The coronavirus – an extra challenge for Global Fleet Managers
For all the panic it causes, the coronavirus will (probably) not cause the end of civilisation. But it does illuminate the weaknesses inherent in our global, interdependent economic system. As such, it’s one more item on the worry list of Global Fleet Managers. The real challenges, though, are more systemic. But, as this Q&A with three GFMs shows, so are the opportunities.
Time is money, so we asked three leaders in the field of Global Fleet Management – each responsible for tens of thousands of vehicles across the globe – to give short, sharp answers to three quick questions.
Here are the leaders:
| ||Huub Smeets, Global Procurement Lead for Fleet and Travel at Philip Morris International (PMI)|
|Yit Ming Ng, Regional Procurement Manager for Car Fleet in Asia, Oceania and Africa for Nestrade (the global trading company within the Nestlé Group)|
|Ferenc Hegedüs, Global Category Lead for Auto Leasing, Auto Rental and Ground Transportation at IBM|
And here are the questions (and their answers):
What’s the main challenge Global Fleet Management as you see it? And how are you facing that challenge?
- Huub Smeets:
“For this year, the main challenge is to bring more alignment and standardisation between countries and regions. Initially, we’ll be focusing on tool cars, which constitute about 80% of PMI’s global fleet.”
“For this reason, we’ve introduced global sourcing guidelines, including standardisation of models such as sedans and hatchbacks. Furthermore, we’re focusing on better brand alignment – while obviously recognising that one size does not fit all.”
“Obviously of huge concern is the current outbreak of the coronavirus. When it comes to fleet and factory closures in Asia-Pacific, we do not yet know the impact on delivery times, availability of spare parts, etc.”
- Yit Ming Ng:
“The main challenge is the overall slowdown in the world economy – which is now being compounded by the coronavirus (also known as Covid-19). This is causing uncertainty with respect to investing in new vehicles.”
“Add to that the fact that Covid-19 will cause vehicle supply shortages in an already weak auto industry. Multiple OEMs in Asia have cut or even shut auto production.”
“The best course of action in this case: to plan ahead, and to have a business contingency strategy, so we can mitigate the risk as much as possible.”
In a global perspective, which region is giving you the most headaches in terms of global fleet alignment? And how can the fleet industry help you resolve this issue?
- Yit Ming Ng:
“Due to the specific local requirements, plus limited options when it comes to OEMs and leasing companies, and last but not least, currency fluctuations, Africa is the region that gives us the most issues.”
“I would like to see the fleet industry and the global automotive players to notice the potential of Africa. This, in turn, would lead to more investment and to greater standardisation across the region.”
- Huub Smeets:
“For PMI, Asia-Pacific is the largest region, and as such continues to be our main challenge. There are hardly any leasing companies present in the region which can service corporate needs across borders. The OEMs which are present are mostly Asian brands, and in most of PMI’s countries across the region, a focus on an eco-friendlier fleet is not yet possible.”
What’s the biggest opportunity that Global Fleet Management presents? And how are you seizing that opportunity?
- Huub Smeets:
“The biggest opportunity that GFM presents is the chance to further consolidate both leasing companies and OEMs, with a strong focus – wherever possible – on eco-friendly drives.”
- Yit Ming Ng:
“Even in these challenging economic times, there are still growth opportunities. So, developing markets is the biggest opportunity out there. And ironically, Africa – which presents a lot of challenges – is also a place of opportunity, provided consolidation can occur.”
“For example, we’re in discussions with big local dealers to agree on a regional deal. That would be a win-win, as corporations like ours would get the best value for money, while the dealers themselves would achieve increased volume growth across a larger region.”
- Ferenc Hegedüs:
“I feel the three biggest challenges are at the same time the three biggest opportunities.”
“First, WLTP. Due to the new measurement system, we face a lot of difficulties (availability, getting the right product for the right price, etc.) in order to meet the 95 g/km CO2 emission threshold set by the EU regulators. This is good in the long run, since it will help us reduce our carbon footprint, but in the interim, it is a huge pain.”
“Secondly, electrification. We at IBM took the decision to go electric, which is of course very ‘cool’: electrification is the buzz word of today's Fleet Industry. It is working well in the well-developed Western European countries and in the Nordics. But in Central, Eastern and Southern Europe, or Latin America, the US or Asia-Pacific, we're facing big obstacles. This is due to limited infrastructure availability and the fact that local legislation is not necessary on-trend.”
“Finally, Mobility. In my view, this is a great concept. However, as with electrification, infrastructure has to follow the trend and the demand. I had a chance to test how this can work in a developed country, and it has a great rationale, since we do not need always to have a physical car. My suggestion is that we have to think about our need and adjust our mindset a bit. I’m sure there’s more to come in the next years.”
The three fleet managers are part of our Global Fleet Managers Club, the best practice sharing group of global and international fleet managers organised by Global Fleet. If you are an international fleet manager and would like to join this Global Fleet Managers Club, you can by filling in the online registration form.
And don't forget that you can learn about the winning fleet management best practices and hear from experts in global fleet management at the 2020 edition of the Global Fleet Conference in Rome, from 25 to 27 May. To register, visit the event website.
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