The boundaries between pure fleet and pure retail sales in the automotive market are blurring as the two markets increasingly converge. The new developments require flexible, smart systems to help manage the convergence, says leading global automotive finance, leasing and fleet software provider, Sofico.
Sofico, whose systems manage more than 1m vehicles around the world, has witnessed an increasing convergence trend in the way that fleet and retail markets operate across Europe, as suppliers identify new strategies to try and maximise their market share.
Captive or manufacturer-owned finance companies, those affiliated to one particular make of vehicle, are increasingly turning their market attentions towards corporate fleet customers. In a bid to increase their share of the corporate fleet market, they often bypass some of the more traditional routes to market by going direct.
Many are now launching full service lease products aimed at fleet owners or putting a renewed focus on their existing finance and lease offerings, targeting mainly small fleet owners and sole traders.
At the same time, multi-brand, international leasing companies are focussing their ambitions, not just on corporate customers, but on individual drivers themselves – and are designing and developing a range of products aimed specifically at the individual.
Private leasing, for example, is becoming more prevalent. By targeting private individuals in this way, multi-brand leasing companies are now expanding beyond their traditional business2business (B2B) market into the retail business2consumer (B2C) space and are also targeting the broader employee base of their corporate customers. A trend we could label as business2business2employee (B2B2E).
Wim Bauwens, Sales and Marketing at Sofico, says this increasing market convergence is altering the systems’ requirements of many leasing suppliers.
“In an increasingly converging market, both multi-brand leasing companies and captive finance companies run the risk of maintaining two portfolios of customers in two separate systems and duplicating a considerable amount of effort.
“It is far more efficient and cost-effective to manage all contracts, regardless of retail or fleet, B2C or B2B, in one system to ensure a good customer experience, to avoid duplication and reduce the errors that this can cause as well as maximising opportunities to cross-sell and upsell.
“Current retail systems are good at processing and managing high volumes of individual contracts, but traditionally these are for a simple finance product without any additional services.
“Fleet systems, on the other hand, are good at managing complex products, such as full service leasing with finance and an abundance of different of services, but don’t have the same operational efficiency or scale of retail systems.
To manage both portfolios of contracts in this new converging market on one system, you need to add the complexity of operational lease products to the retail software system or you need to add the efficiency of a retail software offering to the fleet management system,” he said.
Sofico’s approach to this new market convergence is to adapt its Miles leasing and fleet management software so that it can handle higher volumes of individual contracts efficiently and effectively.
“That’s why the concept of supporting a mixed portfolio of retail and fleet customers is a target for our Miles software.
“This is very much in line with our continuous strategic development of and investment in Miles, in order to maintain our market-leading position in the market,” he added.
