How to assemble a successful fleet in APAC
In a region as vast and diverse as APAC, there’ll always be tension between the urge to harmonize and the need to be local. That being the case, here are four building blocks for a successful strategy that is crucial throughout APAC, wherever you are in the region.
International companies may be tempted to impose their fleet policy format onto the local APAC markets. That’s usually a bad idea, as it negates local usage and reduces the attractiveness of those employers in the ‘War for Talent’.
It should be noted that local practices (see Box) vary widely, especially between the more mature markets in northern Asia (i.e. Japan and South Korea), and the lower-income ones elsewhere.
2. Sourcing and Saving
As most APAC economies have experienced robust growth, there has never been a greater need for savings than now. Saving in APAC is both difficult and easy.
The difficult part:
- Many markets are fragmented, with lots of suppliers, lots of different products, which means lack of standardization and flexibility.
- Because leasing companies are often too local, there are few conventions with OEMs to award discounts or volume bonuses.
And because savings have never been needed, there is plenty of fat to trim.
Here is the easy part:
- Start by defining simple limits in your policy, for example maximum annual mileage.
- Invoice control generates some savings, but it also sends a message to fleet suppliers: we’re watching you!
- Examine fitness for purpose. Many fleets reward their drivers with vehicles that exceed requirements.
Outside of China, full electrification is not yet practical. However, introducing mild hybrids can help reduce cost – typically from 7-8 l/100 km to 5-6 l.
China is a different story. EVs make more sense on various levels: to combat urban pollution, reduce dependency on foreign oil, and because China – a centrally planned economy – is making a concerted effort to lead the world in electrification.
Especially in South Asia, many fleets are rural, and roads are generally bad. There are local NCAPs available, for example in India, but be mindful that these operate on local standards.
APAC throws weather phenomena at your fleet, such as a typhoons and rainy seasons, that needs to be included in your insurance policy.
Telematics is a good idea. It’s a well-developed practice throughout APAC, with measurable benefits not just in terms of safety, but also productivity.
Two popular major local practices
Private use of company car
|Company cars are often the first and only cars in a family, and are used widely for private purposes. Restricting usage, as is done in more mature markets (especially for tool cars) may be perceived negatively.||Some companies will financially support employees who want to buy their company car at the end of the lease cycle. Typically, they fund the difference with a pre-set residual value (e.g. 20% instead of 30% of the original list price).|
Do you want to read more about how you can implement a good strategy for your APAC Fleet? Read our latest E-Book on the topic - Dowload it here