Fleet News

September: record run continues as fleets pile on the sales

A SURGE in registrations from the fleet market made September a record-breaking month for sales and has prompted the industry to revise its forecasts for the year upwards to an all-time record of 2.5-million units.

Fleet buyers kept the new car market on track for an all-time record last month as they snapped up the new registration plate in record-breaking numbers.

The September car market fell by 2.4% overall compared to last year, from 443,265 units to 432,661 as demand from used car buyers slumped, but fleet purchases were up 7.2% year-on-year at 168,263, backed by a healthy 13.1% jump in sub-25 fleet sector sales to 49,025. Private buyers accounted for 215,373 sales last month, or 49.8% of the market.

The Society of Motor Manufacturers and Traders is now predicting 2002 will be an all-time record for car sales, reaching 2,510,000 units by the end of December, up 2.1% on the 2.46 million record set last year.

Christopher Macgowan, SMMT chief executive, said: 'We are well on course to smash the 2001 year-end record and the UK has now firmly established itself as the second largest car market in Europe, with 2002 on course to break the 2.5-million barrier for the first time.'

Fleet sales are also on course to break the one million barrier for the sixth year in a row and could beat the all-time fleet sales record of 1,055,816 set in 1998.

For the year-to-date, fleet sales have reached 854,013, a 5% annual rise. Taking into account sub-25 fleet sales of 195,203 (up 11.1%) businesses have already accounted for more than one million car purchases this year. The favourite model for fleets last month was the Vauxhall Astra, with 11,905 sold, closely followed by the Ford Focus, on 11,368.

The Vauxhall Corsa came third (9,004), followed by the Ford Mondeo (7,887) and the Vauxhall Vectra (6,464), while the BMW 3-series enjoyed a jump to sixth place (5,858).

This left Vauxhall top of the pile in the manufacturers' league table for the month, with sales up 17.1% at 33,254.

Ford took second place in the monthly fleet sales charts, with 29,297 units, down 3.2%. Renault's monthly sales grew 28.2% year-on-year to 14,285 units, compared to 11,145 last year, which saw the firm take third place while Peugeot was fourth, with 12,863, followed by Volkswagen on 12,405.

Toyota also enjoyed a successful month, with sales up 55.1% to 8,717, driven by the Avensis and a 454% rise in demand for the Yaris to 2,286.

Jon Pollock, general manager of Toyota Fleet, said the company's 16-strong corporate sales force had generated 450 new fleet agreements this year, while supply of Yaris was also more plentiful. He said: 'Growth is coming from a number of key sectors, including 100-plus and 500-plus fleets, Motability, public sector, and some smaller rental firms also taking the car.'

The alternating fortunes of the past month have left all to play for in the remaining three sales months of the year.

While the Ford Focus is streets ahead for year-to-date fleet sales, with 81,130, compared to the second-placed Vauxhall Astra on 58,462, the two manufacturers are much closer overall.

Ford has sold a total of 172,075 units so far this year, a fall of 4.8%, while Vauxhall has seen sales grow 7% to 166,040.

Mike Wear, Ford's head of fleet, said the manufacturer felt its sales were in line with expectations. He said: 'The activity in September is quite remarkable. Sales started well behind and there seemed to be a headlong rush at the end of the month. 'I think we have a healthy balance of fleet and retail business, which may not be the case for some of our rivals.'

The two major fleet players leave the rest of their rivals in the distance, with Renault (76,276) and Peugeot (73,312) in a fight to the finish for third place, while Volkswagen had a commanding hold on fifth place (63,597).

Nissan keeps the sixth place it held at this time last year, despite sales being down 8.9% at 41,432. Toyota has enjoyed a solid year, with sales up 24.1% at 33,084, but Citroen is close behind on 31,715, down 5.8%.

Finishing off the table is BMW on 29,499, up 8% on the back of booming 3-series sales up 12.4% to 21,551, while Fiat holds 10th place, down 19.8% for the year to date, to 26,357.

'Murky business' rumours surface

RUMOURS of murky business and dark arts in the fleet market began to circulate well before the end of September as manufacturers started to accuse rivals of manipulating fleet sales to feed the market.

The old industry favourite of pre-registering unsold cars as fleet sales has largely disappeared, following the terms of the New Cars Order 2000.

Moreover, with the daily rental market still operating on a lean basis following the impact of September 11 last year, and September more likely to be a defleet than refleet month, another distress route to market for manufacturers has closed.

But there is more than one way to skin a cat, including bulk sales to car supermarkets.

A scout around the larger car supermarkets in the first week of October revealed no shortage of 52-plate cars, with many advertised as UK models rather than parallel imports, while larger dealer groups report attractive offers of batches of cars from manufacturers.

Perhaps that is how a fleet market heading for 390,000 units in mid-September somehow managed to peak at 430,000 registrations.

At the Paris Motor Show, Kevin Wale, managing director of Vauxhall, said September was proving a tough month for the industry, predicting that the market would 'get close to its forecast but with a lot of forced volume to get there. Retail is down generally in September and there is a lot of aggressive marketing coming into play early in the month in all segments.'

At Ford, managing director Paul Thomas referred to 'murky' business in the September market, while insisting that Ford was 'fairly pure in its fleet and retail mix.'

Car makers are starting to identify waning consumer confidence, despite house prices continuing to boom, low interest rates and decent employment prospects, fuelling the need to incentivise new car offers.

Brian Carolin, managing director of Nissan GB, said the underlying strength of the market 'is starting to diminish'.

'There is a reduction in retail confidence and all brands are seeing it. The UK market has become very offer-based, and since June and July incentive levels have increased, but nowhere near the levels of 2000.'

While aggressive offers that lead to genuine retail sales are of concern only to fleet operators running fast cycle replacement schedules (because private buyers are tempted into the new car market rather than the nearly new sector), skulduggery in sales that oversupply the total market affects all fleets because of its negative impact on residual values.

Leasing industry experts claim that healthy, stable residual values rely on a new car market of no more than 1.7 million units.

When that figure is exceeded by 800,000 registrations, by fair means or foul, there are dark clouds on the residual value horizon for 2005.

Diesel drives the market as petrol loses favour

DIESEL was the driving force behind new car sales growth for both the private and fleet market in September. Overall demand in the diesel market was up 24.4% in September to 99,601 units, while year-to-date sales are up 42.7% to 470,839, putting its market share at about 23%.

But taking the fleet market in isolation, the impact of heavy oil models is even more pronounced, as increased take-up of diesels off-sets a fall in demand for petrol models.

Last month, fleet diesel sales were up 26.7% compared to the same period last year, at 47,921 and accounting for 28.5% of the market.

The Ford Mondeo took the top spot last month with 4,146 units, followed by the Focus (3,355), with two Volkswagen models, the Golf (2,746) and Passat (2,656) taking third and fourth place, while the Peugeot 307 nestled into fifth (2,572). This gave Ford the September fleet diesel sales honours last month, with 9,366 units, up 44.7% on September last year.

Volkswagen's strong performance gave it second place, with 6,809, followed by Peugeot (6,251) Vauxhall (5,931) and Renault (3,409).

In a repeat of August's figures, the biggest percentage increase in September came from Volvo, up 264% to 1,874 units, thanks to the burgeoning popularity of its D5 diesel. For the year-to-date, this puts Volvo ninth with 6,636 sales, a 627.6% rise on last year.

The bottom four places in the year-to-date fleet diesel sales chart are now taken by prestige manufacturers, with Audi, BMW, Volvo and Mercedes taking seventh, eighth, ninth and 10th places respectively.

Topping the chart is Ford, with fleet diesel sales to date up 36.3% to 44,112, mainly through demand for Focus, which is the best selling fleet diesel model so far this year, and the Mondeo, which comes a close second.

Peugeot comes second in the year-to-date fleet sales charts, with a 28.1% increase to 39,721, followed by VW, up 54.1% to 35,539, Vauxhall (up 12.3% to 30,007), Renault (up 115% to 15,709) and Citroen, (up 20.1% to 15,709).

  • For a full breakdown of fleet registrations in September and the year-to-date click here.
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