SERVICING SMALL FLEETS

ACA Research, our partner in the AAAA Aftermarket Dashboard, says average fleet lives are being extended, marking an opportunity for the aftermarket

In 2019, Australian fleet buyers bought almost 440,000 new vehicles. 2020 is obviously a different story though, with YTD sales to business down to just over 260,000 new vehicles.
While the final number will vary depending on how the final quarter of this year plays out, this leaves fleet sales down about 100,000 units year on year. Given this decline, fleets will obviously be extending the life of their existing assets, which suggests an opportunity for the aftermarket.
This is however only one part of the story, as we need to understand their existing fleet to know how much of an opportunity there truly is.
According to the upcoming ACA Research Fleet Insights research, there are now 460,000 Australian businesses that own and operate company vehicles. Between them, they have almost four million vehicles on Australian roads.
When it comes to managing these fleets, we spend a lot of time talking about the larger ones (typically 20+ vehicles), but the reality is that it is hard for an independent workshop to meet all of their needs. Let’s have a look then at the smaller end of the market.
There are about 400,000 businesses with less than 10 vehicles, but they still have almost 1 million passenger, light and heavy commercial vehicles, so how are they servicing them? Looking at the data in Chart One, we can see that the servicing splits out three ways:

SERVICING AND MAINTENANCE:

Chart one: How fleets with <10 vehicles are servicing their fleets
(Source: ACA Fleet Insights 2020)

This is a good result for the aftermarket and demonstrates that many independent and chain workshops are already effectively tapping into the fleet market. As we have seen before, this includes a mix of independent and chain workshops, as well as mobile mechanics.
Given fleets cannot afford to have their vehicles off the road for extended periods of time, that feels like one area to keep an eye on over the next few years. Similarly, there might be interest in servicing outside of typical business hours, or pick-up and drop-off services, to avoid employees losing time during the day.
Looking at the other major fleet servicing expenses, we can see an even stronger skew to the aftermarket when it comes to replacing or repairing tyres, with more than three quarters of our fleets preferring aftermarket workshops.
The key point this demonstrates is that around half of the fleets taking their vehicles back to the dealership for servicing are still interacting with the aftermarket when it comes to tyres – does this provide an opportunity to expand the relationship into other areas of vehicle maintenance?

TYRE REPLACEMENT AND REPAIRS:

Chart two: How fleets with <10 vehicles are replacing and repairing their tyres
(Source: ACA Fleet Insights 2020)

Based on the data in chart two, we know that aftermarket providers are getting a solid share of fleet business. To do that consistently, they are obviously providing a good service, and we can see that reflected in the satisfaction scores.
As shown in chart three, aftermarket workshops performed well across both servicing and maintenance and tyre replacement and repair. Additionally, while there were some suggestions made around how they could improve further (free coffee is always popular!), in many cases, customer feedback just told us how happy they are.

Chart three: Satisfaction with aftermarket workshop amongst fleets with <10 vehicles (Source: ACA Fleet Insights 2020)

Ultimately, while the aftermarket already has a strong position in the fleet market, COVID-19 has disrupted many of the plans fleets had going into this year.
As we move towards 2021 though, there is a significant opportunity to grow fleet business, with independent and chain workshops well placed to cater to these customers.
As we’ve said before, it then becomes a case of understanding your local community, so you can tailor your specific services to their needs. Also, don’t forget to use the AAAA postcode tool if you need more information about the type of vehicles in your area.

This column was prepared for AAA Magazine by ACA Research, our partners in the AAAA Aftermarket Dashboard which is delivered to AAAA members each quarter.

For more information, visit www.acaresearch.com.au or contact Ben Selwyn on bselwyn@acaresearch.com.au