The UK fleet market is heading for another bumper year, targeted to hit over 1 million vehicles in 2003, a repeat of the amazing feat in 2002. However, manufacturers should be wary of discounting too heavily as it is sustained long-term growth and development that manufacturer’s need to focus on.

The UK fleet market is one of the largest and most dynamic in Europe. The market records approximately 1 million sales per year, largely through a sizeable company car market and daily rental sector.

Recent figures suggest that fleet sales for 2003 will break the 1 million barrier again, repeating the performance of the last 6 years. Vauxhall, Volkswagen and Toyota have increased their sales by 7%, 2% and 3% respectively, and are the only manufacturers to increase their year to date sales to fleets significantly.

In terms of volume sales, Vauxhall holds the fleet top spot with year to date sales of 142,205 vehicles. Ford is second with 136,904 sales and Renault third with sales of 60,438. The Ford Focus is still the best selling fleet model, with impressive unit sales of 58,719 for the year to date, the Vauxhall Astra is second placed with 45,816 sales and the Vauxhall Corsa is third, with 41,363 sales.

Despite increasing sales, selling to the fleet sector, especially in the UK, has proved unprofitable due to the competitive nature of the market. In previous years, manufacturers have backed away from the fleet sector, and especially the rental sector, due to the low profit margins available, but the lure of increasing market share has proved too powerful for most players.

Whilst growth is an important objective, it is sustainable growth that is the most important factor to consider, especially in the UK fleet market. Manufacturers need to be wary of discounting too much, which reaps short-term gains but is likely to create problems in the medium-term. Manufacturers also need to be acutely aware of residual values when their cars are de-fleeted, which can have a dramatic impact on new car sales and financing contracts.

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