Ideally, a fleet manager in an organisation with a policy of owning and operating its own fleet would like to be able to log on to a site on the internet and buy the fleet, or a substantial number of new replacement vehicles online. They would expect to do this without losing any of the benefits that they would get from a traditional, face-to-face deal with the manufacturer. The reality, however, is rather different. Manufacturers are surprisingly reluctant to make this kind of facility available for bulk business-fleet buying.
Of course, there are umpteen sites, including manufacturer sites, where the fleet manager could log on and make a series of individual purchases.
But the whole point of a fleet purchase is to leverage some economies of scale. The last thing you want is to be treated like a consumer.
However, the manufacturers value their direct relationship with corporates, even if the actual fulfilment is routed via their distributor and dealer chains. They like to have the fleet manager sitting across the desk from their national sales director, talking about the farmyard and the weather over a cup of tea. Contact with the customer is rare enough for the manufacturer and fleet buys are a heaven-sent opportunity to keep a finger on the pulse of the corporate market.
Perhaps it is only human nature, but the manufacturers are also very reluctant to give up the power of negotiating prices on a bespoke basis with each large buyer. If they were going to make everything available through the internet, the simplest approach would be to formalise their sales policy for corporates into a visible-to-all discount scale: so many vehicles, so much discount. Alternatively, they could use the interactive nature of the internet to do exactly what they do across the desk. They could put forward a price, haggle, have an exchange of views. But there would be no tea, no face-to-face meeting and that “finger on the pulse” would retreat into a trend statistic, which wouldn’t be very satisfying.
As a spokesperson for Ford says: “These deals are quintessentially bespoke arrangements – we don’t see that the internet could bring the same level of service for our corporate clients.”
Undoubtedly, there is a lot to talk about in a major fleet purchase.
You don’t just turn up with a list of cars. There is the matter of fleet policy to be worked out. What grades of employee get what cars, with what extras? What can’t they drive? Soft tops? Four by fours? The manufacturer’s sales director has a great deal of experience to contribute either directly as part of an out-and-out consultancy deal, or by way of analysis on the fleet buyer’s starting point. Web sites have excellent vehicle configurators and can do very rapid cross comparisons, but does this amount to full blown consultancy? Manufacturers think not.
Graham Biggs, a spokesperson for BMW, points out that his company is piloting a scheme that extends internet access, including online ordering, to three or four of its large corporate customers who buy their fleets through BMW. However, this scheme is still very much in its infancy and its primary objective is not so much to provide the fleet manager with a tool, as to increase BMW’s market share in a multi-marque fleet. “Our target is not the fleet manager, but the ‘user-choosers’ within the company,” he says.
The idea is to provide a web site that will allow employees to access the BMW site and to design and specify their own vehicle from scratch, within the budget that their company sets. This information is then passed directly through to BMW’s factory (after the necessary authorisation) and the car is built. From the fleet manager’s perspective this doesn’t represent the kind of deal where online purchasing leads to savings. What it does create, however, is a more contented fleet driver base, since everyone gets to feel that they have had “authorship” of their own vehicle, specifying it from scratch. It also, of course, takes the pain out of providing employees with this level of choice, since the system automatically collates all the user choices and generates the order documentation. Biggs says the reception so far has been fantastic.
An alternative to the manufacturer making online fleet purchasing available to the fleet buyer is for the vehicle leasing companies to extend their online services. That way, the company fleet manager can leverage the leasing company’s buying power and the discounts will be reflected in the monthly lease instalment. Once again, however, while leasing companies see the internet as an excellent tool for administering fleet management contracts, many of them have been slow to shift their sales business online.
Spencer King, a spokesperson for fleet leasing company Velo reckons that while his company is looking at extending online facilities to corporates, it isn’t planning to conclude the sale online. “We can see value in providing clients with access to quotations online, or letting them get all their documentation for a PCP deal or contract hire online. But outright purchases are not really were we are going. It would make a lot more sense for the client to come to us with his/her requirements and to get us to source the vehicles at the best possible price,” he says.
Andrew Cope, managing director at vehicle leasing company Zenith takes a similar view. He points out that Zenith already offers corporate clients a number of online services, particularly in the field of accident management, which speeds up getting cars back on the road. Purchasing, however, is a different story. Cope can see the attraction for the corporate buyer.
Indeed, Zenith would very much like to be able to meet its fleet requirements online, but so far it has met with considerable resistance from manufacturers.
“We have been very keen to talk to the manufacturers about online ordering direct from their factories. We are bulk buyers and we would like to be part of the booking system that the manufacturers are in. The relationship with the dealer would still be there as far as vehicle delivery was concerned so they would not be out of the loop. So far though, the attitude of the manufacturers has been very cagey – they have their dealer chain and distributors to protect,” he says.
For Cope, the issue is not new versus old technology, it is simply a matter of business efficiency. Every advance enabled by the internet has to justify itself in terms of its ability to deliver efficiencies. “We see ourselves as an innovative, niche player in the leasing game. We come up with new ideas and we don’t want technology to be a constraint on what we do. At the same time, we don’t want to be constrained by traditional working practices either,” he says.
One company that seems to have made more headway than most in enabling online bulk buying is Tuskerdirect, a vehicle fleet leasing company specialising in online transactions. It was started by two ex-GE Capital people, Tom Stephenson and Tim Grant, who are now joint managing directors of the new company.
“Most of the business processes in the car leasing market are 15- to 20-years-old. Quotations are ground-out overnight in batch runs and there are still teams of staff providing short-lists and quotations to fleet managers. Today, people won’t wait for answers, especially not when those answers take longer to arrive than it would take them find the information for themselves. This is why sophisticated online capabilities are essential,” says Stephenson.
What happens in a normal leasing deal is that the fleet manager and the driver or drivers have to do their own research around dealers from various manufacturers, gathering data on different makes and models, pricing and option data. Instead, Tuskerdirect aims to provide fleet managers with a fast way of looking at all their options online and of making comparisons.
Once the employer has loaded in its fleet policies, Tuskerdirect gives drivers secure access to the site, where they can view cars that fit the specification laid down by their company’s fleet policies. “What we do is provide them with an easy way of setting up their fleet rules online.
The system provides them with everything they need to know about any car they want to lease. We present it in a format that is easy to use, so they can see comparisons, for example, of three vehicles simultaneously.
They can see at a glance what the implications for their benefit-in-kind taxation will be on each car,” says Stephenson.
This may be a long way from the fleet manager buying the fleet online, but it does cut down on brochure collecting and running to and fro to get the best deal for each employee. “What we find happens the other way around is that drivers go through a whole loop, consuming days selecting a car. Then they find out that it is very fuel inefficient, and so will end up costing them too much in tax, so they start the whole process over again. The internet makes it all much easier,” he says.