The price of fleet management services will likely increase due to growth in business numbers and rising corporate profit.
Los Angeles, CA (PRWEB) March 14, 2014
Fleet management services have a buyer power score of 3.1 out of 5. This score indicates that buyers have slightly more power in negotiations, based on the modest rate at which service prices increased during the past three years. According to IBISWorld procurement analyst Jeffrey Cohen, “Factors that contributed positively to buyer power were the relatively fragmented nature of the market, a modest availability of substitutes and moderate switching costs.”
The price of fleet management services increased at a moderate pace during the past three years as the economy steadily recovered. This rise in price occurred as the number of businesses increased alongside corporate profit, causing businesses to increase demand for fleet management services. In response, suppliers raised the price of their services. However, price increases were mitigated due to declining demand from another key buyer, local and state governments. Although the US economy was in the midst of recovery, many local and state governments experienced budget shortfalls and had to reduce spending on services that were not priorities, including fleet management services. “Due to reduced demand, suppliers kept price increases low to try and retain existing customers,” says Cohen.
Buyer negotiation power is positively affected by the relatively fragmented nature of the market. Because there are many suppliers throughout the United States, buyers have many choices in which supplier to purchase services from, thereby pitting suppliers against one another (this applies mostly to medium and large buyers). This factor can benefit buyers in terms of price and receiving additional services they otherwise may not have gotten. In addition, buyers have the option of purchasing products and services such as vehicle telematics and consulting services from vendors other than fleet management companies, thereby allowing buyers not to have to purchase additional services in a bundle that they may not need. Lastly, there is a moderate level of switching costs, which favors buyers because there are several suppliers that have years of experience and are willing to provide services to buyers located anywhere throughout the United States. The top four vendors in the market are General Electric Company, Automotive Resources International Inc., PHH Corporation and LeasePlan USA
For more information, visit IBISWorld’s Fleet Management Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of fleet management services. Fleet management services involve the management of a company’s transportation fleet, which primarily includes commercial motor vehicles such as cars, vans, trucks, ships and rail cars. The primary services that fleet management companies offer are vehicle financing, vehicle maintenance, vehicle telematics, fuel management and health and safety management. The key buyers of these services are businesses and local and state government entities. This report does not include fleet leasing car services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.