How are fleet manufacturers meeting the challenges of Covid-19? Honda UK responds

In May and June, Fleet News surveyed all the major manufacturers to find out how they were responding to the coronavirus pandemic, how they are supporting their fleets customers and their views on the type of impact it would have on the fleet sector.

The resulting article was published in the June edition of Fleet News.

Here is Honda UK's response.

Fleet News spoke to Jacqueline Rowe, Honda UK's fleet engagement senior manager (answers as at 5/6/20)

What action are you taking to support fleets during the Covid-19 crisis?

Honda has a business centre with an office-based accounts team of fully trained corporate professionals. This team has remained operational throughout the lockdown period, so we can support our corporate customers.

To further ensure our customers know we are operational, we have been proactive in contacting them to advise we are operating as normal and are available should they require any support or advice.

Will Covid-19 have a bigger and longer lasting impact on our industry than the financial crisis in 2008? Please explain your view.

The lockdown stopped movement in the country, within our dealerships, supply networks and pretty much stopped purchasing apart from essential items for over two months. This inevitably will impact our industry in the following ways:

• Covid-19 has forced businesses to stop trading or operate remotely; this will inevitably impact some businesses longevity and future decisions. It’s not over yet, so it is difficult to forecast the true impact.
• Electrification looks like it has now moved up the list of most business agendas – we have just launched the new hybrid Jazz and Jazz Crosstar, with the Honda e arriving later this summer.
• Equally, fear of travelling on public transport might see an increase in rental or core fleet volumes as business take decisions for the safety of their staff.
• More businesses will be operating pool cars to support employees’ business travel rather than encouraging them to use public transport.
• Rental businesses are increasing their support for local companies on longer term rentals.
• However, while there is an expectation from most people we are talking to that face-to-face interaction is still preferable and the desired option, digital communications are becoming the norm for business to business meetings, with Skype, Microsoft Teams, Zooms calls etc.
• The lockdown has forced changes to consumer spending and attitudes. As a result, we are expecting considerably reduced leisure miles as people don’t go shopping or socialising – but also considerably reduced business miles as people switch to digital communications. These changes will impact negatively on fleet renewals.

How much of a decline in total market fleet sales are you forecasting this year?

Unless there is a significant cut in our customers’ budgets, we don’t believe Honda will experience a major decline in our corporate volume, as we do not chase a high volume through this channel.

Positively, we are already starting to get enquiries from rental businesses and bodyshops around taking volume from Honda.

Please outline your exit strategy and how you believe the way business is carried out in future might change – the so-called ‘new normal’.

Our overall strategy will be guided by our customers’ needs and to be flexible as a result. We are increasing digital communications, virtual model introduction and vehicle demonstrations.

Social distance meetings, with Covid-19 check and trace input required before allowing access to offices – as there is still a desire for face to face interaction from customers.

Long term demonstration vehicles become less freely available, as the virtual tour becomes more interactive and we move to shorter test drives.

The cost of delivery will increase with the impact of social distance requirements, cleansing of cars and delivery drivers’ reluctance to travel on public transport, making this an expensive sales tool going forward.

How soon do you think fleet sales will recover after the coronavirus threat is over?

Once businesses are back to work, with some form of ‘new normal’, we are expecting there to be some resemblance to how things used to be by October time, hopefully.

Personally, I think we will see an increase in purchases of small/medium cars, either by families (second vehicles) or fleets wanting essential use cars/pool cars.

Will we experience a break on the development of MaaS and fleet electrification?

Honda remains focused on our move to electrification – with all of our mainstream cars electrified by 2022. Indeed, we are seeing businesses reviewing their entire fleets, in some cases speeding up their plans to move to electric.