Now a three-way battle for the fleets
General Motors and Ford, the world’s biggest car manufacturers, are locked in a bitter struggle for the most prized possession in the motor trade, the British fleet and company car market.
In no other country are two out of three cars sold to people who do not drive them. Their total value is put at between £7,000m and £8,000m a year. The most attractive and, in normal times, most profitable sector of the fleet business is the medium or family saloon, generally reckoned to account for one in four of all cars sold here.
Until last year it had been dominated for nearly 20 years by Ford’s Cortina. It was never an outstanding car which made drivers rave over its performance for styling, but was nevertheless seen as a “big car” , and that made it the company rep’s dream. It was a question of size not so much to carry his samples but to massage his ego. The Cortina did that so successfully that by the autumn of 1982 when it went out of production more than 4-25 million had been sold. The Cortina became a legend in its time and Ford’s fortunes in Britain were secure. It bestrode the car market like the cocksure winner it was achieving more than 30 per cent penetration, 10 per cent more than BL, its nearest rival.
But behind the scenes at Ford’s Warley headquarters nerve ends were beginning to twang. Nothing drops down the charts faster than a car that has overstayed its welcome. The early warning signs were there for Cortina. Ford had a shiny new model ready to replace it but king-making is a tricky business. Cortina had broken every sales record in the book and in the words of one of Ford’s Detroit bosses: “It will be one son of a bitch to follow.”
In September, 1982 the Sierra was unveiled to the delight of the motoring press but coos of suprise from the public. The smooth contours of its jelly-mould outline were certainly eye-catching but not everyone liked it. “Of course,” said the Ford men,
“it is so different from anything on the market that people will need time to adjust.”
But as days turned into weeks the queues at dealers’ showrooms did not materialize. So Ford resorted to an old but expensive ploy: offering substantial discounts to its dealers to enable them to sell the Sierra at cut prices, a not unheard of practice in the cut-throat conditions of the past two years but never for a new model. And all the time the key fleet buyers, men disposing of millions of pounds worth of orders annually, were dragging their feet.
The fleet men’s big worry was the effect of heavy discounting on the prices they would get when they disposed of their Sierras two years later. The solution for many was to turn to Vauxhall’s Cavalier, launched a year earlier and making a name for itself with a new high-performance but still economical engine in a modern front-wheel-drive layout. In contrast Ford stuck to Cortina’s old front engine and rear-wheel-drive concept for the Sierra, insisting it was the proven layout for easy maintenance.
The industry shook its head and whispered that Ford Europe was short of the funds needed to develop a front-wheel-drive job with a new engine because it was having to support its hard-pressed US parent. Ford was not going to loosen its grip on such a lucrative market easily. It hit back with fleet discounts of around Â£600 for every Sierra bought and threw in a lot of “demonstrator” models. Vauxhall had been waiting too long to get its feet under the fleet table so it, too, offered discounts of hundreds of pounds a car. And it has been that way ever since with first one side upping the ante and then the other.
No official figures are available for market shares in the fleet business. But sources suggest that Ford had 50 per cent until two years ago, now down to about 40 per cent, compared with Vauxhall’s fast increasing 20 per cent. One big fleet executive said: “It’s a bloody battlefield with nobody taking any prisoners. They’ve thrown away the rule book on business etiquette. Some of the salesmen who come here are nervous wrecks. They say the pressure is so great to get sales they have no alternative but to get down in the mud with the competition.”
Soon another contender will be knocking on their doors. On April 25 Austin Rover unveils its long awaited medium saloon, the Montego. lt will be the state-owned company’s first specifically designed fleet and company model for nearly 20 years. Fleet buyers were consulted from the drawing board to its final commissioning. They were also among the first to be flown to the south of France to test drive it last month. Austin Rover has already fired the first shots by reinforcing its fleet sales department with staff “pirated” from competitors.
The industry’s prolific grapevine has it that the first casualty has already bitten the dust. Ed Blanch, 58-year-old chairman of Ford Europe, surprised everyone last week by announcing his retirement after less than two years in the job.
Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...
Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
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