Fleet industry downturn

The fleet industry is set for a strong downturn this year after propping up new vehicle sales over the past four years.

Companies are now holding on to their fleet vehicles for longer and buying more second-hand vehicles, according to a study by market research company ACA.

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It found the median age for fleet vehicle replacement had risen from 3.5 years to four years or 120,000km.

The survey also found that a third of fleet vehicles were now bought second hand and 31 per cent of businesses say that some or all of the vehicles in their fleet were purchased second-hand.

Fleet sales have been bolstering the industry for the past four years, rising 11.93 per cent from 348,405 in 2005 to 389,958 last year, while private sales dropped 2.09 per cent from 470,602 to 460,773 and government sales deflated a massive 17.72 per cent from 87,547 to 71,037.

"We've done some market modelling for 2009 and we're predicting about a 10 per cent drop in the whole market," he said.

"That is going to affect the business and private market. While the private market will drop further, there is no question that with companies producing less and selling less with fewer employees they will need fewer vehicles."

He said companies were now discussing fleets at board level.

"By elevating fleet management to a board issue, companies are signalling the important role fleet plays in their efficiency, profit and increasingly, their ability to adapt to the current tightening economic climate," he said.

"This trend has accelerated as business confidence has weakened and growth has slowed."

The national survey of more than 320 fleet managers, conducted for FleetPartners, found that the bigger a company's fleet the more likely it was to consider fleet strategy as core business.

Occupational health and safety is still a major driver of fleet decisions, with 75 per cent of companies saying it played an important role in setting their fleet priorities.

Airbags and anti-lock brakes are considered the most important safety features for fleet vehicles, with 62 per cent and 36 per cent of respondents respectively listing these as key safety requirements.

Measures to cut carbon emissions from their fleet have been introduced by 38 per cent of companies, according to the survey.