Arval targets growth after returning to Government procurement scheme

Arval has been reappointed to the Government procurement framework run by the Crown Commercial Service (CCS), after a four-year absence, in a bid to accelerate its growth with public sector fleets, particularly in vans.

The three-year contract means that the company can now tender for public sector business for Lot 1 of the Vehicle Lease framework, which covers the lease of cars and vans up to 3.5 tonnes.

Light commercial vehicles account for almost one-third of Arval’s risk fleet and the company has a team of dedicated staff to handle this area of business. It includes a number of former fleet managers within its consultancy team as well as a specialist in van conversions.

“We took a conscious decision four years ago to leave the procurement scheme due to group strategy. Now we are looking for growth so we are exploring this option,” said Tony Grove, Arval LCV manager.

“Vans used to be run into the ground by local authority fleets but as they move to contract hire and outsourcing, they have to do regular replacements – there is more of a habit in the industry of three-, four- and five-year operating cycles.

“We are not audit takers; we get under the skin of what fleets need. This includes looking at their supply chain and the logistics of their business, not just their choice of van.”

Chris Salmon, Arval head of corporate sales, added: “The question being asked is ‘have I got the right van for the job?’ This is where we can add value.”

Arval will launch a dedicated CV programme towards the end of 2015 to advise fleets on safety, legislation and efficiency. It will also roll out a telematics solution in June focusing on tracking and mileage management services.

“Our CV programme will go up to trucks, supported by BNP ,” said Grove. “We will be sharing knowledge and best practice across fleets with all types of vehicles, from cars to HGVs.”

In its sights for “aggressive” growth are fleets that currently buy their vans outright, particularly in the sub-100 vehicle category. These organisations have been “suspicious” of leasing in the past because of a belief that they would “be ripped off”, as well as concerns about downtime and wear and wear costs, according to Grove. “We have put in place steps to address those,” he says.

Those steps include improving the aftersales service by building relationships between dealers and van drivers to enhance dealers’ understanding of fleet pressures.

Grove added: “We have a 26-week minimum for van touch points – that’s when we want to see them .”

Contracts can be bespoke for individual customers to include uptime offering such as out-of-hours servicing.

Arval also offers just-in-time supply for bodybuilding and racking, enabling customers to order a complete van.

New services include mid-term rental from one to 24 months. Arval racks and fits out the vans, including livery, for customers on a bespoke programme.

“It’s gaining momentum,” said Grove. “We also have an option to switch the vehicle into a contract hire asset if the customer wants.”

The programme is targeted at fleets that have short-term contracts and seasonal variations in demand, and “fills a gap for Arval”, added Grove.

For a full list of appointments to the Vehicle Lease framework, go to commercialfleet.org/CCS.

‘Total solution for vans and trucks’

Arval has brought in former fleet manager Wayne Millward as a fleet consultant for vans and trucks. But while vans are handled directly by the leasing company, its parent company BNP Paribas is responsible for trucks through a leasing solutions operation.

Millward said: “Arval stops at 3.5 tonnes; then BNP takes over. But we join up where appropriate. For the customer it feels like a total solution rather than two businesses – we work together to create the solution.”

Many customers have separate van fleet and truck fleet managers, although Arval is seeing the two roles increasingly combining. Retirement is often the trigger for consolidation within a fleet.

“We have good opportunities in truck. It is a hard sector regarding volume and there are a lot of funding partners that are not household names,” said Millward.

“The truck parc is steady; what has changed is operators make the trucks work hard. telematics is 20 years ahead of van and they really sweat their assets.”