Fleet Industry | Competitive Forces Analysis
The competitive forces analysis examines those factors which influence competition within a particular industry.
Our analysis covers the full service fleet management industry.
Rivalry Among Existing Competitors (Medium/High)
Fleet management services are commoditised and hard to differentiate overall proposition. Many providers utilise the same IT platforms as in-house systems can be cost prohibitive for all but the largest suppliers.
Many providers use the very similar second tier supply chains for in life services and have to use the same OEM and dealer networks. Manufacturer discounts are “owned” by the end customer rather than the lessor so sale of supplier is less of a competitive issue.
Pricing can vary according to different assumptions relating to forecast residual values and maintenance requirements.
Less competitive rivalry on specialist assets or more complex commercial vehicle requirements as many providers will cap their services at the light goods vehicle level.
Bargaining Power Of Buyers (High)
Wide range of different suppliers and brokers offering vehicle finance and associated services.
Headline pricing is relatively transparent.
Relatively low switching costs although these can be more significant where services are fully outsourced.
Bargaining Power Of Suppliers (Low/Medium)
Many suppliers offering similar services gives limited chance for differentiation.
Digital enablement offering some opportunities to reduce customer services costs and improve service offerings.
Niche areas such as specialist vehicles or new services linked to mobility as a service (MaaS) offerings can offer advantages where customer requirements exist.
Threat of New Entrants (Low/Medium)
High capital requirements means banks, vehicle manufacturers and private equity are the main players.
Government legislation and FCA regulations can make compliance an onerous and costly activity.
Threat of Substitute Products and Services (Low/Medium)
Services such as Mobility as a Service (MaaS) may act as a long-term substitute for company vehicles.
Perk or status drivers are increasingly opting for the company car allowance rather than a company car due to the increased tax burden on company car drivers.
Public transport quality and interconnectedness improving alternative transport modes.
Working from home may become the new normal during and after the Covid-19 pandemic.
Younger generations adopting alternative transport modes as alternatives to the company vehicle.