Telematics take-up in the UK fleet market could accelerate significantly with Arval set to be the next contract-hire company to enter the fray.

ALD Automotive led the contract hire market into the telematics arena a decade ago, but since then only a handful of rivals have followed suit.

However, according to the British Vehicle Rental and Leasing Association (BVRLA), the fleet industry - fleet managers, leasing companies and rental operators - will be largely responsible for ensuring that telematics reaches its full potential.

Essentially, the technology allows the remote management of a fleet of vehicles wherever they are, 24 hours a day, helping to cut costs, improve legislative compliance, reduce risk and boost business efficiency and productivity.

In addition to contract hire firms, telematics providers, insurance companies, motor manufacturers and telecoms specialists will have a huge influence on the rapidly growing market. But, as yet, the UK is perhaps five or 10 years away from any form of product harmonisation, according to insiders.

Fleet management consultant Professor Colin Tourick believes the rapidly changing telematics markets - falling hardware prices and the development of an increasing array of features - has resulted in some lessors holding back from forming partnerships with third party suppliers and waiting to see what emerges.

However, he added: “I have no doubt that this area will grow, that we will see more telematics systems installed and leasing companies and telematics companies will provide ever more integrated solutions, until we get to the situation where they will merge and offer seamless solutions.

“It is clear that for the right fleet the right telematics solution can deliver quite amazing benefits, including a reduction in fleet costs and risks, and a significant improvement in customer experience.”

Arval, which operates a fleet of almost 90,000 company cars and vans in the UK, says it is speeding up its investment in telematics and has already started rolling out initiatives in some of the 25 markets in which it operates.

A spokesman for Arval UK said: “We are working on a solution with an external supplier and expect it to be ready for launch by the end of the year.”

Arval’s telematics solution will be specifically tailored for the UK market taking account of synergies and best practices gleaned from other countries where its telematics solutions are being launched.

He added: “Telematics has become a strategic topic for Arval over the past few years. Not only is it an important lever to optimise fleet management, both in terms of total cost of ownership and from an environmental perspective, it is also a way to get drivers directly involved and influence their driving behaviour.”

Apps increase accessibility

The BVRLA in its recent ‘Fleet Technology White Paper’ explained that telematics functionality and affordability had developed at such a rate that it was no longer just the tool of the large field service fleet.

“Once associated with expensive, bespoke hardware, it is increasingly moving to web-based apps available on smartphones and other mobile devices,” said the report.

“Delivering them via the driver’s own company smartphone can help overcome the issue of driver acceptance and enable fleet managers to introduce app-based incentives or instructions to improve driving habits.”

BVRLA chief executive Gerry Keaney added that the rental and leasing sector was “well aware of the potential of developments”.

Since ALD Automotive launched its ProFleet2 telematics solution a decade ago, the functionality has developed significantly.

After installing the technology in almost 40,000 vehicles across its fleet of more than 90,000 company cars and vans, it says telematics is now a “vital component” within a fleet operation.

Rhys Harrhy, ProFleet2 development consultant at ALD Automotive, said: “In-vehicle telematics is now the key source of vehicle information for many fleet decision-makers as they seek to better understand their fleet operation and how they can improve their fleet’s overall efficiency.

“Improved efficiencies particularly relate to driving down travel time through better mileage management, which not only reduces fuel costs and vehicle wear and tear but also cuts fleets’ carbon footprint.

“In addition, the data enables journey planners to improve operating schedules.”

ProFleet2 was launched as a mechanism for ensuring vehicles were serviced on schedule through the triggering of a two month/2,000-mile vehicle service reminder that also eliminated the risk of in-life or end of contract recharges caused by poor service history. The technology also proved invaluable in helping drivers’ record accurate business mileage.

Since then, ALD Automotive has added further functionality and a fuel monitoring tool is in the process of being launched that measures fuel usage, fuel costs and vehicle and driver efficiency as well as monitoring vehicle CO2 emissions.

LeasePlan, which operates a UK fleet of almost 140,000 vehicles, launched its telematics product in summer 2013 and has fitted it to more than 1,000 company cars and vans.

The company says the technology is “a growing force in efficient fleet management” and that, while it is early days, “our customers will derive huge benefits from it”.

Oliver Boots, head of product services at LeasePlan, said: “We have had reasonable uptake and telematics will become more prevalent in fleets.”

Cost control drives uptake

Telematics was initially the preserve of commercial vehicles fleets, but its growing use in company cars is being driven by compliance and cost control with historic fears of ‘Big Brother’ long gone in most cases, it is claimed.

However, Boots said that while telematics had been given a big billing it would not change fleet operations on its own.

“Telematics is about data collection,” he explained. “Fleet managers need to use that data to make decisions and change policies.

“We are taking a more consultative approach to help customers implement solutions after action areas have been highlighted by telematics data.

“Telematics does not solve problems itself and fleets can suffer from information overload. That is why we are talking to organisations about their objectives as a result of implementing telematics because the resulting data drives real value.”

Others will follow

Other leasing companies will enter the fray, but Harrhy said: “They are not the only organisations entering the market. Vehicle manufacturers, for example, are introducing connected systems.”

Telecoms companies have also thrown their hat into the ring. Vodafone said when it announced its intention to acquire Cobra Automotive Technologies - the deal was concluded last month - that the company’s telematics products and expertise would enable it to provide a more comprehensive range of end-to-end services to automotive customers.

Erik Brenneis, director of machine-to-machine at Vodafone said: “The combination of Vodafone and Cobra will create a new global provider of connected car services.

“We plan to invest in the business to offer our automotive and insurance customers a full range of telematics services.”

Ultimately, it could be that the within the next decade all parties - telematics providers, contract hire and leasing companies, motor manufacturers, telecoms specialists and the insurance industry - all come together to provide a telematics offering that is a pre-emptive solution to managing vehicle service, maintenance and repairs, cuts fleet insurance premiums and delivers a raft of other fleet management and information data.

However, as Harrhy, a telematics specialist for the last decade, said: “There is a long way to go - perhaps five or 10 years from a harmonised solution.”

 

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