THE European fleet market is bracing itself for the impact of a financial storm that will create changes within the market of unprecedented and previously unheard of levels.
That’s the view of fleet experts at independent fleet management solutions provider, Fleet Logistics, which is currently witnessing pressures within the fleet market on two fronts that could have the deepest impact in a lifetime of working within the pan European fleet industry.
The first front is that facing major companies themselves who, due to the impact of the global credit crunch, are under severe cost-cutting pressure across many areas of their operations, including the fleet, to maintain profitability.
The other major front involves fleet suppliers, such as leasing companies, who face rising financing costs and a dearth of readily available credit which threatens their very existence.
As the two fronts meet, a financial storm of huge proportions is being created – one which is in danger of spiraling out of control and which needs expert skill to navigate through.
As a consequence, increasing numbers of major corporates are turning to Fleet Logistics for the expert advice and help they need to steer their fleets through the financial turmoil they currently face.
The effect the economic crisis is now having on the fleet market is profound:
* Fact - Motor manufacturers are witnessing their worst sales performances at any time in their history.
* Fact - Residual values across Europe are plummeting rapidly as a result of declining consumer demand. Some countries have seen falls as great as 20-25% in the last six months. Spain and the UK are the worst affected.
* Fact - Leasing companies, particularly those owned by financial institutions, are in a credit crunch themselves caused by the rising costs of finance. It is not unusual for Fleet Logistics to see differences in financing costs of up to 3% for the same customer on the same day.
* Fact - In one case recently witnessed by Fleet Logistics in the UK, one of the large European leasing companies increased the interest rate it charged one of its largest clients to an astonishing 11%.
* Fact - There are real risks that some leasing companies will not be able to weather the current storm. Different leasing companies are reacting in different ways – some are cutting staff, which impacts on service levels, some are significantly increasing prices, while others are cutting back on overseas operations.
* Fact – There are now huge variations in prices in the fleet market and it is not uncommon on any one day to find price differences between leasing companies of up to 20% per car per month on typical fleet models.
* Fact – At the same time, many major corporate are looking to cut fleet costs as a priority, and as part of major cost-cutting exercises. They are prepared to consider all options to do so.
Such unprecedented financial uncertainty requires a steady hand to guide fleets through the eye of the storm.
Fleet Logistics, with its enormous experience in managing major fleets across Europe, is able to provide fleet operators with a powerful portfolio of tools and solutions to do just that.
For more details please see: http://www.fleetlogistics.com
