Brian Rogerson finds that GMAC’s leasing subsidiary Masterlease
is thriving in a difficult market.
June 5, 2008 was World Environment Day, and Masterlease took it
seriously. With news that oil prices have risen to over $130 a
barrel – virtually doubling over the last 12 months – and with
environmental issues never higher on the public agenda, even the
most doubting fleet managers are now placing greater emphasis on
conservational and cost-cutting measures.
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Masterlease UK’s managing director Peter Tatlock told Motor
Finance that, as part of its ongoing commitment to tackling
climate change, the company is encouraging businesses to “kick the
CO2 habit”. “The aim,” he says, “is to reduce the environmental
impact of their fleets and, at the same time, their global fuel
bills.”
Already the message may be hitting home, caused to some degree,
Tatlock believes, by the changes to VED for the 2009/10 tax year
heralded in the March UK Budget. A recent survey commissioned by
Masterlease revealed that, for the first time, respondents placed
the cost of fuel alongside health and safety and duty of care
issues as top priority issues.
Stark remedies
As the head of one of the top five UK motor leasing companies
with a fleet of around 76,000 cars (and some 200,000 worldwide –
its parent is GMAC Financial Services), Tatlock outlined some stark
remedies for fleet managers seeking to cut costs.
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By GlobalDataThese include reducing driver mileage by methods such as car
sharing for commuting and business travel; making available public
transport links; advocating short-term hire or pool cars;
increasing teleconferencing; and better journey planning.
He also advocates more efficient measuring of business mileage,
since even where this is logged for company car drivers the
business mileage in private vehicles is often hidden in the
expenses system.
Masterlease also urges fleet managers to ensure that CO2 figures
are clearly shown and highlighted in all vehicle choice lists, and
to offer incentives to drivers who choose the greener option – such
as money-back schemes for those who drive lower emission vehicles,
reductions in vehicle choice, and stipulations on fuel types.
There is a raft of other recommendations in the “kick the CO2
habit” initiative, and Tatlock explains that it is now of top
priority for Masterlease to help customers make informed decisions
regarding vehicle selection.
Tatlock is a long-time General Motors finance man who joined
GMAC in Manchester in 1979. He served several overseas appointments
including Saab in Sweden, GMAC Europe in Zurich and, later, a spell
of duty in Australia. He was appointed managing director of
Vauxhall Finance in 1998.
The company has prospered in recent years with its Vauxhall,
Saab, Chevrolet and, more recently this May, its Hyundai private
label brands. It has made a success of canvassing the small to
medium-sized enterprise (SME) fleet sector which, although
traditionally difficult to access, Masterlease estimates is worth
around £540m a year.
Tatlock outlines that the company’s combination of close liaison
with its franchised dealer networks, web-enabled technology and a
small but dedicated field force have helped make an impact in the
SME sector.
“Nor is our sole preference for those franchises with whom we
have private labels,” he says. “We play in all markets and around
57 per cent of our fleet is comprised of non-GM vehicles. Nor are
we neglecting the larger fleet sector. During 2007 Masterlease won,
against significant competition, a deal to lease some 1,500
vehicles to Cattles plc.”
Tatlock is especially proud of having won the 2008 Midlands
Excellence Award which recognises applicant companies’ performance
in nine key business areas, including leadership, managing people
and satisfying customers. “All areas,” he stressed, “form part of
the Business Excellence Model which is a management framework used
by over 20,000 businesses across Europe.”
Ambassador for excellence
Masterlease employee Jo Dowdall won a special Ambassador for
Excellence award at the event which acknowledged her work in
promoting excellence and best practice to other businesses around
the region as well as ensuring quality within Masterlease.
It is Tatlock’s skill at the tiller that has steered Masterlease
within the top five UK motor lessors – in times that have seen its
competitors fuelling growth via acquisition or merger. He stresses
the importance of the company having a long-term industry presence
(“we have always been able to navigate the industry cycles”),
having a pro-active customer approach rather than re-active, and a
settled staff complement.
Illiquidity is not a problem for Masterlease, Tatlock explains:
“We have always been pro-active in the ways we raise capital for
the business, for example in utilising securitisation and various
other financial instruments. Our bad debts and write-offs are the
lowest they have been for many years and we see no need to amend
our underwriting criteria.”
Nevertheless, Tatlock and his colleagues are keeping a weather
eye on certain sectors of the market which may be affected by the
economic downturn – especially customers in the construction and
allied sectors.
He believes that it will be important for all Masterlease
clients to reduce their fleet costs in the near future: “They may
say to their staff you can still have your BMW – but make it a 320
rather than a 520 model.”
Also, he forecasts that the market downturn is likely to have
detrimental effects on the used-car sector with all the
ramifications that may mean for residual values. The company
customarily auctions the majority of its de-fleet vehicles,
although much effort is going into developing online re-marketing
to a wider audience together with driver- and employee-sales
initiatives.
As a further investment in cutting costs for fleet managers,
Masterlease has inaugurated two products: Fleet Risk Management – a
tailored look at a company’s exposure to risk as well as individual
employee profiles; and Driver Risk Management, a psychometric-based
driving safety management system aimed at improving safety behind
the wheel and cutting costs including fuel and wear and tear on
vehicles.
By all accounts Tatlock runs a tight ship – and tightly-run
ships are invariably well placed to weather the approaching
storms.
Motor Finance Issue: 44 – June 08
Published for the web: June 26 08 15:39
Last Updated: June 26 08 15:44
