Ford’s UK fleet director Phil Hollins is responsible for UK market leader Ford’s fleet sales. Dave Leggett recently caught up with him at a launch event for the new Transit Connect.
DL: How’s it going for Ford in the UK fleet market?
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PH: Pretty well. On car net fleet – which is pure fleet, excluding daily rental and demonstrators – we led the market last year and we were pleased with that after a slow start due to Genk large car supply issues. It was a good performance across the board – Fiesta did very well from about April onwards after launching current Fiesta in the first quarter last year. Supply and demand got balanced on large car and Focus was kicking along quite nicely. Cars had a pretty good year. On commercials we sold more last year than in the previous year – 70,000 versus around 66,000 in 2012. The good thing there was the channel mix, fewer daily rental, fewer demos, more retail and net fleet. We have led the UK commercial vehicle market for 48 years (which compares with 37 years market leadership on passenger cars).
In total last year, we sold around 210,000 net fleet – so that’s 140,000 cars and 70,000 commercials.
DL: And what are the big model sellers in the fleet market for Ford?
PH: The majority of fleet sales are Fiesta, Focus, Mondeo and Transit. That’s where the majority of our volume is and one of the challenges we face is that our model range is expanding. That means we need to find a way to sell the MAX family, Tourneo, Edge, EcoSport, Kuga…all of these new products that we are developing…to the fleet market. They may be small volume in fleet sales on their own, but when you add them all up it’s sizeable. So we have to look at how we do that, how we get these vehicles positioned on policy lists. Also, contract hire is a channel through which you can get to the typical small business buying vehicles on a monthly lease online. One of the things we are successfully doing this year is strengthening our team that is developing business with the big contract hire companies. It’s important because some 85% of my volume is financed via a contract hire and leasing company. So we need to find ways to come up with a win for them and a win for us.
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By GlobalDataDL: The small business user and the lease product is clearly important…do you have your own?
PH: Yes, we reach these customers through the contract hire companies and through dealers. We have a competitive lease product called ‘Ford lease’ that is competing in the online leasing space with an offer from Lex, from Leaseplan and so on. We need to recognise this as a separate channel and develop it.
DL: Is there much replacement demand coming now that the UK economy has improved?
PH: Yes, we are seeing strong demand and many fleets are now looking to renew their fleets after a period when they may have held off. The trick is to catch that wave with the right product, new product, and we are doing that and we are well placed with new product. We are seeing some big fleets coming back into the market after a period when many were extending replacement cycles. This year it looks extremely positive, especially on commercials.
DL: So how do you see prospects for Ford fleet sales in UK this year?
PH: Our CV numbers in fleet go up this year by around 20%; so we’re doing more fleet and backing out of less profitable daily rental, which also helps residuals, too. We’re expecting a significant boost from new Transit Connect – it did 6,000 last year and I am planning to do 14,000 this year. The upcoming [due in May] Courier (B-platform high-cube small van) is a new segment for us, so that will be mainly incremental growth.
DL: There was a Fiesta-based high-cube van once wasn’t there, called Courier…?
PH: Yes, well remembered. We exited that segment in 2002 when Transit Connect came along. Now we are getting back into it.
DL: Was exiting that segment a mistake then?
PH: No, I wouldn’t look at it quite like that. It’s all about points in time and where you want to place your dollars. Obviously, in a company like Ford, there are always proposed vehicles competing for finite investment funds, to actually make it into series production. Back then, the decision was taken not to replace Courier, presumably because it was thought a better return would be available elsewhere.
But the great thing about Alan Mulally’s ‘One Ford’ strategy is that we are now making commercial vehicles for sale in all markets around the world. We are no longer just developing commercial vehicles just for Europe.
The biggest opportunity for the Courier is actually Turkey. So, it’s back for Turkey and we in the UK will also get it.
DL: And it will be made in Turkey?
PH: Yes, at a brand new facility dedicated for Courier production. We have identified a very big market opportunity in Turkey so it makes sense to asssmble and localise production there.
It will also be available with the 1-litre EcoBoost engine, which will also go in Connect – but with a lower mix than in Courier.
