Bart, please give us an overview of your business.
TCOPlus offers three products to the market. The first is GreenCube, which is software we have built around all the different taxation rules in Europe and in the rest of the world. GreenCube visualizes the taxation impact of improvement projects such as CO2 because Europe has about nineteen countries that have linked car taxation to CO2 emissions of the car. We have visualized this in software and we use the software to do an immediate “what if” analysis based on the actual data of our customers. We upload the data, we take a picture of their current situation, and once it is uploaded in the GreenCube system, it is put online and our customers can immediately see the impact of scenarios they want to explore. The unique selling proposition of the tool is that, of course, we take out all of the relevant taxation information linked to the different countries and we even bring, at the visual point, the hidden taxation effect. If you look at general business cases for improvement projects, about 35 to 40 percent is represented by taxes and that is usually not captured for these projects.
A second service we provide to global and international fleets is what we called FleetCube. FleetCube is a global reporting tool where we upload the data from a client and its global suppliers. We assemble the data, check it, clean it, and upload it in a three dimensional data base. We predefine KPI’s and the client can slice and dice his information and by a mouse click can see what his fleet is composed of: the numbers, the number of cars by brand and model, by suppliers, by corporate entity or division, the number of leasing companies, the spend, CO2 emissions, etc. All represented and reported in fancy dashboards.
And the third service we offer to the international fleet managers is what we call center of excellence or FleetCentral, meaning we assist international fleet managers with the centralization of fleet processes. It is actually the concept of a shared service center translated into fleet processes. We, for a number of countries in scope, will map the fleet processes in the country and then assess what processes are in common and if there is an opportunity or feasibility to have them centralized in one country.
Tell us about the European fleet market. What are some of the unique characteristics that you see?
Europe is not a single market although they do pretend to be. Europe is the United States of Europe, meaning we have lots of different countries, lots of different languages and lots of different cultures. That is what makes Europe a little bit unique and also very different to understand when you are not from Europe.
Going back to my specialization, if you look at the taxation system in Europe, it is quite different in the various countries – you need a guide — so that is why we also publish the International Fleet Guide. The levels of taxation differ substantially, going from 0 in Luxembourg to almost 180 percent, for instance, in Denmark. That is also something that you need to take into account.
Cultural differences predict that a one size fits all will never be possible in Europe. For instance, if you are in Italy, driving a Fiat is fine, but driving a Fiat in Germany will not be fine. Those are things that you need to take into account and that makes it interesting and appealing, and on the other hand very difficult.
What advice would you give to a North American fleet manager who just been handed a global fleet to manage?
The first step is to measure. Take a picture of what your situation is today and then look at that picture and see what the elements are that can be improved. My advice to managers or international fleet managers new in the business or who start a global program – measure! Make sure you consolidate data, learn from what you see in this consolidated data, and that already will be a big, big step in the right direction.You need a guide, a mentor and you need also to communicate with your peers, with your suppliers, with other people that have done this before you.
The biggest mistake you can make is a copy/paste mistake. If it works here and you think it will work everywhere and you copy and you try to paste, you will 100 percent for sure run into trouble.
What kinds of trends are you seeing in the industry with respect to taxation?
Taxation is increasingly linked to C02-emissions. In Europe it started in 2005 in the UK; the UK was the first country to impose a benefit in kind taxation on CO2 emissions. And then gradually it was picked up by other countries in Europe, so now we have about nineteen countries that have links to emissions to taxation or the other way around. What we see now is that the rest of the world is picking up these ideas: we have Japan, South Africa, and Canada using C02-emissions for taxes or duties. So, they are also picking up on the idea, which is logical because the environment is a world issue. Secondly, I think that politicians also understand that when you tax based on an environmental objective; people tend to swallow this a little bit better.
What have you seen in terms of the corporate consciousness being raised?
CO2 emissions and environment fits under the umbrella of corporate social responsibility or CSR. So, CSR, CSR objectives and CSR strategies; every international and even national company has a CSR objective. It drives projects like CO2 improvement projects, but it also drives projects around safety. The good thing is that CEOs and CFOs and other people that are driving the strategy have realized that if you have a good CSR strategy it will bring savings, which is logical because CSR is also about building in efficiencies and efficiency means cost cutting.
In a recent presentation you gave some examples of fleet vehicles that could be offered for some pretty dramatic savings. Can you talk about that a bit?
I showed you our GreenCube and the unique selling proposition of the tube is that it visualizes the tax effect of CO2 improvements. To give you an example, in Belgium for instance, you can deduct your fleet cost from your taxable income. But the percentage you can deduct depends on the CO2 emissions of your company cars. That varies between 50 percent and 120 percent. Usually that is not visualized because that is only a cost which is visible if you are a CFO or tax director filling in the corporate tax return. Now, what we do is we take this hidden tax cost and we bring it into the fleet equation. Hence, we evolve from a TCO to a TCO plus situation, including all taxation effects. We make it visible and this brings flesh to the bone whenever you are building a business case.
That is one example. The other example is if you take a car with new technology like a Lexus CT 200h hybrid; that car tends to be a little bit more expensive in terms of lease price compared to the cars it is competing against. But if you take into account the tax effect of the hybrid car and the tax incentives you have in some countries for hybrid cars, then although at first sight the cars seems more expensive, the car becomes cheaper than most of its competitors. As a fleet manager you want to make sure that you put the cars at the right place in the car policy so that it is not competing against models where no one will choose your hybrid car and you will not reach your environmental objective.
Bart Vanham established Fleet&DriverCare in Belgium, a company focusing on measuring and improving driving behavior, and is a co-founder of TCOPlus. Bart’s main activity is consulting on indirect taxes, car taxation, and within the framework of TCOPlus, on different fleet related topics. Bart is co-founder of the International Fleet Managers Institute (IFMI), a discussion and training forum for international fleet managers. He is also a consultant for several car manufacturers, distributors and dealers, fleet management companies, and other companies directly or indirectly involved in the automotive sector.