Getting to Know the Asia Pacific Fleet Region
In recent months, the Wheels and ALD Global Alliance has made great progress in its expanded coverage of Asia Pacific (APAC) with the announcement of new partnerships with Mitsubishi Auto Lease in Japan, Shouqi in China and the opening of Malaysia under a joint venture between ALD and Mitsubishi UFJ Lease & Finance. This comes on top of the existing presence in India and the partnership with Fleet Partners in Australia and New Zealand. There is more to come in the near- and mid-term future, making this the perfect opportunity to share some insight into the APAC region.
Huge and diverse
With more than 3 billion people spread across two continents who may not share similar languages, culture or economic prosperity, what this region has in common is that they’ve been enjoying a rapid growth rate in recent years. The region contains several large economies trying to build a strong service sector and push internal consumption to complement or sometimes replace the industrial fabric they’ve developed. It is also an area of large and congested mega cities.
We expect international companies to continue to develop in the region and as they grow, put in place more mature organizations into local markets. This is relevant to the fleet industry because the fleet organizations will support this evolution and refine mechanisms for procurement, retention and mobility for those who need it (sales, after sales, logistics, management etc.).
So, why APAC as a region?
For most companies, the world is split between the Americas, Europe, the Middle East, Africa (EMEA) and APAC regions. Grouping markets with different maturities works if you’re able to balance local realities with regional oversight. Hong Kong, Singapore and Shanghai are home to the region’s finance and treasury centers. Procurement departments within organizations tend to follow the regional structures, and they have been working efficiently in this region because of the prevalence of direct purchasing in these manufacturing hubs. Indirect procurement departments are maturing, and it is fair to say that fleet has not been a priority yet.
There is an inherent complexity in addressing the APAC markets as fleets operate under various schemes within organizations, such as externally funded with a broad level of outsourcing, including chauffeur services, allowances, transportation services, novated lease, etc. Regional fleet management companies often do not offer the coverage nor the breadth of solutions and consistency expected.
In addition, leasing solutions compete to a greater extent with a variety of mobility and sharing solution providers that offer basic services at low costs. It is easy to picture crowded Asian streets with all sorts of taxis, rickshaws, vans and bicycles. So, it’s a real mobility and multi-modal strategy that’s needed.
How to make fleet work?
When you decide to include a regional lead on your fleet, you must consider how this person would fit into your regional organization and what value they can bring. A common priority is cost control. However, that approach will not work if the person doesn’t have a solid knowledgebase in data, local fleet strategies and best practices.
In this region, understanding the balance between perk and work in the local mobility strategy within each market is key. Shooting for a pure cost-minded approach could be damaging for the local organization and will create conflicting interests with the local teams.
You need to understand what local fleet policies are trying to accomplish and what their main challenges are. Having this broader understanding on what value the fleet creates for the operation will also ease your communication with the local and regional stakeholders such as HR, local sourcing, sales, operations and finance.
Look for a fleet savvy person with a good track record in another market that could export methodology from one market to another, leveraging the common items that will work well in these new ecosystems.
With that in mind, it’s important to create a circle of trusted advisors that can share market knowledge. A typical advisory board would include a contact from an OEM, one from a fleet management company and two or three fleet managers from other companies. These strategic partners will feed you with best practices but will also give you a second view of what the local teams claim to be market specificities.
Integrating APAC into your global fleet culture
I previously identified six pillars to consider when building a strong global fleet culture, each of them can be relevant to the APAC region. You can help steer the discussion in the right direction, build bridges with other regions, coordinate with regional/global stakeholders and ensure the local data can flow into your global model.
You can also find great experimenting grounds and future centers of excellence in some markets in the region. China is already the largest electric vehicle market in the world. Mobility solutions are a must in countries where the road traffic is complex, like in Indonesia. Australia has a very mature product of B2B2C leasing with novated leases, and Japan can offer some advanced business process outsourcing to manage the fleet.
APAC is in the very early stages of becoming an integrated region when it comes to fleet. Will it follow the European, LATAM or North American model with a fairly standard and harmonized product or will it become a more diverse marketplace with hyperlocal solutions to fit the mobility needs of each business?
We will have to watch the changes in the next five years very closely. Until then, share your thoughts on the APAC region with me at firstname.lastname@example.org.