Romanian firms start outsourcing fleet management

ALD Automotive, the operational leasing arm of BRD-Groupe Societe Generale, expects its turnover to double next year in the wake of the steady expansion of the fleets of the major companies operating in Romania.
“The market has a very high growth potential due to the fact that Romanian companies, too, have started resorting to car fleet management outsourcing. We estimate our turnover will surge by 110% in 2007 against this year, so that we will come to manage 3,000 units,” says Philip Valigny, a general manager with ALD Automotive.
At present, the company manages a fleet of 1,000 delivered cars, with another 400 units to be added shortly.
The first car fleets that ALD got to handle after its operations started in 2005 were fleets belonging to multinationals, which were used to resorting to such services abroad.
“Our first customers were companies that had been using such services for a long time, which were aware this is cheaper and more efficient. We had to educate Romanian customers and make them understand this practice is much more cost efficient,” says ALD manager.
The company now plans to gain major domestic customers. The French financial group’s unit provides operational leasing with included car fleet management outsourcing services for any vehicle weighing less than 3,5 tonnes. Fleet management contracts are sealed over a previously agreed period of time and preset number of kilometres travelled, with no advance payment, and customers pay a fixed monthly instalment for which they receive a single invoice.
Contracts have duration of between 12 and 45 months (or 75% of the normal life duration of cars).
At present, competition on the domestic market is quite low, Valigny believes, since there’s no market specialisation yet.
“There are only two other companies providing such financing in Romania, unlike the Central European markets, where there are up to 20 players and a differentiation of provided products,” he believes. Nevertheless, there’s indirect competition coming from companies that have their own car fleet management department and from financial leasing companies, adds Valigny.
Players on the operational leasing market are also coping with the fact that the used car market is not very well structured in Romania.
“Leasing firms have to create a buy-back service in partnership with domestic distributors,” believes Valigny. Last but not least, this product’s lack of popularity with Romanian companies and the poor state of road infrastructure are also hampering the development of ALD Automotive. Dacia models make up the largest part of cars included in the portfolio of ALD Automotive. Sixt New Kopel and APP Finance are the other 2 firms competing with ALD Automotive on the domestic market.

ALD Automotive
The domestic operational leasing unit of French-owned BRD-Groupe Societe Generale
Expects turnover to double next year amid rising car fleets of major companies operating in Romania
Now manages a fleet of 1,000 cars
Its first customers were multinationals, already familiar with this type of services
Now plans to gain major domestic customers
Has only 2 competitors on the Romanian market