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.

How great service can supercharge your fleet

Focusing too narrowly on price leaves fleets at risk of losing out on the expert advice and value-added services that can save substantially more money in the long term. Here at Business Lease, we are committed to delivering leasing as a service, not a commodity. By pursuing a genuine partnership approach, we can create and deliver non-standard solutions to meet the individual needs of all of our customers.

We fully appreciate that price is important, but it should not be the only criteria used when you select a supplier. As a smaller international leasing company, we’re dedicated to being account managers not accountancy managers, and we’re proud of the Care and services we offer our clients, regardless of how many vehicles you have and where you operate them. Time invested in understanding your needs is time well spent.

E-Mobility QuickScan

Included in our services is our E-Mobility QuickScan. This tool for example, designs a roadmap for fleets to transition to electric vehicles, identifying the vehicles that can switch seamlessly to battery power, the charging infrastructure required, and helping you to rewrite your car policy to take into account the different issues involved in running EVs.

This personalized approach extends to our Driver Desk, where you and your drivers can call with questions and enquiries, including advice on choosing the right vehicle. We apply a similar customer-centric philosophy to commissioning service, maintenance and repair work, with our Call Centre experts discussing with the driver the work required and the most convenient time for this to be done, before booking an appointment with a garage. Working this way means we can not only direct the driver to our approved garage network, where we can guarantee the quality of the work, but also find a convenient time when the driver will not need a replacement vehicle, saving you money.

17 Customer Care Moments

There are so many touch points in the life of a lease vehicle for both fleet manager and driver, from invoicing and management reporting to vehicle handovers and onboarding, that Business Lease has categorized 17 Customer Care Moments. We carry out customer satisfaction surveys to measure our performance in each of these 17 moments, and we share the results honestly with our clients, identifying what is working well and where we are investing to improve our service. Our objective is to eradicate your problems.

This is why we feel it is vitally important to include a significant weighting for customer service in your tender appraisals. The savings that arise from expert advice on selecting the right vehicle, funding it in the optimum way, managing it to maximum efficiency, enjoying the flexibility to adapt a contract to meet your needs, and receiving the management information you want, when you want it and in the format that you want it, make a far greater difference to the true total cost of ownership of running a fleet than simply counting euros and cents.

To find out what excellent service really looks like, contact Business Lease at www.businesslease.com or contact Erika Korver via e-mail or phone at e.korver@businesslease.com / T +31 6 212 60 115.