Maintaining focus…

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There's a popular misconception that fleets only use main dealers for sourcing cars. When it comes to service and repair work they go to an independent garage or a national chain because they are cheaper.

This does not appear to be the case. Big and small dealer groups across the UK are heavily dependent on fleet work and the best of them will dedicate time and resources to winning and retaining fleets as they are an integral part of their customer mix.

Take Vertu Motors. The listed dealer group, which trades as Bristol Street Motors in England and Macklin Motors in Scotland is one of the top 10 car retailers in the UK, selling around 95,000 new and used cars last year. It was founded at the end of 2006 with no sites, and now has 95 covering a wide geographical spread. Its founder and CEO is accountant turned entrepreneur, Robert Forrester, and he is under no illusion how important it is to offer a bespoke service to fleets customers.

‘Fleet is a fundamental part of our business,’ he said.

The group recently reported its financial year-end for 2012. A remarkably successful year for the business with turnover up 15.7% to £1.2bn, a quarter of which came from its fleet operations. Forrester's interest in fleet is typical of many small, medium and large groups: it's an important market which is difficult to win and easy to lose.

Fleets expect dealers to deliver highly professional local services at competitive rates. Most of them do, but everyone has a bad dealer story to tell.

Vertu has invested heavily in local business specialists to make sure dealerships have a dedicated member of staff who can forge and build relationships. Most of the mainstream fleet car brands have similar programmes in place but Vertu, like a growing number of dealer groups, sees the pragmatic value of running its own scheme.

Forrester funds the programme centrally from head office for 12 months to enable the fleet specialist to build a customer base and then hands over the funding to the individual sites as the expectation is to turn that cost base into a profit centre: it's a highly focused approach which guarantees results.

‘We have grown the number of local business specialists in our business and are keen to have one within each of our dealerships,’ he said.

According to Forrester the programme works particularly well when the dealership represents a brand with vans in their line-up, enabling the specialist to address a wider range of fleet requirements with local businesses.

As for the thorny matter of competing against independents for subsequent servicing work Forrester, for one, is adamant that his sites offer a better business case for fleets whether they represent an established fleet brand such as Ford and Peugeot, or an emergent one like Hyundai.

‘If you're a fleet and you've bought a brand new Hyundai i40 why on earth would you want to go to an independent? For starters they won't have the diagnostic kit.’

This improved relationship between businesses and their local dealers has been noticed by Ross Jackson, CEO of Fleet Operations, the fleet management consultancy.

‘Dealers’ ability to deal with fleet has radically improved over recent years. Even some of the lesser fleet names, such as Fiat, have actually now got some sensible fleet operations which historically they never had.’

However, he says fleets can find themselves unable to use their local dealers, even though they may have relationships in place, because of the limitations imposed by the funding companies they use: ‘Leasing companies are fairly insistent on using their preferred network of dealers or independent repairers and over time we have seen an erosion of businesses using the dealers they want to.’

Otherwise, Ross said a common scenario is for fleets to put premium cars through franchised dealers, in the belief that it will protect their residual values, and be less proscriptive about their mainstream vehicles. Although he acknowledges that car brands have worked hard to keep their vehicles within franchised networks with the likes of Vauxhall, Renault, Toyota, Hyundai and Kia all offering extended warranty cover.

For fleets it remains a buyers' market. Clearly the better dealers, like Vertu, are addressing the specific needs of their local business customers and are delivering top notch services, but then so too are many independents who have upped their game. Ultimately there's a lot to be said for personal relationships when it comes to who will provide the best all round care for your staff and their vehicles; getting the best possible value, even in these straitened times, is not always down to price.

 

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