By Mike Sheldrick, Senior Editor
GE Capital’s annual survey of middle-market companies — those with sales between $10 million to $1 billion — found a generally confident outlook. As a result, they plan to expand their fleets and their use of alternative-fuel vehicles. The 400+ respondents included companies with local, national, and global reach. The majority of the companies surveyed were private — only 11% were public.
Over 25% plan to increase the size of their fleet in the coming year, and more than half plan to incorporate alternative-fuel vehicles in their fleet in the same period. And the switch to AFVs is even more pronounced: in the next two years, nearly two-thirds plan on adding AFVs and within five years, over 90%.
Almost 70% of executives surveyed said their companies saw improved financial performance compared to last year. And the outlook seems to be equally rosy. The combined confidence score of those “extremely confident,” or “somewhat confident,” was overwhelmingly on the optimistic side. Local companies, especially, see good times ahead — 83% weighed as extremely confident or somewhat confident.
That confidence, of course, is the underpinning for expanded fleet size (unless there are offsetting productivity gains). GE Capital found that over one-quarter of fleets expect to increase the size of their fleets in the next years — good news for the fleet management industry. Nearly one-third planned to lease these new vehicles, just a little more than the proportion who plan to obtain theirs with cash on hand. That suggests opportunities for fleet leasing companies to expand their market penetration.
The primary objectives of fleet managers are reducing maintenance and fuel costs via right-sizing and alternative-fuel vehicles. That’s because the largest increases in fleet-related costs in the past year were in the area of fuels and maintenance, especially in the upkeep of older vehicles, which are prone to unscheduled repair needs.
The Fleet Market Outlook Survey Overview can be found here.