Fleet Logistics has a growing presence in the Nordic countries of Norway, Sweden, Finland and Denmark where, as in many other European countries, environmental issues are rising up the corporate agenda. So says operations manager, Ulf Wirkeland (pictured), who is responsible for helping manage around 2,200 fleet customers’ cars across the region.
Fleet Logistics’ Scandinavian operation looks after fleet customers in the four main countries where there are a number of similarities, but also a number of essential differences, in the operation of fleet management, usually driven by the local tax or fiscal regimes of the respective countries.
Operational leasing is the main acquisition method for most companies within the region, with the exception of Sweden where finance leasing is the predominant method, linked to pay-for-use services such as fuel cards, maintenance and fleet management.
Sweden is also Fleet Logistics’ largest market where it manages some 900 cars on behalf of corporate customers, typically major multi-national high tech corporations. Although finance leasing is still the most popular acquisition method, the faster growing is operating leasing which now accounts for 20% of the company car market of some 400,000 vehicles, due to two major factors.
The first reason is that its popularity has increased as companies’ attitude to risk has changed, and fewer are now inclined to accept the residual value risk associated with finance leasing, especially in a turbulent and fluctuating used vehicle market.
The second is the increase of leasing companies in the market with a number of international newcomers who have opened up the market and increased the amount of choice available.
With operating leasing being the dominant new car acquisition method across the region, it is perhaps not surprising that the most popular service that Fleet Logistics provides to fleet customers is its highly acclaimed multi-bidding product, which is at the core of its FleetCARE fleet management proposition.
Instead of relying on a single source of supply from one solus leasing company, multi-bidding works by selecting the most cost effective leasing rates per vehicle from a basket of leasing suppliers.
With multi-bidding, Fleet Logistics acts as the interface between leasing companies and fleet customer, and recommends the use of a minimum of two leasing companies and a maximum of three to four, to supply a fleet customer’s vehicle requirements and optimise acquisition costs.
This helps keep TCOs under control by ensuring that only vehicles with the most attractive prices are added to the fleet. In this way, multi-bidding has been instrumental in making major cost savings for many of Fleet Logistics’ clients.
Also popular with Nordic fleet clients is the unique pan European reporting capability that Fleet Logistics provides through its Fleet.NET database; invoice control through its invoice verification tool Fleet.INVOICE which validates all supplier invoices; and Fleet.WIZARD, the highly regarded online vehicle configurator which allows drivers to view vehicles of their choice and for new vehicle orders to be placed and tracked online.
‘Green’ issues are coming more and more to the fore across the Scandinavian region and carbon dioxide emissions are now the subject of much debate.
In Sweden, for example, cars using alternative fuel technology, such as Volvo Flexi-fuel or Saab Biopower models, receive a tax reduction in BIK rates and are also exempt from the congestion charge in the country’s capital, Stockholm.
However, a change in the law from the start of 2009, when the congestion charge rebate looks set to disappear, could well change new car buying habits and may lead to a reduction in sales in these large, but greener vehicles. Nevertheless, cars that emit lower CO² emissions will remain high on the Swedish fleet agenda.
“Right now, it is a balancing act to offer attractive cars to the drivers and to avoid the cars with the lowest residual values,” says Ulf Wirkeland.
In Finland, where the fleet market totals around 60,000 units, Fleet Logistics operates a fleet of 550 cars on behalf of major pan European corporate clients. Here, a recent change in company car tax has promoted cars with lower carbon dioxide emissions and this looks set to have an impact not only on the price of the car, but also in the residual value.
“Because of the Finnish tax regime, it is quite common that drivers, especially those with substantial business mileage, prefer to be reimbursed for using their own car,” says Ulf Wirkeland.
Denmark has a fleet market totalling some 80,000 cars on operating lease, and here Fleet Logistics has around 650 cars under management. The main fleet issue in Denmark is, again, the punitive tax regime which leads to high personal taxation for drivers.
This has created a fleet market where smaller cars with smaller engines tend to dominate the majority of fleets, with Ford Mondeo, Opel Vectra and Volkswagen Passat being typical company cars.
Fleet Logistics’ smallest presence is in Norway where the fleet operated totals some 100 cars and where the tax regime is particularly company car-unfriendly.
A Norwegian company car driver faces a high BIK charge which is added to salary and taxed as earned income at a marginal rate of 47%, which perhaps goes a long way to explaining why Norway has the smallest company car market of the four countries at 50,000 units.
