In the next couple of months at ICDP, we will be exploring and analysing the market of SME fleets, a rather under-explored area of the fleet and leasing sector in the UK. To help us do this we’ll be diving into the strategies of banks, dealers, and manufacturers that litter the FN50, revealed by Fleet News in the last couple of weeks. Once again, the industry is highly competitive, and no more so than at the very top, where the top 10 now accounts for 81% of the top 50, a figure that has slowly increased since 2000 when they claimed just over half. It’s worthwhile taking a short look at who these giants are, and which players are likely to stay on top in the future.
Within the top 10 sits 3 captive fleet companies: BMW’s own leasing arm, Alphabet; Volkswagen Financial Services Fleet; and Citroën Contract Motoring. Up until this year, Alphabet was able to claim the title of the only manufacturer owned player to appear in the top 5, something they have managed to sustain consistently since 2011. Volkswagen joined Alphabet in the top 5 this year after overtaking ALD to sit just 10,000 vehicles shy of the number 4 position. It hasn’t been easy for Alphabet to maintain a position at the top though, they’ve increased their fleet by a further 50,000 vehicles since first making it into the top 5. But even in that time their share of the top 5 has weakened – dropping from around a quarter in 2011 to just 10% this year.
The biggest players in the sector remain those owned by banks and financial providers, who hold all 3 positions at the top of the ladder. With a collective fleet size of over half a million they’ll be hard to touch. Lex Autolease has remained the largest fleet and leasing organisation in the UK with over 300,000 vehicles ever since Lloyds merged Lex and Lloyds Autolease in 2009. It’s hard to imagine them being knocked off their podium, even though they haven’t increased their fleet size since they still more than double the fleet size of LeasePlan, which holds the number 2 spot.
The only dealer to appear in the top 10 is Arnold Clark Finance, after wiggling their way above GE capital (later acquired by Arval) in 2011. Dealers, both national and regional, litter the rest of the top 50, including Inchcape (12), Pendragon (15), and (impressively) CEM days (20), who hold a higher position in the FN50 than the AM100**.
Completing the top 10 is Zenith, who are still holding onto their number 7 position after being the first independent to enter the top 10 in 2014 after they were acquired by HG Capital. Looking towards the future, we’ll expect to see the players at the top consume more of the leasing business in the UK, likely acquiring some of the players appearing lower down the ladder. As an independent, Zenith may be vulnerable to acquisition, but HG Capital has proven to be an aggressive investor, after acquired the Parts Alliance in 2014, they’ve consolidated a further 4 businesses for a combined turnover that will likely take them into the top 3 largest Motor Factors in the UK over the following year.
We’re not likely to see much movement between the players in the top 5, where the top 3 banks hold 70% of the share, but the story may not be so straightforward further down the table where, excluding the top 5 giants, manufacturers, dealers, banks, and independents hold a fairly even split of the business. Looking forwards, it will be worthwhile to see which players are taking advantage of the opportunities around SME fleets, a sector that doubled its share of the fleet industry from 2003 to 2013.
*They actually have 740 less vehicles than they did in 2009.
**They aren’t the only dealer group to manage this, TC Harrison, Sandicliffe, and Sinclair Motors also achieved a higher ranking in the FN50 than the AM100 this year.