THE giant Daimler AG group has staked a claim for market share in the fast-growing Australian fleet management industry by launching what is only the group’s second fleet management operation outside Europe.

The owner of the Mercedes-Benz, Freightliner, Fuso and Western Star brands, among others, has launched Daimler Fleet Management in Australia after a painstaking three-year preparation period within Mercedes-Benz Financial Services Australia (MBFSA).

Daimler Fleet Management (DFM) will offer a broader range of services than has previously been available through MBFSA thanks to a crucial partnership struck with fleet management industry leader McMillan Shakespeare.

“We could do this much faster by partnering with McMillan Shakespeare,” MBFSA managing director Juergen Rochert told GoAutoNews Premium at the DFM launch in Melbourne.

“We know it’s the right thing to do. Doing it this way cuts out a lot of time and we don’t have to make every mistake ourselves, which normally you do as a start-up.”

McMillan Shakespeare will provide all the back-office support needed to offer a full range of fleet management options, leaving DFM to focus on its customers and its products, Mr Rochert said.

Mr Rochert admitted that partnering with a service provider would trim DFM’s margins, but he said the saving in terms of time to market made it worthwhile.

“In this type of business, margin is not our biggest concern,” he said. “This is about servicing our customers better, having an additional product in the line-up and really having the whole customer space covered from all sides.”

As with the financing operation, the fleet management business is a way to bring more customers to the group’s brands and to encourage loyalty among customers. A large element in deciding whether DFM is successful will lie in the proportion of repeat business it writes.

“We’re here to support our customers for the long run, to create loyalty. We’re here when something goes wrong. That’s when it counts,” Mr Rochert said.

He added that DFM won’t know if it has succeeded until the lease runs out and the customer buys another Daimler group product.

Mr Rochert said that “retention” and “come-back without even thinking about it” was what DFM is after.

“It doesn’t matter if someone has a successful business with two cars, somebody has 10 vans or somebody has 50, 100 or 500 trucks. It doesn’t matter,” he said.

“There’s a difference between an owner/entrepreneur and, of course, an executive or manager. But, at the end of the day, they all want to have the chance to dedicate their time to their customers, not to their infrastructure and assets.”

The MBFSA director of sales and marketing Britt Roberts said that, while DFM was going after every fleet on the road, it was the small to medium fleets that offered the most promise.

“I personally think the market here are the businesses with 5 to 10 trucks,” he said.

“They just want to run their businesses with a fixed cost bundle. They want to be able to calculate what that expense is, put it in their budget and they want to move on.

“I think that’s where the sweet spot is and, as we have begun to actually roll this out, instantly some companies have come out of the woodwork.”

Paying for fleet management may look like an extra business cost, but Mr Roberts said the idea was to avoid unexpected costs down the track.

“Look, an unmanaged fleet ends up – and we’ve seen this – with maintenance not being done on a regular basis. You can’t control how the trucks are being treated. They don’t get fixed promptly. You have got to have somebody doing that.

“If you don’t, the depreciation and downtime catches up with you at some stage.”

The creation of DFM has been steered by Rod Croes, who was hired away three years ago from LeasePlan Australia where he had been chief financial officer, and is now head of Daimler Fleet Management.

“We need to keep our customers’ business within our organisation,” Mr Croes said. “How do we do that? We offer fleet management services.

“How do we do that? We do it by being able to offer end-to-end, cradle-to-grave service, managing the fleet, which is finance and fleet servicing.”

He said MBFSA had a choice of three alternatives after it had decided to enter the fleet management area: it could buy a fleet management company, buy some fleet management software and start from the ground up or it could find a partner to provide the back-office services.

“We’ve done the latter,” Mr Croes said. “We have a co-operation agreement with McMillan Shakespeare to provide back office services. We provide the finance and we take care of the residual value.

“We couldn’t do it in the past. We could only offer finance or a separate service plan or separate insurance.

“What you have got is basically an offering by a captive financial services company, the largest automotive manufacturer of trucks, and now it has a presence in a fleet management sense.

“Being able to add financial services and being able to find solutions where we are not losing those customers that traditionally would have gone to an SG Fleet, a LeasePlan, a Fleet Partners, an Orix or GE.

“We have some really exciting things ahead of us. We have operating leases and finance leases, and we shortly will be able to provide some solutions to our heavy commercial folk as well. Then on top of that we will be looking at, hopefully, novated leases as well.

“We’re here to provide some great solutions right across the board; solutions that not only encapsulate finance by also encapsulate fleet management as well.”

By Ian Porter