Holman and Element reactions to Athene acquisition of LeasePlan USA: "No surprise as scale is needed"
Considering the coming together of LeasePlan USA and Wheels Donlen by way of parent company Athene Holding, there is another strong US-based fleet management company on the rise which will boast a fleet of some 800,000 vehicles.
The merged group will certainly benefit from added scale, increased investment capacity, and differentiated capabilities, all of which will allow the yet-to-be named company to better position itself in the fleet and mobility landscape.
Considering this, you can bet that North American vehicle leasing and corporate mobility players are certainly keeping an eye on the situation so that they can plan their next steps.
In this brief reflection of the market, let’s get an idea of what key executives in the region are thinking of this new collaboration through this interview with Bob White of Holman and David Madrigal of Element Fleet Management.
As the landscape of the entire automotive sector continues to shift and pivot in response to market disruptions, many companies are adjusting their strategy accordingly.
“That being said, while these types of mergers and acquisitions are noteworthy, I think we’ve all come to expect the unexpected and it’s not surprising to see companies coming together to explore new opportunities," says Holman President of Fleet and Mobility Bob White (pictured left).
“No surprise – Athene’s acquisition of LeasePlan USA following the merger of Wheels Donlen was a most likely scenario as Athene sought to build scale in an industry where scale is an essential ingredient to compete,” says Element Fleet Management Executive Vice President and Chief Commercial Officer David Madrigal (pictured right).
Most importantly, M&A activity is a vote of confidence in the long-term viability of fleet management. Ideally, it will further professionalize our industry and provide better options for organizations that want to use a Fleet Management Company, adds Mr. Madrigal.
Bringing together multiple organizations of this scale is certainly going to be a significant project. While today’s fleet industry truly spans the globe, it is still fairly fraternal. “I have terrific relationships with many of my colleagues from across the industry and I wish my peers all the best and continued success as they begin to navigate this transition,” says Mr. White.
From a fleet operator’s perspective, a variety of options and competition in the market is a good thing, according to Mr. White. "It pushes all of us to continuously improve the products and services we offer and allows the customer to find a strategic partner that aligns with the particular needs of their business."
What does this mean for the competition?
Element is now several years removed from its own integration and subsequent transformation, going from two legacy companies to one and it is pleased to have that behind them today, according to Mr. Madrigal.
"We are focused on delivering a consistent and superior experience for our clients and in delivering strategic solutions that help them navigate through supply chain disruptions, inflationary pressures, and the transition to EVs. Our clients continue to cite both our people, the flexibility of our solutions, and confidence in the scale of our operations as reasons for choosing us."
"We have a clear vision and certain path forward for our clients who have recognized us with record high Net Promoter Scores (NPS), a key metric on our Balanced Scorecard that represents client satisfaction and loyalty."
“On a cost-of-capital comparison, the steps we have taken to strengthen our balance sheet and diversify our funding sources enable us to effectively compete with an Athene-sponsored competitor, says Mr. Madrigal.
Lastly, the executive said that it is an exciting time for the fleet management industry and while we cannot predict exactly what’s next, Element Fleet Management will continue to monitor the North American market closely.
"With this recent news, it is Holman’s unsurpassed collection of complementary services and profound understanding and experience across the entire automotive industry that truly sets us apart from the competition", according to Mr. White.
“Our organization remains focused on continuing to drive what’s right, leveraging Holman’s unique competencies to deliver the integrated automotive solutions that keep our customers’ business moving forward,” the executive said.
For those of you who are looking to get a comprehensive view of the Vehicle Leasing Ecosystem around the globe (before the Leaseplan USA announcement), download the latest Global Fleet E-Book on the matter.