Fleet News

New car pricing shake-up could see retail buyers get cheaper deals than fleets

MANUFACTURER price cuts are throwing fleet buying arrangements into disarray and have raised fears that some company cars could be sourced cheaper by individual retail customers and not through a bulk purchase.

A rash of price cuts has been announced in the past few months, including four over the past few days by manufacturers to coincide with Friday's December 1 deadline set by the Government in its Supply of New Cars Order 2000. Peugeot, Citroen, Fiat, Volkswagen and Renault all cut their prices to coincide with the Order. Only Nissan has yet to cut prices. In making the price cuts, car makers have radically rethought their approach to discounts, with dealership margins slashed from above 10% to as little as 2% in some cases.

Peugeot, Volkswagen, Ford and Vauxhall all admit to cutting their dealer margins as part of the strategy. In most cases, additional funding is available for retail buyers, but fleet support is dealt with separately.

Fleets have raised fears the changes to margins will make their vehicles more expensive. Lex Vehicle Leasing has already claimed contract hire rates will rise following price cuts by Ford, while one un-namedfleet boss claimed he would end up paying more than private buyers.

He said: 'A contract hire firm or fleet will receive a 2% discount and £500

volume-related bonus from one manufacturer, while a dealership supplying a private buyer would get 2% plus an 8% retail margin, which easily outstrips the fleet offering. It is absolute madness.'

Manufacturers are adamant that fleets will be no worse off than before the pricing changes and say any customers who find they are paying more should inform them. However, they admit that, particularly for small fleets, buying as a private customer could be an option.

If fleets and leasing companies move in large numbers to buy vehicles as individual retail customers, fleet sales figures from the Society of Motor Manufacturers and Traders could plummet, despite demand for fleet cars being unchanged. John Taylor, Peugeot's director of fleet and leasing, said: 'Fleets will be no worse off and in the majority of cases, they will be better off. The margin has come down but the price has come down as well. There is still a benefit in being a fleet customer.

'There have always been situations where tactical offers exceeded smaller fleet arrangements and any switched-on fleet buyer is well aware of that.'

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