Fleet News

State of the Industry: Rising costs in a downturn

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State of the industry: Senior figures in the fleet industry tell Sarah Tooze about the issues they are facing

Clive Forsythe,
sales and marketing director,

High fuel prices have hit customers hard, but it isn’t all negative.

The soaring costs are acting as a catalyst for change in the industry and organisations are now being forced to take green issues more seriously.

Fleet managers may have struggled in the past to get the board to listen to the argument for ‘greening’ their fleet, but now the economic reasons cannot be argued with.

Mike Waters,
head of market insight,

With the economic downturn taking hold, cost has become the key issue.

Alternative fuels may seem an attractive option in reducing costs but fleet managers must take a measured approach in their vehicle selection so as to be aligned to the market.

Not an easy task, as demonstrated by the government’s recent change of stance on biofuels, from absolute support to caution.

Marcus Noble,
managing director,
Active Risk Management

At a time of record prices at the pumps, drivers can play a significant role in cutting
company fuel costs simply by altering their driving style.

By making greater use of awareness training, so that company drivers anticipate further ahead and take actions much earlier than they would normally, it is possible to make quite startling savings in fuel consumption.

Martin Brown,
managing director,
Fleet Alliance

Car allocation and fleet policy planning have become more important due to legislative changes that take effect next April.

From that date, cars with emissions of 160g/km or under will suffer no contract hire rental disallowance, while those above that limit will attract a flat 15% disallowance.

This gives fleet operators a real incentive to select cars emitting less than the magic 160g/km.

Lorraine Farnon,
UK sales director,
Europcar UK Group

We are working with customers to support fuel economy and meet environmental targets with a
move to smaller car groups, the use of hybrids and online management information to determine how vehicles could be used more efficiently.

But there’s still demand for traditional mid-size vehicles.

It would be good to see vehicle selection based on the journey rather than engine or vehicle size.

Nick Sutton,
group development director,
Zenith Provecta

The past three months have seen the credit crunch dominate the headlines.

Some of the banks have been severely restricted in terms of available capital.

Having the ability to draw funds from more than one lender is very important in today’s climate.

Another feature of the fleet industry has been the fall in used car prices and the on-going challenge this has presented to the industry.

Des McCann,
director of Network &
Operations UK, Budget Rent-a-Car

As well as challenges surrounding the tough economic environment, the industry
is experiencing tough supply conditions, particularly in terms of rising fleet costs.

This is having, and will continue to have, an upward pressure on rental prices and a downward pressure on profit margins.

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