A weekly roundup of fleet news from around Europe
Fleet lessors not protecting against
risky clients, says report
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Nearly one-fifth of commercial vehicle lessors
are not taking proper precautions to mitigate the risk of exposure
to near-insolvent businesses, according to business information
service Creditsafe.
Creditsafe said its research found some
commercial vehicle leasing agencies are failing to take even basic
precautions against signing contracts with firms at risk of
entering insolvency and 17% of commercial fleet lessors do not
always run credit checks on prospective and existing customers to
monitor their financial health.
Based on online research and analysis of a
representative basket of leasing firms across the UK, the study
also found 33% of fleet firms have seen an increase in late or
defaulted payments from customers and had customers attempt to
renegotiate leasing terms in the last 12 months.
The same research also found 16% of UK
commercial fleet leasing specialists have lost money as a result of
customers entering insolvency.
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By GlobalDataAs a result of its research, Creditsafe
contends leasing firms across the country are being forced to
re-evaluate their forecasts and in some cases drastically downgrade
predicted revenues.
David Knowles, business development director
at Creditsafe, said it is vital for companies in all industries not
only to vet new clients but to regularly review the financial
health of existing clients.
“Particularly,” he said, “in industries where
customers sign multi-year contracts, where payment is not made
entirely upfront, firms can be left extremely vulnerable if there
is default on the contract midway through its term.”
Paul Garvin in Driving seat at
software house
Fleet leasing software house Drive Software
Solutions has appointed Paul Garvin as director of professional
services.
Garvin has a 25-year background in
international banking systems and consultancy, having worked at
senior programme director level for Deloitte and PA Consulting as
well as Raiffeisen Bank Aval, American Express and Sofgen.
UK software company Drive Software Solutions
focuses on the fleet, vehicle management, contract management and
leasing sectors and its core vehicle fleet management and leasing
product DRIVE is currently operating in 16 countries worldwide.
Garvin said: “DRIVE has become a major
domestic and international player in the leasing business and my
role is focused on changing the way the company delivers
professional services to our client base, so that our clients get
more benefit from the knowledge that we have and even more benefit
from the DRIVE product.’
Andrew Burns, DRIVE managing director, said:
“Paul will be interacting with both our existing customers and new
clients. The DRIVE business is growing internationally and our
emphasis is on making sure we are listening to and delivering to
our customer’s requirements. With his wealth of experience within
the global banking space Paul will ensure we can continue to be the
very best in the industry.”
Leasedrive maps out the road
ahead
As 2011 draws to a close, Roddy Graham, the
commercial director of UK vehicle management firm Leasedrive, got
his crystal ball out to divine the 10 industry trends for 2012.
To find out what those trends may be, delve
into Mr Graham’s predictions:
1.
Fewer Large Players as Industry Consolidates Further
Graham said in year which saw several changes
in the UK fleet market including the acquisition of ING Car Lease
and Masterlease, the latter by Leasedrive, he expects consolidation
to continue with fewer players “making up a more select league
table.”
2.
Asset Funding vs. Asset Management
“As the squeeze continues on financial
institutions, set against a backdrop of the eurozone debt
crisis, expect further banks to question non-core
activities and consider concentrating on what they do best. At
the same time, expect potential new funding entrants to the leasing
market with an appetite for healthy profit. There’s a wide gap
between asset funding and asset management which more banks are
recognising – expect change!”
3.
Cost – The War Cry
“Expect every cost line to be challenged and
the winners will be those who do even more with less.”
4.
Olympic Transportation Nightmare
“It’s hard to see London not repeating the
Atlanta Games nightmare when it comes to transportation
delays. During the 16 days, an extra nine million spectators
will descend on the capital, which is often log-jammed at the best
of times. Transport definitely appears a weak link and will affect
the fleet industry.”
5.
Tax Efficiencies = More Salary Sacrifice Schemes
“With salaries frozen or increases kept to a
bare minimum, salary sacrifice could become more popular for
hard-pressed employees wishing to see their money go further.”
6.
Company Cars vs. Cars-for-Cash
“Fuelled by a combination of factors – lower
CO2 emissions, higher mpg, wider model choice, tougher car
policies, a sensible Benefit-in-Kind regime, greater vehicle
manufacturer incentives, the company car is back on the road again,
something I predicted would happen six years ago!”
7.
Electric Vehicle Charge Forward
“Currently only driven by true believers, I
expect more people to test them, either through city car clubs or
vehicle rental companies. We might even add a couple to our
own fleet, along with charging points, to gain greater insight into
the driving experience and true cost of ownership.”
8.
Greater Pump Price Stability
“With sky high fuel prices [this year], the
FairFuelUK Campaign collected more than 100,000 signatures to
secure a Parliamentary debate on scrapping the three pence per
litre petrol duty increase in January and called for a fuel price
stabiliser where taxes go up when oil prices fall and drop when oil
prices go up. It all makes sense, and with the government
wanting to avoid a backbench revolt, the Chancellor completed a
U-turn in his autumn statement by scrapping the planned
increase. The FairFuelUK Campaign has had unprecedented
success so far and expect it, therefore, to drive for more
concessions from government.”
9.
Lower Vehicle Rental Costs
“The word on the street is that one of the
major rental companies has so upset its rivals that they have had
enough and are determined to recover market share through
aggressive pricing. A price war for market share would result
in lower vehicle rental costs.”
10.
Proliferation of Fleet Management Outsourcing
“In a tough economic climate, businesses
naturally wish to focus on core activities, those that they are
expert at. Non-core activities tend to get outsourced in such
circumstances and expect the trend to continue.”
grant.collinson@vrlfinancialnews.com
