The Impact of the Credit Crunch on the European Fleet Market

OVERVIEW 1
Catalyst 1
EXECUTIVE SUMMARY 2
Table of Contents 3
Table of figures 4
Table of tables 4
CHAPTER 1 DOWNTURN IN THE FLEET MARKET: AN OVERVIEW 5
CHAPTER 2 FACTORS LEADING TO THE DOWNTURN IN THE FLEET MARKET 11
2.1 Fall in residual value 11
2.2 Increased cost of borrowing 12
2.3 Rise in rental rates 13
CHAPTER 3 STRATEGIES ADOPTED TO FIGHT THE DOWNTURN 14
3.1 Strategies adopted by customers 14
Increased demand for lower-value and eco-efficient cars 14
Outsourcing of non-core activities 14
Extension of leasing contracts 15
3.2 Strategies adopted by leasing companies 15
Focus on internal efficiencies 15
Extension of leasing contracts 15
Expansion strategy on hold 16
Diversified remarketing channels for end of contracted cars 17
3.3 Government incentive schemes 17
CHAPTER 4 NEW TRENDS IN THE FLEET INDUSTRY 19
4.1 Growth of open-ended leasing contracts 19
4.2 Total cost of ownership 19
4.3 Multi-level marketing 20
4.4 Growing demand for eco-friendly cars 20
CHAPTER 5 FUTURE OUTLOOK 21
5.1 Recovery expected in 2011 21
5.2 Operational leasing contracts to experience growth 22
5.3 Market consolidation 24
APPENDIX 25
Market size of the European company car market in 2008 25
Growth in company car purchases (2008-14e) 29
New car sales in the EU 25 markets 30
New car sales in the EU 25 markets 30
Monthly new car sales in Europe 31
Definitions 32
European 25 markets 32
Top 7 markets 32
Small 7 markets 32
Eastern European markets 32
Emerging European markets 32
Research process 33
Forecasting methodology 34
Further reading 34
Ask the analyst 34
Datamonitor consulting 34
Disclaimer 35
List of Tables
Table 1: Lessors' strategies in downturn 17
Table 2: Scrappage incentive schemes currently operating across Europe 18
Table 3: Fleet market, basic terms definitions 32
Table 4: Fleet market, funding methods definitions 33
List of Figures
Figure 1: Bubble graph depicting the downturn in the European fleet market 5
Figure 2: Company car purchases vs new car purchases in European 25 markets 6
Figure 3: Company car purchases vs new car purchases in Top 7 markets 7
Figure 4: Company car purchases vs new car purchases in Small 7 markets 8
Figure 5: Company car purchases vs new car purchases in Eastern European markets 9
Figure 6: Company car purchases vs new car registrations in Emerging European markets 10
Figure 7: Factors that led to the downturn in the fleet industry 11
Figure 8: Average residual value demonstrated by used cars at auction in the UK (2008) 12
Figure 9: Strategies of various stakeholders in the downturn 14
Figure 10: Extension to replacement period of operational leasing contracts 16
Figure 11: Remarketing channels used by lessors 20
Figure 12: Bubble graph depicting the future outlook for the European fleet market 21
Figure 13: Bubble graph depicting the future outlook for the European fleet market (magnified) 22
Figure 14: Proportion of operational leasing purchases among total company car purchases 23
Figure 15: Growth in operational leasing purchases (2008-14e) 24
Figure 16: Proportion of company cars in the total car parc of the European 25 markets (2008) 25
Figure 17: Proportion of total passenger car sales represented by company cars in the European 25 markets (2008) 26
Figure 18: Penetration of operational leasing in the company car parc of the European 25 markets (2008) 27
Figure 19: Penetration of company cars by number of employees in the European 25 markets (2008) 28
Figure 20: Growth in company car purchases (2008-14e) 29
Figure 21: New passenger car registrations and GDP growth in the EU 25 markets 30
Figure 22: New passenger car monthly sales 31