We focus on medium and large enterprises - Tomasz Czarnecki talks to Janusz Kowalik, CEO Arval Polska.

– What is going to become the most competitive factor among CFM companies? Price or quality?

– Current situation on the CFM market sees the end era, when companies were competing against each other by price. Of course, it is always going to be an important factor, but not that much as it was a year or two ago, when contracts were won due to low costs of the services. But such “price war” must have ended. The truth is that everyone wants to make money. Also, European CFM market sees dropping of the vehicle residual value. It is not just a rumour or marketing catch. It is sad reality.
CFM enterprises will have to use the “handbrake” and lower the prices.

– The residual value may become a crucial factor.

– Especially to the companies, which have decided to risk the residual value and lower their services prices very much. We may see these problems already the next year.

– At the present time, CFM companies have their roots in different countries – the Netherlands, France, Belgium etc. Can we classify them by place of origin?

– We can classify them in such way, but we have to consider how they adjust to the local markets and conditions. And also people managing the company in particular country. For example, Athlon Car Lease is a very strong player on the Dutch market, but in Poland they have to prove their value. Let us have a look at other enterprises, even LeasePlan. It used to be Dutch company. Enterprises from the Netherlands are well organised, what results in their good image. French companies are extremely resilient and enterprising, but their culture is as it is, so they seem “not to be organised”. We are no going to learn the truth until we are inside. On the other hand, German companies look to be perfectly managed, but how it is inside? I do not know…

– Previously you have worked in Business Lease. How would you compare that company to Arval?

– Well, it is the same business (laughs). Business Lease is much smaller than Arval and operates on few markets in Europe only. It is a private enterprise, and it makes a difference when comparing to entities, which activity is based on a bank or huge syndicate. You can say that my present employer is a large European player, able of winning any tender. While Business Lease should focus on customers, which car fleets range from 20 to 100 vehicles. That is the segment where their profit margin is more competitive then big players’ ones. Customers can also be offered a unique additional value; at least it used to be like that. Now, I have been working in Arval for several years.

– Does it mean that Arval is not interested in small and medium business?

– We are there for those clients, but we focus on medium and large entities. Our added value to the company that car fleet consists of several cars is marginal. We manage such fleets, but they choose long-term rental more for their convenience than from the economic point of view as they value replacement car, mobility, lack of troubles with selling a vehicle after three years etc.

– What are your nearest plans as competition does not sleep?

– It is going to be very good time for Arval in the nearest future (laughs). We are glad we have a competition for it has to be anywhere and that is something that drives you to even better work. Our company changed a lot in last two years – we entered the stage of “adulthood”. We adjusted a few processes and procedures to the present situation. I mean channels of sales, acquisition, what at present works exactly the way we want it and our goals.

– Are you going to introduce new products?

– In my opinion, nowadays market is moves toward environment-friendly procedures. Although, not very much in Poland, where government is not interested in change of law and regulations. There is lack of sanctions for vehicles, which pollute the environment excessively. But we are member of European Union and this trend will arrive sooner or later. We are going to think how to rationalise costs, what directly leads to selection of particular fleet cars - those, which emit less pollution and thus lower fuel costs.

– Clients have expressed very positive opinions about Arval, but one of them noticed that you are too accurate on car collection and you charge for almost any scratch …

– Well, it is obvious that three years old car condition is different than a brand new one. But additional damages affect the selling price and client may be charged for them. In the end of the day, we do nothing more than other CFM companies, as we proceed according to Polish Association of Vehicle Hiring and Leasing regulations, which are created as a specimen for all its members.

– I would like to ask about insurance. Is it true that you recommend only one insurance company to all clients? Do you cooperate with any broker?

– We cooperate with one broker, which suggests to us two or three insurance companies. It is impossible to cooperate with more companies, due to the fact that we look for partners, which would meet our needs in terms of insurance claim proceedings. They have to work quickly, operationally and effectively.

– Some of CFM companies pride themselves on their wide range of consulting services.

– For companies like Arval, consulting is one of the core businesses; it is a part of fleet management. If we limited our activities to purchasing a vehicle, leasing them and car service, then added value of our management service would refer to taking the vehicle out of the balance sheet. That is not what this business is all about. That would be short-sighted. Advising is something natural to us and there is no reason to brag about it. Although, we can only take actions that would lead to improve that service internally.

– President of Arval is interested in football, golf, but you do invest in volleyball. Why do you sponsor that discipline? As the CFM company you are not going to find new clients in volleyball courts …

– Idea of supporting volleyball was born as this sport has become in Poland more professional than in many other European countries. Such status is not attainable for other sports, fro example football. Though, in this the most popular sport discipline in our country, a one big step has already been taken. Polish Football Federation hired a professional from abroad. Leo Beenhakker’s methods vary from those applied by local coaches, so in my opinion Polish football will profit from it. If you asked me whether Leo should go - as the debate in Polish media is going on - I would answer no. No way!

But we were talking about volleyball. Players are doing well, and this is very important to us. Crucial factor is also a volleyball audience. This is a college sport. University students usually play volleyball, not football. And that is where we meet business. And the atmosphere during volleyball matches is completely different from that at the football stadiums. I do not know whether it is better or worse, but there is no doubt it stands out significantly. So we decided to support volleyball and at the same time use it as a bridge to contact our clients and contractors. We attend the matches together and that makes our mutual relations even better.

– Do you practice any sport?

– I was born in a football family. My dad has played for 20 years. I spend a few years on the football pitch, playing for Dutch team Vitesse Arnhem. Today, I prefer playing golf (laughs).

– I heard that on the golf course you compete with coach of Poland’s National Football Team.

– That is true, recently I went to Rajszew with Leo Beenhakker for a round. Unfortunately, it was a tie (laughs).

– Last question is going to be about your cooking. Rumour says that head of Arval likes to spend some time in kitchen, not necessarily eating.

– When I was younger, I used to work as a chef in restaurants, and that is how I started my
professional career. At home we mostly base on recipes from French, Italian and Spanish kitchen. That is why, if we sat at one table together, it would be a miracle if you were served pork chop - we are not Polish at all in terms of food we consume. For many years I have lived in the Netherlands, which had numerous connections with colonies in Asia in the past. That is the reason why I am willing to cook Indonesian and Thai food. Each time I go to Van Gogh’s homeland, I always bring some special ingredients, and then we prepare a real feast (laughs).