What SMEs want
The new car market in the UK continues to defy all expectations with May heralding the longest period of sustained growth since the 1980s as businesses and private motorists continue to trade-in old for new at a rate no-one was predicting at the beginning of this year.
With May witnessing the 27th consecutive month of growth, the Society of Motor Manufacturers and Traders expects demand to level off with the year finishing at around 2.4 million units; the highest level since 2007.
A look at the SMMT data reveals just how strong fleet demand is. While the new car market is currently powered by retail demand, which climbed 13.4% in the year to date, fuelled by some amazingly low finance deals, the fleet sector is also enjoying a resurgence. Consequently sales to businesses running over 25 cars have risen 9% year on year, reflecting the practical need for medium to large companies to replace cars sourced during the downturn which have been run for longer than their traditional three year cycles.
However, growth to smaller businesses, running less than 25 cars, is nothing short of unprecedented with a year on year increase of 20.4%.
This rise has been facilitated by the growing number of car manufacturers addressing these businesses and gearing up their dealer networks to proactively serve their needs.
However, some of the bigger dealer groups are also getting in on the action and offering SMEs more highly targeted services than ever before.
The latest dealer to launch a dedicated offering for small fleets is the Leicester-based Sytner Group, which operates 130 showrooms. The brands it represents are at the more selective end of the user-chooser spectrum ranging from Seat, Mini, Volkswagen and Honda, to Audi, BMW and Mercedes and up to Porsche, Bentley, Rolls Royce and McLaren. No wonder it modestly describes itself as the “UK’s leading retailer of prestige cars.”
Last month the group launched an all-new company car contract hire service, called Sytner Supply, aimed specifically at SMEs running up to 75 vehicles, which it claimed could save businesses £50 per vehicle every month.
The group is in an ideal position to operate such a service as SMEs already form an important part of its customer base and the geographical spread of its dealerships offers wide coverage across the UK.
At the heart of Sytner Supply is a contract comparison and ordering service which uses the dealer group’s panel of finance lenders to locate the best deal for each car from the different manufacturer franchises it represents.
The service is designed to remove the hassle from acquiring new cars for small businesses and covers everything from the initial enquiry to vehicle delivery.
‘We already have an extensive SME customer base and are aware of the significant amount of time that companies of this kind have to spend in finding the best funding for their new vehicle,’ said programme manager Nigel King.
‘Having no captive contract hire operation ourselves, we realised that we were perfectly placed to create a service that compares a wide number of funders and takes the legwork out of vehicle acquisition.’
Sytner has extensively piloted this service and claimed it has so far achieved average savings of around £50 per month per vehicle for clients compared to the quotes they had obtained themselves.
‘The SME market provides a significant opportunity for the Sytner Group and we believe that, through Sytner Supply, we can offer smaller businesses a similar level of advantage to those that we are able to offer to our very largest fleet customers.’’
Meanwhile, Bradford-based multi-franchise dealer group JCT600 has also boosted its fleet operations with the recent appointment of Frank Turner as national broker and corporate accounts manager for its growing fleet operation.
Turner has worked extensively in the contract hire and leasing sector and his appointment is a further development of the group's ongoing plan to increase its presence in the company car sector (as reported by Fleet World in April) by supplying vehicles to local businesses and national fleets.
‘We have seen significant demand for our fleet services with customers responding well to our transparent approach,’ said Neill Richards, JCT600’s fleet sales director.
‘As part of a major group incorporating a wide range of brands, we are able to provide balanced car cost comparisons and give customers expert advice about what is best for them in terms of cost per mile and taxation.’
Some dealer groups are getting the message that SMEs expect to be able to source and finance fleet vehicles from a local business they know and trust.