Fred Crawley talks
to Mel Goodliffe of Flexxilease about how short-term leases could
shake up the contract hire market.
Go deeper with GlobalData
For a man who spends a lot of his time
figuring out how to sell vehicle leases lasting anywhere from 3 to
24 months, Flexxilease managing director Mel Goodliffe is anything
but a short-term thinker.
Goodliffe believes the rental market, despite still
being served by some very capable and substantial providers, has
lost enough participants to leave substantial niche business
available – but only to companies with the agility and experience
to take advantage of them.
This confidence will be necessary: 2010 will bring
Goodliffe the challenge of managing no fewer than four ambitious
lease and rental brands for Giraffe Automotive Services (GAS), the
group he set up with co-director Adrian Hayter in September last
year.
Goodliffe knows that business will not be easy to
come by in the year ahead, but he thinks that with shrewd use of
the resources with which Giraffe launched, it could be the perfect
time to build a new rental player.
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By GlobalDataThe most valuable of those resources is the
Flexxilease marque, which had generated £20 million in annual
turnover for former owner the Car Crash Line Group (CCL).
Flexxilease executed transactions on around 4,000 vehicles
annually, and part of this work was providing interim rental
services for CCL customers left without a vehicle in the wake of
accidents.
The book that Flexxilease built will remain with
CCL, where Goodliffe was formerly commercial director. It will be
run off over the next six months under the One Stop Car Shop brand,
while the Flexxilease channel itself will begin to feed Giraffe’s
new panel of funders.
Rental focus
But does Goodliffe have ambitions to
build up a lease portfolio again?
“Looking at the cost of funds at the moment, I just
don’t think we could be competitive. But in the long term, there
are definite aspirations,” he says.
Those aspirations lie with Flexxilease’s new sister
brand, Flexxirent, which Goodliffe describes as a “conceptual
rental proposition” based on experience and goodwill garnered from
work with CCL. This niche business will be supported by a large
joint venture partner, and will launch fully in the second quarter
of 2010.
Flexxirent will provide daily rental solutions to
accident victims – a field many rental providers have avoided, due
to the administrative burdens involved. In Goodliffe’s opinion,
there is “definitely room for another player in that sphere”, and
he thinks the contact base and market knowledge built up under CCL
will be what propels Flexxirent into that position.
Also upcoming, and also supported by a joint
venture partner (this time in the commercial vehicle rental
sector), will be Flexxivan – a commercial vehicle (CV) venture that
was piloted through the autumn of 2009. After what Goodliffe called
a “learning experience”, the venture’s partner is now on board to
launch the programme fully in January.
The van offering, it is hoped, will help to even
out the Giraffe group’s fleet/consumer business ratio. This
currently stands at around 70:30 in favour of consumer
transactions, but Goodliffe’s appetite is definitely aimed towards
a majority of fleet business.
The fourth of Giraffe’s channels will be
Flexxipartner, an online service for brokers that will provide the
group’s forty or so long-standing introducer partners with access
to the other three Flexxi business lines.
Internet strategy
In fact, the online sales model will be
at the heart of all of Giraffe’s brands, and Goodliffe feels this –
along with a broad product offering – will be what allows the group
to push its market share in its crucial establishing year.
“With all due respect to today’s CV and car rental
businesses, I feel there is perhaps a little too much inertia
around. A lot of big providers have been reliant on a fairly
vanilla route to market, and there are much quicker ways of getting
to end users,” he comments.
Speed will be essential to the Flexxi brands, not
just in their online delivery, but in their deployment in the motor
finance world at large. Each brand has its own objective for 2010
but, in the view of GAS, its funders and its investors, says
Goodliffe, “there are a lot of obvious synergies between them”.
What next? After gaining ground with Flexxivan and
Flexxilease, the plan will be to consider the start of a portfolio
for Flexxirent. By then though, it seems likely GAS will have
thought of new market spaces to scout out.
One space to watch might be general asset finance –
Goodliffe was formerly programme director for a CIT vendor
business, and says that potential backers have already shown
interest in using the experience behind Giraffe to front a joint
rental venture in the “yellow metal” plant sector.
“[The idea] appeals,” says Goodliffe, “but it is
still a little outside my comfort zone. That said, I think there is
a real opportunity for this sort of business in the plant sector,
and it staggers me that there haven’t been more serious attempts by
major players to capitalise on that.”
