Arval reaches for next milestone
11 December 2014
Tom Seymour speaks to Arval MD Benoit Dilly about the firm's next steps now that it's passed a major landmark
Arval has now passed a 100,000- vehicle milestone on its fleet and MD Benoit Dilly has set out plans for the company's further expansion.
The UK's top five leasing firm disposed of its fuel card business Allstar to FleetCor in late 2011, and Dilly says the move helped it focus on its core activities in preparation for growth. As part of those preparations it successfully migrated to a new IT system last year.
"We were had a clean sheet after the Allstar disposal to start growing the fleet," explains Dilly.
Arval has grown by 12,000 units in the past 12 months. The growth has come from both cars and vans, but LCVs make up a significant part of the business and, as Dilly explains, are its strength too.
"Our LCV share of our fleet is 30%, which is quite considerable, but it's been consistent across the years," he says.
"Our strength with vans is a key differentiator against our competitors. Vans are more complex and sophisticated because we believe there's a higher level of service delivery."
Dilly adds that Arval's larger rivals have approximately a 15-20% mix of vans in their fleet by comparison.
Managing vans is part of a company's production flow. Every breakdown of a van is a loss of revenue and so managing that process is where Dilly believes Arval stands out.
The company's rate of growth of 1000 vehicles a month has been helped by a rise in business confidence: the economy is growing so vans are being replaced. During the difficult years, van life cycles were stretched to as much as five years.
Dilly says: "When these companies saw the first signs of economic recovery, they started thinking about replacing vehicles with something fit-for-purpose and we've seen that."
Arval will be close to 6% market share by the end of this year. Dilly is aiming for 8% as the next benchmark, but he wouldn't be drawn on a timeline.
"There are factors that depend on us, our competitors and how the market is growing. What we know is that we want to carry on with this pace of growth."
Arval is growing in three areas within its SME and corporate business (Arval classifies this as companies between one and 1000 vehicles): new business, retaining current customers, and expanding fleets with existing customers.
Large corporate business (1000 vehicles-plus) is a different story: Arval hasn't won a major new customer this year, but Dilly says the company has focused hard on renewals and extending contracts with the customers it already has, such as emergency repairs company Homeserve, which is a big customer. It was actually one of its drivers that took Arval's 100,000th vehicle.
It claimed there is a single pillar behind Arval's customer retention, and that has been the quality of service.
Dilly says: "If you don't have the basics right in terms of service delivery, you can't grow.
"We work with dealers, brokers and manufacturers, and if you're not professional they will stop working with you."
Arval measures quality each week using a Net Promoter Score system, which is based around whether clients would recommend their service.
Dilly was not willing to share figures on customer service improvement, but says the growth the company has seen shows how Arval has improved.
One way he says its contract hire customer service specifically had been improved is with the introduction of account teams to look after corporate customers. Arval puts staff responsible for orders, biddings, delivery and end-of-contract in a circle of desks to enable them to resolve any request and easily talk with each other to answer customers as quickly as possible. Arval is extending the idea of centralising its account teams to manage its SME business in the same way.