Fleet News

British Motor Show: Peugeot, Vauxhall, Volvo, Ford, MINI, MG Rover, Toyota, Nissan, Audi, Jaguar, VW, Citroen, Fiat, Subaru and Renault

Peugeot's warning on new block exemption

PEUGEOT has hit out at the new block exemption regulations for car sales and servicing, describing them as 'misguided' and warning that they could actually lead to lower quality standards.

Tod Evans, managing director of Peugeot Motor Company, said the choice for manufacturers to decide between selective or exclusive dealer franchise agreements threatened to undermine dealer networks.

Like every other manufacturer, Peugeot has opted for the selective option, preferring to determine the quality standards of its car, parts and repairer franchisees, rather than appoint dealers to exclusive territories.

However, the new rules will only allow manufacturers to select on both qualitative and quantative grounds their car and parts franchisees. For vehicle service, maintenance and repair franchises, manufacturers can dictate quality standards but not quantity or volume of work levels.

'So if other organisations set themselves up as authorised repairers they could take business away from existing dealers who make 65% of their net revenues from aftersales,' said Evans. 'It erodes the viability model, and it could mean that dealers cannot stay in business so we lose business selling new cars.'

He questioned whether this would be of advantage or disadvantage the consumer, suggesting that fewer repair centres would eventually lead to less choice and higher prices for car buyers. There is also the danger that the Europeanisation of quality standards actually lowers performance levels in the UK, according to David Brookman, sales director of Peugeot.

'You will have to look for the same quality standards across Europe and the car industry is different in the UK, and more sophisticated than some markets, so there is a danger of levelling standards downwards because it's easier than developing them up,' he said.

'And conformity will mean the pace of change for improvement will slow down.'

Brookman added that while Peugeot had received some interest from independent garages interested in achieving official repairer franchise status under the new block exemption rules, the manufacturer had not received any interest from any independent third party interested in selling new Peugeot cars.

However, he conceded that potential predators (from supermarkets to internet firms) were probably 'keeping their powder dry' until 2005, the date when foreign based dealers gain the right to open showrooms in other member states of the European Union.

Sports theme as Vauxhall unveils hot coupe

A NEW coupe from Vauxhall based on the Holden Monaro V8 could be launched in the UK if public reaction is positive.

The four-seater 5.7-litre V8 has the same power as a Ferrari 360 Modena and can accelerate from 0-60mph in 6.8 seconds, with a top speed of 153mph.

A spokesman for Vauxhall said: 'Monaro is at the show to gauge reaction and if it is positive enough, then there is a good chance that the coupe could appear on Britain's roads.'

A turbocharged Vectra SRi also points towards the company's growing focus on sporty models. The 175bhp engine is a new development from the 2.2-litre unit that already sits in the VX220, along with other Astra and Vectra models. Prices have yet to be announced.

Also, a new Astra GSi, the fastest version of the lower-medium car, made its debut, offering 200bhp from a 2.2-litre turbo-charged engine, giving a 0-60mph time of eight seconds and top speed of 150mph. Prices will be announced closer to its November launch date.

Also making its UK debut was the ECO Speedster, a 1.3-litre diesel engines concept car that can achieve 155mph and 113mpg.

Launches probe niche markets

THE new Meriva mini-MPV made its debut at the show with a commitment from Vauxhall that it would have an alternative fuel version next year.

Meriva goes on sale next spring with engine options of 1.6 and 1.8-litre petrol and a 1.7-litre diesel. It is part of a string of launches planned for next year in key niche sectors that Vauxhall expects to eventually account for 40% of sales. This includes Signum, appearing in the second quarter of 2003.

Maurice Howkins, fleet sales director, said key launches in the next year would allow Vauxhall to improve sales in a declining fleet market.

He said: 'We expect the 2003 market to be down about 5% to reflect the retail market.'

Fleet sales key to Volvo's ambitious sales forecast

VOLVO is relying on fleet sales to secure future growth as it expands its model range and invests in corporate expertise across its dealer network.

Hugh Reid, Volvo's new managing director in the UK, believes demand for diesel in the premium sector and competing in new market segments will help achieve ambitious sales targets for the Swedish company over the next few years.

Changes to company car tax rules this year – combined with a powerful new common rail diesel engine – have seen demand for Volvo soar in the corporate sector.

Reid said: 'Our annual sales are up by nearly 1.5% year-on-year, and although the market is up by 5%, the sectors we compete in have declined in 2002.

'We were hurt in the early part of the year by lack of supply of the D5 common rail diesel engine, although this has rapidly improved and we see further opportunities during the rest of this year.

'Diesel has accounted for 33% of our sales this year – much higher than the market overall which is now approaching 25%.

'Changes to company car tax have driven this high growth, and demand for our diesel has been much stronger than we expected – although there are tax-efficient alternatives such as gas and direct injection petrol engines.'

He said the number of owners of Volvo franchises has decreased since 1996 although the number of outlets has remained stable.

Reid claims that this process means that changes to its network in the light of the changes to block exemption rules were unnecessary.

'Our dealers were working on a five-year cycle, and franchises were renewed in 1996, then in 2001,' he said.

'On both occasions we reduced the number of franchise owners, and since 2001 the franchises were set to be renewed every two years. Over this period we have reduced our number of franchise owners – or strategic partners – from more than 100 to 56 in this time.

'They have invested in their premises and we are working with them to increase our volume. This will be achieved by those who are interested in the fleet market and deliver what fleet customers want.'

  • Volvo's new XC90 is about to go in sale in the UK, with high performance all-wheel-drive versions of the S60 and V70 models available next year and a replacement from the S40 and V40 going on sale in 2004. Reid said the range will expand further in future, with a greater choice of models at the lower end of the range.

    Ford unveils new extended family

    FORD took one of the biggest stands at the show to reveal the full size of its extended family and the shape of things to come.

    One of the stars of the show was the Focus-inspired multi activity vehicle concept 'C-MAX', which was making its UK debut at the show.

    The C-MAX is intended to combine the space, versatility and comfort of a multi-activity vehicle with the traditional best-selling features of the Focus.

    Inside, passengers are offered four individual seats, along with a DVD-based, rear-seat multi-media system twin, tinted skylights that run the length of the vehicle roof and increased storage space.

    The C-MAX Concept also features iRIS – an integrated Remote Imaging System, which allows you to see what is happening in the car, even if you are not in it, through a webcam and wireless data transmission. It also features an electronic parking brake and infotainment system.

    Martin Leach, chief operating officer, Ford of Europe (pictured below with the C-MAX), said: 'With the ever-increasing popularity of Focus, we are looking to its future with this MAV concept as a potential addition to the range.

    'A compact MAV that we believe people will like to look at, like to be seen in, and like to drive – a product worthy of the Focus badge.'

    Also on show was the revised Ranger, offering a new look, enhanced safety, braking, steering and ride quality along with a new pillarless Super Cab.

    Prices were also announced for the new three-door Fiesta, which is due to go on sale in December. They will start at £7,995 for the 1.3 Finesse and rise to £10,195 for the Zetec TDCi.

    Ford also showed off its prototype Focus Fuel Cell and revealed an LPG Focus which will be available next year.

    ##CMax--none##

    MINI fleet link reaps rewards for BMW

    A MOVE by BMW to include MINI as part of its fleet proposition is gaining momentum. The manufacturer said production levels now mean it is in a position to fully promote the car to fleets.

    BMW and MINI corporate sales general manager Bernard Bradley said: 'We had the choice of tying MINI and BMW together, having a dedicated corporate sales team just for MINI or ignoring it as a corporate car altogether.

    'But we decided we didn't want a BMW representative talking to a prospect on a Friday and then a MINI representative visiting the same company the following Monday.'

    Bradley said the move to forge a close partnership between BMW and MINI was reaping dividends and giving BMW an entry to fleets that view the 3-series as too high a starting point. 'The partnership is opening new doors for BMW, which is great,' Bradley said.

    Extra shifts introduced at its Oxford plant means that MINI is now able to cope with orders generated by fleets, Bradley said. The manufacturer also accepts the need to change some perceptions of the car, one being that it is too small, but said work had already started on this.

    He said the MINI tlc package, that offers five years' servicing for £100, was an attractive offering to fleets.

    Bradley said he saw no reason why MINI would compete with smaller BMW models planned for the future. In 2004/05 the manufacturer will launch its new Focus/Golf-sized car, the 1-series.

    'Some BMW models compete against each other anyway,' he said, 'but I didn't see MINI competing with any of our models.'

    Bradley said the most popular fleet model is, and will remain to be, the mid-range Cooper. He said the company was excited about the launch of a diesel model next year.

    Diesel and LPG engines to spur MG Rover's growth plans

    FLEET sales will be a key element of growth for MG Rover next year with an increased range of diesel engines and liquefied petroleum gas (LPG) conversions.

    John Sanders, the company's marketing director, said although sales could have suffered this year through difficulties in the supply of parts in the first few months, followed by a fire at a seat supplier factory in the summer, MG Rover is ready for a new offensive during 2003.

    He said: 'I'm not sure whether difficulties in the parts supply could have affected sales, but it would have been frustrating for fleet operators.'

    Next year MG Rover will expand its range of gas-powered vehicles to cover the whole of the petrol range. A spokesman said interest in gas conversions from public sector fleets has already been strong, particularly as the conversions are available on both Rover and MG models.

    MG Rover used the show to launch its new high-performance XPower SV sportscar (pictured below).

    Powered by a 326bhp 4.6-litre V8 or a 410bhp 5.0-litre V8, the car will go on sale next year with prices starting at £65,000 and maximum annual volume of about 100 units.

    ##XPower--none##

    Toyota plans business centres

    TOYOTA has announced plans to create almost 90 business sales centres within its UK dealer network.

    The manufacturer revealed the latest development within its fleet strategy at the show, where it unveiled its new Land Cruiser.

    The new centres for fleet customers, with cars and light commercial vehicles, will be launched in January and among other offerings specifically for the business customer will be longer opening hours for servicing.

    Toyota fleet general manager Jon Pollock said: 'They'll be based in our major markets and in major towns and will also offer a call centre facility. Our customers want a service that is quick, hassle-free and easy – and that is what they will get.'

    Toyota's corporate sales this year are expected to reach about 42,000 units, an increase from 32,000 units last year, and next year the manufacturer would like to achieve fleet sales between 46,000 and 48,000 units.

    Pollock said the Avensis would play a major role in fuelling the growth, but the Yaris and Corolla will also play a part.

    Its daily rental business currently numbers between 5,000 and 5,500 vehicles and Pollock said the business was important for Toyota's exposure.

    'We are aiming to have about 20% of our total fleet mix in business than is less than 12 months old,' he added.

    'And we are about on track for that.'

    Nissan remains bullish

    NISSAN executives expect their total number of corporate sales by the end of this year to have fallen.

    But they say it is not surprising when considering the new Primera had a March launch date and that the five-door model – which historically accounts for up to 80% of sales – was not available until June.

    Speaking at the show, the manufacturer's fleet sales director, David Murfitt, said he expected the company to supply about 50,000 vehicles to fleets, down from more than 53,000 last year. The run-out of old models paving the way for new ones, such as the new Micra, would also have contributed to the fall, he added.

    Murfitt said: 'We are expecting a fall in our corporate sales but that doesn't mean things are not going well – we are very optimistic and pleased with our performance. The Primera is a great success story for us. It's tough because of people opting out of company car schemes and from general downsizing – but the Primera has a respectable share of the market.'

    Nissan used the show to announce specifications of the new Micra (pictured below) – but it will be another month before prices are announced. Although the manufacturer hopes to attract company car sales with its new Micra it views it more as retail proposition.

    The car, on sale next January, will come with a choice of five engines which are either new or extensively revised including, for the first time, a dCi diesel unit. Every version of the car is equipped with what Nissan calls 'friendly lights', which illuminate the way to your front door at night.

    The Micra's range structure consists of E, S, SE, SX and SVE. Standard equipment on the Micra E includes electric power steering, anti-lock brakes, electric power steering, a passenger airbag, remote central locking and a CD player. The top of the range SVE features include electronic climate control with 'ivory' switchgear, 15-inch alloy wheels and ultrasonic rear park sensors.

    ##MicraShow--none##

    Audi heralds the petrol fightback

    AFTER taking a battering from diesel over the past couple of years, the petrol engine is making a comeback in the fleet sector, according to Audi.

    Stephen Butt, head of corporate sales for Audi (UK), said: 'We have always had a strong diesel mix - 30% total sales for some years - and now, with the A4 it is as much as 60% diesel. But we are expecting a balancing effect from the new FSI petrol engine. We are starting to see a swing back to petrol.'

    The A2 and A4 both use the new 'common rail' petrol engines developed from the R8 Le Mans car, and with lower CO2, higher power and better fuel economy, Butt claimed the strong user-chooser element of Audi's corporate sales are selecting the petrol unit.

    He is delighted with the progress the firm has made in the fleet sector in the last 18 months in terms of sales and improving residual values.

    He said: 'It has been very good. With the combination of the emissions-based benefit-in-kind legislation and the new A4, our market share has moved from 2%-3%, which equates to 26,000 cars in the fleet sector.

    He admitted than in the past, Audi had not dealt as well as it could with wholelife costs, but said the firm had become much more skillful in controlling its product mix.

    'We are putting new cars into the market in a more sensible fashion. We now look at the complete cycle. Our second-hand cars now have better specification and this is probably one of the most important things we have done. A high proportion of cars are factory ordered by the individual. This means you build cars that are unique, and this helps residuals.

    'This year has been tremendous for us, and we are not looking at a significant downturn for next year. Our planning is fairly conservative. We are a business built around good cars, good pricing and good residuals.'

    Jaguar leaps forward with record global sales

    JAGUAR may be a fairly traditional brand but the firm sees itself as a relative newcomer in the fleet market and as a global volume player.

    It had a busy show, displaying the XJ saloon (pictured below) for the first time in the UK and announcing record global sales. The all-aluminium car, which goes on sale next spring, will spearhead a sales drive that has already seen sales leap to 102,189 cars worldwide in the year to the end of September, breaking last year's record of 100,791 cars.

    And John Abel, manager of corporate operations for Jaguar, underlined just how important the new flagship model would be for the company's burgeoning fleet ambitions. He said: 'The XJ is a critically important car for us. It's a return to the Jaguar heartland, and what it does is get us talking to the boardroom again. Jaguar is more accessible than ever and the XJ gives us a chance to show the managing directors and financial directors what we can do for the rest of their fleets.'

    Jaguar has been working hard with its dealers to ensure that fleets get the best possible treatment. Each dealer now has a member of staff specifically dealing with corporate business, because the vast majority of XJ sales will be business sales. Industry analysts have been wondering aloud about the success of sales of the X-type, with the closure of the Halewood plant for a week this month to let demand catch up with supply.

    Abel said: 'The X-type has a 52% share in the four door 2.5-litre petrol and above premium compact saloon market.'

    'If there is end-user choice in fleet, then we do very well. We have 10.2% market share of the total compact premium sector in the UK. We do well with the right engines. We do not try to meet the market, but instead deliver Jaguar values. There's no point trading up to a Jaguar to find it's not what you want.'

    In order to grow X-type's share in other sectors, a diesel is a key weapon. On the subject, Abel continued the official Jaguar line of the past year.

    He said: 'We haven't committed to a timing, but when it comes, it will have to be the right solution to fit with Jaguar values. As for a diesel in the future for XJ, it's not something we would rule out.'

    ##XJ--none##

    Volkswagen confirms mini-MPV for spring – and predicts dip in fleet sales

    VOLKSWAGEN is predicting a steady year for fleet sales, despite its launch into three new segments that are expected to attract fleet buyers.

    At the show, the firm hosted the UK debuts of its new Touareg off-roader, the Phaeton and it revealed that the new Golf-based Touran, a mini-MPV, will be launched in the spring.

    But despite the brand expansion, the firm claims that fleet sales will remain static or may even dip.

    Andrew Waite, national fleet sales manager, said: 'We are expecting fleet sales to be 80,000 for 2002, with about 77,000 in 2003.

    'The models that are being introduced are relatively low volume and some of our models are reaching the end of their replacement cycles, such as the Golf, which is due for replacement in 2004.

    'We don't want to create problems for ourselves by forcing volume on the market and we have ensured that we have been doing 'true' fleet business.'

    This has meant restricting exposure to areas such as rental or Motability, whose combined sales are just over 10,000 units.

    Waite predicted that next year, the overall car market would fall from this year's predicted record of about 2.5 million cars to about 2.3 million and the fleet market could see a similar dip.

    In the face of a falling market, he said he expected VW to keep its current 7.5% market share.

    When Phaeton arrives, it is expected to sell about 255 units in 2003 while the Touran will only account for about 4,000 in 2002, with the Touareg in between.

    Citroen UK looks for fleet to match retail

    BRINGING fleet on to the same footing as its retail business is a key strategy for Citroen UK over the next year, its managing director said at the show. Citroen's retail side of the business has a 6% share of the UK market, and managing director Alain Favey would like to see the fleet side achieve parity.

    He said: 'We would like to achieve fleet share closer to our retail market share. It means talking to the audience in the right way. When you talk to a fleet customer, we have to have the appropriate message to give them.

    'One of the things we have is diesel. Diesel is 23% of the total market share and we achieve a market share of 8.6%. We have product that is perfect for the fleet market.' In the last year, Citroen believes the total fleet car market has grown 6% to 1,049,216 cars, while Citroen's share has stayed static on just over 4% (43,904 cars).

    Favey would like his firm to match that growth, and believes better communication, the use of its van range and small fleets are areas that will power it.

    He added: 'One of the ways to attack the fleet market is to look at the van market. We are number three in the van market and we can use vans to enter big fleets. Then we have been able to get the dealer network to understand how fleets like that work – the service levels and expertise they require.

    'We cannot just say 'we are strong on retail', or one of the other. We have to be strong at retail and fleet. The C8 and the C3 Pluriel prove we can produce interesting and exciting cars. The C8 proves to fleets that we are able to create new standards.'

    To develop the small business market, the dealership network is key. Favey said: 'We are trying to develop the business market, the one to 24 car fleets. That's where we have the biggest potential. The dealers are used to the market, but there are not enough who are good at it. We are doing more training.'

    Due to the changes to block exemption, notice has been served to all 230 Citroen dealers and new contracts drawn up, but Favey does not anticipate any changes to the size and shape of the network.

    And he does not see the multi brand dealership becoming commonplace under the new block exemption rules.

    'If multi brand worked, dealers would have done it already. The brand has value,' he said.

    Fiat reassures fleets

    FIAT is reassuring fleet customers that it is 'business as usual' in the UK despite the current financial difficulties faced by its parent company in Italy.

    The company's UK year-to-date sales are about 8,000 units lower than in 2001. About 5,000 of the lost units are in fleet. But fleet director Richard Hogarth said the decline in fleet sales is part of a reduction in rental activity which ensures the company can concentrate on supplying more profitable fleet business. And he added that continuing discussions with market analysts have led to an improvement in residual values.

    Hogarth said: 'We have reduced our rental activity this year, which accounts for our decline in fleet sales. We will continue in the rental market because we have long established and successful relationships with many customers, but we will reduce our activity even further next year.'

    Hogarth said some of the company's lacklustre performance in the UK this year could be put down to early supply problems with the Stilo.

    He added the Italian parent company was looking towards the future with a sense of realism and pragmatism.

    'We are committed to recovery 100%. We will invest more money in new products than we have done before and the technology sharing that has come from our partnership with General Motors has already saved 1 billion Euro', he said.

    Subaru considers LPG in lieu of diesel engine

    THINK Subaru, think world rally cars. But in future it might well be think Subaru, think fleet.

    Although it is a small player in the total fleet market, Subaru wants to claim a bigger slice of the pie than it currently enjoys and is working on new products to entice more people into a Subaru.

    While the company's range of cars has been revised this year, it is two other products which Subaru hopes will draw buyers in. It is set to launch a PCP scheme with maintenance through Subaru Finance and secondly it is launching an internet-based contract hire quotation system for use throughout its dealer network.

    Harvey France, Subaru's national fleet and used car sales manager, said: 'Our dealers and business to business operation has been very active and these products should assist customers.

    'The PCP scheme should enable us to go for more business because people are looking for fixed cost motoring.

    'The new internet contract hire system gives dealers the chance to offer people an instant quote on a huge number of parameters, including with or without maintenance and different mileage profiles.'

    And as well as financial products, Subaru has also been working on new products for the road, including a revised Impreza range with an improved front end to go on sale in February, an upgraded Legacy model and new Forester.

    Subaru is also working towards an LPG engine. France added: 'There is no diesel on the horizon from Subaru so we are looking at LPG. A prototype car is already being assessed and we are getting feedback from the corporate market on it.

    'As soon as we are satisfied with the way the car performs we will introduce it. LPG is more acceptable now and there is no reason to think that it will not be introduced across the whole Subaru range.'

    Small fleet target as Renault eyes growth

    THERE was 'Va Va Voom' in abundance on the Renault stand, with examples of the new Megane and Espace, and news of a best ever year for the fleet department.

    Renault UK's fleet and commercial vehicle director Keith Hawes, said: 'It's been a record year in fleet with a volume of about 100,000 cars and vans.'

    Renault has sold more than 82,000 passenger cars this year, and more than 15,000 vans. In particular, its concentration on the user-chooser market is reaping dividends. Hawes added: 'In the user- chooser area of the market, Laguna is in the top five. And there has been a 20-30% volume growth in contract hire.

    'Megane will appeal to user-choosers and we are aiming at Volkswagen's Golf and Ford's Focus. We needed a car that will compete head-on with those two. Megane will be 50/50 retail and fleet, and about 50% of fleet will be diesels.'

    Success in the user-chooser market illustrates Renault's efforts to keep away from reliance on high volume, low margin deals, and to further its cause the firm has now completed a six-month process putting together a small business team.

    Hawes commented: 'We are trying to get dealers to sell to small businesses and some dealers are good at it, some not so. The small business team's job is to go and knock on doors, create databases and leads. They work under the fleet team in the north and south divisions.

    'The small business team is having an effect already, achieving conquest sales and building databases.'

    Fleets should also see improvements in Renault servicing. Although there will be no increase in the size of the dealer network as a result of the changes to block exemption, Renault is planning to grow the number of service centres, particularly at its smaller, local dealerships.

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