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The start point for the best source of fleet information |
First of all, Thompson is keen to point out the challenges fleet companies have been through over the past 12 months. He says: "I think everyone has been as flexible as they can be. Rather than a usual three-year change cycle, they've probably extended that to four or further.
"The truth of it is, I think a lot of manufacturers have struggled to meet demand of course, and there's been a tendency to prioritise those areas of the business that are inevitably more profitable, because that is the critical nature of businesses when they're under pressure.
"Having said that, we've managed to still supply fleet volume, but it is around 25% mix of our business. For many years, we've always run a less traditional UK balance of fleet and retail. The major reason for that, is that we don't really compete in the high cost, short cycle side of the business. That's for several reasons, one is cost and the other is the residual value management.
"With relatively constrained supply, we must be quite careful where we place our business. That's all going to change with the CX-60, as fleet has moved incredibly quickly towards electrification - far quicker than the retail market. I think the demand for product is outstripping the available supply chain for many, many manufacturers.
"For Mazda, we have one battery-electric car - the CX-30 and no PHEV, so that should change quickly with the CX-60. I think we start to have an ever more relevant portfolio that is going to satisfy fleet business as we go through the next months and years."
Thompson believes that the fleet attraction to diesel has changed, but there will be some specific fleets with long-distance needs, where the diesel CX-60 is still appropriate. He says: "In the large SUV sector, I believe 20% is still diesel - so it's not the significant sector of the segment, but it remains important and there are customers where it's got to be diesel to meet their needs. We don't expect huge volume, but it's an important addition to the CX-60 range.
"We're probably one of the manufacturers that have continued to invest in diesel technology - because it still has a place. Let's not forget, for the next 10 years for many fleets, there are two or three-change cycles, and then I suspect, there will be a strong market for some of those internal combustion cars, in later years, in the used market. So, there's definitely a place for diesel."
Thompson is quick to say Mazda will be compliant to the incoming 2030 and 2035 rule changes, but he's mindful there could be switches before then. He says: "I think we're clear what the government's hard points are today, but that doesn't mean to say those will be the same hard points tomorrow. We must plan on what we know and what we know is that 2030 and 2035 are milestones.
"I do think, in the short/medium term, there is a great advantage to covering several bases - there still remains a very strong part of market that is internal-combustion-oriented. So, for the coming few years, that is still a sweet spot for Mazda, but I think there's no denying that you must plan on what you know and what we know now are the 2030 and 2035 rules.
Thompson also believes that the cost-of living crisis and expected recession could be a real opportunity for fleet. He says: "There is a lot of latent demand in fleet, I think the attraction to start to fulfil that, trying to meet that demand is going to be significant.
"I think it will provide a buffer for all manufacturers as to what might happen in the coming months and years.
"So, yes, I think this will be existing and future fleet demand matched by the manufacturers ability to fulfil those orders, because of a better supply chain situation. I think that will smooth the bumps in the road ahead with the retail market."
Mazda fleet business has been very good, Steve Tomlinson told me. He says: "From the information I've received, I believe we haven't been as affected as other brands in terms of production capacity. Fleet customers tend to get on the front foot in terms of ordering their cars a bit ahead of retail, and so when we've had cars available, order take hasn't reduced at all throughout the period.
"Overall, we've sold fewer cars than we would expect in a normal year, but in the last fiscal year we sold more cars in fleet than we set out to. So, if you look at fleet in isolation, then it has been pretty good.
"Obviously, the overall business has been impacted a little bit, but again generally speaking, we got to April last year and because there were lockdowns on the back end of 2020 and into early 2021 - and these lockdowns didn't lift quite as early as we were expecting, we had plenty of cars to sell. This is because we order the cars from Japan and two-months later they get built. Then four- to six-weeks later they turn up.
"We were expecting a normal March 2020 - then March wasn't normal. So, as we went into April, May, June, July and August, we had plenty of cars available under our standard plans. So, for the last fiscal year to August 2021, business was pretty normal, and fleet was getting slightly more than their normal share of our UK volume.
"From September last year, our production was impacted and our volumes did drop. We set our stall out this year, for volume growth - because we always set out plans on the basis it is going to be normal and if they aren't we adjust them. What we don't do, is we don't plan for pessimism, for dooms day scenarios, we always plan for optimism and the best possible outcome, then adjust down where necessary. So, fleet has been in a decent place over the last 18 months or so. And we still anticipate selling more cars than we did last year as things stand."
"We've done our best to make sure we have plenty of new Mazda CX-60s, we've got stock coming, plus physical cars now, so we've got the opportunity to conquest customers from other brands because of availability.
"We generally work on a 12-16 week lead time. We may have to extend out 16-20, but this is not unusual considering. It also depends on shipping schedules, production cadence in the month - so if it's built in the first week of the month it will come quicker than if it's built in the third or fourth week. It does vary from model to model."
Tomlinson is quick to assert that EV will play a significant part in Mazda's future fleet strategy. He says: "EV is like diesel was a few years ago in the fleet market - they are highly attractive to company car drivers. As we stand today, we've got a good choice of mild hybrid, full hybrid, BEV and now PHEV in our line-up. We see offering choice being the best way forward, because as a brand, historically fleet has been a modest proportion of what we do.
"We do aspire to grow the mix of business that we do within fleet. The Mazda MX-30 is a prime example of this, we've been challenged by production of MX-30 to be fair - but the last fiscal year, 50% of MX-30 were sold through the fleet channels and that's the first car for some time that has had that level of mix in fleet. The last time was the Mazda6 when it was launched, or CX-5 when that was launched. So EVs will form part of our mix and strategy going forwards.
"As far as CX-60 mix, the plans are that 50% of CX-60 will be sold within fleet. Despite this, you'll probably find that Mazda is sub 30% overall in fleet. With a couple of model lines achieving 50% who knows what will happen in the future, but all of this is dependent on how the government continues to support and incentivise - particularly in terms of EV adoption for company car drivers and in terms of infrastructure across the UK."
Production constraints have held Mazda back over the last year, but Tomlinson sees there's every opportunity to grow corporate hybrid and EV sales. He says: "Because of production constraints, mild hybrid is 36% of our volume, full hybrid is only 4% - but that's because the volume is fixed - we have no control over the production volumes. Had we some control, I would expect the mix to be quite a bit stronger than that. EV is only 5%, but we have some production constraints on that one, too. I think if that hadn't been the case, we'd be looking at 40% of our mix."
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