23% of employees can choose their company car freely
Somewhat surprisingly at times of growing harmonisation and efficiency, 23% of all employees can choose a new company car without any limitations. This implies these employees can choose any car manufacturer, any model, any powertrain – to some extent even any budget.
The numbers are the result of a survey executed by Belgian motoring site Gocar among around 3,300 Belgians. It remains to be seen if the same trends apply in other European markets but it wouldn’t be surprising as the pressure on the labour market was cited as a main motivator to give employees free choice.
The war for talent is fierce and it is inciting companies to introduce unconventional policies to attract and retain staff. A nice company car may still be a vital element in this war, but most employers are already offering similar company cars so it makes sense for companies that want to stand out to give their talent free rein.
Such liberal policies aren’t the preserve of top executives as one in seven young university graduates and even one in three blue-collar workers also get automotive carte blanche.
“This doesn’t mean that thousands of Belgians will start driving expensive cars,” said Gocar spokesperson Stephanie Popovic. “In most cases, employees can ask quotes in a number of car dealerships and hand them to their manager. Together, they can then decide which company car they can order. An additional benefit of this strategy is the fact that employers can demonstrate more appreciation and trust.”
And the other 75%…
Three quarters of employees that drive a company car still have to adhere to strict car policies. In many cases, the policy not only limits their budget but also the brand or models they can choose. Employees over 45 years old often get more flexibility in choosing their preferred car as they possess valuable expertise that employers are keen to retain.
Another reason why younger drivers mostly do not get carte blanche, is that employers take into account youthful foolishness, believing that more basic vehicle are less prone to being involved in heavy accidents.
Leasing product in Japan
The European and American client will be surprised by the limited product offering of the leasing companies in Japan. It roughly comes down to a fairly standardized leasing product (most often on 36 months and 100,000 km), a management product for owned fleets and a re-leasing product. The latter corresponds to the extension of an existing lease beyond the initial contract parameters.
Contract recalculations are possible but are not standard practice as this would be the case in Europe. Matrix contracts or contracts with guarantee of initial parameters are rare and not popular.
Mobility solutions such as corporate car sharing, bicycle leasing or the possibility to use a different car in weekends or on holidays, are unheard of. Some of the leasing companies have a “mobility division”, but more than, at best, a theoretical concept, these divisions don’t have a real product or service offering.
Unbundling is theoretically possible, but not common and the leasing company will definitely not promote it. Standardisation is crucial in all Japanese businesses and the leasing industry doesn’t escape.
It requires understanding of the Japanese culture to correctly assess why the Japanese lessors are not more innovative. Relationships between client and supplier go much further than the occasional meeting with an account manager, as this is usually the case in Europe or the US.
It all starts with a number of discovery meetings between both parties. Different people from different hierarchies meet each other over a longer period of time and slowly build a trust relationship. During those encounters, business is a secondary topic and pricing negotiations are completely out of the question. The client will explain their requirements on various occasions and these will be met with explicit signs of understanding by the supplier.
From a Western point of view, these meetings are highly frustrating as it seems like no progress is being made. From a Japanese point of view, the presence of a Westerner and the type of questions this Westerner might ask, is equally disturbing as it hinders the natural evolution of the relationship building process.
At a certain point in time, both parties will recognize that there is enough trust between them to go to the next step, which could be called “the agreement”. Only, in Japan it is not certain that a written document will seal the deal. It might very well be that client and supplier judge that a contract is not necessary, as the relationship is solid enough to move forward.
This also implies that both the client and the supplier are fully engaged in the relationship. Both have a personal interest in making the relationship work. If the relationship doesn’t work, it’s not only an issue for the supplier: both parties lose face and will personally suffer from a feeling of intense failure in front of their companies. Disappointment is not something the Japanese take lightly. It will ruin their careers and they will lose respect from their peers and bosses.
The service level
As a result of the slow build-up of a commercial relationship and the mutual investment of both client and supplier, service implementation will be done with great attention for detail. Once the operations go live, the client expects a zero-error treatment. The processes that are put in place are extremely detailed and followed meticulously. This leads to a strong focus on standardisation, which is usually promoted by the supplier and accepted by the client. It also leads to over-administration, with an excessive number of documents that are meant to check and re-check each request and service delivery.
Foreigners are often surprised to see that Japanese companies still do much of their business via fax rather than via email or digital processes. This has nothing to do with conservatism or a lack of technology; it’s all in support of – often tedious – processes that lead to a flawless execution of the services.
This doesn’t mean that the Japanese supplier is per se change resistant. Innovation and change are possible, but always and only within the framework of a process that is well thought through and that will result in errorless execution.
Similarly, Western style tendering is considered to be highly disruptive and as a potential risk for the company and its internal clients. Nevertheless, as relationships are rarely challenged, there are often valid reasons to change suppliers; it’s not uncommon for a client-supplier relationship to exist for over a decade and pricing to be off the charts.
In this case, the best option is to share the concerns with the Japanese hierarchy, explain the benefits a change in strategy will bring to the company and guide and leave it up to the locals to execute a tender or a pricing readjustment. It’s very likely that a change in supplier is not necessary and that the incumbent supplier will adapt its pricing. Everything is better than losing the relationship.
ALD France launches private lease platform
ALD Automotive has launched LeasingAuto. The fully digital platform is aimed at the private lease market in France – where the segment is not yet as developed as in some other European markets.
LeasingAuto allows consumers to select from more than 8,500 private lease offers online, refining their search by adding options and equipment, and specifying the mileage, duration and services associated with their contract.
Adding to the transparency of the system, the price is adjusted every time a variable is changed. Once a vehicle and contract formula have been selected, the user can submit all relevant documents online and finalise the contract via electronic signature.
ALD’s MonLeasing app allows customers to manage invoicing, servicing and other aspects of their contract via their smartphone.
Developing its private lease business is one of ALD’s major priorities for the coming years. “Our initial target market were the large companies, then the smaller ones. Following our orientation towards very small companies and the liberal professions, our targeting of individual consumers is the logical next step”, Jean-François Chanal, CEO of ALD France told French newspaper L’Argus.
LeasingAuto offers private customers a product that is essentially the same as corporate leasing, with the difference that it can be tailored individually and the whole process is available entirely online. Customers can pick up and return their vehicles at the dealers with which ALD collaborates to enable the offer.
“It’s hard to put a figure on our private lease ambitions, as this is virgin territory in France. There may be an important potential here, but it may take some time”, said Mr Chanal. www.fleeteurope.com
ALD offers private lease via French online bank
French online bank Boursorama is offering its 1.5 million clients a private vehicle leasing offer in cooperation with ALD Automotive. It’s the first ever online-only offer for private leasing in France.
The formula ‘Leasing Auto avec Boursorama Banque’ allows clients of the online bank to choose between 30 brands and a total of 8,500 models. Prospective customers can compare rates and choose the most fitting one for them.
As an inaugural incentive, private customers can get a lease on a Fiat 500 Lounge for less than €200 per month.
Customers can also download MonLeasing, an app that allows them to manage the products and services associated with the private lease offer via their phone.
For ALD, the partnership with Boursorama was a natural fit: like the lease company itself, the online bank is a subsidiary of Société Générale. Previously, LeasePlan and Arval have launched private leasing offers on the French market.