Senior fleet figures give their opinions on the previous 12 months and also look forward. Paul Barker talks to the industry
Julie Jenner, chairman, ACFO
Sum up last year
Fleet operators became increasingly proactive in ‘progressing’ their fleet operations and are moving away from the retention of the status quo they adopted during the depths of economic gloom.
What was your biggest worry going into it and were you right to worry about it?
The challenge has been, and remains, disjointed Government policy and a lack of understanding of fleet operations in some areas.
What is your biggest opportunity in 2013?
During 2012 ACFO implemented a whole raft of changes that sees it take on a new strategic direction in 2013, particularly targeting employees who are ‘part-time’ fleet managers in the sense that they also have other responsibilities within their job description. The introduction of webinars, more seminars on key issues and greater use of the internet to help members access the raft of knowledge that is available within ACFO is essential to further expand membership.
What one piece of advice would you give business car operators?
Plan for the future and utilise the huge wealth of information, knowledge and support accessible to them. Get fleet decisions wrong and it can prove to be extremely expensive.
Tony Gannon, communications director, BCA
Sum up last year
Fleet and lease used car values continued to climb. However, supplies reaching the wholesale used car market are quite significantly down on the peak seen four to five years ago and there is a real shortage of good quality, ready-to-retail used cars. This is leading to generally rising values for the best examples reaching the remarketing arena.
What was your biggest worry going into it and were you right to worry about it?
The wider economic backdrop was the major concern, along with rising costs and the possible negative effects on the marketplace from the number of high-profile events in 2012. These fears were well founded, particularly as the UK slipped back into recession mid-year. But the shortage of supply – particularly of good retail quality stock – kept values and conversion rates reasonably high all year.
What is your biggest opportunity in 2013?
BCA has moved from being just selling in a physical environment to multi-channel remarketing, selling vehicles through a variety of physical and online channels and offering a range of complementary services. That journey will continue.
What one piece of advice would you give business car operators?
Keep in touch with used market sentiment – not just when it is time to sell your vehicles but at the acquisition stage so you can future-proof your company’s investment.
John Lewis, chief executive, BVRLA
Sum up last year
It was a year that saw a continued strengthening in residual values, an improvement in the supply and cost of funding, and small but steady growth in business volumes.
What was your biggest worry going into it and were you right to worry about it?
We had two main worries: funding and insurance. Any concerns we had over the industry finding a long-term, sustainable supply of funding were allayed. Unfortunately, the high cost of insurance, particularly for the rental industry, continues to be a major concern, although there are signs the problem has peaked.
What one piece of advice would you give business car operators?
Continue to keep a tight focus on cost, but don’t lose sight of road safety.
Ed Hummel, sales director, Glass’s
Sum up last year
We use the auction houses as the basis for reporting and tracking wholesale prices. In October, the average price of all fleet cars was down 3% and dealer part-exchanges were down by 2%. That sounds negative, but what we’re actually seeing is a pattern of price improvements taking the year as a whole compared with previous years. If we talked about disposal prices on three-year-old ex-fleet cars, they were up 11.7% year-on-year in October. That’s an increase of about £1000 per car, and so for asset managers of leasing and fleet companies, there has been a windfall bonus that was not anticipated in their wildest dreams at the beginning of the year. Auctions have seen a year-on-year increase in conversion rates since mid-January too.
What was your biggest worry going into it and were you right to worry about it?
I expected the car market to fall significantly, but have been pleasantly surprised to see it grow, albeit with an increasing number of manufacturer self-registrations.
And your biggest worry for 2013?
A triple dip recession.
What is your biggest opportunity in 2013?
To connect with more customers through new products, delivered through a new customer-facing team.
What one piece of advice would you give business car operators?
I’d advise them not to use a single source for used values and whole-life cost data.
Peter Lambert, fleet director, Kwik-Fit
Sum up last year
Demand for tyres, MoTs and service maintenance has remained flat.
What was your biggest worry going into it and were you right to worry about it?
My biggest worry was whether tyre manufacturers would continue to increase prices. However, there was good news in August when two – Bridgestone and Michelin – actually reduced prices. A second worry related to tyre labelling and whether the huge investment in the initiative could turn out to be a waste of money. Kwik-Fit believes it is a step in the right direction; however, only three of around 50 tyre attributes are being measured and that is insufficient for motorists to make an objective decision as to which tyres to purchase.
And your biggest worry for 2013?
Financial instability uncertainty and indecision regarding the implementation of a long-term fix for the European economy.
What is your biggest opportunity in 2013?
Itochu invested millions of pounds in Kwik-Fit in 2012 and that investment strategy will continue throughout 2013, particularly with the refurbishment of more centres with approximately a further 100 to receive the new look.
What one piece of advice would you give business car operators?
Operators should look to make budget savings by turning to independents for vehicle mechanical work – servicing and MoTs – where savings of 20-30% are achievable in comparison with franchised dealers.
Andrew Hogsden, senior manager – Strategic Fleet Consultancy, Lex Autolease
Sum up last year
Businesses of all size began to realise the importance of an effective, policy-driven fleet management strategy as a means of controlling costs and operating in a challenging economic environment.
What was your biggest worry going into it and were you right to worry about it?
Challenging macro-economic conditions gave fleet the greatest cause for concern. This concern was justified as economic difficulties constrained demand and made it harder for businesses to access finance.
And your biggest worry for 2013?
The biggest challenge for fleets is uncertainty caused by the continuing difficulties in the global economy.
What is your biggest opportunity in 2013?
Businesses are recognising the importance of obtaining maximum values from their suppliers and this trend is likely to continue. We see growth opportunities in this area.
What one piece of advice would you give business car operators?
To ensure they have a robust, flexible strategy and be mindful of changing market conditions. Issues such as fuel costs, taxation, emission levels and vehicle choice are factors operators can and should try to proactively manage.
Other key players in the industry
Dave Brennan, MD, Leaseplan UK
“To help businesses overcome continuing financial pressures there is still a huge role for leasing firms to play. We are also likely to see further outsourcing of fleet services, due in part to the ongoing trend of reductions in in-house fleet management teams.”
Vincent Kinner, head of VW Fleet Services
“If you can tailor your proposal to have the right people with the right experience and expertise to sell the right cars to the right customers at the right time, there’s everything to be optimistic about in 2013.”
Mike Waters, senior insight & consultancy manager, Arval
“It is likely to be more of the same as conditions remain tough but manufacturers continue to come up trumps, giving the most savvy drivers the ability to manage their costs and benefit from some impressive advances in technology.”
Nigel Schroder, managing director, TRG Vehicle Hire
“The business model for rental companies will have to change and the rental side will have to generate higher levels of profit in order to sustain the overall business. This has to mean the consumer will be paying more.”
