Fleet Management in Australia: A Complex Business with Shifting Marketing Schemes

Strategic Insights -

The fleet management industry in Australia is marked by volatility, with interest rates on leasing having shot up by about 50% over the past five months. This has led to unpredictable resale values, affecting the final catalyst for lease periods, rates, and Fringe Benefits Tax (FBT) liabilities. Amidst this uncertainty, innovative marketing schemes are being introduced to attract new clients, including new-car lease rates reaching about 10.5% and an increase in auction prices for used late-model vehicles. Meanwhile, finance companies are developing creative lease plans, and fleet management companies are experimenting with new approaches, such as plastic cards and phone networks, to control vehicle usage and provide detailed data.

Key Takeaways:

  • The leasing rate for new fleet cars has increased by about 50% over the past five months, with the best rate now at 10.5%.
  • Fleet management companies are facing a complex business environment, with unpredictable resale values and volatile market conditions.
  • Many fleet management companies are introducing new marketing schemes, such as off-balance sheet leases with guaranteed buy-back prices, to attract new clients.
  • Caltex has reported success with its Star Card, an integral part of its Star Fleet management system, which has a customer base of at least 46,000 and is growing rapidly.
  • The new joint venture between Lease Plan Australia and TNT Fleet Management aims to become the leading commercial fleet management company in Australia by 1998.
  • Lease Plan will offer operating leases for commercial vehicles, including trucks, fork-lifts, and ground-support equipment, and will be flexible enough to handle fleets of any size.

Statistics:

  • The leasing rate for new fleet cars has increased by about 50% over the past five months.
  • The best rate for a new fleet car lease is now at 10.5%.
  • Auction prices for used late-model Commodores and Falcons fell by $2000 from last November to May.
  • Caltex's Star Card has a customer base of at least 46,000 and is growing rapidly.
  • The new joint venture between Lease Plan Australia and TNT Fleet Management has a target of becoming the leading commercial fleet management company in Australia by 1998.

Sources:

  • "Fleet Management in Australia" by Bill Tuckey, [No publication date available]
  • [Other sources not mentioned in the article]