“Fleet management- a service business to lower operating costs” - Deloitte
It's always interesting to compare the South Africa fleet management market to other markets because it provides a benchmark and it motivates and drives our own product development. This is how our South African market has developed over the 38 years of its existence.
I've always held the view that our product offering is comparable to markets in the US and Europe but the great differentiator is their volume which changes how it is delivered.
Deloitte has published this excellent review of the North American fleet market. https://www2.deloitte.com/content/dam/Deloitte/de/Documents/consumer-industrial-products/Deloitte_Fleet-leasing-and-management-in-North-America.pdf
The US has always had few company vehicles, whereas S Africa followed the European model of a larger volume of company cars. That of course has changed in recent years with our preference for car allowances.
However, there are some very interesting features in this Deloitte’s report, which makes very good reading if you have an interest in our market.
- 5.49% of light vehicle registrations go to corporate fleets (US)
- 90% of corporate fleet sales are “tool of trade” vehicles (US)
- Vehicle selection is largely based on price (US & Canada)
- 64% of fleets have 15-99 vehicles. 2% have fleet sizes greater than 1000 vehicles
- +/- 40% of Fleets with less < 500 vehicles utilise outsourced fleet management (FM) services
- +/- 65% of Fleets with greater than 1000 vehicles utilise outsourced FM services
- Fuel accounts for 20 – 22% of TCO
- FM Services include:-
- Fuel, maintenance, tyres and accident management
- License and registration
- Telematics and personal usage for Tax purposes
- Consulting
- Telematics contributes significantly to improved productivity and reduced costs
The Deloitte report also looks at the future of Ride Sharing and Autonomous / driverless vehicles. It concludes that mobility will become an established service and that Fleet Management companies will have an increasing role to play.
Fleet management is an established business in S Africa with established and reputable companies providing an extensive range of FM services similar to the US and EU markets. Whilst Deloitte state that FM plays an important service in the reduction of operating costs, South African corporates do not appear to have fully grasped the cost benefits that can accrue through a focus on fleet management.
Deloitte states that “Fleet management is evolving into a service business to lower operating costs for customers”