On your Marques: Navigating the Company Car Conundrum
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On your Marques: Navigating the Company Car Conundrum

By: Isla Campbell

First impressions count in life as in business. That is why to many executives the type of company car they can choose to drive is more than a tool or a ‘workhorse’ to do the job effectively and efficiently. It defines them and their position within the organisation. It becomes as much a part of their uniform as their suit or briefcase.

Indeed, it acts as a symbol of success to the stakeholders they are trying to influence – their customers. In this psychological capacity, it performs an ambassadorial role to clients who subliminally also wish to be associated with outward displays of confidence and competence. One could not, for example, park outside a client’s chrome and glass headquarters in a vehicle that failed to exude the kudos associated with the job they were there to execute. It would simply be a tool that would portray the wrong image.

In this context, imagine the HR issues surrounding a large multi-national that for reasons associated with economies of scale and consistency wanted to consolidate its worldwide fleet and reduce cost. This might require a change to the badge policy that would reduce choice but include different classes of vehicles. How would this be communicated without it seeming like a demotion and a disincentive? This is often the quandary for larger, acquisitive pan global organisations where they inherit several, often expensive fleet policies with differing levels of choice and lease providers. It now requires a single or dual badge strategy rather than the previous multi-marque offering, and it must deliver consistency, transparency and economy of scale across the international estate.

It could be argued that a market leader would have less of an issue here, because ultimately there is an associated prestige with working for the best in class. In fact, however, there is a form of inverted logic at play because customers would recognise that the company was not only perceived to be head and shoulders over its competition, but also offered value for money. Likewise staff, although not happy about losing their choice, would not necessarily look to change jobs just because of a shift in car policy. They already command an excellent salary package and work for the number one in their field. Any head hunter would have their work cut out to prise them away from their existing employer and it is doubtful that a better choice of car would or could swing the decision.

The key fleet influencers are the finance, procurement, fleet and HR departments. It is only the latter that may have an issue with the change in fleet policy. This is because they are not simply seeing the decision in black and white cost terms. They recognise the psychological and often unsettling impact upon staff created by sudden changes. Employees look to their companies for stability and changing ‘perks’ for cost-cutting purposes may create unnecessary panic and distract personnel from their day-to-day efficient working patterns. Therefore it is critical that the HR department be on board with the changes early on so they can communicate the rationale behind the decision to the world wide employee base with sensitivity and care.

Businesses must be careful to consider the wider picture. By reducing choice down from six brands to two, for example, there may be an opportunity to manage costs more effectively, but, the selection also needs to consider the total cost of ownership (TCO) issues including residual value, maintenance and emissions. Although some marques might have a higher purchase cost they may have lower emissions, so are both economic to run and eco-friendly in terms of their C02.

• If there is an open policy in a country, consider reducing this to limit the number of manufacturers on offer. Don’t be too ambitious in driving this change. If there are six marques on the books, cut it down to four over two years, and down to two over a further two years, for example.

• When considering a pan-European strategy, consideration should be given to offering indigenously-produced vehicles where there may be a strong national loyalty.

• Drive this process through an empowered international fleet management team who can communicate with empathy and knowledge of the local leading manufacturer market, but at the same time deliver on a mandate of reducing cost in order to become more competitive in the market.

• Incentivise and educate the fleet drivers about reducing CO2. By accepting vehicles with smaller engine sizes and lower emissions, they are doing their bit for the environment.

• Reduce the number of leasing partners across all the territories for consistency and buying capability or power. By having fewer leasing partners companies can greatly reduce their administration, provide a more consultative approach and better implement the company strategy.

Whichever strategy is pursued, the communication must be handled sensitively in order to hold onto key staff and not disrupt and de-motivate the business at a time of intense competition. This should be done by careful ‘carrot and stick’. It will happen, but there is a greater good at stake namely cost and carbon savings that will protect business profitability and their long-term employment prospects, as well as offering them ‘more for less’ in the shape of a higher spec car that does the job, but pollutes and costs less.

Again this can be communicated as ‘killing two birds with one stone’ particularly with high mileage users where changing to smaller engine vehicles results in a greener fleet and reduces the overall carbon footprint, a message that feeds into the corporate social responsibility messages that many larger organisations now subscribe to.

Article Source: http://articlenexus.com

As a fan of article content and as a professional working for a digital marketing agency, Isla Campbell hopes you enjoyed her article but urges you to treat it as corporate content with business interests.

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