Fleet News

Fleets warned on suppliers’ future

COMPANIES choosing an outsourcing firm instead of an in-house fleet manager could be gambling financially following a study which found one-in-four fleet management businesses are in danger of going bust.

In a recent report of the financial situation of the biggest 180 fleet management firms, 47 – or 26% – were rated at a ‘high risk of financial collapse’.

These businesses are suffering from low and declining margins and uncontrolled rising debts, and the situation is so precarious that normal business decisions are becoming constrained, the authors of the study concluded.

Consequently, companies outsourcing to the wrong provider could well find their fleet costing them more than if they had continued with an in-house fleet manager.

The research throws into focus how important an in-house fleet manager is to ensure that suppliers in a tender are financially sound, can deliver what they promise and, once in place, are hitting their service agreement levels.

A spokesman for the fleet operators’ association ACFO said: ‘Companies cannot outsource their fleet totally. An in-house fleet manager is essential to ensure there is somebody guarding the guards. Firms need to have that internal expertise.’

Put together by Plimsoll Publishing, the report also found that an equal number of firms were doing very well, and were rated ‘strong’, suggesting a widening chasm between the haves and the have-nots.

David Pattison, senior analyst on the project, said: ‘The simple message to these firms is change or risk failure.

‘At these high risk companies, the managers need to act quickly to get their firms back on a decent financial footing.

‘It seems inevitable that we will see a period of consolidation. Job losses and cost-cutting are essential if these companies are to survive.

‘Personally, I would not rule out a series of takeovers. Most of these companies are blissfully unaware of how exposed to acquisition they are.’

  • The 348-page report on the financial health of 180 fleet management firms, priced at £350, is available by calling 01642 626400 or by emailing m.aston@plimsoll.co.uk
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