The power of the fleet pound could rocket next year as declining registrations lead to increased competition between lease providers.

In 2008, the number of fleet registrations is predicted to fall by 1% to 1.165 million cars, while the number of business car registrations – those into fleets of less than 25 vehicles – will fall by 6% to 150,000.

As the market falls, so providers will increasingly look at innovative ways to improve the service they offer to capture and retain business. It is also predicted that outsourcing of fleet management will remain a feature in the short term.

“The more complex regulatory environment, in particular in respect to environmental measures and health and safety issues, is likely to lead to more companies outsourcing fleet services,” said the UK Fleet Services Market Development Report published by Market & Business Development.

“The increased flexibility and the various finance options offered by fleet services providers are also likely to continue to be an attractive option for many companies.”

However, talk of downturn in fleet registrations is misplaced, says the British Vehicle Rental and Leasing Association – the representative body of the leasing industry.

“The present uncertainty caused by the credit squeeze for example, will actually lead to more companies taking the opportunity to lock in their interest costs over a longer term, while in these difficult times the banks will certainly appreciate the advantages of funding for secured assets such as vehicles,” said BVRLA director general John Lewis.

“We have seen growth of about 3% a year in the fleet market place over the last few years, and nothing currently would cause us to deviate from that for the next three to five years.”

LeasePlan agrees that any talk of a downturn is premature. “We see 2008 as largely a flat market. We’d agree that there’s potential for some growth in fleet registrations as duty of care pressures continue to persuade drivers out of the grey fleet,” said David Brennan, managing director of LeasePlan.

“This may be tempered by the effect of the credit squeeze in the short term, but it really is too early to say with any certainty how that will affect the market.”