Fleet News

New car sales slump could benefit fleets

The fleet industry could be the main beneficiary of the slump in new retail car sales over the coming months as manufacturers looking for business begin to court fleets.

As private car buyers shy away from dealers, experts believe fleets will find themselves in a stronger bargaining position.

Figures in May show an accelerating decline in retail sales among a number of brands, while fleet sales continue to increase.

Overall in 2008, retail sales are down 3%, with May down 10% compared to the same month last year.

By comparison, fleet sales are up 2% and 3% respectively for the same periods.

One senior figure at a car manufacturer told Fleet News: “The brands that are heavily reliant on retail sales rather than fleet are really starting to struggle.

“They are increasingly seeing buyers struggle to get finance, plus people are concerned the value of their house is going to drop, so they are putting off buying new cars altogether.

"I think we’ll see manufacturers having to focus more on their fleet sales over the coming months.”

The latest sales figures show significant rises in fleet sales in percentage terms for brands including Vauxhall, Nissan, Volkswagen, BMW, Honda, Mercedes-Benz, Audi and Chevrolet.

Of those, only BMW is showing a positive return in the retail sector so far this year.

Ford is one of the only manufacturers to reverse the trend – fleet sales are down 8% while retail is up 2%.

The result of this could be that fleets are going to be in a stronger position when it comes to bargaining power with more manufacturers chasing the same business.

In addition, it is expected that manufacturers will return to the rental industry after years of claiming to cut short-cycle business.

John Lewis, director general of the British Vehicle Rental and Leasing Association, said: “The consumer car market has always been volatile and it looks like many manufacturers will now be relying on the fleet sector to make up any sales shortfall.

“We may even see some carmakers returning to the rental market to help keep their production lines flowing.

"However, they will have to accept the lower returns that these more stable markets offer.”
 

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