Cash consumer or creator? Executives and companies new to fleet management are still tempted to look on vehicles as a corporate cost - a necessary evil to support the core business. Traditionally, management's main concern has been to minimise what it considers a drain on the bottom line.
A more profitable approach is to treat vehicles as contributors to income. As debis Fleet Management commercial director Patrice de Marigny told a fleet management conference: "Every fleet department is called on to produce an expense statement, but few are asked to provide an income statement."
It's an attitude that, in the past, has relegated fleet managers and their responsibilities to the fringes of corporate life. Increasingly, though, the cost of buying and running vehicles has brought them to the attention of the executive mainstream.
In some cases, they are managed from there. In many others, they are outsourced to professionals. Much as companies would like to own and manage their assets, they recognise fleet management is a time-consuming, specialist business.
There is an awareness that a well-run fleet is a valuable asset. Badly run, it can drag a company down.
This is recognised in the US, where a formal qualification, the Certified Automotive Fleet Manager, is a must for fleet-manager applicants at many companies.
Through Rand Afrikaans University (RAU), the SA Vehicle Rental & Leasing Association (Savrala) runs a fleet-manager programme in SA but it is not a prerequisite for employment.
Stannic Fleet Services' Mark Ashworth confirms that SA companies are abandoning their traditional "I-know-best" attitude to fleet management and calling on the experts for advice.
That advice may be to continue doing what they are doing already, with a few adjustments. The trend of a few years ago towards full-maintenance leasing (FML) - in which an outside specialist manages the entire fleet management process - has moved to one of offering individual services.
Nigel Webb, a former head of fleet management operations in the Imperial and McCarthy groups and now with his own company, Latitude Fleet Services, says about 7% of SA companies use FML. That's about the same as in other countries. There are many advantages to FML - not least the fact that it takes a huge administration weight off the customer and allows it to concentrate on the core business.
But "some people find it very prescriptive", says Webb. "FML has reached a level of maturity. Volumes have become stable and we're not seeing the growth in the market we did a few years ago."
For customers wanting single elements of the overall fleet management package, there are plenty to choose from. Some newcomers to the market are surprised at how much goes into the mix. It may include the buying and disposal of vehicles; financing; insurance; fuel cards; employee car allowance management; and the registration and licensing of vehicles.
There are many issues to consider, says Webb. Take imported vehicles. Is the budget price a bargain? What is the availability of service and the price of parts? There's no point saving R20 000 at time of purchase if you're going to pay a premium for replacement parts.
Effective fleet management means applying discipline to all areas, says Webb. In some cases, a comprehensive, well-run strategy can cut at least 20% from a company's fleet costs.
