Leasing experts believe that manufacturer-owned contract hire companies will accelerate their penetration into the UK fleet market over the next two-to-three years.
Evidence comes from BMW-owned Alphabet’s acquisition of ING’s leasing division last year while Mercedes-Benz Financial Services is about to go multi-marque in a deal with Leasedrive.
Now Toyota Financial Services (TFS) has paved the way for a rapid expansion of its risk fleet with the development of a multi-brand funding product.
The company, which is 25th in the 2012 FN50 with a risk fleet of 6,316 vehicles, currently provides funding only for Toyota and Lexus models.
However, the launch of Multi-Marque will enable it to widen its range of potential customers, says TFS managing director Doug Gillies.
“We have a product which we will be launching over the coming months which will enable us to offer a multi-brand funding solution,” he says.
Being able to provide funding only for Toyota and Lexus models had been a “barrier” to winning business, adds Gillies: “Now we can turn around and offer funding for vehicles from other manufacturers.
“In an ideal world all of our corporate customers would have a 100% Toyota and Lexus fleet. However, in the real world, we know this isn’t possible.”
Traditionally, TFS’s main fleet customers have been small and medium-sized businesses.
It made a decision not to target larger blue chip companies because they typically wanted one contract hire company to provide funding for all of the various brands on the fleet, something TFS couldn’t offer at the time.
However, under Multi-Marque, TFS will be able to offer funding for a multi-brand fleet, provided the business is competitive and it leases at least one Toyota or Lexus vehicle.
Also on the horizon for TFS is a new contract hire product which will have additional features and offer a more mainstream solution for fleets.
TFS points out that contract hire is not the only funding solution available to fleets and for funders to be successful, offering a diverse range of options is key.
“We don’t just see fleet as contract hire,” says Mike Fisher, general manager, Lexus, fleet and national accounts.
“We do a lot of PCP programmes which are a very good way for businesses to purchase cars. It is difficult to put a number on our total business risk fleet but we do see fleet as not just a contract hire product but through purchasing as well.”