Fleet Market Nigeria Market Trends
Category Intelligence on Fleet Market Nigeria 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
Regional Market Outlook on Fleet Market
Outsourcing fleet management vs In-house fleet management
Organizations can typically achieve cost savings of 8-10 percent by outsourcing the fleet management services and this is the preferred model in Nigeria.
In-house management of fleet vehicles involves a higher manpower (15-20) as compared to outsourcing the services. Initial setup cost for in-house fleet management is high and streamlining the internal operations will require additional time.
In-house
Ratio of Staff
- Typical size of an internal team is 15–20
- A minimum of 10-12 for fleets in the range of 150-200
- 100% internal staff
- No external staff managing fleet
Role of Internal and External Staffs
Role of internal staff includes contract management, supplier relations, financial analysis and budgeting, accounting and billing, performance and audit, fuel, insurance/claims, vehicle safety, tracking, roadside/accident assistance, driver safety, training, licensing, maintenance, servicing, vehicle utilization/performance, supplies, parts and disposal
Outsource
Ratio of Staff
- Internal staffs include a fleet manager and 5-7 department heads, who report to him
- A minimum of 4-5 employees for fleets in the range on 150-200
Role of Internal and External Staffs
- 90% of the activities are outsourced
- Typical departments under fleet manager are acquisition, disposal, maintenance, training and safety
- Internal team is responsible for coordinating the entire activities between leasing company and the organisation
- Leasing company/fleet management company manages the daily operations
Key Cost Saving Opportunities
Multi-bidding
- The best rates and discounts can be identified by running an RFP to multiple suppliers in the market.
- In some cases, depending on the fleet size, buyers can choose the supplier with the best quote and try negotiating further
Fleet Mix
- Reducing the number of car manufacturers and concentrating fleet mix to a limited number of OEMs can result in additional discounts, and this can lead to cost savings
Purchase through FMC
- In some cases, depending on the discount, fleet management companies also facilitate car purchase with higher discounts but with a marginal fee per car
Lease Term
- Increasing the lease term/rental term by one year (maximum five year lease) can be a quick win and can result in cost savings initially. However, the road conditions and maintenance related issues need to be considered before increasing the lease term
Car Upgrades
- Buyer organizations can also negotiate on different upgrades for the cars that they purchase or lease
Cost Structure of Fleet and Cost Saving Opportunities
In Nigeria, organizations can save 10-12% of their spend over unmanaged fleet vehicles.
Organizations in Nigeria use company cars for a period of 3 years, since, cost structure components like depreciation and maintenance increase after this period
Cost saving opportunities
- Depreciation: As depreciation rate increases exponentially Y-o-Y, FM companies provide discounts on depreciation rates based on the volume of purchase
- Insurance: Insurance cost can be negotiated as the fleet management company will be in direct contact with the insurance provider
- Maintenance and Service: Maintenance costs can be reduced as the FMC will have a centralized maintenance contract for all of their vehicles
- Fueling: Discounts on fuel rate will be given by the FMC and centralized monitoring and tracking of the vehicles also results in cost savings