Fleet Management Market Overview
The market trend of fleet leasing is high among areas such as Europe and North America. However, purchase is the preferred model in the Asia Pacific (APAC) and Latin America (LATAM), even though large companies in these regions are moving towards leasing.
The growth of the global fleet management market is driven by factors such as centralization of fleet sourcing and management, a decrease in the sale of diesel vehicles, risk and safety factors, driverless/self-driving vehicles, increase in mobility budget, a shift towards alternative fuel vehicles (AFV) such as battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV).
In a fleet management model only, the buyer owns the vehicle fleet and outsources its management to a fleet management company. Since the fleet management company (FMC) does not invest in vehicle fleets, it does not incur any capital cost or financing cost. Cost of capital/finance and maintenance together contribute to 60 percent of the supplier’s cost. Dry operating costs account for nearly 90 percent of FMCs’ fees. The maintenance management costs, administration expenses, license and permits account for nearly 80 percent of FMCs’ fees. For certain situations, the FMCs provide assistance to their buyers for their financing needs and arrange financing from a third-party financial institution/bank. In this case, the FMCs earn a 1–2 percent financing markup.
Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.
Fleet Management Market Trends
Category Intelligence on Fleet Management covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Fleet Management Market Analysis and Global Outlook
Adoption of the Internet of Things (IoT) devices and connected vehicle solutions are majorly influencing fleet management market trends. These leading-edge techs are beneficial in addressing dynamic market requirements for precise vehicle monitoring.
Fleet management operators connect fleet assets and automobiles by deploying IoT devices and offer the ability to oversee fleet operations remotely, paving the way for opportunistic growth potential.
Telematics has considerably become the cornerstone of fleet management services. The inclusion of informatics with telecommunications capabilities enables fleet managers and operators to monitor and assess the trends related to the operations of their automobiles through systems such as the GPS.
Telematics is making huge strides with the advent of autonomous vehicles and Radio-frequency identification (RFID) in logistics and transport bodies owing to rising investments and large-scale innovations from tech giants Tesla and Waymo.
BREXIT –Impact on Fleet Leasing and Management
An increase in fleet leasing cost is majorly dependent on the manufacturer's suggested retail price (MSRP) of the vehicle and residual value. Though the impact of Brexit was negligible in 2016, the Pound exchange rate is expected to remain low in 2017. As a result, MSRP is expected to go up and so does the lease price.
Action Item
- Buyers can focus on consolidating their fleet spend and obtain the best discount possible in the market to reduce the impact.
Increase in Fleet Management Costs
- Fall in the exchange rate of U.K. pound has resulted in higher fuel prices and has lead to higher fleet management costs.
Action Item
- Companies can use this opportunity to explore fuel reduction techniques, reviewing fuel reimbursement rates and adopting high mileage vehicles in the fleet.
Fleet Management Global Market Maturity
North America has been witnessing a notable rise in the number of warehousing operations, propelled by earlier adoption of fleet management solutions in tandem with the rising number of third-party players in the logistics domain.
Moreover, an increasing number of automotive original equipment manufacturers (OEM) in North America, including Ford, Fiat-Chrysler, and General Motors, are investing in telematics innovations, which will drive the revenue in the commercial vehicle segment thus supporting the fleet management market growth for the long term.
Surging investments in corporate vehicle fleets for workers is primarily favoring the growth of the fleet management market size in Europe. Furthermore, the growth of the automobile leasing business in the developed region has led to large-scale investments.
Vehicle fleets across APAC have been growing rapidly over the recent past. However, the sector has also been confronting problems with regard to maintaining employee mobility and increasing capital and operational costs.
Further, the APAC fleet management market is also encountering hurdles in terms of infrastructure, with traffic congestion being a major concern that is hindering the adoption of fleet management solutions.
Fleet Management Global Drivers and Constraints
Buyers having global presence, increasing sales force and benefits of outsourcing non-core functions are driving the fleet leasing industry. However, alternatives to travel, like video conferencing, and alternatives to company cars, like car sharing, are some of the constraints.
Outsourcing benefits cost control
- The buyers outsource the car leasing and fleet management services to reduce the administrative overhead and to achieve cost benefits. Moreover, the fleet is one of the major spend areas, and buyers prefer outsourcing the fleet management functions to focus on their core business functions
Global presence and scalability
- Buyers with a global presence and higher mobility of their employees prefer outsourcing fleet management services to manage the increasing fleet size
Sales force
- An increasing sales force that requires mobility solutions results in increased fleet size, which drives the fleet management industry
Video conferencing and webinars
- With the advent of new technology like live webinars and video conferencing, it is possible to conduct online meetings and sales presentations, reducing the travel time and cost
Support network
- The usage of support networks like insurance, maintenance, servicing, and remarketing that are required in this industry is high and acts as a constraint to manage these small support service providers
Alternate strategies
Constraints
Potential Security Risks
While the usage of fleet management systems and software is tremendously increasing, concerns regarding the risk of unauthorized access to automobiles are setting a huge challenge for market players.
As per this fleet management market research, industry players are going back to the drawing board to develop solutions to tackle the existing privacy issue.
Why You Should Buy This Report
The report provides information on major fleet management industry trends, drivers and constraints, the regional market outlook of APAC, Europe and North America, and Porter’s five force analysis of the global fleet management market share in each region. It provides insight into the supply trends and presents a SWOT analysis of major suppliers such as Arval, LeasePlan, and Wheels Inc, to name a few. Further, the fleet management market report breaks down the cost structure for different fleet management models and compares the best sourcing, pricing and contract models.
