LEASEPLAN has grown its CV business by 22%, just by investing in a dedicated commercial vehicle team.
We caught up with head of commercial vehicles Mark Lovett at last week’s CV Show to find out how the CV business helps LeasePlan’s other brands and the company’s CV plans for the future.
Is LeasePlan expecting to expand its presence in the LCV market?
“Continual expansion is important to us. I think maybe five or six years ago we were very much a passenger car-orientated leasing company. We embarked on a five-year strategy back in 2010, with an ambition to really take a hold of the LCV leasing market and developed a strategy that would see us grow our commercial vehicle funding fleet to 50,000 units – which we achieved.
“We currently have a fleet in excess of 50,000, which has represented significant growth. Last year alone we grew our CV fleet by 22%, which was ahead of the UK van market growth, and we’ve done that through investing in a dedicated commercial vehicle team.
“So we have a team of commercial vehicle experts who support all four of our brands in taking that commercial vehicle language out to our customer base and new business prospect base as well.
What’s most important to them is choosing a leasing provider that absolutely understands that any time that vehicle is off-road, for whatever reason, it is costing them money
“We fundamentally believe that to be successful in the van leasing market, you have to talk a very different language because as you can see from being at an event like the CV Show, the commercial vehicle world is very, very, different to the car world because it’s all about addressing your business.
“Thinking of your van as a mobile tool box, rather than a big car with no windows – that’s where we’ve grown our business, by demonstrating that we actually get to where we’re talking to really large and demanding van fleet operators.
“What’s most important to them is choosing a leasing provider that absolutely understands that any time that vehicle is off-road, for whatever reason, it is costing them money. If you’re going to be able to address that, you have to have a business – not just a sales team, with a commercial vehicle culture.
“After our five-year strategy, that’s kind of where we’re at now. Where we’re going over the next five years, is the next phase of that commercial vehicle journey and my belief is that there are a few other lease companies that are aware of the CV opportunity.
“Certainly, there aren’t that many that are able to commit to actually changing the whole of their business model to address the needs of the most demanding van fleet.
“One of the things I talk about a lot to evidence this point, is that we apply an HGV philosophy to managing LCV fleets. If you’re a truck operator, operating in the HGV or truck industry, you know everything is about legislation, compliance, duty of care, telematics and driver behaviour.
“Driver behaviour because of fuel, which now has a massive impact on the commercial operation of a commercial vehicle fleet.
“Everything I’ve said there, none of that fits into the car leasing world. So it’s a very, very different business model and that’s where we’ve got to within LeasePlan now. We’ve very much realised we need commercial vehicle experts, to go out and support our account management teams across our four brands and talk the language – talk the van language!”
How do you plan on doing this?
“So the next phase, is for us to embrace further our strategy and to tangibly demonstrate how that HGV philosophy plays out. So, one of the things we’re looking to do is to enhance our telematics position for our commercial fleet customers.
“That robust telematics strategy enables you to deliver proactive maintenance because one of things you can’t afford to do with a van fleet operator is to wait for them to tell you that they’re off the road! You need to be pre-empting as you do in the truck industry with safety inspections.
“If it’s proactive maintenance, nine times out of ten most business will work round that and knowing that vehicle is going to be off road for a couple of hours that day, they actually don’t need that replacement vehicle and we can change our schedule for that day.
There will always be some downtime, you have to have that, but our mantra will be that we absolutely minimise any downtime, or on a more positive spin, we maximise your uptime.
“Utilising an almost separate servicing, maintenance and repairer to what our car customers want, so again, we’re using a CV appointed SMR network and SMR networks supplying dealers as well. So if I was to summarise it, it’s about in-life operations.
“What we’ve been very good at over the last five years is selling our knowledge, selling our commercial expertise and showing that we get it and we can talk fluently in the commercial vehicle language.
“The next phase of the strategy is modelling our in-life operations to that truck and HGV operator. So, it’s out-of-hours servicing, overnight servicing, that kind of stuff, which really sets you apart. There will always be some downtime, you have to have that, but our mantra will be that we absolutely minimise any downtime, or on a more positive spin, we maximise your uptime.
“This is hard to deliver, unless you’re working in the LCV market 24:7. If you’re predominantly a car leasing company, then it’s unrealistic to expect you to be able to deal with the demands of a critical commercial vehicle fleet operator. So our approach is very much to use our dedicated commercial vehicle expertise and having our in-life operations aligned to what the commercial vehicle operator needs.
“Having people operating our commercial fleets means that we are able to deliver that – because that’s what we do all the time. Ultimately we want to be known for being a car and van leasing company, but it’s a car and van leasing company which does elements of both markets evenly well!”
Can you tell me which of your four channels benefit most from this strategy with the LCV business?
“Well funnily enough, they all do – but in different ways.
“So the LeasePlan brand deals with our major corporate customers, so that’s customers that operate with a fleet of 100 vehicles or more – so they benefit from the fact that there are a lot of large corporate planned fleets out there, that also operate passenger cars as well.
“We’re able to strengthen the whole LeasePlan combined solution, by having conversations about their car fleet and then the commercial fleet team talking about their commercial fleet.
“We’ve actually over doubled our corporate LCV fleet over the last five years. So that demonstrates that actually that brand has doubled its LCV fleet, as evidence of the success of our LCV strategy.
Where we can add value to them will be that outsourced fleet manager giving them the advice, or the expertise that they need, because often or not, they are experts in their trade and not in running a van
“LeasePlan Go is our direct channel to the SME market and they have benefited in the sense that quite often that small business user – small one-man band – doesn’t have the luxury and resources in that team to have a fleet team or fleet manager.
“So where we can add value to them will be that outsourced fleet manager giving them the advice, or the expertise that they need, because often or not, they are experts in their trade and not in running a van.
“Therefore we can help them in terms of specifying the vehicle, which manufacturer they should be looking to use, what conversion and what appointed converter they should be choosing for their racking. All that kind of stuff, so the SME channel benefits as well.
“Automotive Leasing is our public and local authority brand. If it’s local authority they have a heritage of commercial vehicle understanding due the nature of their fleets. They also want to have a conversation with a lease provider who understands it as well.
“So there’s some real credibility there and we’ve done an awful lot of work, where we’ve been very successful in winning new business through housing associations. Again they critically want somebody to say I don’t know what spec of van to have, then what racking or ancillary tools I need. So we give advice to them.
Our final brand, where we have very strong levels of commercial vehicle success is Network. We succeed there in having really strong relationships with the manufacturer partners, where we’re able to offer tactical stock deals.”
What’s the proportion of LCV to car fleet at Lease Plan?
“We’ve now grown our commercial vehicle fleet to represent a third of our total fleet.
“Five-years ago, before we implemented the LCV strategy, that mix was a quarter of LCV. So its gone from a quarter to a third and it’s continuing to grow.
“So there’s a suggestion that in the next five to 10 years, that half of our fleet will be CV. We are committed to keep on investing in the LCV market, because it’s good business for us.”
Where do you want to be in five years?
“The leader in van leasing.”
Can you give me an idea of your top five manufacturers that you lease?
“Ford is a large contributor, the Mercedes Sprinter is a preferred vehicle and one we’re happy to endorse. Renault – all of their models are strong. We anticipate doing more Volkswagen product in 2016/17, again across the board, and Vauxhall is another manufacturer that we work with.
“We want to work with manufacturers that follow our working philosophy.”