Senior figures in the fleet industry tell Sarah Tooze about how falling residual values are affecting them

Ian Wardle, chief executive, Camden Fleet Solutions

As the used vehicle market continues to struggle, fleets should be concerned about getting the best return on vehicles at end of life.

A focus on vehicle appraisal, combined with making an investment in mechanical and body refurbishment is crucial to ensure that the current used car market conditions do not impact too severely on a business’s bottom line.

Tony Gannon, communications director, BCA

The key issue is currently the used car market. Values have been under pressure all year and while the uncertain economy and rising household bills continue to affect consumer confidence it is difficult to see any change to this pattern in the short to medium term.

Despite this, demand is still there for good quality product if it is valued in line with market sentiment.

Dave Scobie, managing director, All Fleet Services

Falling residual values on lease vehicles is one of the critical factors affecting the fleetindustry.

Tightening credit standards and potential price hikes from auction houses will exacerbate the situation at a time when fleet operators’ costs are soaring.

Our discussions with many companies focus on the requirement to limit risk and find alternative
ways of reducing costs.

Paul Everitt, chief executive, SMMT

We expect 2.26 million new cars to be registered in 2008, many of which will be orders from fleet managers.

Although this is below levels we have seen over the past five years, it is in line with expectations.

Consumer confidence is low and it is essential that the government takes firm action.

There needs to be a review of VED proposals to ensure a fair, stable and equitable taxation system for vehicles for the future.

Nigel Trotman, fleet manager, Lloyds TSB Autolease

A major challenge lies in the impact of the credit squeeze on residual values, the cornerstone of the fleet industry.

If one of the established industry players get into difficulties, things could become very uncertain.

We need to manage that uncertainty, share best practice and demonstrate that in difficult times the role of fleet manager is a vital one.

John Lewis, director general, BVRLA

With the economy heading for recession, cost reduction is the priority and fleet managers are cutting overheads by extending contracts rather than signing new ones.

The biggest challenge is in used car sales, as residual values are dropping fast.

With conditions set to deteriorate further, leasing companies are looking to maximise sales values by exploring disposal channels such as auctions, traders, online retailers and employee sales.

Mike Pilkington, managing director, Manheim Auctions & Remarketing

The key issue has been the realignment of used car values as the credit crunch, fuel prices and general economic uncertainty combine to create falls in values. With the market changing on an almost daily basis, customers need to react quickly to price changes.

Fleets have an additional challenge in determining the impact of current values on future residual pricing.