Key strategies of the global fleet game in 2023
Cost control through Connectivity
2023 will not be the easiest year for fleet managers, but it will be an important and exciting one. This year, cost control will be the name of the global fleet game and to achieve this fleet automation and connectivity will be key. Because connectivity brings transparency, it will help in making the right decisions, mitigating risk and safeguarding fleet assets. And it will enhance your capability to innovate. As data, in and of itself, is dumb, it’s crucial to open up and collaborate with experts and peers who can make sense of it and get the most out of your data.
Omnipresent EV acceleration
Sustainability is, more than ever, firmly embedded in global and international fleet agendas by both desire and necessity. Companies want to be environmentally responsible; and their customers and authorities are demanding that they do the right thing. Electric vehicles are no longer just about achieving sustainability and improving CSR, they’re now also the tool of choice to achieve efficiency and improve TCO. So, expect sustainability and fleet electrification to be at the heart of global fleet tenders and contracts this year.
Go for sustainable procurement
In an uncertain environment it’s key to seek stability and mitigate risk. It’s logical that, in the first instance, fleet managers focus on business continuity and quick wins. But for 2023, it’s time to build a strategy based on sustainable fleet procurement, eying not only electrification but a complete carbon neutral supply chain founded with sustainable and ethical partnerships.
Electrification intensifies as Chinese brands march in
- Two become one - ALD Automotive’s €4.9 billion acquisition of LeasePlan in Q1, 2023 will create a leasing giant, with a combined fleet of around 3.5m vehicles.
- New car delays continue - lengthy vehicle order times will continue to the end of the year. Forecasters expect a slight increase in sales compared to 2022, but say total sales will remain at least 2.5 million below pre-pandemic levels.
- Fleet lists widen - new car brands are changing the face of company car choice lists, as BYD, NIO, Hongqi, Aiways, Xpeng and Genesis arrive in Europe.
- Electrification pressures grow - the European Commission’s proposed ban on ICE vehicles from 2035 will intensify pressure on workplace and public charging infrastructure.
Legislation to ramp up transition to EVs hits
- The US government’s $433bn Inflation Reduction Act will help push the transition to electric vehicles.
- Holman, Element Fleet Management, and the merging of Wheels Donlen and LeasePlan USA are among the players to keep an eye on.
- At least eight new battery cell gigafactories are being built in the US.
- Canada’s first full-scale EV manufacturing factory known as CAMI has started producing E-vans in Ontario by way of BrightDrop.
- Despite the ongoing lack of semiconductors impacting the market, the political and economic environment in the region is quite stable. One thing expected is diminishing inflation, something that could spark more leasing contracts.
Construction of EV factories kicks off
- Bravo Motor Company is carrying out a 25bn-real (US$4.7bn) investment plan in Brazil to produce EVs.
- Great Wall Motors is investing 10bn real ($1.9bn) in vehicle production in Brazil and Chery is planning BEV production in Argentina.
- Leasing players to keep an eye on are Localiza & Co., Movida, ALD and Arval in Brazil, plus Element Fleet Management and LeasePlan in Mexico.
- Despite challenges such as political instabilities, economic disparities and poor road conditions, LatAm is a vibrant region filled with creative minds.
2023: Adjustments and Alignment
- Growth projections in APAC are expected to be adjusted downwards and corporate alignment. Slower economic growth, hence stabilisation of fleet sizes, more focus on cost, accelerated transition from CAPEX to OPEX.
- Weak JPY will lead to price surge of Japanese cars.
- It could be a success year for South-Korean EVs, globally and in APAC.
- Further diversification in form factor, e.g., ultra-small electric vehicles.
- Further professionalisation of local lease supply chain, driven by international players and requirements of corporate customers.
- Hydrogen roll-out in China setting the standard for global transition.
This land of opportunity needs investment
- Ghana, Nigeria, Ethiopian, Kenya and the DRC, where manufacturers and multinationals run large fleets that require fleet services.
- Innovative start-ups, like ROAM and FlexClub are being funded by investors from Europe and elsewhere to help ‘citizen-entrepreneurs’ set up mobility businesses.
- Fleet funders include: Eqstra, Absa, Imperial, Fleet Africa, Avis Fleet Services, Wesbank, and Standard Bank.
- Commercial fleets are driving a demand for Asian brands Toyota, Nissan and Hyundai.
- A young, tech-savvy population, plus 4G and 5G networks makes pay-by-phone popular for transportation and mobility.
Contrast between rich and poor countries intensifies
- The United Arab Emirates (UAE) ranks ranks 8th globally in terms of EV readiness.
- Saudi Arabia has pledged to have 30% of vehicles in the capital Riyadh electric by 2030.
- The UAE is forging ahead with plans to introduce autonomous ‘robotaxis’ on a large scale.
- Operational leasing is relatively advanced in the UAE, although structured to comply with sharia law.
- Local ride-sharing giant Careem has developed a ‘super app’ that provides a variety of services (including financing, shopping, etc.).
- Wealth and determination are the region’s strongest assets but only in the richest countries. Poorer, more populous countries like Egypt are struggling to transcend economic and regulatory limitations.
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