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One man, two vehicle management hats
Date: 07 March 2007
In his first major interview since the creation of Leasedrive Velo, where he is commercial director, and becoming chairman of the ICFM, Roddy Graham talks to Tristan Young about his plans for both
On the Leasedrive Velo deal
Tristan Young: You never ruled out a merger or acquisition for Leasedrive [where Graham was commercial director], but why Velo?
Roddy Graham: Two years ago my partners and I saw a gap in the leasing and fleet management market for a high quality offering so acquired Leasedrive. I'm delighted to say this worked really well for us, and Velo had the same strategy.
Before either firm was formed customers didn't have a wide choice. At Leasedrive we wanted to give people a viable alternative to the bigger companies. Most of the tenders we got involved in, when we get down to the final three, used to be against Lex and Arval; now it's us and Velo or Zenith.
When we were in discussion with Velo, we found the similarities were incredible. Both worked on an exclusive basis with their customers where it's hard for the large companies to add value.
You can't have been identical, so what areas of expertise will you be using from each firm?
They had a couple of areas of expertise we didn't have, for example ECOs and a European fleet alliance.
We bring the best technology in the industry and a rental spend of around £15m a year.
What has been the reaction of your customers?
The customers say it's great so long as is doesn't impact on their day jobs, while Velo's account management team is pretty much moving in its entirety. The only disruption people will see is a better IT system.
How big will the new business be?
Collectively we'll have 35-40 significant customers and our fleet is around 17,500 strong. We now have greater firepower and a £60m turnover.
So how much will you grow this year?
We're not planning to grow in 2007; we're aiming for a smooth integration. We've given ourselves 12 months to sort the merger, but we should break the back of it in three to six months. That said we have just won two new global brands with 800- and 500-strong fleets.
If we signed eight clients that would be a big year. In the past we have turned down people because we can't add improvement, and if we can't add value we don't waste people's time. We only work on an exclusive partnership; others do dual- or multi-supply agreements.
Would you grow by acquisition?
We haven't ruled out any acquisition in the future, but we're not looking at anything right now.
When you are ready, what areas of the business will see growth?
We continue to invest in areas that are important.
12 months ago we introduced Carbon Manager to look after the environmental side. This is important to our large blue-chip clients who must be able to be audited. I could see a year ago that measuring a firm's carbon footprint would be important, and we're working with Future Forrest, now called the Carbon Neutral Company, on this one so we can provide carbon offsetting either for a company or an individual.
When we launched it there wasn't much interest, but now people are really interested, even though there is minimal take-up. I am willing to bet that in 12 months large PLCs will build this into their car fleets. On a typical £20,000 car, carbon neutralising adds £3 to £8 a month on the rental - metallic paint adds £10.
I'm not an eco warrior, we just have the responsibility to give the best advice and to provide the systems to do that.
The other are of growth is still risk management.
On becoming Institute of Car Fleet Management chairman
How did your involvement with the ICFM start?
Back in 1992 I thought the setting up of the ICFM was a brilliant idea. Before that, the image of the industry was not what I wanted. In 2003 I got in touch with [previous chaiman] Tom Madden about supporting the ICFM, as I thought we [LeaseDrive] should support it. It helps us as a fleet management company to deliver quality.
Now you're chairman, what are your plans?
My dream is that it gets to a stage where firms only recruit people who are ICFM trained with a professional set of standards.
Only 10 years ago staff recruited into a purchasing department did not need any training qualification. These days you can't get a job without one.
People don't insist on a qualification, but in our industry I want to raise our profile with HR, procurement and head-hunters, so that they do.
We no longer live in a world where interested amateurs can survive. I don't think we should have unqualified people controlling such big budgets.
Are you leading by example?
Looking inward, we're getting our people [Leasedrive Velo] trained and we're encouraging other fleet management firms as well as the car makers' fleet departments to do the same. Toyota started doing this two years ago and their success has been noticeable. I'm not saying all of it is down to us, but I'm sure it helps.
It's the first thing companies should ask fleet management firms and should be part of the tender.
It would be great if there was one standard for the industry. The ICFM training leads to a nationally recognized qualification.
