 September 2022. This index will provide a periodical overview of the cost history of leasing various popular models in different European markets – offering fleet managers a useful tool for their policy decisions.

If you are interested, the Fleet Europe platform will host a live webinar on 28 September 2022, moderated by Steven Schoefs, to talk about the Car Policy Index in a panel, followed by a Q & A session with the audience. In order to attend this live webinar – free of charge – you can register here.

3.    Check fuel usage

On the one hand, WFH might mean we drive less. But on the other, fuel prices have skyrocketed due to the war in Ukraine. So managing fuel cost remains of critical concern. Typically, drivers with a fuel card have access to a wide range of fuel stations. Can you set up a program to incentivize them to seek out those with the lowest prices?

4.    Evaluate parking spaces

If WFH has reduced the number of cars that drive into the office every day, perhaps it’s time to review the parking spaces that you need. Can you reduce the parking spots that you lease or rent? And if so, how much will be enough to manage peak demand?

5.    Look at damage ratios

Less driving fortunately also means less wear and tear, and fewer accidents. This affects the need for maintenance and repair. And it also opens opportunities to review insurance premiums. Are you making the most of those opportunities?

6.    Examine maintenance cost

Similar to the fuel situation, there is less need for maintenance, but the cost of maintenance itself has shot up – due to labor shortages and supply chain issues. Which steps can you take to ensure that service and maintenance costs are kept to a minimum?

Business Lease is an internationally operating leasing and mobility company specialized in Central Europe. As a family-owned business, we value personal relations as the basis for excellent service – including in our consultancy, aimed at helping your fleet perform above expectations in the ‘New Normal’.

How can we help you? Ask our International Team at internationalsales@businesslease.com or contact Erika Korver.