Automotive Fleet

DEC 2013

Magazine for the car and truck fleet and leasing industry

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FLEET TRENDS sales in the commercial feet market. "Tere has been a reduction in large SUV sales to feets and an increase in small SUVs, due to the desire for more fuel efciency. We can predict REYNOLDS that gasoline prices will dictate where this market will go in the future, which can be further infuenced if there is a void in the small truck market," said Wayne Reynolds, operations manager, truck and vehicle upftting for LeasePlan USA. Tis observation was seconded by Mathew of Donlen: "Anticipate the large SUV market to continue to shrink and the small to mid-size SUV market to experience moderate growth." Overall, commercial feet purchases for SUVs is forecast to be fat, according to Fontana of Emkay. Vocational Growth Segments Te vocational segments representing the strongest growth potential in the truck/ van feet market are the energy sector and Top 5 Fleets by Total Vans Top 5 Largest Fleets by Total SUVs 25,000 4,000 20,000 Top 5 Fleets by Total SUVs: 2,000 1.GlaxoSmithKline 2. sanof 3. AT&T 4. Forest Pharmaceuticals 5. Novo Nordisk, Inc. 1,000 0 1 2 3 4 4,150 4,000 3,087 2,915 2,913 5 SOURCE: AF RESEARCH DEPT. 3,000 There has been a reduction in large SUV sales to feets and an increase in small SUVs, due to the desire for more fuel effciency. Total Vehicles 5,000 Total Vehicles telecommunications market. ● Energy Industry: Te oil and gas industry is experiencing rapid expansion, including "upstream" energy production, "downstream" refning and marketing, and crude oil transportation. "Tere is strong demand for pickups and cab chassis in the oil and gas exploration and distribution industry," said Mathew of Donlen. In addition to the major integrated oil companies, the energy industry's expansion is fueling feet growth with independent "upstream" energy production companies, such as Chesapeake Energy, Pioneer Natural Resources, ConocoPhillips, Oasis Petroleum, and Devon Energy. "We see the energy sector as a growth market, inclusive of oil feld and fracking organizations that have been very active of late," said Fontana of Emkay. "Vehicles used in the energy sector run the spectrum from mid-sized SUVs through Class 8 highly customized and upftted specialty vehicles." Te growth in the energy sector is being characterized as explosive, which bodes well for growth in future feet sales. "Te Top 5 Fleets by Total Vans: 1. Comcast Corp. 2. AT&T 3. Verizon 4. Sears Holding Corp. 5. VPSI (vRide) 15,000 23,468 20,484 13,780 9,800 6,524 10,000 5,000 0 1 2 3 4 5 SOURCE: AF RESEARCH DEPT. "Van sales to feets have been slowing and diminished some as new confgurations emerge," said Fontana. Tis observation was also made by Mathew of Donlen. "Anticipate moderate growth as a result of all the new van entries and the trends by some customers to downsize MATHEW from pickup trucks to small cargo vans." Others are bullish on the van market, such as Ghosh of ARI. "Tere is a potential for substantial growth in the van segment," he said. "Tis market segment should see stronger growth in outlying years (beyond 2014), thanks to the increasing versatility of these new vans entering the North American market. For instance, service industries concentrated in metropolitan markets will most likely move to the new style vans, as a more self-contained mobile work solution is better suited to their industry." ● SUVs: Te cost of fuel and corporate pressure to increase overall feet fuel economy are the primary factors driving SUV Class 3-6 trucks are the fastest growing segment in the commercial feet market with double-digit growth. The vocational markets with the strongest growth potential are the energy sector and telecommunications industry. BY MIKE ANTICH The van market segment should see stronger growth in outlying years, beyond 2014, due to the new models entering the market. AUTOMOTIVE FLEET I DECEMBER 2013 A7

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