1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142 
An international outlook on work
Page 18
Page 19
If you've noticed an error in this article please click here to report it so we can fix it.
With the acquisition of Lex Transfleet in 2007, Fraikin made a major leap forward in the UK. To find out what else is in store, CM spoke to the company's executive I vice-president for international, Laurent Bonnaure.
Words: Andy Satter / Images: Garnett Keeler ALIHOUGH THE market might have you looking out of Laurent Bonnaure's 17th-floor office window and considering your future, nobody at Fraikin is panicking not just yet, anyway.
Bonnaure is Fraikin's executive vicepresident for international he joined the company last September and he came across as far from despondent when CM caught up with him to discuss the current economic recession and the challenges and opportunities it has presented the contract hire and rental giant. Indeed, as we reported last month, Bonnaure reckons the UK market is in a healthier position than the rest of Europe.
"Our clients are focusing on their core activity and concentrating their capital expenditure into these areas," he says. -The result of this is a further shift to outsourcing of services, and fleet management is, of course, an area of interest for many customers. We had thought this might result in a lift for the short-term rental business, but we are actually seeing a lift in long-term contract hire activity, which is a positive signal for business confidence."
Bonnaure said these first signs of revival had come in the UK at the start of January, and there were now signs other European markets France and Spain were beginning to follow suit, although he was a long way from predicting an upturn in the market.
If anything, the Fraikin case is more a result of the company's actions to get closer to its customers and generate more business, than a sign the economy is on the up.
A French concern
Bonnaure occupies a small office on the 17th floor of a giant building in La Defense, Paris, the equivalent of London's Square Mile. It's here where the corporate HQ of Fraikin resides.
The firm remains a predominantly French concern -67% of its fleet works there and is responsible for 72% of the company sales but the appointment of an executive vice-president responsible for its international operations is an indicator that Fraikin is looking to broaden its horizons.
There's a rolled-up map of Europe beside his desk, waiting to he unfurled and the European expansion plan fully unleashed. Initial moves to Eastern Europe have proved successful — Poland, for instance, now supports a 1,000-strong Fraikin fleet, the company only having launched there two years ago — and there are plans afoot to break into further new markets.
Poland kicked off from scratch two years ago, and the demand there is for contract hire. "We're number one in Poland for contract hire sales," reveals Bonnaure. Indeed, the company has created and defined the market for contract hire in Poland. -We've had to target customers and explain the benefits of contract hire and a fully managed fleet approach. Traditionally, it has been a market driven by ownership. We see this a lot in developing economies. There is a definite link between GDP per capita and the trend to outsourcing."
While the past two years have seen Fraikin develop in other markets outside of France and the UK — Poland, Spain and the Benelux countries are all active markets — the drive for growth into new international markets will be tempered a little while the economic storm rages. This year is unlikely to see Fraikin embarking on a drive into other markets; "It's better to focus on your own territories and protect them. Stick to what you have and not worry about what you might have had," says Bonnaure. "In 2009, we are entering a storm, the question is do you accelerate or slow down as you go into it? Our objective has been to voluntarily slow down our rate of growth and focus on our customers."
The right strategy For Fraikin to be successful in these challenging times will require a definite fleetness of foot and agility in strategy, and the company is well aware it has to stand by its customers during these lean times with a compelling proposition. And this is a theme to which Bonnaure repeatedly returns during the course of our interview.
A recent initiative launched by Fraikin is Client Star, which is a project focused on making sure customer relationships are maintained at a high level. "This was launched in December and we are scanning our customers, reviewing their requests to ensure we are doing what they need and that they get what they want out of their contract with Fraikin.
"We may have some services which certain customers may not be aware of. For instance, we have an insurance offer for customers that some might not know about; we can also look at fleet adjustments on their behalf and the tracking of their assets, which may assist in reducing their cost of ownership."
Cautious development This approach will, no doubt, also give Fraikin an opportunity, and ensure their customers are even more tightly welded to the company. Indeed, Bonnaure sees Client Star bringing natural organic growth as the customers are made more aware of the cost benefits of working with Fraikin.
"To withstand the storm, we are being cautious in our development," he adds. "Expenditure is a critical area, we are cautious about spending, and our capital expenditure has been tightened considerably. However, we have to balance that with making sure we don't jeopardise the future of our business.
"We have to continue to invest in our people through training and we have to ensure we continue to invest in our systems and processes to guarantee the service levels to our customers."
the flight to quality is a well known trend in times of crisis as companies tend to seek out the trusted brands and reliable partners in order to withstand the troubles.
So, on this evidence, Fraikin is well placed to take advantage of this, and providing it does stay true to its word and ensures customers remain at the heart of its offer, then it should emerge from the recession a stronger, more resilient company with a very loyal customer base.