In the next three years, prices are forecast to increase at a slower pace due to growth in the number of businesses, corporate profit and government spending
Los Angeles, California (PRWEB) February 27, 2015
Fleet vehicle leasing has a buyer power score of 3.8 out of 5, indicating that purchasing conditions are generally favorable for buyers. According to IBISWorld market research analyst, Hayden Shipp, "This market has a medium level of market share concentration, so although some large players generate a substantial share of market revenue, many smaller operators also compete for buyers' business." As such, buyers benefit from having several supplier types from which to choose, including large suppliers with the capability of supplying vast fleets to facilities around the world, and vehicle dealerships that cater to local markets and are willing to work closely with buyers whose leasing volumes are low. Major vendors in the fleet vehicle leasing market include General Electric, Enterprise and Hertz. The fleet vehicle needs of each buyer are distinct, making a supplier's ability to provide a customized solution an important part of the selection process. However, the need for customized solutions lengthens the market's lead time and increases switching costs, reducing buyer power.
The primary market characteristic that works in the buyer's favor is the slow pace of price growth. "During the past three years, demand for fleet vehicle leasing from the private sector has risen with growth in corporate profit, the number of businesses and trade volumes," says Shipp. However, expenditure on fleet vehicle leasing has dropped from government buyers during the past three years. This decline has been especially pronounced for local and state agencies, which have continued to decrease their investment levels in the aftermath of the recession. Government buyers are critical members of suppliers' customer base, because they account for nearly one-third of market revenue and are generally long-term customers. As such, the decline in government expenditure during the past three years has mitigated recent demand and price growth. Relative stability in suppliers' wage costs has also helped temper price growth.
Buyers benefit from the low volatility of this market's price drivers, which helps prevent significant price fluctuations. During the next three years, the volatility of drivers and market prices is expected to remain low. Finally, substitute availability is high in this market, increasing buyer power and reducing dependence on fleet vehicle lessors. For more information, visit IBISWorld’s Fleet Vehicle Leasing procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist with fleet vehicle leasing. Suppliers lease cars, sport-utility vehicles (SUVs), vans, buses and trucks (e.g. pickup trucks, box trucks and semi-trucks) through open- and closed-end agreements. Under an open-end lease, also known as a finance lease, the buyer determines the vehicle’s service life after a short minimum term, usually one year. Under a closed-end lease, also known as a walk-away lease, the buyer leases the vehicle for a fixed term and then returns it to the supplier. Vehicle lessees, also called buyers in this report, come from the private and public sectors. Suppliers are also called lessors in this report.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
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.