FLEET discounts worth tens of millions of pounds are under threat as manufacturers consider how to react to the Competition Commission's New Cars Inquiry report. Car makers are warning that current fleet discounts are 'unsustainable' and 'insane' and must be cut or manufacturers will 'run out of money'.

The report's recommendations, endorsed by Trade and Industry Secretary Stephen Byers, calls for dealerships to be given the same access to discounts as fleets when purchasing cars outright. But rather than dealer discounts significantly increasing, this could mean fleet discounts are cut. Norman Donkin, director general of the British Vehicle Rental and Leasing Association, said he feared if manufacturers were forced to increase discounts to dealerships, they might cut back on fleet

discounts to claw back 'lost' income.

Vince Kinner, Volkswagen's head of fleet, claimed cuts in fleet discounts were inevitable and added: 'Discounts offered over the last 12 months by some volume manufacturers and importers have been insane. They have ranged from the normal discounts for fleet customers up to 40%. There must be some rationale between volume purchased and the amount of discount available.'

Byers is to order manufacturers from June 10 to provide their dealers with regular statements of the terms they are prepared to offer which reflect the terms given to fleet customers. While it remains to be seen how manufacturers will publish the discount tables, it is unlikely that car makers will want to continue to 'buy business'.