John Hargreaves, head of feet and remarketing at Kia, tells Motor Finance about the results of a recent fleet attitude survey Kia undertook in the late summer
We commissioned research company Vanson Bourne to interview a sample of SME fleet managers, as we believe that by listening to a wider audience we will find additional growth opportunities and resist the temptation to adopt a one-size-fits-all approach, allowing us to be flexible and individual in our approach to the fleet market.
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The fleet business for Kia Motors is about sustainability, organic growth and profitability of the dealer network, rather than a channel for us to expand our current market share with excessive numbers of short-cycle deals. Our fleet business has been based on the provision of good-quality vehicles and service at a fair price, maintaining residual values and delivering an attractive alternative to other brands.
While cost of ownership has been and will continue to be a key focus, we’re looking to broaden our customer base by listening to any changing trends among company car operators. The aim of this research was for us to understand how our business customers are thinking and where they see the market moving – thus enabling us to insure that our fleet offering is in line with future expectations.
Steady market
With continued stability within the UK economy, the car market is experiencing a steady rate of growth. The majority of the growth has come from the fleet sector, which accounts for 53% of the total sales volume and is up by 11% year-to-date. We found that the more stable the economy is, the more confident businesses are about increasing spend, and in particular about increasing their fleet sizes.
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By GlobalDataThe average company’s fleet size has increased by 4% in the past five years, and when we looked into the demand for fleet services within businesses, this too has increased, on average by 3% since last year.
Looking to the future, fleet managers were asked where they see their fleet, with the majority believing the proportion of eco-friendly models will increase to 42% by 2020. This will be helped along by improvement in infrastructure and increased product familiarity.
This trend is positive for Kia with the Soul EV already on the market and the 1.0 T-GDI engine having been launched on the new cee’d in September. There are also other fuel-efficient models on the way, including the plug-in hybrid Optima and a dedicated hybrid model launching in 2016.
At Kia we are committed to delivering sustainable improvements in fuel usage and clean technology – on top of existing ISG, clean-diesel engines meeting Euro 6 standards, smaller-capacity turbo engines, pure-electric powertrains and improved end-of-life recyclability.
As well as looking into upcoming trends in the fleet sector and how this can effect manufacturers’ directions, we wanted to make sure we also understand the position that the fleet manager is in when it comes to decision-making for fleets and businesses, as this too needs to be taken into consideration.
We recognise that while the majority of company fleets focus on cost of ownership and improved fuel economy, user-choosers and small business operators can and do look at different factors when making choices. These include things such as packaged servicing, personal recognition and, in many cases, the ability to come to a brand in an almost retail-like manner, and receiving a retail-style experience.
It’s already common knowledge that total cost of ownership is one of the most important factors for fleet managers. However, with our research we wanted to look into what fleet managers prioritise to please their drivers. When asked this, the top three reasons when choosing their most predominant fleet models are appearance, environmental friendliness and fuel efficiency. In fact, environmental friendliness – 42% – is almost equal to appearance – 43%, which suggests to us a shift in priorities.
When looking at challenges that fleet managers face, around half – 49% – report lack of time to handle all queries about their employees’ current company cars, with 24% admitting there’s a lack of resource to identify the best vehicles for the fleet.
As a manufacturer and not a fleet management company, we’re not in a strong position to advise on how these issues can be rectified, or comment on particular queries fleet managers face.
However, we are dedicated to making the journey throughout the process as smooth as we possibly can. For example, Kia offers Care-3, which gives operators a competitive fixed-price package on the first three services, which may come as good news to the 17% who admitted budget worries when it comes to servicing their fleet.
The research has shown us some interesting factors we hadn’t expected, and it’s important to remember that the opinion of the individual, which this research reflects, can show different outcomes to the trends reflected in registration data.
The feedback from this research has allowed Kia to expand and broaden its insights into this sector which, in-turn, will help us make positive decisions for the brand’s fleet offering.
We feature consumer Reevoo feedback on our website to show future customers that we listen to what people have to say about the Kia experience, and in a similar way, this research reiterates Kia’s message of listening to customers rather than just analysing sales data.
