Over the past five years, Ford has halved the number of vehicles it sells into the daily rental market – from 90,000 to around 43,000 – as part of a strategy to improve its sales mix and focus on more profitable channels.
It is still the biggest player in rental and views it as a key route to market, not least for the steady churn of nearly new vehicles demanded by its retail network.
But improvements in product quality and design, and enhancements to the support network, have enabled the company to replace some of the rental business with corporate and retail sales.
Ford director of fleet operations Kevin Griffin points to figures that show the carmaker as the market leader in the ‘net fleet’ sector, which removes bodyshop and demonstrators from the SMMT’s true fleet figures, with just over 13% market share, up 3.3% year-on-year.
More broadly, Ford’s total fleet sales reveal a share of 16.8%, ahead of the 15-16% target. With retail share up at 12%, it has left Ford “short on the ground” for several models, especially the Fleet News Award-winning Focus.
“We have oversold compared to the targets we set,” Griffin says.
It’s an enviable position, particularly for a company that has spent the past 30 years as the UK market leader.
Fleet News: You’ve been reducing sales to daily hire for the past few years but this year you are at a similar level to 2011 – is this process now complete?
Kevin Griffin: Our strategy is to have some volume with every major player, spread around depending on terms and tactics.
We’re about where we want to be now. A lot of the rental volume we control: Ford Rental is 6,000-7,000 units and Ford Retail UK has the rental business in the Channel Islands which is also significant volume.
We buy back most of the vehicles because we know we have demand from dealers.
FN: Your 1.0-litre Ecoboost petrol engine has attracted a lot of media interest: has it a role in the fleet sector?
KG: It gives a viable alternative to diesel and we have some fleets looking at it.
This engine takes 22% of our retail sales but it will take longer in fleet because diesel is dominant and we also have a very good diesel engine. Stage 6 diesel will be a challenge for the industry because it will add cost – the investment is significant.
At that time, more people may consider petrol.
We’ve also found that there is deterioration in diesel particulate filters past 100,000 miles and they are expensive to replace.
On the Focus, our filters go to 150,000. There will be an issue with other vehicles at 100,000 miles and it could affect residual values. This will be an interesting one to watch.