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Fleets in focus: Commercial Group

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Conventional fleet wisdom says that once company cars get much above four years or start to reach 100,000 miles they become uneconomic to keep due to rising maintenance costs and falling residuals.

Nobody told Commercial Group.

The Cheltenham-based business services company’s replacement policy sees it frequently double the industry average operating cycle of 42 months.

For cars, six- and seven-year cycles are commonplace; 200,000 miles is not out of the ordinary.

For vans, 350,000-plus miles are the norm.

Many fleets talk about sweating the asset but few are prepared to go as far as Commercial Group.

It buys all its 60 cars and 12 vans outright and operates a cascade policy which sees vehicles handed down until they end up in the pool fleet.

New cars are given to those drivers most in need, such as engineers and staff who visit customers.

After two or three years, they are passed to another employee, such as a new starter, who might keep the vehicle for another two years.

Finally, they move into the pool fleet for one or two years. Vehicles stay on the fleet as long as they have a useful life.

“We are different to most companies because we try to get the most use from a vehicle before we replace it,” says Commercial Group logistics manager Rob Paddock.

This policy could not exist without full engagement from the drivers; they have to take ownership of the vehicle and treat it with respect to minimise maintenance and repairs.

It’s an area that many fleets struggle with. What’s Commercial Group’s secret? “It’s part of our business culture from the board down,” says environmental strategist Simon Graham.

“Staff feel 100% part of the organisation so they are willing to go the extra mile. We involve them in our future plans; we make them feel part of the bigger picture and that they have value within the business.”

A pre-emptive maintenance programme is also a vital component; vehicles are regularly inspected and drivers have their own weekly checklists to complete.

During the warranty period all vehicles are serviced and maintained at dealerships.

After that, they go to one of three local independents approved by Commercial Group.

“We know when things will break because of our experience with older models so we can keep a close eye for faults,” says Paddock.

“Maintenance costs are mostly wear and tear items which don’t increase much year-on-year; the costly items are the exceptions like clutches and gearboxes.

"It’s rare to see major hits during the lifecycle because the vehicle is carefully maintained from the outset.”

Commercial Group’s long-life policy would not be possible without outright purchasing its vehicles; contract hire and leasing companies are reluctant to quote rates for vehicles kept more than six years.

Complementing this approach is an emphasis on getting sales staff to use public transport and video conferencing wherever possible.

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