Fleet Management Global Industry Outlook
In 2016, global passenger car sales were close to 83 million units, and they are expected to grow at ~2.5 percent to reach ~ 85 million units in 2017. APAC will be leading the growth of automobile sales.
BREXIT –Impact on Fleet Leasing and Management
Increase in Fleet Leasing Cost Lease price is majorly dependent on MSRP of the vehicle and residual value. Though the impact of Brexit was negligible in 2016, exchange rate of Pound is expected to remain low in 2017. As a result, MSRP is expected to go up and so does the lease price.
- 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.
- 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
Fleet leasing is high among the companies in North America and Europe. Though purchase is the preferred model in LATAM and APAC, large companies in these regions are moving towards leasing.
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
- 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
- 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
- The use of alternate techniques, such as car sharing and carpooling, reduces the number of vehicles in use