Arval and Alphabet’s fleet services are strengthening
their hold on small European countries. Georgina Lavers reports
that a little competition is welcome in the lesser European
markets.
Go deeper with GlobalData
Two major fleet companies have expanded their services into
small European markets.
Arval, the pan-European fleet
leasing subsidiary of BNP Paribas, has opened a Danish office to
solidify its presence in northern Europe.
Alphabet saw an opportunity to take
its 19th market in Romania with the help of UniCredit Fleet
Management, a partnership which has already proved successful in
Slovakia.
While Denmark has a fairly robust
fleet of 170,000 corporate vehicles, Romania still suffers under a
budget deficit and high taxes, and both markets are small. Yet,
competition is growing in smaller European countries.
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By GlobalData
The Eastern
Bloc
Predictions for fleet leasing in
the Central and Eastern European region prior to the economic
crisis were upbeat, with 3% annual growth in eastern European
company car fleets forecasted by Datamonitor in 2005.
Once the recession hit, less
developed markets suffered the worst blow, with new EU member
states seeing a 26.6% fall in new vehicle registrations in
2009.
With numerous companies preferring
outright purchase, which they saw as safer, Alphabet’s decision to
enter eastern Europe was a high-risk strategy.
However, Nancy Storp, head of
international marketing at Alphabet, believes the risk was
worthwhile in order to expand its customer base.
Romanian fleet leasing company New
Kopel, welcomed competitor Alphabet into the fold, saying the
competition could only strengthen the sector.
“The entry of several international
players in this market has brought a higher level of awareness of
operational leasing services,” said Dudy Perry, chief executive of
New Kopel Group.
Looking North
Meanwhile, Arval is looking north,
diving into a Danish fleet sector currently led by Nordania.
Operational leasing accounted for
68.2% of the total Danish fleet sector in 2009, with Nordania Fleet
Management leading the market with a 29.3% share.
With nearly 2.6m vehicles in 2012,
and a potential 63% of corporate vehicle registrations to be for
cars under full-service lease contracts by 2014, the company
described Denmark as “a growing market in full-service
leasing”.
Frank Verver, regional manager for
Arval in Denmark, said penetration into this area would open up
opportunities for its international customers.
“We will be able to offer customers
the possibility of integrating their Danish fleet into their
international fleet, which is a major cost advantage for them,”
Verver said.
“Europe is a key economic and
geographic zone, and we want to offer all our European customers
the same level of innovation in whichever country they are,” said
Arval chief executive Philippe Bismut.
Across European countries, more and
more large companies or state-owned organisations are thinking
about operational leasing, in many cases wanting to outsource not
only cars, but all transportation.
With smaller markets focusing more intently on their global
solution, it appears as though the time is now for fleet services
to capture big fish in a small pond.
