29 Jan 20

Global Fleet Managers unveil 2020 APAC Agenda & Challenges

As the focal point of Global Fleet managers is shifting to Asia, the region that realizes half of the global GDP, it becomes painfully clear that the supply chain needs to improve. Especially Global Fleet Managers, whose ambition it is to consolidate and harmonise fleet strategies as much as possible, must display an extraordinary amount of creativity to integrate Asian fleets.

We have asked the members of the APAC Advisory Board what’s on their agenda for 2020 and which obstacles they anticipate encountering. For clarity, below analysis excludes the mature Australian market.

The leasing markets

“Markets” in plural, as the Global Fleet Managers regret that leasing providers don’t operate on a regionally consolidated level. This leads inevitably to local tendering, which is not only time-consuming, but also an additional obstacle to aligning service levels across the region.

The lack of regional consolidation is due to 3 factors, the first one being that for the 2 main players in the market, leasing is not the main profit generator within their holding groups. Orix is known in Japan for its credit card and loan businesses, whilst Sumitomo-Mitsui, a merger of 2 Japanese banks, is knows for its banking and investment activities (in Japan, the branding is reversed: Mitsui-Sumitomo and focuses even more on the financial activities of the group).

Next, international leasing providers across Asia most often operate through joint ventures with local players, either from the leasing or adjacent industries, such as car distribution. This is not only for footprint reasons, but also because in some countries, e.g. Vietnam, it is still impossible to establish a business without local participation. These local investors invest in a leasing company for a reason: generating additional revenue streams for their core business.

Finally, the leasing companies in Asia are not following developments of the leasing product by their European or North American counterparts. As they have not been exposed much to internationalization, it’s common to see basic and highly standardized leasing products. This is even the case in Japan, where close to all contracts are proposed on 3-year/100,000km parameters, without matrix, without the option to unbundle services and at identical SMRT conditions.

Mr. Huub Smeets, Global Procurement Lead Fleet and Travel at Philip Morris, whose company runs a fleet of several thousands in Asia, puts it as follows: “We’re facing multiple challenges of which alignment and consolidation might be the most important ones, followed closely by Asia’s diversity of languages and cultures. Nevertheless, at Philip Morris, we’ll be testing the waters on further consolidation and continue looking for that supplier that can potentially serve us on a regional level.”


Similar frustrations on the OEM side of the job. Asia is a Toyota market, which means that, (due to Toyota’s regional setup) a Fleet Manager, needs to negotiate agreements locally with the Toyota subsidiaries. Discount negotiations are, in addition, difficult. Unlike Europe, making a deal with an OEM is rarely based on the total potential over several years, but rather on the order at hand. In many cases, it’s even more cost efficient to take the leasing vendor’s deals (they order higher volumes of cars than most corporates) rather than negotiating a corporate agreement.

Nissan however has been making good progress in restructuring its sales force to better serve regional and international clients. A dedicated department, based out of Yokohama with local satellites across Asia, has English speaking staff that will handle communication with local entities and simplify the tendering process for international customers.

Mr. Ng Yit Ming, Regional Procurement Manager – Car Fleet at Nestrade (Nestle) says: “The APAC market is dominated by Japanese and Korean manufacturers. It’s therefore particularly difficult to globalize, when you, as a company, have selected a European or American OEM to be your main vendor. EU or US vehicles are not only overpriced in Asia, their availability across the region is limited. So you have to go with the local brands, which means overcome the fact that they all operate differently, depending on the geography. And then we’re not even talking about hybrid or electric…”

Safety, Compliance, Taxation

The APAC Advisory Board members highlight that consolidation goes further than the fleet supply chain. One of the members, active in animal healthcare, mentions the difficulties she faces to find a solution for her company’s sales force: “We’re not just looking at leasing or fit-for-purpose vehicle selection – that’s actually less important than establishing and maintaining a safety and compliance strategy that is compatible with the Company’s standards. Also, we’re forced to study and understand the different tax regimes across the region. Thailand for instance has introduced, a few years ago, a taxation that includes a CO2 component. It’s important for us to know these things.”

Language and culture

For International Fleet Managers, it’s obvious that there’s always a cultural barrier to cross when working overseas. Ming at Nestle, who’s based in Malaysia, describes the difficulties of working in multi-language / multi-cultural Asia as follows: “English might be the international business language across the world, but we still meet many people for whom it’s uncommon to work outside of the linguistic comfort zone of their national language. This makes negotiations difficult and leads to complications when a client wants a contract in English.”

Importance of the Advisory Board

Exactly for these reasons has Global Fleet established the APAC Advisory Board. The Board’s mission is for international companies to join forces and speak with one voice, to build a network of peers who can advise and share experiences and, finally, to suggest content and activities of Global Fleet.

If you’re interested in joining the APAC Advisory Board, please reach out to

Read more about the Global Fleet Summit APAC on the event website


Authored by: Yves Helven