General Motors Europe In Huge Pan-European Deal With Rentokil Initial

Global business services provider Rentokil Initial is to enter into a pan-European agreement with General Motors Europe worth up to £100 million at showroom prices over four years.

In one of the largest fleet deals of its kind ever signed in Europe, Rentokil Initial is taking General Motors Europe vehicles in 16 European countries, with the largest single tranche of vehicles being supplied in the UK.

In the UK, Vauxhall Motors will supply Rentokil Initial with primarily Astras and Vectras for its fleet of 3,600 cars, and also car-derived vans and light commercial vehicles up to 3.5 tonnes for its 1,900 commercial vehicle fleet. The deal replaces a primarily Ford single badge arrangement in the UK.

The agreement also includes the majority of Rentokil Initial’s 1,200 cars and light commercial vehicles in the Netherlands, 700 in Germany, 650 in Belgium, part of its French fleet of 1,350 vehicles, and 1,300 vehicles in a further eleven countries from Finland to Greece.

The huge agreement was awarded to General Motors Europe after Rentokil Initial, which is listed 53rd in the FTSE index of top 100 companies with a market capitalisation of almost £4bn, embarked on a coordinated global procurement exercise that initially covered 20 priority categories of spend including vehicles, electronic security products and textiles.

For the vehicles contract, Rentokil invited six vehicle manufacturers to tender earlier this year after carrying out on internal appraisal of its vehicle requirements across Europe using an internally developed ‘fleet analyser’ software programme. This allowed the company to build up a profile of its various company vehicle fleets across Europe and identify its requirements in a coordinated manner for the first time.

After receiving tenders from the six manufacturers involved, Rentokil Initial used a sophisticated benefits analysis exercise that looked at all aspects of fleet operation including acquisition price, whole life costs, suitability of vehicles, availability across Europe and fleet service levels before awarding the contract to General Motors Europe.

Procurement director Mike Tunnell said: "General Motors Europe offered us the optimal financial solution in terms of acquisition price and whole life costs, and appropriate logistical and service solutions in terms of vehicle suitability, availability, fleet service levels and back-up."

In the UK, the Rentokil Initial cars will be mainly operated on three year/75,000 mile replacement cycles and the commercial vehicles on four years/100,000 miles. Across Europe, the bulk of the fleet, both cars and vans, is diesel-powered, as is the commercial vehicle fleet in the UK, although the majority of the UK cars are currently petrol driven.

Procurement manager Ian Lathey said the Company expected more UK drivers to opt for diesels, as they were more efficient in terms of the new CO2 based benefit-in-kind taxation system. "We are already starting to see a swing towards diesel operation in the UK and would expect to see it increase still further."

The company is also investigating environmentally friendly vehicles that operate on alternative fuels such as liquid petroleum gas and compressed natural gas.

At least 75% of the Rentokil Initial fleet vehicles ordered across Europe will be supplied by General Motors Europe while the remainder comprise a number of sales and management cars from other manufacturers and some purpose-built and other commercial vehicles.

Vauxhall Motors fleet director Maurice Howkins, who carried out the negotiations in the UK in conjunction with General Motors Europe fleet manager George Megyeri, said the Rentokil Initial agreement was one of the most satisfying fleet deals he had signed.

"The size of the contract, the fact that it was won against stiff competition from other major manufacturers and the level of services involved all combined to make this a very satisfying contract from a General Motors point of view," he said.

"Everyone within the organisation will undoubtedly be doing their utmost to deliver the level of service expected with a contract of this size and complexity and to ensure 100% customer satisfaction."

Published 24 October 2002 Melanie Carter

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