Fleet News

Ford walks away from fast-churn fleet deals

FORD is to put profit before volume and market share in a new approach to the fleet sector which will see a major reduction in its fast-cycle business. The manufacturer's 24.7% sales slide in the August fleet market marked the start of a more consistent approach to the fleet sector, according to Ford of Britain chairman Ian McAllister.

In future, the UK's leading manufacturer says it will walk away from unprofitable fast-churn business. Such a move should boost residual values on its fleet vehicles. Speaking to Fleet NewsNet at the launch this week of Ford's new sub-B sector Ka, McAllister said: 'We are not abandoning fleet business, but what we are trying to do is adopt a consistent approach.'

Ford's fleet sales in the first eight months of 1996 are 12.9% down on 1995 levels at 157,989 (181,362) with Ford's August fleet sales down 24.7% at 35,377 (47,009).

McAllister said there had been a large amount of heavy, one-off discounting in August but Ford had simply refused to compete because it damaged the business relationships it built with its customers and damaged residual values. That suggestion was backed by Retail Motor Industry Federation chief executive Christopher Macgowan, who claimed the year-on-year 4.5% rise in total new car sales had been achieved largely through deep discounting to big fleet purchasers.

Late last year then Rover chief executive John Towers told Fleet NewsNet it was prepared to lose fleet sales and market share in a bid to improve profitability. Earlier this year new Vauxhall chairman and managing director Nick Reilly said it had 'pulled back' from some deals to safeguard profitability.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee