Business car replacement cycles fall
30 June 2011
Fleet replacement cycles have dropped to between 41-46 months as contract extension schemes come to an end, according to a report supported by leasing and fuel card giant Arval.
The research, conducted with 4500 fleets across Europe, also found that fleets in the UK have significantly shorter vehicle replacement cycles than on the Continent.
Depending on fleet size, the current replacement cycle for UK businesses is on average between 41 and 46 months. Within the rest of Europe, the average replacement cycle is between 50 and 70 months. The data shows that last year the replacement cycle was, on average, between 43 and 49 months for UK fleets.
Commenting on the figures, Arval director of market insight, Mike Waters, said: "The perception within fleets is that duration is increasing.
"However, contract extensions which happened during the recession have now worked through the system and it's gone back to pre-recession figures."
Waters believes that cost pressures on fleets is forcing the perception that replacement cycles are increasing.
He added that the reason for the longer replacement cycle on the Continent was due to several factors including a stronger market for higher mileage used vehicles and cross-border movement, while the UK's replacement cycle was shorter due to a more stringent MOT test.
Despite the replacement cycle decreasing from last year to this, the research also shows fleets in the UK are expecting cost pressures to increase while for Continental fleets this is less of a concern.
"There is a clear expectation that cost pressure will grow in the UK while European fleet managers don't envisage quite the same conditions. The UK Government has taken tougher steps to reduce the national deficit than many other countries and it seems that the expectation of a difficult year ahead is clearly recognised by those responsible for operating UK business fleets," said Waters.
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|Source: Arval|| || || || |
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