Lex Autolease boss fears for public sector fleets
11 April 2011
Public sector fleets could become increasingly less attractive to leasing companies as they move towards a focus solely on price, according to Lex Autolease.
"I'm worried for the public sector - it's ceased to be interested in relationship management and seems to be purely looking at price," Lex Autolease MD Rick Francis told BusinessCar. "Unless you get some SMR or accident management, they are less interesting."
Lex Autolease has around 40,000 of its 230,000 vehicles contracted to public sector fleets.
"We will stay in the sector but I don't see growth, unless there is a large one-off sole supply where economies of scale make it worthwhile," he continued. "The reason I'm worried for the public sector is that a number of businesses may pull out and less choice is never good for the customer."
The spending cuts have led to widespread pressure to reduce public sector fleet costs, with Government alone looking to shave around £39m off its central car fleet. But Francis feels that with contract hire businesses now through the worst of the financial crisis and less willing to fight for business that doesn't offer a certain level of profit, public sector fleets may be choosing the wrong time to take an approach that majors on price.
"They have a dynamic about them that will become less and less attractive," said Francis. "All contract hire businesses are now about the bottom line, all resized and are no longer about nicking business. But we're in the public sector and we will stay there."
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