José Vantolrá Ruiz
Manager of Distribution, Fleets and Direct Sales
VW de México
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Insight

Steady Momentum for Fleet Mobility Services

Mon, 09/01/2014 - 13:19

The boom in Mexico’s automotive industry has been a blessing for the country’s fleet sector at a time when the global fleet management market is expected to grow from a value of US$10.91 billion in 2013 to US$30.45 billion by 2018. In response, Volkswagen established its Fleet Mobility Services division (VWFMS) in 2012. The new company has identified opportunities to offer services to both large corporate fleet owners and the smaller SME segment. José Vantolrá Ruiz, Manager of Distribution, Fleets and Direct Sales of Volkswagen de México, explains that since the company started, it has developed a management portfolio of 12,000 vehicles in the country. “We have identified the customers that really need mobility solutions and the combination of our strong brand and financial division allows us to provide an attractive service for them. Ordinarily, fleet management is mainly focused on large fleets, but we have also identified significant potential in the SME sector, which requires support but currently has no major provider,” says Vantolrá.

Volkswagen’s market knowledge allows VWFMS to provide the entire range of fleet management services including vehicle selection, accessories selection, financial and insurance plans, maintenance, warranty, and administration for the lifecycle of fleets. “Identifying the right vehicle and having easy access to parts and maintenance is crucial,” says Vantolrá. To this end, VWFMS has a dedicated network of suppliers, certified repair shops, and pre-paid maintenance schemes in place. Financing is obviously an essential support mechanism for fleet establishment, and Vantolrá explains that the company’s financial division serves the leasing segment heavily, with over 70% of its financial portfolio being comprised of leasing customers.

The relationship between fleet management and technology continues to evolve and the importance of being able to electronically monitor fleet and driver performance is becoming crucial to understanding and reducing lifecycle costs. “The role of technology in the fleet management process is critical to manage and control a fleet, it is essential to have robust, flexible, and reliable systems to ensure performance monitoring of each component of the fleet,” says Vantolrá. VWFMS has identified that companies want greater control and standardization of costs, processes, KPIs, and financial products. “Currently, in Mexico and the rest of the world, the Volkswagen Group is investing heavily to develop a wider range of systems to suit the global needs of our customers. In Mexico, we are in constant communication with our global matrix to support customers. Additionally, we have introduced alternative technologies such as telematics that allow real-time monitoring of the fleet, although currently these solutions remain more accessible to large corporate entities,” says Vantolrá.

Historically, fleet sectors worldwide have grown with increases in taxation levels as company owners have looked for ways to circumvent government taxation policies. This has led to the company car becoming a prevalent employee benefit in many regions. In fact, almost 60% of new cars sold in Europe are for use as company cars. Following Mexico’s Fiscal Reform, leasing will offer more favorable VAT conditions to fleet lessors that may well incentivize more leasing. Vantolrá explains: “With the recent reforms on taxes, leasing has become the best option to acquire the fleet. Although the deductibles for leasing have decreased from MX$250 (US$19) to MX$200 (US$15) a day, expenses associated with the vehicle, such as gasoline, maintenance, and insurance, remain 100% deductible.” Vantolrá believes the reforms will encourage growth while attracting more competition to the market. “We visualize the incorporation of new players, either entering from abroad or emerging from within Mexico,” says Vantolrá. Essentially, VWFMS aims to remove troubles from any companies expending a lot of time and effort to manage a fleet that is an essential part but not a central component of their core business. VWFMS is seeking to stand out from the number of competitors operating in the Mexican market by providing a number of core services. It handles negotiations with OEMs when buying a number of units for a given fleet, by handling the acquisition and disposal of fleet renewals, by providing funding alternatives to match a company’s needs to its budget, by ensuring that the vehicles receive servicing on schedule, handling the administration of fines stemming from breaking the rules of the road, and ensuring drivers can benefit from an established personal support system.