Carmakers are fighting to stop more fleet and lease companies – especially those with vehicles on extended contracts – moving to independent service and MoT providers.

“As fleets extend their cycles…turning to independent garages for service and maintenance becomes a strong option for reasons of cost,” explained Ken Trinder, head of business development for Epyx.

Labour costs at independent centres can be anything between 15 and 34% less than at a franchise dealer.

A significant number of fleets have already made the switch. Latest figures from Kwik-Fit Fleet shows a 10.4% rise in its sales in 2009 thanks to MoTs on company cars and vans increasing 89.7% and fleet vehicle servicing rising 54.2%.

“Sales growth in 2009 was almost entirely due to business conducted through existing contracts and fleets deciding to extend vehicle replacement cycles,” said head of Kwik-Fit Fleet Mike Wise.

“Time is money and for that reason fleets want a fast and efficient service that is convenient for their company car and van drivers.

"Our centres already offer seven-day-a-week extended hours opening and with a service typically available within 48 hours rather than the 14-day wait for some franchised dealers. This makes vehicle MoTs, servicing and repairs very attractive to fleet operators and drivers.”

As a result, it is now commonplace for leasing companies to use independent centres for some of their vehicle service needs.

However, manufacturers – such as Volkswagen – are fighting back by amending their fleet pricing policy in an attempt to keep fleets in their dealer network even when warranties on their vehicles have expired.

“By offering value for money, fixed cost SMR for older vehicles, they can retain fleet business,” said Trinder.

VW’s Fleet Package Pricing programme is geared to ensure fleets remain with its dealers.

“We offer a package that provides pricing consistency to all lease companies to manage their budgets,” says Kevin Eastwood, fleet business development manager at Volkswagen Group.

But with labour prices higher than the independents, it is a battle, he admits. In addition, it is unlikely that a dealer stamp in a non-premium marquee will make any difference to RVs.

“Buyers at auction will always seek out cars with a full service history and while a stamp from a franchised dealer may attract a premium, a car with a full service history by an authorised specialist, using manufacturer approved parts, should not be disadvantaged,” explained Daren Wiseman, valuation services general manager, Manheim Auctions.


 

However, fleets should not abandon franchise dealers without due consideration, especially is they run premium marques, as CAP spokesman Mike Hind explained: “Rather than an uplift for vehicles with a full franchised service history, trade buyers will tend to penalise a prestige/executive car if it does not have one.

"This tends not to happen with more mainstream volume models where a full service history by independents will be acceptable,” he said.

“The key for fleets is understanding whether the money saved by using independent service suppliers is justified when it comes to disposal.”

Nevertheless, there has been a decline in fleet business since 2005 as they drift to independents.

But with additional services such as guaranteed three-day booking and the option for lease companies to negotiate further discounts directly with the dealer, that decline is levelling off, claims Eastwood.

And even the prestige manufacturers are working to retain fleet business.

“Within Audi leakage to the independent sector is less of a concern as most Audi fleet drivers do not want their vehicles serviced and maintained other than in the Audi network,” explains Iain Carmichael, head of Audi fleet sales.

“This is partly about the technology on the vehicles, partly about the high levels of training, skill and experience of the Audi technician and partly about the experience of visiting an Audi centre.

“However we have not been complacent and ignored the key aspect of SMR costings. In 2009, after significant consultation with the fleet industry and an extended pilot, we introduced Audi National Fleet Service Pricing; designed to address concerns around both service levels and price.”

This national plan relates to all service and maintenance work carried out, irrespective of the car’s age, so the impact of contract extensions diminishes.

“These measures ensure that we have a strong offer for the fleet industry, continued customer loyalty for the dealer network and the continued delivery of high standards of customer care from the network,” said Carmichael.