Fleet management meets technological milestones and challenges
To judge from the plethora of glossy adverts showing sleek vehicles speeding along forested hillsides, it would be natural to assume that selling cars directly to consumers is the prime intent of motor manufacturers.
In fact, more than half of the cars sold in the UK in the past two years went to companies and rental groups, according to the Society of Motor Manufacturers and Traders. Fleet management provides a steady stream of business compared with the whims and spending habits of individual drivers, and is more than a third of carmakers’ profits, according to estimates from Exane BNP.
Across Europe, the picture is similar in some respects. Of the 13.4m vehicles produced across the continent in 2015, 6m were sold to consumers while 3.8m went into fleets such as company cars, according to a senior figure at a car manufacturer. The rest were rental vehicles or preregistered demonstration cars.
It is a market in flux and this report looks at the challenges facing different types of fleets — from traditional cars, vans and lorries to drones and London’s black cabs.
Innovations such as electric drivetrains, connected cars, telematics and driverless technology present a long-term threat to traditional business models in the sector. Over shorter time horizons, many haulage companies are benefiting from low oil prices but some operators in Europe face the challenges of disruption created by the refugee crisis.
The advent of drones has consequences not just for delivery groups — which may see Amazon turn to airborne parcel carriers — but also for industries as wide-ranging as agriculture, firefighting and oil exploration.
Telematics is already changing the way that employees — whether full-time drivers or company-car owners — are behaving. Richard Perham, director of Airmax, a hardware and software engineering company, says installing telematics allows fleet operators to reduce expenses fraud and cut down significantly on costs. His clients who install the technology have an average cost saving of 30 per cent in the first year, he claims.
“Once people know Big Brother is watching,” Mr Perham says, “they drive very differently.”
Instances of claiming mileage for commuting to work — which is illegal — dropped sharply, while drivers waiting for deliveries turned off their engines rather than leaving them idling, a move that could save £250,000 per year for a business with a fleet of 750 cars, he estimates.
It also reduces insurance costs for business, who can know much more accurately the location and conditions of their vehicles.