The names of the OEMs might change, but the requirements and expectations from end users remain the same. Paul Hollick, chairman of the Association of Fleet Professionals (AFP) discusses the challenges.

AFP chair Paul Hollick

Because motor manufacturers are large organisations who make expensive products and tend to advertise in a kind of omnipresent manner, it’s easy to think that the ones who today dominate fleet have a permanence attached to their place in the market. However, history shows that’s not the case.

Look back to the 1970s and there was only really a choice of Ford, Vauxhall or the various incarnations of British Leyland. Fast forward to the 1980s and 1990s – on a cassette, of course – and others such as Peugeot, Nissan and others started to take a bigger market share.

More recently, in the 21st century, low lease rates have meant that prestige German manufacturers – whose badges would once have been considered out of reach of the average fleet driver – have become remarkably prevalent.

Now, it looks like we might be undergoing another shift, thanks to a number of developments. Post-pandemic supply issues mean that several manufacturers previously ‘important’ in fleet simply can’t make enough product and are often choosing to concentrate production at the top of their model range. At the same time, previously less significant manufacturers are now able to offer cars to fleets with reasonable delivery times. As a result, they are increasing market share, especially those with attractive EV designs. Also, we are seeing the beginning of a concerted effort to enter the UK market by Chinese manufacturers, almost all of whom have an electric-centric offering. Finally, there is the question of spiralling lease rates, with some previously attainable cars simply becoming too expensive, forcing employers to consider other options.

Taking a gamble on the new breed

There is quite a lot of conversation about this subject within the AFP and especially around the potential dangers of buying from manufacturers with a limited or no fleet track record. It’s a variation of the old “Nobody ever lost their job for buying IBM,” adage – those who choose to try new suppliers often feel as though they are taking quite fundamental risks.

This raises an interesting point: what do fleets want from ‘new’ carmakers, whether it’s those who have previously been unknown to the UK market or those who have had a restricted presence? Let’s assume that these manufacturers are being considered largely because they are felt to be attractive in terms of pricing and supply, what else is needed?

For fleets who buy – rather than lease – cars, the biggest worry I have heard expressed surrounds residual values. This is a fundamental issue and evidence that RVs are being proactively managed and protected by the manufacturer as part of a long-term strategy for the used sector can go a long way towards overcoming fleet objections.

Another key concern is keeping vehicles on the road in good condition. Although a small number of manufacturers have managed to thrive without a traditional franchise dealer network, the presence of one is still a massive reassurance for many fleets. Knowing there is somewhere you can go to look at cars, test drive them, get them serviced and – crucially – buy spares easily when needed, is a definite plus point.

The final factor is some kind of resource dedicated to fleet. Manufacturers who understand our sector and spend time and money ensuring that operator needs are being met – which could mean anything from financial support to producing vehicles with the right specifications – tend to do well. Indeed, some established carmakers have reduced their resource in this area recently and the market reaction has been negative. Fleets like to deal with people who understand what it is like to run a fleet – and the AFP offers training in this area.

Ultimately, all of this information adds up to something quite simple. At any time, fleets are generally happy to work with manufacturers who show a genuine commitment to the UK market. They are also willing to build relationships with those who will invest in providing a stable environment in which to buy, operate and sell their vehicles. It’ll be interesting to see which of these new entrants achieves this aim and make definite inroads into the company car market during the next few years.