After the lull of 2009, when car manufacturers slashed production in the face of a possible depression, 2010 saw a return to something much more like business as usual. To understand the underlying driver of fleet sales, you only need to bear in mind one fact. Since the peak year of 2007, just one major factory in Europe has been slated for closure – GM’s Antwerp plant. Given that Europe had major over-capacity even at the peak of demand, it is no surprise that too many cars were chasing too few buyers in 2010 – and fleet deals had to take up some of the slack. Another factor in 2010 was that quite a few car manufacturers gave up hope on the pound. In 2009, some manufacturers (especially Renault) cut back on exports to the UK in the expectation that the pound would strengthen in 2010 and make exports profitable again. However, the pound has stayed stubbornly weak and car manufacturers seem to have decided to bite the bullet and sell hard in the UK anyway.
Thus 2010 was in many ways a return to the bad old days – all that 2009 talk of prudent marketing seems to have gone out of the window. In terms of market share, Ford just managed to hold on to the top spot. In 2011, we would expect the new C-Max and Focus to help Ford maintain that position, but Vauxhall could always out-discount its way to the top if it felt so inclined.
The brands which grew most strongly in 2010 were an interesting mix. Hyundai used to largely ignore the fleet market, sensibly choosing not to pick a fight with the big boys. However, Hyundai is now one of the big boys and has no intention of resting on its laurels (indeed it seems unlikely the Koreans would even understand the concept).
2011 will see Hyundai’s first large car designed with Europe’s fleet market in mind – the i40. This is very much a statement of intent: Hyundai knows that if it is going toe-to-toe with Toyota and Nissan it needs to be strong in fleet as well as retail. Meanwhile one of the other top performers was BMW, who increased sales by one-third to take a remarkable 6.4% of the fleet market. BMW is now number four in the fleet market (while Audi is sixth), which makes it both volume and premium at the same time. That is a unique achievement, but it is also something of a balancing act.
The overall message from 2010 seems to be that companies need a strong brand or great value. That is good for the likes of BMW and Hyundai, but slightly worrying for brands in the middle.
Author: Jay Nagley