The Corporate Vehicle Observatory, a research project initiated by the BNP Paribas Group and Arval, presents for the ninth time the results of an independent study conducted among fleet managers working in companies of various sizes across 15 countries worldwide.
– For Arval, the initiator of the CVO, the data presented in the report are extremely important as they allow for a better understanding of the market and customer expectations. By observing trends and shifts in market sentiment annually, we are able to precisely advise our clients and support them when making key decisions regarding fleet management. This gives our company the opportunity to fully adapt its products to the requirements of our clients – said Grzegorz Szymański, CEO of Arval Service Lease Polska Sp. z o.o.
The Polish CFM market continues to develop
Polish fleet managers look with optimism at the development opportunities for the fleets they manage. In European markets, sentiment is much more conservative. According to the “Arval Fleet Barometer”, among the largest surveyed companies (over 500 employees), as many as 36% of fleet managers predict that their managed fleet will increase over the next two years, and only 5% believe it will be reduced. The average company in Poland has a smaller fleet of cars than its European counterpart with a similar number of employees. The reason for this difference may be the specificity of the Polish economy, which is still a developing economy. But it seems that the relatively short history of fleet outsourcing in Poland also has an impact. Among Polish enterprises, an increase in vehicle turnover is observed. Compared to last year, the usage time of fleet vehicles has shortened in practically all company groups, both for passenger cars and delivery vehicles. Only 7 to 12% of Polish companies believe that the average usage time of cars in their fleet will increase. In other surveyed countries, there is a tendency to extend the vehicle usage period compared to the Polish market.
– The optimistic forecasts of fleet managers, although more cautious than a year ago, paint a picture of the Polish CFM market as still having great development potential. Interestingly, in this respect, our market stands out against the more conservative forecasts from other European countries. It is also interesting that Polish fleet managers plan to refresh their fleet, as indicated by declarations of shortening the vehicle usage period over the next year – said Grzegorz Szymański.
Polish Fleet Managers place little importance on TCO
The results of the ninth edition of the “Arval Fleet Barometer” indicate that in Polish enterprises, regardless of their size, the main criterion for choosing a company car remains its initial price. This factor was indicated by 34 to 48% of companies of various sizes. Unfortunately, at the same time, issues related to the full cost of operation, i.e., the so-called Total Cost of Ownership (TCO), are almost completely ignored. Only 6% of companies employing 100 to 500 people and 10% of companies with over 500 employees indicate TCO as an important criterion for choosing a company car. Additionally, great importance is attached to the brand of the fleet car, which is indicated as an important selection criterion by about a quarter of respondents.
The structure of company car financing indicates that Polish fleet managers still have some catching up to do compared to their Western colleagues. In Poland, cash purchase is the most popular. It is chosen by between 45 and 48% of companies in all surveyed groups. In other markets covered by the study, the popularity of this form of payment is much lower, especially in the largest organizations, where only 27% of enterprises use it. The biggest differences in fleet financing appear in the case of leasing. In Poland, financial leasing is definitely more popular, chosen by 31% (in the case of the largest enterprises) to 38% (among companies employing between 100 and 500 people). Only 5% of companies employing up to 10 people and 9% of medium-sized enterprises opt for long-term rental. It is worth noting that only 11% of large companies (100-500 employees) and 23% of very large companies (over 500 employees) use Full Service Leasing services. In both cases, this is more than half less than in other surveyed countries.
– The structure of fleet financing in Poland largely indicates a low market maturity, but at the same time, it shows opportunities for the development of the CFM industry. Polish fleet managers first look at the current cost associated with purchasing or using a car, without looking at the total costs resulting from operating a fleet vehicle – notes Grzegorz Szymański. – Such short-sightedness, however, affects the overall fleet maintenance costs. Of course, some criteria for choosing a company car result from the cultural characteristics of Polish society and the principles of employee remuneration in the company. For example, the car brand in Poland is still very much linked to prestige. However, the low interest in the TCO indicator is worrying. I hope that the publication of the “Arval Fleet Barometer” results will be a good pretext for a discussion on the criteria for choosing company cars among fleet administrators. It is comforting that over the last few years, changes in the way fleets are financed indicate a steady development of leasing as an external source of financing and confirm the development prospects of the CFM industry in Poland – adds the CEO of Arval Poland.
The full report can be downloaded at www.arval.pl