Interview: Benoit Dilly, Arval UK
Following a period of huge growth, Arval UK is out to broaden its offer for customers and hang on to market share despite large challenges facing the sector. Managing director, Benoit Dilly tells Alex Grant more.
You could excuse Arval UK’s managing director, Benoit Dilly, for being a little more fraught than his relaxed demeanour gives away. With the integration of GE Capital Fleet Services complete, but still fresh, within the company’s operations, and a growing customer base, its fleet has almost doubled to 160,000 units within four years. And, while he says significant further expansion isn’t planned, there’s no time, and no desire, to slow down.
“It’s not important to us whether we are number two, or number three, in the market,” he explains. “What’s important was to achieve our key objective; to have between 8-10% market share, that is where we want to be. Now we need to focus on existing customers, to give them more services and products, and support retention. Your customers are your best promoters.”
Integrating GE’s operations bodes well. GE’s former Manchester headquarters and sales team were retained, and continued to deal with existing customers, which made the transition easier, Dilly adds. “We haven’t lost any customers, which gives a good sense. We’ve taken two or three really good practises, in terms of organisations, products and tools – 18 months ago the motto was to make the best of the two worlds, and this is what we have been doing.”
Acquisitions aside, fleet growth has been organic across all of Arval UK’s channels, he says. It’s the result of a focus on SME customers, and dealers, plus efforts made to improve the offering to large corporates. Products such as an in‐house telematics solution, its own accident management service, and a unique fully‐insured vehicle offer – leveraging BNP Paribas expertise – have all helped.
But the wider automotive market looks challenging – and not necessarily for the most obvious taxation, political and legislative reasons. Dilly believes used car volumes, the result of booming registration volumes under PCP and PCH schemes, could pose the bigger threat to the contract hire and leasing sector, suppressing used values and making it less attractive.
“This to me will have a much bigger impact than the uncertainty coming from Brexit and so on,” he says. “Take an individual or small company – in the last four to five years they’ve been given the opportunity to have a better car, cheaper. If this car becomes much more expensive, will they still do it? I’m not that sure. What will they do then, will they keep their existing car? Will we see massive trend for contract extension? Or will they step down in terms of category, if it’s more expensive once residual values and discounts are not the same. I think they will keep the car.”
With that in mind, Dilly sees the business adding value by working in partnership with its customers. Utilising its fleet expertise to enable them to offer mobility solutions, cut costs and CO2 emissions, and make better use of assets. Arval UK will have its first salary sacrifice customers in place before the end of 2017 – an offer Dilly says is still valuable, provided it isn’t pinned on tax efficiency – though it’s also looking at how customers of all sizes operate. Including, potentially, having an offer which would enable the traditional fleet management role to be outsourced completely.
“If you have a 50-car fleet, you don’t have a fleet manager, you have a busy boss trying to sort out the business. He needs to source cars, but he doesn’t have the time, he is not interested. We need to create, and put in his mind, the idea of a virtual fleet manager. Technology will allow us to do so. That, to me, is how we will use our expertise and knowledge about managing smaller fleets through technology. We need to push information they can digest, and process, and get them to a point where we can do a lot for them. The need for companies like us to manage big fleets will remain forever, so I see a big trend where we need to manage large fleets, but also be able to manage smaller fleets virtually.”
Despite the challenges, though, recent growth has only strengthened its base in the UK. “We need to see those big trends related to the automotive market, more than the economy. BNP Paribas has 7,000 employees in the UK, we’ve been here for 150 years, and we see potential for growth overall. We are in the UK for the long run.”
Adding value for customers
Focused, for now, on large corporate customers, Arval UK’s telematics solution uses its own in-house technology and offers information on driver behaviour, fuel consumption, CO2 and journey optimisation among others. “Telematics started as a slow burn, but it is picking up quite nicely,” says Dilly. “It’s providing customers with relevant information for us to push recommendations and enable them to make decisions. We have some sizeable fleets taking that on board.”
Adopting a model that’s common in the rest of Europe, Arval UK remains the only company here to deliver a fully insured vehicle. It also has an accident management service, based out of Birmingham, which Dilly says has reduced downtime by an average of 10%, as well as repair costs: “What we are trying to do is move the approach of leasing companies from something based around the more the customer pays the more I get in revenue – which is not sound – to the situation we are in today, where revenue depends on savings we can offer to customers.”
Already offered in Italy, Arval UK is looking to roll out its car sharing solution next year. This will enable businesses to offer vehicles to employees, for personal and business use, booked through an app and web portal. In Italy, it’s said to cut business mobility costs by 20%, as well as making better use of vehicles which would otherwise be sat idle. “We need to find our position within the overall mobility and car sharing market,” Dilly explains. “We’ve got the expertise to do so, but we are not meaning to become the Airbnb of car sharing. That is not in our DNA.”
“Now we need to focus on existing customers, to give them more services and products, and support retention. Your customers are your best promoters.”