Smooth Road Ahead for Fleet Leasing: GE Capital

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

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