Fleet News

Fleets need to buy online to make e-trading a success

MANUFACTURERS and dealers must convince large fleets to buy new vehicles over the internet if online trading is to be successful, according to a new report.

While online sales of new cars presently account for just a few thousand vehicles, there is no evidence that fleets are turning to the internet to buy. Instead, the 'net remains the domain of private buyers - and possibly small fleets, many of whom adopt a retail buying mentality.

However, with the emergence of e-commerce fleet management networks from the likes of LeasePlan, Arval PHH and Godfrey Davis Contract Hire, the mechanism now exists to persuade fleets to buy over the web.

'Online sales of new cars this year will probably amount to just a few thousand,' said Mark Berrisford-Smith, senior economist in the business economics unit at HSBC Bank. 'Some analysts believe this figure could soar to about 50,000 in the next year, reaching 200,000 - 250,000 (a tenth of the market) by 2005. While this volume of sales is not beyond the realms of possibility, it will only be achieved if manufacturers and dealers switch a sizable proportion of their sales to large fleet buyers on to the internet.'

The HSBC report concludes: 'The most likely outcome of what is a confused, fast-moving situation is that while a few of the new online entrants will establish themselves, sales will be dominated by existing dealerships and manufacturers.

'Nonetheless, the growth of online distribution, along with other alternatives to traditional franchised dealerships - especially supermarket chains - will help to alter the retail landscape considerably in the next few years.'

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