In the spotlight: Venson Automotive Solutions

Nestled in a quiet Surrey village, in an anonymous red brick building opposite the local post office-cum-convenience store, sits one of the UK’s largest contract hire and fleet management companies.

Independent-owned Venson Automotive Solutions moved to Thames Ditton in 2006 from its old site in Esher.

It marked a clean break for the company following a change of holding company and a court case with a major shareholder. But it also prepared the way for a sustained period of growth.

Back then Venson had a risk fleet of 8,143 vehicles; today it funds 10,408, split evenly between vans and cars, plus another 3,000 vehicles on fleet management, making it the 18th largest leasing company in the FN50.

The company, which celebrates its 20th anniversary this year, has already expanded into adjacent buildings, dominating the mini office complex.

But contract hire and leasing is only part of the Venson story; the business has several strings to its bow which makes it, in the words of managing director Samantha Roff, “a service company, not a funder”.

She adds: “We do everything from motorcycles to fire engines and leasing to a full management package, including doing physical maintenance ourselves.”

Sitting alongside the fleet management business is a specialist arm which funds and maintains bluelight vehicles for the police and ambulance services.

Its priority is to ensure vehicles get back on the road as quickly as possible; the resulting investment in IT systems and processes also benefits Venson’s corporate customers.

The company operates three workshops, each catering for a particular fleet service.

The Nottingham site is contracted exclusively to Nottinghamshire Police which outsourced its entire fleet management needs to Venson in 2001 on a 25-year PFI (Private Finance Initiative) contract.

A workshop in Hessay, Yorkshire, accommodates an ‘Equip to Service’ business which offers a cradle to grave conversion service for everything from lightbars to cranes; most customers’ vans require a re-fit to some extent.

Accredited with type approval, the facility “stops just short of coach-building”, according to Roff – although that has not been ruled out as a future development.

The third workshop, a 40,000sq-ft premises in Welwyn Garden City, Herts, repairs and maintains major commercial vehicles, such as buses, fire engines and mobile libraries.

It also has two full-size ovens for accident repair and a couple of mobile response units.

“We see commercial vehicles as our specialism; our workshop background is why we built up that level of expertise,” Roff says.

“Diversification has done well for us. In the recession our workshop business did well while the contract hire sector suffered.”

Venson didn’t always perform so robustly. Until 2006, its accounts were frequently in the red.

Worse still, its parent company went into administration after losing a legal battle with Irish billionaire and shareholder Dermot Desmond.

Desmond alleged that he had been misled when originally investing in the business in 1999.

Following his victory in the courts, he took over Venson and formed a new holding company, Premier Fleet Management and Contract Hire.

Just as significantly, he appointed Roff as managing director. Since then, the business has consistently made a profit. So what is her magic formula?

“I was already running the contract hire and leasing division and that was doing well.

"But the rest of the business was in turmoil – big contracts weren’t going well and we had a different ownership structure with people who weren’t working in the business,” Roff explains.

“What we did was to put the Venson stamp on the rest of the business. We also cut significant cost at a senior level without cutting cost at the operational and service delivery level.

“Those two things turned the business around and we have grown steadily year-on-year since then.”

The “Venson stamp”, as Roff puts it, is customer service; she believes passionately that this is the company’s key selling point.

It refuses to operate a call centre-type set-up, for example, as it would be “impossible to deliver the level of customer service we want”.

“Our core value is accountability; customers want to build a relationship with some and you can’t do that with a call centre,” Roff says.

“It’s often when things go wrong that good customer service is fully appreciated.”

Venson’s customer retention rate averages 95% over the past seven years. Roff claims to have never lost a customer through non-performance; it’s down to either merger/acquisition or price.

It has around 100 fleet-funded customers, each on either a sole supply contract or dual supply if the operation is large enough.

The typical customer runs anything from 30 to 3,000 vehicles; 98% are on a ‘with maintenance’ contract, either fixed cost or pay-on-use.

“It tends to be an exclusive or one-of-two basis because, for us, it’s more about the fleet management service package rather than ‘here’s a Mondeo for x pounds a month’,”

Roff says. “You can’t add value for the customer if you are one of four or five suppliers – we are not in that market.”

She has identified the emergency services sector as a major opportunity for growth, but recognises there are hurdles to overcome.

“There’s a fear that ‘my vehicle won’t get the priority’,” says Roff.

“But we can show that we have the right systems, people and KPIs to prove that it can work and that they can make huge savings.”

Venson is prepared to open more workshops to cope with greater demand for maintenance contracts and to accommodate growth in ancillary services and a likely move into heavier trucks.

The public sector business will be the primary trigger because their operations are concentrated by region; in contrast, corporates are spread across the country making a workshop solution impractical without owning a nationwide network.

“We would like to grow our contract hire and leasing business but it’s about stability,” Roff adds.

“We have a supportive shareholder that wants to see stable, sustainable growth.

“It means we can work smarter; there’s no temptation to chuck vehicles on for the sake of it.”

Venson’s funded-fleet priorities involve contracts combining leasing and fleet management services. However, this doesn’t mean the company believes in total outsourcing.

“We’re not a threat to the internal fleet manager; in fact we are delighted if they are retained because we get to work with someone that understands and appreciates what we are doing,” says Roff.

“We want to take the grind and data crunching away from the fleet manager to enable them to be more strategic.

"Everything we do is intended to make things easier for the fleet manager; our job is to make them look good.”

Samantha Roff on...

Residual values

“I think residual values will have a small downturn next year. It’s tempting in a period where residual values are high to think the party will never end – some companies forget they ever took a hit on RVs. They think about what’s happening now rather than what might be the case in three years’ time. We didn’t get caught out last time and we won’t this time because we never chase loss-leader business.”

Transparent relationships

“Customers are smarter these days and there are more terms and conditions in place. I would welcome a more open market; it would enable like-for-like competition. But it’s a utopia we probably won’t get to.”

Telematics

“It’s been around for a long time but it hasn’t got into preventative maintenance yet. We’re not far away from that type of solution and the ability to predict vehicle failure and further minimise downtime will be the next big thing in fleet.”

Wholelife costs

“There is much more focus from fleets now on wholelife costs and understanding on the movement of lease rentals. We have tried to educate them to ask the right questions, for example, how residual values are set, will they move and tracking pricing. There are so many variables in the contract hire price, it’s hard for them to keep track during the contract after doing the tender.”

Procurement

“The best tenders involve a blend of procurement and fleet. It gives the tender structure and control from procurement with the understanding of the fleet needs for product and service.”

Van and truck fleets

“There is a big difference between car and van fleets. Van fleets are worried about too cheap a price because if the operation fails to deliver there are issues. The heavier you get, the more risk averse they are – they tend to go for more of a quality-based decision.”

Maintenance contracts

“If a fleet has 2,000 vehicles it will have peaks and troughs to iron out cost – we would always question why they have a fixed cost maintenance contract . For small fleets, fixed cost makes more sense because it only takes a few issues to have a significant impact on their budget.”

Factfile

Parent company Premier Fleet Management and Contract Hire
Managing director Samantha Roff
Time in role seven years
Risk fleet size 10,408 (FN50 2013)
Risk fleet cars 5,161
Risk fleet vans 5,247