Fleets urged to turn to WLC approach as cost remains a key concern
New research from Venson Automotive Solutions, the independent leasing and fleet management specialist, reports that containing costs is the biggest worry for fleet operators for the coming year. In a survey of its customers, 89% said cost containment was a key concern for 2014 and 80% reported that the most important way suppliers can help businesses is to work harder to reduce costs.
Of those surveyed by Venson, 71% said they were under greater pressure in 2013/14 to reduce supply costs, with 29% also under pressure to reduce internal costs. In addition, 40% said they were more closely monitoring the financial viability of suppliers. Perhaps tellingly, the key areas fleet operators felt they would be spending less on over the next 12 months was fuel cards (35%), as many look to implement an integrated solution.
Vehicle servicing maintenance and repair (27%) and purchasing cars (25%) were the other areas fleet managers felt they could reduce spend over the coming year.
In response, Venson has urged fleets to consider switching to a whole-life cost approach for purchasing cars, saying that those businesses that calculate the expense of running a fleet on the basis of a vehicle’s whole-life cost will achieve the most effective reductions in financial outlay.
Alan McCleave, business development director for Venson, commented: ‘When we analyse companies’ car choices, within existing grades, the whole-life cost deviation between the lowest and highest is frequently significant and that is money businesses are currently giving away, despite containing costs being their top priority. Despite significant savings to be made by selecting vehicles based on whole-life cost data, a recent ACFO seminar highlighted only 20% of organisations use whole-life costs when compiling choice lists; a figure I believe is slightly generous.’
In contrast to the cost-cutting areas, 21% of fleet managers felt that insurance was an area where they would spend more, with the natural rise in premiums. 21% also said they would spend more on daily rental and fleet management. Interestingly, 95% felt they would spend the same amount on risk management and 87% will be spending the same amount on telematics.
McCleave concluded: ‘It’s clear, from our survey, that effective fleet solutions that focus on reducing costs are what matter most to fleet operators. We don’t believe in a one size fits all approach; we deliver impartial fleet advice and purpose-built solutions that truly help businesses achieve their operational objectives and contain costs in today’s challenging economic climate.’