An efficient key to company transportation problems<\/p>\n
Prodjo Sunaryanto, Managing Director of TRAC<\/p>\n
The protracted economic crisis, which this country is still in
\nthe throws of, has forced companies to be cost-efficient.<\/p>\n
Company cars, for example, are important for corporate image,
\nbut the price of new cars continues to soar as does the cost of
\ncar maintenance. If a company needs 100 cars at a price of
\nRp 150 million apiece, for instance, a huge amount of money must
\nbe allocated for transportation alone.<\/p>\n
Besides which it will have to spend more money on car
\nmaintenance, drivers' salaries, insurance and vehicular taxes.<\/p>\n
Obviously, this company, the core business of which is not
\ntransportation, will need a separate division to handle car
\nregistration and the maintenance and repair of the cars.<\/p>\n
Unless a company operates taxis -- and as such can run a
\nbusiness with only 100 cars -- it is cheaper for this company to
\nrent cars rather than purchasing them. If it rents cars, the car
\nrental company takes car of any repair work that might be
\nrequired.<\/p>\n
Renting a car means that routine maintenance, the replacement
\nof the lubricant, the renewal of the motor vehicle registration
\ncertificate and even insurance are taken care of.<\/p>\n
In fact, renting cars is basically advantageous for a company.
\nFor many companies, while it is apparent that transportation
\ncosts are high, a clear account of transportation expenditure
\ncannot be produced.<\/p>\n
These are some of the problems companies may face:<\/p>\n
- There is difficulty in drawing up a budget because there is
\nno certainty about overheads, i.e. when the cars must be sent to
\na workshop for maintenance.<\/p>\n
- A problem in cash-flow management arises when the company
\ndecides to buy cars because it must allocate a significant sum of
\nmoney for the downpayment.<\/p>\n
- The company's debt increases as it must pay back its car
\nloan in installments.<\/p>\n
- Return on assets will be lower because investment in
\noperational cars will only augment the assets and reduce the
\nchance for investment in areas more strategic for the company.<\/p>\n
- The company must pay taxes such as the annual tax on
\nmotorized vehicles, the Value Added Tax on the purchase of cars
\nand the expenses arising from the maintenance of the cars.
\nBesides which, the company must also keep a file of the standard
\ntax invoices for the collection of the Value Added Tax, for
\nexample.<\/p>\n
- The company must spend time and money on processing its
\ninsurance claim and other important documents related to
\ninsurance.<\/p>\n
In view of the aforementioned problems, it is clear that
\nrenting cars is more cost- and time-efficient than purchasing
\nthem.<\/p>\n
It is common today for a company to employ domestic and
\nforeign experts on a contractual basis for a period of two to
\nfour years only. Therefore, it is better for a company to hire
\ncars along with their drivers rather than buying cars for these
\nexperts. When the contract expires, what happens to the cars and
\nthe drivers?<\/p>\n
Obviously, the car rental business can profit both the
\ncompanies hiring the cars and the car rental companies
\nthemselves.<\/p>\n
TRAC Astra Rent A Car, for example, has enjoyed a favorable
\ngrowth since its inception in 1986. This company was set up to
\nsupport PT Astra International Tbk, an automotive company and the
\nsole agent for several car makes. However, it rents both Toyota
\nand other makes.<\/p>\n
A low rent is not the main consideration for a company when
\nrenting a car. Before a company rents a car, it must find out if
\nthe car rental company can give an integrated solution to its
\ntransportation needs.<\/p>\n
A bonafide car rental company must be supported by a skilled
\nand hospitable staff, reliable cars, professional drivers and
\npersonal services. The staff must always be ready to lend a hand
\nand understand the needs of their clients.<\/p>\n
As a guarantee of its excellent service, a good car rental
\ncompany usually has a customer-care division. The customer care
\nofficers will professionally and personally attend to the needs
\nof the customers and listen to their complaints.<\/p>\n
The more branches a car rental company has and the more
\nworkshops it cooperates with, the better it can serve its
\ncustomers.<\/p>\n
The format of business in the future will be greatly
\ninfluenced by the ability to apply standard procedures in all
\ncorporate operations, as well as by the extent to which these
\nprocedures can be applied continuously and consistently to
\nsupport all corporate activities.<\/p>\n
Another obligation that constitutes the prime concern of a
\nbusiness is the development of information technology. Bonafide
\ncompanies, including those in the car rental business, must meet
\nall the requirements set for this format of business.<\/p>\n
Since 2003, TRAC has applied the Astra Management System and
\nimplemented Balanced Score Card as its management tools to
\nstrategically communicate TRAC's performance to the stakeholders.<\/p>\n
The application of this system refers to four perspectives,
\nnamely:<\/p>\n
- A financial perspective, which is aimed at obtaining a
\nstrong and solvent financial structure.<\/p>\n
- A customer perspective, which is aimed at ensuring good
\nquality and satisfaction for the customers.<\/p>\n
- An internal perspective, which shows reliance on an
\ninnovative attitude in products and services, a strong business
\nnetwork, an excellent corporate operation and quality management
\nand technological systems.<\/p>\n
- A perspective of learning and growth, which is aimed at
\nproducing competent human resources with strong teamwork.<\/p>\n
At this juncture, three parties deserve equal treatment: the
\nshareholders, the employees and the customers.<\/p>",
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