Mark Sinclair's blog: 1 February 2011 - Fit for purpose
01 February 2011
Mark Sinclair is boss of leasing firm Alphabet
If anything lies close to the heart of fleet management it's the choice list.
Construct the right list and everyone is happy. Get it wrong and the chorus of complaints is deafening.
As far as I know, the otherwise limitless sea of self-help books doesn't contain titles like Effective Fleet Choice or the Seven Secrets of Successful Choice Lists but a recent survey did ask several hundred fleet managers for their thoughts.
Experteye, the research and benchmarking company, asked managers to rank the factors they use when selecting cars. The top seven were as follows (multiple choices were allowed so the percentages don't add up to 100).
Fitness for Purpose (64%)
CO2 emissions (55%)
Maximum Monthly Rental (45%)
Vehicle Cost per Mile (22%)
Safety Features (21%)
Vehicle Brand Image (18%)
Engine Capacity (15%)
Seeing fitness for purpose at the top of the list might strike some people as odd in these days of cost and environmental pressures. But the phrase has acquired a broader meaning in recent years.
No longer does it simply apply to the number of doors, usable load space or carrying capacity. Rather, it's become useful shorthand for the plethora of factors that earn a car a place on a choice list.
After all, what is the essential purpose of a company car? We can take it for granted that it will get its driver from A to B. But its real job is to keep a large group of people happy. Finance - cost; HR - reward; CSR - environment; Line Management - motivation and productivity. And not forgetting the driver (style, status, comfort, match to lifestyle, etc.).
To do its job well, a company car has to tick a lot of boxes. Does that mean that the fundamentals, like cost, are relatively less important? Experteye's MD, Rick Yarrow, feels that many contract hire companies "will feel disappointed that the use of cost-per-mile, which includes fuel, sits at just 22% when in the fleet sector it is seen as a far more relevant and accurate measure for policy setting."
However, if you add up the scores of the 'cost' factors in the survey results - i.e. CO2 (definitely a cost driver), lease rental and cost-per-mile - they outweigh the others.
Choice lists are ultimately a business decision and cost will always play a major role but companies are finding that the way they set policy needs to change.
Cars and the leasing market have changed radically in response to new technology and the shift to carbon centred taxation. To run a successful choice list, companies find they need to ask more nuanced questions about what they want from their fleet and how their leasing company can help them to achieve it.
That doesn't mean that many companies don't still formulate their lists on the basis of the largest discount from list prices or cheapest rentals. But as the recession drags on and it becomes even more vital to retain key skills and knowledge, the fitness for purpose of choice lists based on such misleading metrics will increasingly be put to the test.
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