Fleet News

Consolidation will continue

THE pressure to maximise shareholder returns will see continuing consolidation among motor manufacturers. In the long-term, six or seven car makers will emerge to lead the field, according to Steven Utting, corporate finance partner at PricewaterhouseCoopers, at the Fleet Show 2000 forum, 'Impact on consolidation on the contract hire market'.

'It's been difficult to make profits in the climate of change of change that will accelerate,' he said. There will be the further consolidation. 'Research and development costs, high capital investment costs and the fact that manufacturers are not making enough returns to shareholders means changes will take place,' Utting said.

The returns car makers are making is 25% less than returns that other industry sectors achieve. Financial services in the motoring sector, for example, make an average of 17.5% return on their capital, which means manufacturers will increasingly move into this area. The companies most likely to be part of the 'vehicle grand owners' are GM, Ford, Renault/Nissan, Volkswagen, DaimlerChrysler/Mitsubishi and Honda.

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