Brian Rogerson talks to the head of the UK’s largest fleet about
integration and insourcing
Earlier this year Lex announced a three-year extension to its
finance relationship with Honda Finance Europe. The lessor will
continue to provide Honda-branded back-office services to Honda
dealers throughout the UK while customer relationships will be
managed by Honda Finance.
Go deeper with GlobalData
The Honda deal confirms Lex’s skills at insourcing its expertise
– and augments its connections with HSBC, Ford Business Partner and
its small-fleet broker business.
Lex’s current total fleet size of 250,000 was boosted by the
2006 insourcing of HSBC’s fleet of some 47,000 units and the 2007
assimilation of Bank of Scotland Vehicle Finance’s (BoSVF)
65,000-strong fleet – the latter on the verge of being
completed.
Traditionally, integrating fleets has never been an easy
process. Yet Jon Walden, Lex’s managing director, stresses that it
need not be insurmountable if the correct corporate strategy is in
place beforehand. Lex has been the UK’s number one fleet lessor for
some years now but Walden has never viewed size as a goal in its
own right.
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By GlobalData“We have carried out integrations many times now,” he tells
Motor Finance: “and the primary concern is always that
there is no negative impact on our customers. What small challenges
we had with the latest integration were quickly ironed out and we
have now successfully created one business where there was two
previously.”
The rise and rise of Lex is largely down to Walden, who
originally joined Lex Service in 1982 and rose to deputy chief
executive of its Volvo Concessionaires subsidiary. In 1990, he was
promoted to Lex Vehicle Leasing as managing director before moving
on to Lex Retail in 1995. Some two years later, he left the Lex
group to go solo as an industry consultant, before being persuaded
to return to Lex Vehicle Leasing (later re-branded Lex) as managing
director in 1999.
It is the innovations that Walden has introduced over the years
that have made Lex successful in assimilating large contract wins
as well as, unusually but simultaneously, growing organically.
Most valuable asset
Walden has always considered his people to be the company’s most
valuable asset. “We are 100 per cent dependent upon the quality and
expertise of our people,” he says. “As a result, some four years
ago we formed our Sales Academy (SA) which comprises a structured
development programme, initially for our sales teams, which 18
months ago was extended to our operations team. We have around 12
people in-house who support the SA, which aims to give all
colleagues the expertise and skills they require to carry out their
jobs with the maximum effectiveness. It not only measures success
by examination but also offers remuneration rewards for those who
are successful.”
In addition to a development commitment to staff, some five
years ago Walden introduce Q6, a Six Sigma quality programme that
is dependent upon the input and commitment of all people for
success.
Winning results
Lex returned good results during 2007 even before accounting for
the BoSVF integration. Turnover rose to £711m (2006: £697m) while
profit before tax rose by 12 per cent to reach £72m (2006:
£64.2m).
To Walden, organic growth is vitally important, and a couple of
months ago Lex won a contract to manage construction company Taylor
Wimpey’s 1,650 vehicle fleet. As part of this Lex will manage the
sale and leaseback of 700 vehicles that originally belonged to
George Wimpey as part of a fully outsourced sole supply
contract.
Walden explains that Lex won the Taylor Wimpey deal after
overcoming a number of challenges. Prior to the merger of Taylor
Woodrow and George Wimpey, Taylor Woodrow had been a Lex customer
for six years. As a parallel, George Wimpey was a new business
prospect which, prior to the merger, had reached the conclusion
that a leased option was most appropriate and Lex was a prime
contender to acquire the business. However, with the advent of the
merger, and the consolidation of the respective fleets, Taylor
Wimpey put its fleet out to tender.
“This was a fantastic result for Lex,” Walden says, “and
represented a further endorsement of our consultative approach to
meeting customer needs and the strength of our outsourcing
proposition.”
Keeping the Momentum
One of Walden’s weapons in avoiding commoditisation of its
leasing product is Lex Momentum which comprises a team of 10
consultants with leading-edge experience and capability in finance,
human resources and reward, taxation, fleet operations, outsourcing
technology and change management.
“Fleet managers are currently being swamped by legislation and
regulatory issues. As a result they are asking us for ever more
advice. We are offering this as an outsourced service to running a
fleet in the most cost-effective and appropriate manner. The days
when we simply quoted a monthly leasing rental are long gone – a
modern fleet lessor is now a complete motoring service
provider.”
Lex currently has around 15 per cent of the UK fleet sector, so
Walden forecasts plenty of scope for growth. “We see opportunities
in the LCV sector,” he says, “and have recently appointed a
specialist to head up LCV sales, Mark Lovett, who has joined us
from Nissan UK.”
Lex’s fleet of light commercial vehicles is currently standing at
around 50,000 units – or some 20 per cent of its total fleet.
Looking forward, Walden is keen to anticipate demand from
customers and the company is currently piloting next-day servicing
for fleet vehicles to a “select number of clients”. It is part of a
pro-activity campaign by Lex whereby the company can provide
same-day needs of the modern company vehicle user. Turning around
queries more speedily and providing faster service levels is part
of Walden’s pro-active strategy. “After all,” he says, “why should
drivers have to wait a couple of weeks for a car service? Their
doctors will invariably see them the same day – so why shouldn’t
their car-service agents?”
Motor Finance Issue: 45 – July 08
Published for the web: July 25 08 12:26
Last Updated: July 28 08 12:1
