Q: Operational leasing has increasingly become a habit in Romania, especially since, in recent years, not only multinational companies, but also local companies have been using it. What benefits does an operational leasing have and how have service providers adapted their portfolio to the local market?
Frederic Banco: During ALD Automotive’s 12 years’ experience on the market, not only have we learned everything there is to know about the specifics of the market, but we have also shaped modern operational leasing services in Romania. If at the beginning our main focus were multinational companies, in order to achieve our desired growth we later started looking beyond this sector and focus our attention towards a new segment with huge potential: SMEs.
We have developed specialised programmes for these potential customers and our sales consultants can offer custom advice during the entire purchase process.
Apart from focusing on local customers, another local market trend exhibited by customers is to opt for full-service operational leasing, which offer them the best option for business efficiency and longterm business stability. Overall, in this dynamic environment, our customers go for this funding option as it provides total predictability: fixed monthly instalments, 0% down payment, technical expertise in relation to suppliers, permanent mobility. Moreover, the operational leasing can provide flexibility to the companies, as the costs are kept under control and the time invested in managing the fleet is also reduced. When companies opt for this product, they also outsource the risk of servicing, maintenance, repair, and insurance and they are in control of their fleet expenses, as they can access daily monitoring reports.
Q: How would you characterise the evolution of operational leasing from the first services offered on the market, in 2005, up to now?
FB: If we analyse the situation from the perspective of figures, we can say that operational leasing have exhibited positive developments, because they are the form of financing with the greatest magnitude in recent years, with constant annual growth. For instance, in 2007, out of 348,000 newly registered vehicles on the Romania market, just 1.6% were financed through operating leases, while, in 2012, this percentage rose to 13%, then 17.3% in 2013, and then 16% in 2014 and last year it was 13.3%.
Meanwhile, the number of vehicles registered by lease companies within this segment has grown constantly reaching 64,350 units during the first half of this year according to ASLO (The Association of Operating Lease Companies).
We have noticed that more and more customers, thanks to the constant efforts of communication made by companies in the field, have started to understand the benefits of operational leasing and to access this type of financing. So, in my opinion this sector has shown positive development every year and still has huge growth potential.
The developments of this industry are also shown by the trends that are starting to be adopted in our market. We have moved beyond the traditional operational leasing product towards diversifying the range of services and facilities to provide the best mobility solutions and unique business experiences in terms of financial flexibility. And here the following are worth mentioning: web platforms for fleet managers, applications for mobility of the drivers, operational leasing for electric and hybrid vehicles, telematics solution, car sharing. There is also a level of accelerated competition, driven by the high professionalism of the relevant players and which ultimately serves our customers’ best interests. Things are moving at a constant pace; international trends are being adopted faster and the market players are doing everything to integrate the new tendencies in their offers as quickly as possible.
As for ALD Automotive’s historical activity on the local market, innovation, sustainability and quality are our core values which guide our local activity.
Since we entered the Romanian market in 2005, we have launched innovative mobile apps, as support for our customers’ activities; we have created the first White Label operating lease product in Romania, and have been the first operating lease company to be actively involved in greening car fleets.
In the years we have been operating in Romania, we have definitely left a mark on the level of market professionalism, on the diversity of the services and the quality of the customer care offered.
Q: This year, considering your company’s three main objectives, where has ALD Automotive succeeded the most in 2017 and what are your prospects for 2018?
FB: The upward trend and the positive developments of the local operational leasing market were reflected in ALD Automotive’s business during the first six months, according to our expectations and calculations. Compared to the same period last year, we saw an increase of over 10% of the total fleet. This evolution was recorded in terms of our core business, the full-service operating lease.
The business objectives for this year have included the launch of several new solutions and products dedicated to the SME and corporate segments, such as ALD Electric, My ALD – our new mobile and web solution, regional expansion in three major cities in the country – Iasi, Cluj-Napoca and Timisoara, and further development of the White Label partnerships.
For next year, we will continue focusing on maintaining customer satisfaction and fleet growth, and we will be focusing on the full-service operational leasing and mobility solutions, our priorities being to increase the number of customers in the SME sector, to adapt existing products to current multinational client’s needs, to promote low-impact technology, and to develop mobility solutions for companies, regardless of their size and their field of activity.
Q: What are the present and future of operational leasing for electric and hybrid cars as fossil fuel vehicles seem to be reaching their end in the foreseeable future? How does ALD Electric work, as ‘a first’ on the Romanian market?
FB: At European level, companies are starting to view transportation as constantly changing, from different perspectives, from one country to the next and from one industry to the next. That is why companies need an interconnected mix of products and mobility services instead of classic operational leasing services.
For this reason, ALD Automotive is seeking new patterns of mobility specific for corporate customers at local level. In Romania, for instance, we have noticed a growing interest in green mobility solutions, so this year we have launched ALD Electric, a product which is available only in some countries.
As environmental pollution and the vehicle emissions contributing to it has a major impact on the world in which we live, in Romania, one of the most important approaches visible as of late is related to environmental protection. The number of new hybrid and 100% electric cars sold in Romania during the first eight months reached 1,518 units, up by 161% compared to the same period last year, according to APIA (Automotive Manufacturers’ and Importers’ Association). Although the demand is still low compared to the international market, the popularity of electric and hybrid vehicles is on the increase, and ALD Automotive is a promoter of the concept of greening the fleet by actively promoting alternative modes of transport.
Q: What is the impact of digitalisation on your business?
FB: The trend of digitalisation influences the local market in Romania, with direct impact on the management of fleets and drivers. Operational leasing companies need to be aware of this trend, which is an extra service for the customers as it is an advantage that increases the value of the offer.
More and more companies are using modern technologies and are offering interactive online tools for their customers, from web portals that give fleet managers a real-time view of their fleet, to specifically designed mobile apps to facilitate the activity of vehicle users.
ALD Automotive is well positioned in this sense and the launch of My ALD web portal and mobile application for drivers and fleet managers is just such an example.
Q: Can you give us some prospects of business evolution for your business sector in 2018?
FB: I believe the operational leasing sector in Romania will witness growth on all business levels in the future, from the number of vehicles in the players’ portfolios to the increase of the territorial coverage with regional representatives, not to mention the increase in the number of customers.
The main growth drivers will be the appetite of SMEs for this type of financing, and the growing interest of local and multinational companies for full-service operational leasing. The growth of the automotive market remains an important driver for this sector, which will maintain a moderate upward trend, specific to a market that has already reached a level of maturity.
We can notice certain consumption patterns with our customers, who are frequently looking for specific mobility solutions and pay attention to the needs of vehicle users. They benefit from new car models with modern technologies and extensive mobility benefits such as mobile applications and online reporting solutions.
According to these directions, ALD Automotive will continue offering the appropriate mobility solutions to the companies in our portfolio, beyond the classic services offered by an operating lease provider.
