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Is there manufacturer loyalty in the UK’s B2B automotive market?
23/06/2016
Fleet sales = Cars, LCVs, HGVs, pool cars, motability, courtesy cars, daily rental
38% (485,000) of UK companies manage business cars and/or LCVs
UK fleets
70%
25%
4%1%
250+ employees
50-249 employees
10-49 employees
1-9 employees
UK fleet vehicles
55%
45%
250+ employees
< 250 employees
Source: Sewells Fleet Market Barometer 2015Sample size, 1,000 UK businesses (1+ employees)
Can one fleet supplier reconcile all of these competing demands?
User chooser
LCV drivers Cash allowance
Restricted badge drivers
Grey Fleet
Business, fleet and driver decision making groups
Source: Sewells SME Fleet Dynamics 2016
52%60%
54%51%52%53%58%
80%
59%58%61%55%
61%
47%
63%73%
% very important
Van
Car
It is difficult to prioritise product, finance, and service importance
Better, faster, cheaper (greater cost management/transparency) and more convenient importance varies across procurement and fleet support
Q – How important are the following… when reviewing their brand for your van fleet/business choice list?Source: Car/Van Fleet Operator Attitude Survey May 2016
SME 1-24 LCV fleets
1, Manufacturer websites2, Direct contact with franchised dealers3, Independent user reviews on the internet
Source: Car/Van fleet Operator Attitude Survey May 2016
SME 1-24 car fleets
1, Feedback from company car drivers2, Manufacturer websites3, Automotive review/comparison websites
Large fleets 500+ car fleets
1, Fleet operators/managers from other large fleets2, My immediate manager/finance3, Feedback from company car drivers
Q –When considering adding a new manufacturer to your fleet/business car choice list, where do you GO TO FIRST for information when choosing cars for your company’s fleet?
Fleet business information sources vary
Driver of a premium brand Driver of a volume brand Driver of a New Generation/Challenger brand
59%
44%
37%
64%
48%
38%
64%
55%
65%
Within 6 months of renewal Within 3 months of renewal Series3 Within 3 months after pick-up
Q - How likely would you be to consider another (brand driven) for your next company car? Definitely consider
Base: 2,200 user choosers
The constant driver consideration cycle
All drivers groups form and change opinions during each phase – Pre, Post and In-market for a new car
Source: Sewells User chooser Barometer 2015
Disruptions to existing supplier relationships
• 8 in 10 claim the off-balance sheet treatment of leasing/contract hire is important in their decision making for this type of finance
Source: Sewells Fleet Market Report 2016
Source: BVRLA 2016
Consumer and the SME fleet customer journeys are starting to blur
The franchised dealer remains the dominant source of car sourcing for SMEs with twice as much penetration vs. brokers (53% vs. 26%)
Source: Sewells Fleet Operator:SME.
8%
18%
6%
21%
7%
19%
14%
5%
2014-2015 yr-on-yr change
A Mini
B Supermini
C Lower Medium
D Upper Medium
F Luxury
F Luxury SUV
H Dual purpose/SUV
I MPV
• 19% of top 10 SUVs fleet sales were Challenger/New Generation brands• 6% were premium
+13%
-11%
-8%
+1%
+2%
+16%
+26%
-29%
The fleet car parc is changingFleet car preferences no longer only sit within traditional fleet manufacturer brands and C & D segments
Source: SMMT
Challenger/New Gen-eration
Premium
Volume
5%
27%
68%
Top 10 fleet brands share (2015) 2005
86%
14%
-
• In Sept 2015, 8 out of 10 fleet decision makers believed that the emissions investigation would have implications for the car fleet market
• By April, 4 in 10 making changes to their proportion of diesel cars• 1 in 4 are also now more likely to
consider alternative fuelled cars e.g. hybrid or electric
Sewells Fleet Barometer 2015/16
Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-160
5000
10000
15000
20000
25000
Volkswagen Sales
Car Fleet Linear (Car Fleet )Car Retail Linear (Car Retail )LCV FleetLinear (LCV Fleet)
Source: SMMT
It does not just impact the brandThe impact on fleet was more stable than retail
Case study Emissions
Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Alternative Fuel Car Registration - YoY% Variance
Pure Electric Hybrid-Petrol Electric Hybrid-Diesel ElectricSource: SMMT
What about alternative fuel car registrations?
Case study Emissions
Pledge to accelerate the introduction of an ultra low emissions zone in London.
At least 5 other UK expected to follow
Barriers to adoption:• Electric vehicle range and access to charge
points
41% of fleets have introduced/considering the introduction of hybrid vehicles over diesel. 20% are considering electric vehicles
Source: Sewells Alternative White Paper 2016
By 2020 estimates say 10% of new car registrations will be electricFour years, one vehicle replacement cycle to act
Conclusion: Prioritising future customer groups
Almost 12,000 firms in Britain described as high growth status
Segments: Trade, Business, Delivery, Administration, Professional services, Manufacturing, Public sector man's meat is another man's poison
Trade Services Professional Services
There are influencers during key stages of business growth
