FLEET wholesale markets continue to perform well this year with the encouraging signs which started the year continuing as heading into the Spring months.
Society of Motor Manufacturer and Trader (SMMT) figures put new car registration fleet volumes up +0.1% year on year, the wholesale markets are also on an upward trend.
Cox Automotive reported fleet volumes entering the auctions were up 12.5% in February, as well as jumping 2.1% month on month, suggesting fleet renewal activity is in healthy shape.
In line with the total wholesale market, which saw a 7.9% increase month on month and up 10.2% YoY, average fleet prices have also shown a positive upward movement, increasing 7.1% month on month and 10.2% year on year.
February 2020’s average of £11,325 is the highest monthly average price in fleet wholesale since February 2018, reflecting demand for good quality vehicles in a market which is short-stocked overall.
Philip Nothard, Customer Insight and Strategy Director for Cox Automotive, said: “We’d be forgiven for thinking we’ve been here before, but the coming 12-months looks set to be another significant year for the fleet sector.
“This week’s Budget, the impact of fleet Road to Zero strategies, the roll out of Clean Air Zones (CAZs) and changes to Benefit in Kind (BiK) tax, are all set to play a part in shaping fleet industry business models.
“Likewise, with manufacturers ramping up their electric vehicle (EV) output, this could be the year in which future-focused fleets look seriously at going electric.
“Ongoing environmental pressures on fleets to renew, coupled with positive pricing in the wholesale markets, may lead to a flood of de-fleeted vehicles in the new financial year.
“We shall have to see how supply and demand re-balances if that happens, and whether the move is enough to prevent further declines in new car registrations.
“Couple that with a move to shorter rental rather than long-term leasing contracts, personal funding rather than the traditional company car model, and we could see a fleet sector which changes shape significantly.”
Nothard added: “Most industry commentators recognise that the ambitious environmental targets in front of us will only be met with a package of incentives, carrot and stick.
“In the meantime, it’s important that we continue to recognise the impact petrol and diesel derivative vehicles can have on ‘greening’ our fleets.”
The average age of diesels and petrol’s in the wholesale market in February was 6-7.5 years’ old, meeting standards for Euro 5 and later.
Nothard said: “However, with Euro 6 models now entering their fifth year on the market, many of the vehicles which are de-fleeted and heading to wholesale are already compliant with the current environmental standards.
“Investing in new diesel or petrol must be better than holding onto older, higher emission vehicles in the hopes that EV infrastructure will spring up overnight.
“We have to be realistic and ensure our fleets and businesses have the best available solutions with which to operate in the interim.”
