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/ The National Business ReviewSeptember 13, 2013

What’s hot in fleet vehicles

12

Special Report

Whether it’s rep mobiles or commercial and delivery vehicles, through to premium cars driven by senior management, fleet and vehicle

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David Linklater

It was not that long ago that there was a clear demarcation between fleet/busi-ness cars and those aimed at the private buyer.

The former were basic, built down to a price and simply there to do a job. The latter were better dressed, better equipped – and there was no way you would mistake one for the other.

While those basic model hierarchies remain, the gap between fleet and pri-vate product is narrower than ever. High-tech comfort and safety equipment is no

longer the preserve of upmarket models. Changing buyer preference over the last few years has moved some niches into the mainstream – consider the rise of crossover vehicles, for example – so style and status have become more a part of fleet-car culture than ever. Indeed, many companies see vehicle choice A an exten-sion of their brand or a means to reward and retain employees.

One thing is clear from a quick look at the vehicles on the following pages: it’s hard to argue that there is any such thing as a “fleet vehicle” in a singular sense, no restriction on size and shape.

FORD RANGER

Light commercial vehicles have always crossed over into the mainstream new-car market in New Zealand. Double-cab utilities in particular, which often fulfil dual roles as weekday working vehicles and recrea-tional/family transport in the weekends.The Ford Ranger (along with its sister model, the Mazda BT-50) is now regarded as a watershed model for the seg-ment, combining the off-road ability expected of a vehicle of this type with levels of on-road driveability very close to that of a conventional passenger car. In 2011, Ranger also became the first utility to achieve a five-star crash-test rating from the European New Car Assess-ment Programme (Euro NCAP).Despite the multitude of body configurations and specifica-tion levels available for Ranger,

there remains just one engine: a five-cylinder turbo diesel, with the choice of manual or automatic transmission, two or four-wheel drive.The breadth of Ranger’s appeal was confirmed in August, when it was not just the top-selling

light commercial vehicle in the country but also the most popular vehicle of any type.

SPECIFICATIONS

Engine: 3.2-litre turbo dieselPower: 147kWTorque: 470NmFuel consumption: 8.4-9.6 litres per 100kmPrice: $40,640 (XL super cab wellside manual) to $66,640 (Wildtrak automatic)

The National Business Review / September 13, 2013 SPECIAL REPORT: FLEET LEASING 13

The all-new Mazda6 has completely re-energised driving. KODO design delivers a striking new exterior while ground-breaking SKYACTIV technologies, including ultra-effi cient petrol and diesel engines, combine to deliver more performance from less fuel – with consumption from only 5.4 litres per 100 kilometres*. Plus, in a world-fi rst; braking energy is stored in a capacitor ready to be reused to save fuel. Add in comprehensive i-ACTIVSENSE safety as well as dynamic handling and the all-new Mazda6 becomes our safest, most advanced model yet. Test drive one today at your local Mazda dealer or visit allnewmazda6.co.nz

*Combined fuel consumption for the SKYACTIV-D Diesel Maazda6.

MDZ2501_HP_NBR

HOLDEN COMMODORE VF

The latest VF-series Holden Commodore was created to do a very important job: justify the existence of the Australian large car in the face of falling sales. Fleet-oriented models like the entry-level Evoke aim to do that by challenging smaller cars on efficiency but still bettering them on performance and equipment.Holden New Zealand does not have to market the VF with the same sense of urgency as Holden Australia. But the Evoke still compares favourably with many medium-segment sedans and wagons – including Holden’s own Korean-sourced Malibu.Evoke achieves combined fuel economy of 8.3 litres per 100km, which puts it in the same bracket as some four-cylinder cars. It retains “big six” levels of perfor-mance and interior space, while adding a host of standard equip-ment previously only available on luxury cars.

All VF Commodores now feature high-end equipment such as the MyLink multimedia system with eight-inch touch screen and self-parking technology. Further up the range comes a blind spot alert system and reverse traffic alert, which automatically warns the driver of approaching traffic when backing out of a parking space.

SPECIFICATIONS

Engines: 3.0 and 3.6-litre petrol V6s, 6.0-litre petrol V8Power: 175-270kWTorque: 318-530NmFuel consumption: 8.3-11.8 litres per 100kmPrice range: $49,990 (Evoke sedan) to $77,190 (SS-V Red-line)

HONDA ACCORD

Honda New Zealand has two completely different Accord four-cylinder models in its range: the Euro that has been on the market for six years now and a brand new model simply known as Accord. The latter is a replacement for the Accord V6 but is now available with both 3.5-litre six and 2.4-litre four-cylinder engines. Hence the double-up.What seems like over-complication is really just a time of transition. While the Euro continues, Honda fully expects the four-cylinder version of the new Accord to outsell it in its first year in the market.The new Accord brings Honda right up to date in some crucial areas. The 2.4-litre engine is a brand-new powerplant (different from the same-capacity engine in Euro) and the car is available

with a suite of high-technol-ogy active safety features. These include adaptive cruise control, lane-keeping assistance that will tug at the steering wheel should you stray across the white line and a blind-spot warning system that employs a cam-era mounted in the left-hand door mirror.

SPECIFICATIONS

Engines: 2.4-litre petrol, 3.5-litre V6 petrolPower: 129-206kWTorque: 225-339NmFuel consumption: 7.9-9.2 litres per 100kmPrice range: $45,900 (S) to $63,500 (V6NT Sport)

TOYOTA COROLLA HATCHBACK

Can we talk about the fleet-car business without mentioning Corolla? It has been the most important single model for Toyota New Zealand over its 25 years as the country’s No 1 brand. Corolla was the top-selling passenger car for 2012 and looks set to do the same for 2013.The latest Corolla is an evolution of the species, yet also departs from the formula in some subtle ways. The packaging is stand-ard small-car but the styling is more avant garde than previous generations. There is still just one engine but the automatic gearbox has moved to the continuously variable transmis-sion (CVT) technology favoured by so many other Japanese makers.Although the mainstream GX and GLX models will continue to provide the majority of sales vol-ume, Toyota New Zealand has introduced a more upmarket Levin model to appeal to private

buyers – not to mention user-chooser business customers.Corolla is no longer a single model, of course. We’re talking Corolla hatchback here but in fact the brand is split into three. The wagon is based on the same platform as the hatch but shares little in styling or driving character, while the current Corolla sedan is still based on the previous-generation model. A new four-door, which will have much more in common with the latest hatchback, is still to come.

SPECIFICATIONS

Engine: 1.8-litre petrolPower: 103kWTorque: 173NmFuel consumption: 6.6-7.1 litres per 100kmPrice range: $33,490 (GX manual) to $43,690 (Levin ZR)

Deborah LaHatte

The global financial crisis (GFC) put paid to any loose company spend-ing on fleet leasing, major fleet lease companies say.

The fleet market seems to be reasonably flat, volume wise though the new vehicle market is increasing in New Zealand, Lease-Plan managing director Charles Willmer says. “So the fleet market is still being prudent, very cautious and just sticking to its knitting.”

“At the end of the day it’s the right vehicle for the right job at the right price,”Mr Willmer says.

With the GFC still fresh in the memories of most companies, cost management and the effective use of available resources is a priority motivator for many fleet procure-ment decisions, Orix sales manager Nigel Bell-Booth says.`

“Companies have taken a long hard look at the gross size of their fleets and worked to maximise the use of these available assets, he

Fleet co st management rules

/ The National Business ReviewSeptember 13, 201314 SPECIAL REPORT: FLEET LEASING

MITSUBISHI ASX

Mitsubishi’s ASX crossover has been a surprisingly influential model. The com-pact crossover is of course the base for similar models from both Peugeot (4008) and Citroen (C4 Aircross), albeit with some changes to bodywork, suspension

and interior trim.But, back in the main-stream, the ASX provides Mitsubishi with a versatile fleet/business vehicle that capitalises on the current fashion for crossover-type vehicles and offers enough powertrain and specification variation to suit a variety of customer requirements.

Mitsubishi New Zealand simplified the ASX range as part of a facelift pro-gramme this year. Now, the petrol-powered models are front-drive only, while the new diesel model is exclusively four-wheel drive.The petrol versions are powered by Mitsubishi’s familiar 2.0-litre engine and drive through a continu-ously variable transmission (CVT). The diesel model has moved up from the previous 1.8-litre power-plant to the excellent (and completely new) 2.2-litre turbo diesel from the latest Outlander. The gearbox is a six-speed automatic with a pushbutton that cycles through front-drive, on-demand four-wheel drive and 50/50 torque split for light off-roading or loose surfaces.

SPECIFICATIONS

Engines: 2.0-litre petrol, 2.2-litre turbo dieselPower: 112kWTorque: 200-366NmFuel consumption: 5.8-7.9 litres per 100kmPrice range: $31,990 (LS 2WD) to $45,99 0 (2.2D Sport 4WD)

MAZDA6

Mazda’s so-called SkyActi v technology is now very much in the mainstream. First tentatively introduced as a powertrain option on the Mazda3 in late-2011, the SkyActiv ethos of low friction and light weight was applied from the ground up in the design of the CX-5 and now the latest Mazda6.While the look and feel of the Mazda6 could be considered premium, the model range cov-ers enough ground to cater to a wide range of business buyers. The entry-level model is a good example of that: it’s a wagon and also the only Mazda6 variant to be powered by a 2.0-litre engine, albeit with the same SkyActiv technology as the larger 2.5-litre petrol and 2.2-litre diesel ver-sions.The diesels are the hero cars of the Mazda6 range. The SkyActiv-D engine (as used in the CX-5 crossover) has been acclaimed

for its combination of strong per-formance and extreme thrift. It’s available across the range and serves equally well in high-mile-age or high-image applications.In an odd role reversal, the Mazda6 sedan is actually larger than the wagon: 80mm longer in the wheelbase and 65mm longer overall.

SPECIFICATIONS

Engine: 2.0 and 2.5-litre petrol, 2.2-litre turbo dieselPower: 114-138kWTorque: 210-420NmFuel consumption: 5.4-6.6 litres per 100kmPrice: $45,495 (GLX 2.0 petrol wagon) to $60,795 (Limited 2.2 diesel)

Fleet companies are sticking to their knitting

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says. In many cases this has result-ed in a reduction.

SGFleet managing director Geoff Tipene says there is a fleet trend away from larger vehicles into a more mid-size passenger vehicle or a mid-size SUVs. He agrees that all fleet drivers would be extremely happy if they could choose their own vehicle. “How-ever, the reality is that compa-nies today need a vehicle policy in line with their own business

model and budget requirements with little to no deviation from the policy.”

Environmental considerations and safety continue to be impor-tant factors in fleet choice.

The fleet firms are also add-ing new GPS and telematics solu-tions as they develop. That has meant real fuel savings, as well as help for companies working out their best fleet use. Data analysis has also helped customers keep a

close eye on vehicle use and driv-er behaviour.

Whole of life costing has become the standard measure of comparable vehicles during fleet selection, incorporating analysis on lease, maintenance, FBT and fuel expenses over the course of a vehicle’s working life.

The companies are now offer-ing new products including SGFleet’s driver licence manage-ment programme, where it man-ages the licences of all staff who are driving a company supplied vehicle.

And as well as fleet and car companies offering leases, Budget is now offering extended rent-als on its rental cars for up to 36 months. This has proved particu-larly popular in Christchurch for commercial vehicles for rebuild projects, Budget national market-ing manager Stanley Hebden says.


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Driven by demand

As New Zealand emerges from the effects of the slowdown in the economy, there are signs of

improvements in light commercial vehicle demand, FleetPartners customer services director Vern McLaren (pictured) says.

“Returns in the rural economy, investment in large infrastructure projects [like tunnelling and roll out of broadband] plus activity in the Christchurch rebuild are all contributing to the light commercial vehicle demand.

“At the end of July, light commercial vehicle volumes were running 26.6% year to date ahead of 2013 despite supply constraints. Demand for vehicles can often be driven by activity in the economy and this is most evident in the lift of commercial vehicles.”

Orix sales manager Nigel Bell-Booth says light commercial vans are used extensively by tradesmen, technical representatives, and commercial delivery agents across the country. SMEs and sole traders represent a signifi cant portion of user but there are a number of large commercial/corporate users, particularly in the specialty commercial trade and infrastructure markets that require a comprehensive mobile workshop.

Novated leasing returns

One of the products being offered this year is novated leasing.

Orix sales manager Nigel Bell-Booth says novated leasing is a popular product in Australia, where it represents around 35% of all automobile leasing. “While only in its early days here, we anticipate this product will open the market to a host of new clients looking to benefi t from the cost and salary packaging advantages that leasing offers.”

He says Novated Leasing grew out of a tendency for companies to “cash up” a company-supplied vehicle for staff, with the aim of moving responsibility and fi nancial risk back to the employee. Usually the company increases the employee’s salary to compensate.

But when staff bought and ran a car they were disadvantaged, Mr Bell-Booth says. Novated leasing allows employers to offer the same benefi ts of a company-supplied vehicle, but with none of the fi nancial risks or obligations in a traditional company lease. The lease transfers the risk of the vehicle lease to the employee.

But FleetPartners customer services director Vern McLaren recalls that his company (under the Avis Lease umbrella) introduced the 1+1+1 lease (MultiLease) to the market 19 years ago. “Changes to the fringe benefi t tax rules in 2006 removed the benefi ts of Multilease but,

since then, FleetPartners has launched MaXx Lease in 2010 and AutoFleXx in 2011. AutoFleXx was designed to be a New Zealand equivalent to the Australian novated product.

“The essential element of a novated product is the removal of FBT exposure for an employer. To gain full advantage of the benefi ts, 75% of the vehicle running needs to be for business purposes. In the case of AutoFleXx, the lease is in the name of the employee who is paid a car allowance by their employer.”

But Mr McLaren says the takeup has not been signifi cant because employees do not want to carry the residual value exposure risk should they leave their current employer, “whether voluntarily or involuntarily.”

And “signing tripartite agreements, between an employee, their employer and a lease company, can be fraught with diffi culty as the lines between what is and what is not captured under the Credit Contracts and Consumer Finance Act 2003 are blurred and there are compliance costs for the lease company not to mention payroll and overhead costs for the employer.”

FleetPlan managing director Charles Willmer says novated leasing may work in smaller businesses: “but is it going to work in the medium to larger corporate where a vehicle is a tool for the job? An employer saying ‘I need you to have a car to do the job and, by the way, you have to go out and get your own lease on it’ – is that fair? Is it fair to make that person ta ke the risk?”

Charles Willmer

Deborah LaHatte

The executive team at Eroad isn’t taking holidays this year, Eroad chief executive Steven Newman says.

“Having too much fun. Who needs a holiday?”

He may not be kidding: Eroad has just had its best year ever, is cranking up staff numbers and get-ting ready to launch into an export market three times the size of the New Zealand market that it already dominates.

On top of that, all going well, its board will next year look at the pos-sibility of a listing, “a very probable possibility” and possibly in New Zealand.

What Eroad does is manage vehicle fleet, asset and compliance obligations – particularly road user charges but also soon to include electronic logbooks (where driv-ers record their compulsory breaks, which is intended to combat fatigue).

It has most of the market cov-ered in New Zealand after six years and made its first export in May – to a large fleet in Australia.

But it has much bigger fish to

fry in Oregon in the US, which has a weight mileage tax very similar to road user charges except that users pay after doing the distance rather than before as here.

Mr Newman says Eroad has been going through various pilots and an approval process for the best part of the year and will be ready to launch into Oregon in the first quar-ter next year.

“The exciting thing is that for our approval we have had to go through a secretary of state infra-structure audit which is against fed-eral guidelines. This is an extremely difficult thing to do – it’s a combina-

tion of checking our performance against quality standards, security standards and operational stan-dards. It has been an extraordinarily thorough audit and we are most probably halfway though it. It is def-initely making us a better company and showing we can operate to a very high standard.”

To be ready for such a large mar-ket – and other markets to come, Mr Newman has in the past six months hired 60 more staff (with 15 more positions to fill) and moved the 90 plus people into a much bigger HQ in Albany, complete with official opening by the prime minister. On the way Eroad picked up another award – the emerging company award at the NZ Hi-Tech Awards, “so that’s all about rapid growth.”

And it has leapt into the cloud. It had been using Datacom servers with Vodafone providing the cel-lular connection locally. Now it has gone to Vodafone’s global data plat-form and has a relationship with Amazon Web services to use their cloud-based infrastructure.

“So, between the two, we can connect to about 380 cellular net-works around the world and then we go to the appropriate cloud. We

have separate clouds for Europe, America and New Zealand and Aus-tralia.”

What Eroad has “is a wonderful platform that is highly secure that we can do transactions on such as collecting taxes or tolls and then we are pretty flexible about other opportunities. Some of those are country or state based as in New Zealand or Oregon. Other ones will come when we look at more tolling solutions: they may be more project based. For example, if a road needs to be upgraded for heavy transport,

a funder can come in and pay for that road upgrade and, under a per-mit system, we can be used to col-lect a toll for use of that highway.”

Eroad has put a lot of invest-ment in to prepare for international expansion while ensuring contin-ued focus on developing products

for the New Zealand market. It recently raised $5 million through shareholders and some new high net worth investors to allow it to rapidly expand and prove itself as an exporter.

The company has a very high ownership among staff and execu-tives, with some international investors. “Our typical investors are high net worth but they tend to be coming from a banking, finance or legal background. It’s a very, very smart group of shareholders.”

Mr Newman says that although Eroad is not really like Xero, it faces similar risks: “It needs to go as fast as it can to occupy its market. We have a similar problem that, as we do, we show others what we’re doing, so we need to go as fast as we can to capture the best opportuni-ties ahead.

“We are in our sixth commer-cial year but it takes a long time to accumulate critical mass and gain the competency needed to do what we do – because at the end of the day we need to be a trusted partner to government so it knows we are collecting the right amounts and to customers who know we protect their privacy.”

/ The National Business ReviewSeptember 13, 2013

Eroad revs its engine for US takeoff

16 SPECIAL REPORT: FLEET LEASING

STEVEN NEWMAN: Eroad is gearing up


Businesspeople are tired of wading through dozens of reports to find what they need to run their business, TrackIt chief executive and owner Todd Somervell says.

He says a common expression in the GPS indus-try is “dots on maps” and that is what most tracking solu-tions are, rather than useful business intelligence.

The tech industry veteran got interested in GPS systems through following yacht rac-ing and motor racing where GPS is widely used “and the GPS tracking did not do half the things I thought was pos-sible with the logistical data.”

He bought a bunch of GPS systems first from this country, then further afield to try to find something better “and I still didn’t think any-one was doing a particularly good job of it.”

So, Mr Somervell, who already ran his EODdata business with an office in Chicago and a data centre in Dallas (it takes feeds from the stock exchanges around

the world and sells the data to private individuals) and a local firm, Findata, decided to create something better and set up TrackIt in 2009.

Two years of solid R&D followed “with race cars, dig-gers, trucks, planes, buses, you name it. We bought and researched GPS tracking devices and solutions from all over the world to under-stand what was available. “

He says what TrackIt came up with was a more scalable, cost-competitive solution through reducing device and installation costs and moving to cloud-based technology.

“What makes it bet-ter than other solutions is keeping the user experi-ence simple and keeping all the complexity hidden,” Mr Somervell says.

“There are lots of com-panies that do dots on maps. You can look at screens and tell where everyone is. But no one is taking all that com-plex data and turning it into reports you can use in your business to build on effi-

ciency to improve customer service.

“Too much of it is designed to catch people being naughty and punish them, instead of trying to cre-ate a system that encourages good behaviour that is self-regulating and self improv-ing, so that no one person has to log in every day to make it all happen.”

As TrackIt gains more customers it is rolling out improvements to meet their needs.

Mr Somervell cites the presi-dent of the NZ Plumbers Association who, he says, has just replaced his existing GPS with TrackIt as has his prede-cessor.

“We are coming up with better reports all the time: a job dispatcher manage-ment system that allows all the plumbers to record at the point of service delivery what they have been up to, what consumables were used and

automatically generate the compliance certificates they have to come up with these days.

“Rather than focusing on the data, we focus on the outcome that saves the cus-tomer time and effort and money.”

TrackIt started mar-keting to small firms but Mr Somervell says his little salesforce is gaining the confidence

to go after bigger com-panies. He’s proud that early on companies

like Ward Demolition and Pace Couriers (with several hundred vehicles) came on board.

He expects to make more breakthroughs in the next two years because he says his competitors have tied up customers to two to three year contracts but those cus-tomers want to switch when they can. About 15% of sales are now to people who are

switching.“We are also in discus-

sion with a few major firms but their hands are tied. They are being asked to roll out the leasing software from their parents in Australia but they have had a look at our soft-ware and now they are saying they don’t want their parent’s outdated systems; they want to install this new fantastic stuff. The jury is still out.”

Mr Somvervell says that after spending several million dollars on research, the com-pany is coming into profit and while it is still a New Zea-land only product so far, he is looking for international channel partners.

For the record, he does rate several competitors. He likes Hamilton firm Smart Talk’s solution but says he has a customer who switched over.

And, while Mr Somervell says Eroad is the “king of road user charges,” he thinks TrackIt does everything else better.

– Deborah LaHatte

Forget data; business wants results

TODD SOMERVELL: No more dots on maps

cites the presi-

TrackIt started mar-keting to small firms but Mr Somervell says his little salesforce is gaining the confidence

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/ The National Business ReviewSeptember 13, 201318 SPECIAL REPORT: FLEET LEASING

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David Linklater

In theory, hybrid vehicles should be the ideal choice for New Zealand fleets. They project the right image for a company and boast substantially better fuel economy than their conventionally powered equivalents, while costing no more in maintenance and servicing. Win-win?

Well, no. Sans any kind of government subsidy for vehicles with zero-emis-sions potential, the case for hybrids still rests on the balance between the potential fuel saving and the higher capital/lease cost of hybrid vehicles.

In many cases, the price premium for hybrids can-not be justified in dollar terms: the choice is made on philosophi-cal and/or image grounds. To really make hybrids a via-ble choice, price parity with equivalent petrol or

diesel models is required. But that’s not easy to achieve with such complex technology.

The two companies making the biggest steps in this area are, not sur-prisingly, the two that have the longest history and most expertise in produc-tion hybrid vehicles. Last year Toyota launched the

Prius C, which is a stan-dalone model (in keeping with the Prius brand) but is very close in size to its Yaris supermini. Prius C is New Zealand’s cheapest hybrid at $31,280, representing a $3500 premium over the most expensive Yaris model, the YRS.

Honda has also intro-duced a Jazz hybrid, which starts at $31,500: a $4000 premium over the conven-

tional Jazz 1.5-litre.Based on official fuel

consumption figures, the Prius C consumes 2.4 litres less per 100km than the Yaris; at current fuel prices that represents a $3228 saving at the pump over a typical three-year run of 60,000km, so it essentially breaks even.

The Jazz hybrid’s advan-tage over the standard model is 2.2 litres, repre-senting a $3000 saving: a lit-tle further away from what is a more significant premi-um but still fuel for thought.

Honda does seem to have the price par-ity thing nailed with the larger Insight hatchback, though. It’s a very different car from the Civic Euro in terms of style and driving dynamics, but you cannot

help but compare them on size and price: at $36,900, the entry Insight is just $2000 more than the Civic Euro S. With a fuel econo-my advantage of 2.2 litres per 100km, it could pay for itself very quickly.

These equations change depending on the operating environment, of course. For city cars like these, urban use will increase the econ-omy advantage because hybrid technology works so well in low-speed running. Fleet mileage higher than

20,000km per year swings things in the hybrids’ favour straight away.

For larger cars, the pre-mium tends to be higher but then so is the aver-age mileage for fleet use. The $6000 extra invested in a Toyota Camry hybrid over the standard GL model will be recouped by 100,000km. Did somebody call a taxi?

So no, it’s still not easy being green. But it’s getting less expensive.

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Are hybrids a good fleet choice?

Honda Jazz

the balance between the potential fuel saving and the higher capital/lease cost of hybrid vehicles.

In many cases, the price premium for hybrids can-not be justified in dollar terms: the choice is made on philosophi-

ble choice, price parity with equivalent petrol or

starts at $31,500: a $4000 premium over the conven-

tage over the standard model is 2.2 litres, repre-senting a $3000 saving: a lit-tle further away from what is a more significant premi-um but still fuel for thought.

to have the price par-ity thing nailed with the larger Insight hatchback, though. It’s a very different car from the Civic Euro in terms of style and driving dynamics, but you cannot

Honda Jazz

Toyota Camry hybrid

Urban use will increase the economy advantage

budget extend - nbr

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