Alstom UK & Ireland: On track for fleet success

Is fleet a vocation of choice? Nadim Mehar (left) certainly thinks so. The self-proclaimed car fanatic started his career as an 18-year-old working in the finance department at LeasePlan UK for the sole purpose of gaining a foothold in the car industry. Fleet presented that opportunity for the school leaver.

Every couple of years, Mehar switched roles to build up his skills and knowledge-set until LeasePlan was bought by a consortium headed by Volkswagen in 2004. The acquisition opened the door to his first fleet manager role, looking after the internal car scheme. 

“We went onto the Volkswagen scheme which meant going from a change of cars every three-to-four years to changing every three months,” Mehar says. 

“For someone with a passion for cars, it was the perfect opportunity to continue learning.”

He stayed until 2013, leaving to pursue new fleet management career opportunities at Signalling Solutions, a railway traffic light and switchgear manufacturer owned in a 50-50 joint venture by Alstom Transport and Balfour Beatty.

When Alstom bought out Balfour in 2015, the next door opened: Alstom had no fleet manager.

“So, I stepped into the role of fleet manager UK and Ireland,” Mehar says.

“We made some big changes, consolidating the policy and going through a major leasing tender.”

Leasing provider selection

It took nine months to select a new leasing provider, with the decision made by a five-person panel which included HR, purchasing and an administrator.

“It was the first big tender we’d done. For me, it was educating colleagues about what to expect and how to interpret the proposals. For example, if we were offered a front-end rebate, it was working out which part of the deal that money was coming from,” Mehar says, illustrating how his leasing background benefits his current role. 

“It was also paper-based; now it would be digital and a lot quicker.”

LeasePlan won the Alstom tender, putting Mehar back in touch with former colleagues, only on the other side of the fence.

“We wanted a partner which would help us to develop and grow, and which offered synergies with our European business,” he adds. “We were already working with the LeasePlan international team in other countries.”

In 2021, Alstom bought Bombardier Transportation which is currently being integrated into the fleet policy. 

The final elements to be harmonised are around the benefits offering, including salary sacrifice: Bombardier had 60 cars with Tusker, while Alstom had 12 with LeasePlan.

Change of reporting line

Since the acquisition, Mehar’s reporting line has changed from the global benefits director to the finance director, who reports into the board. Fleet has risen in profile among the senior leadership team thanks to his monthly insight updates which typically cover leasing performance, pricing, supply, lead times and other industry challenges. 

“I look at Fleet News and (sister publication) AM for industry news which gets included in the report,” he says.

The business is planning to undertake a full funding tender this year. Mehar initially identified four potential partners, but the list has swelled to seven after he took stock of the market.

“We looked at who we are working with now and who stayed in touch with us after the last time we went to tender,” he says. 

“Seven is about the right number – it will be tough, though, as some are new to us. But they have interesting concepts and products that we want to look at.”

This includes considering alternative funding options such as finance lease. Alstom runs an effective rental policy after rejecting total cost of ownership during the previous tender to ensure greater consistency on the cars sitting in each band. However, it is back on the table, particularly with electric cars in mind.

The tender will seek a fully outsourced fleet management solution that includes accident management.

“This is easier to manage rather than outsourcing to multiple suppliers,” explains Mehar. “Alstom did this in the past, but we brought it all together, which reduces the number of invoices and the admin – we don’t have someone managing all of that, which saves time and money. 

“He adds: We control the relationship through KPIs (key performance indicators) and benchmarking. Within our contract, we can benchmark every six months but, in the past five years, we’ve only felt the need to do this once.”

Company cars could double

The successful leasing company can expect rapid growth from the Alstom fleet. Currently sitting on 580 vehicles, a 70/30 car-to-van split, Mehar predicts the number of company cars could double this year due to recruitment and by harmonising the benefits offering across the whole group.

A relaunch of the salary sacrifice scheme will add further growth impetus with an employee roadshow expected to stimulate renewed interest. 

Open to around 5,000 employees, the choice list drives the employee toward low-emission hybrid or electric cars and offers everything from a Fiat 500e to a BMW iX3.

“The business does two roadshows a year and at one we had questions on cost-of-living and ultra-low emission vehicles,” Mehar says.

“We know car prices are increasing; salary sacrifice gives staff the opportunity to go into a car at a lower rate. We focus on communicating the gross deductions from salary so staff can see the savings.”

Mehar is in talks with manufacturers about enhanced prices which, he acknowledges, has been difficult with the constant price corrections caused by ongoing supply issues.

But he adds: “It’s a quick win if manufacturers embrace it properly as it gives them access to a wider audience than just company cars. We see it as an attraction and retention tool for staff.”

Alstom was in the vanguard of fleet electrification when it adopted the Mitsubishi Outlander plug-in hybrid commercial vehicle as the cornerstone of its van fleet several years ago.

The Outlander PHEV quickly gained acceptance by drivers thanks to the improved specification and quality levels over their previous vans. An unexpected benefit is the fact they are far less attractive to thieves compared with the more conventional panel vans.

“We used to get a lot of break-ins when staff stayed overnight in hotels, especially near Christmas, and we tried everything – deadlocks, parking close together,” Mehar says. 

“Since switching to the Outlanders, we have had zero break-ins, probably because they look like cars, even though they have our logos on.”

Forced into change

With Mitsubishi no longer selling the Outlander in the UK, Mehar is switching to the Toyota Corolla plug-in LCV as the next stepping stone on the journey to full electric. He anticipates starting the full electric phase of the LCV electrification strategy in 2024 but has concerns about the range capability for vehicles which, in some cases, need to travel 100,000-plus miles a year (2,000 miles a week), although the typical mileage is closer to 20,000.

“Covid has put us back a couple of years with the delays caused by the production stoppages,” Mehar says. “We’d like to see the Government push the 2030 deadline back by a couple of years.

“We will probably mix electric and ICE (internal combustion engine) for another two cycles because we need the range and price to work.”

Electrifying the car fleet has been easier, with vehicles doing less mileage and the obvious benefit-in-kind tax incentives, although PHEVs dominate here as well. 

Changes to working practices has enabled Alstom to reduce the four-year lease contract from 25,000 miles to 15,000 miles a year, bringing more vehicles into scope.

“As the business grew, we wanted to encourage safer travel – so, for journeys longer than one-and-a-half hours, we encourage staff to take the train,” Mehar explains. 

“In 2020, when everyone relied on Teams, the processes changed again. That’s when we reduced the mileage to 15,000.”

Help with home charge points

The car fleet has operated with a 75g/km CO2 cap for the past five years, which has accelerated the transition to electric; a further enticement has been a £500 contribution from the company for a home charge point. 

The only ICE vehicles left on the fleet now are some larger panel vans and minibuses which are part of the legacy Bombardier business.

The shift to electric has been supported by broadening the choice list. In 2020, Alstom offered just five brands: BMW, Mercedes-Benz, Jaguar, Land Rover and Volkswagen. It has since added Audi, Cupra, Ford, Hyundai, Kia, Mazda, Škoda, Toyota/Lexus and Volvo to fill grades gaps.

“We now have everything from a small hatch up to a small SUV in each grade,” Mehar says.

Across the entire fleet, BEVs account for 15% of vehicles, PHEVs 80% with the balance consisting of the diesel light commercials. It will likely be 2032/33 before the proportions reverse to 80% BEV; 20% PHEV, believes Mehar.

Operating in the rail industry means safety is not just a business priority, it’s a fundamental part of Alstom’s DNA. 

In addition to the restrictions on driving times, the company also operates a 12-hour door-to-door rule meaning any working day likely to last longer results in hotel accommodation.

EVs assimilate perfectly into this safety mindset. Their automatic gearboxes have helped eliminate the knee injuries caused by persistent use of a clutch pedal. They also tend to be equipped with extensive safety technology, including, for example, assisted braking and blind spot indicators.

Any drivers involved in a road incident have a meeting with their line manager and may undergo training. Mehar hosts weekly toolbox talks and inputs into the monthly company health and safety briefings.

Alstom also operates a company-wide ‘close calls’ policy where any member of staff who witnesses something that might cause an incident is encouraged to raise their concern in the knowledge that action will be taken. 

Examples include a concern flagged by a member of staff suffering from a lack of rest after a long shift. Another was the fact the Outlanders didn’t have split-view wing mirrors which meant drivers couldn’t see the nearside
of the car. Alstom’s solution was to fit aftermarket units. Mehar says: 

“These are quick wins; if you invest in the team, you get fewer headaches.”

He adds: “It is important to have stakeholders within the business who are involved in key decisions, especially purchasing.

"For me to do my job properly, I have to engage with other stakeholders and help them to do their jobs.”

Data underpins fleet activity and decision-making, with the reporting suite including deliveries, live orders, payroll and cost centres in addition to incident stats. The latest reports include benchmarking on allowances. Mehar concludes:

“Quality of data is vital. It’s the only way to effectively run the fleet.”

---

Mehar on... grey fleet

“We have 300 cash takers who use their cars for business purposes. We have criteria in place, including cars can be no older than seven years and 60,000 miles, and we do all the checks for business insurance and MOTs.

“We increased that from five years because of the current cost-of-living crisis. Most of the cash takers are from the legacy Bombardier business which Alstom acquired in 2021, and we expect the number to fall when we bring them under the group company car policy. 

“The business embraces the process. We’ve had people come across from Bombardier with 10-year-old cars and we’ve explained the reasons why they can’t drive them for business – we often use the worst-case scenarios with vehicle safety. 

“People often don’t understand company car taxation, but when we go through it with them and they look at the numbers, they change their mind and want to be on the company car scheme. It’s an education piece.”