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Executive Perspective: Leasing's Role in the Trucking Industry

executive perspective Denise L. Rondini | Editor | drondini@rrpub.com Leasing’s Role In The Trucking Industry Furthermore a truck dealer can achieve, in his overall business, a higher level of proﬁtability by being in the lease and rental business. It allows him to absorb a far greater share of his infrastructure investment. This issue the Executive Perspective focuses on the leasing and rental markets. Dan Murphy, executive vice president and chief operating ofﬁcer of Idealease of North America, Inc., shares his thoughts on the state of the leasing and rental market and its importance in the trucking industry. SD: What is the scope of the leasing and rental business in today’s trucking industry? DM: As we look at things, the trucking universe approximates 4 million units and 1 million would be what we consider prime targets for full-service leasing. And that population, or 25 percent of the overall market today, is comprised of 400,000 units under full-service lease and 600,000 remain in ownership. For the last ﬁve years, the full-service lease industry has not really grown. Among the reasons for that is the fact that in 2001 George Bush put into place the accelerated depreciation beneﬁts for ownership. It is one of the factors that has tempered growth in the leasing side of the business. One of the areas that provides a lot of opportunity is contract maintenance, which allows us to introduce the services and capabilities to customers, which we believe will lead up the service chain to the full-service lease offering. SD: How important is it that dealers be involved in leasing? DM: Lease and rental gives truck dealers the opportunity to really further penetrate their marketplace. A truck dealer has to have a vision that as they develop their full-service lease and rental business they will become their own largest customer. They will become their largest truck customer, parts customer and service customer. It is an opportunity for a truck dealer to really capture 100 percent of the possible revenue stream from the truck customer. S D: What does it take for a dealer to be successful in leasing and rental? and foremost, a truck dealer engaged in the full-service lease business has to be 100 percent committed to this business and that commitment is demonstrated by his investment both in qualiﬁed professional people on the management, sales and service side of the business and by his investment in facilities and support for the customer. That comes in the shape of physical facilities. It comes in the form of mobile maintenance that he takes to the customer. And then it is an ongoing commitment to training and a continued investment in the business. One of the other areas that a truck dealer needs to address right up front is the inherent conﬂict that is going to present itself once he enters the full-service lease business. That conﬂict is between the truck dealer’s traditional retail sales force and service organization and that of the same truck dealer’s fullservice lease sales and service organization. The retail sales force in a traditional truck dealership is protective of its customer base. The service side of that business is not necessarily as actively engaged in the proactive management of the maintenance and service of the vehicle. The truck dealer needs to address those conﬂicts right up front in terms of customer base, in terms of D M: First 16 | SUCCESSFUL DEALER | August 2010

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