Automotive Fleet

DEC 2013

Magazine for the car and truck fleet and leasing industry

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oil and gas segment continues its explosive growth in North America. Te natural gas boom, in particular, is sparking the gains in this market segment, and from the Dakotas to the Rockies, south through Texas and Oklahoma, and even the Northeast U.S. continue to see strong growth. North of the border, western Canada also is experiencing strong growth in this segment, which should continue for the foreseeable future," said Ghosh of ARI. In addition to the overall industry growth, the "oil patch" business is a challenging environment for feet vehicles impacting service life, resulting in a strong demand for replacement vehicles. "Field service continues to be a strong demand vocation. Te oil and gas space carries all the markers of continued strength in the demand for light-duty trucks up to the 10,001-pound GVWR class. Te high activity levels, coupled with strenuous operating conditions and the critical need to stay under the 10,001-pound rating, will continue to motivate vehicle adds and replacements," said Ken Gillies, manager of truck ordering and engineering for GE Capital Fleet Services. GILLIES Ongoing strong demand for Class 3-6 trucks in the booming energy sector is anticipated. "Sales of service body trucks are also becoming stronger, due to growth and an increase in demand for the gas and oil business. Te strongest growth segment in the domestic energy exploration and production market utilizing trucks is in the range of Class 3 to 8 with moderate to specialized upftting," said Reynolds of LeasePlan USA. Te demand for feet trucks in the energy market is a North American regional phenomenon encompassing both the U.S. and Canada. "We're seeing a lot of growth in the oil KEILTY and gas segment in both the U.S. and Canada as exploration and production continues across North America. Tis has resulted in an increase in both general light-duty support vehicles, as well as specialized, industry-specifc vehicles," said Tom Keilty, senior VP, customer and vehicle services and COO for PHH Arval. ● Telecommunications Industry: Te second strongest vocational market is the telecommunications industry. "Tere will be strong demand for fullsize pickup trucks and compact SUVs in the wireless communications market. We're seeing a trend from full-size cargo vans and pickup trucks to the smaller cargo vans, such as the Ford Transit Connect," said Mathew of Donlen. ● Utility Industry: "Tis market is on a positive growth curve, as the need for infrastructure in the western U.S. and the oil and the natural gas boom in the north central states are both expected to keep this segment growing steadily," said Ghosh of ARI. According to Mathew, another vocational segment that will experience future growth is the underground utility services sector, which will increase demand for compact pickup trucks. ● Delivery Truck Segment: Tis vocational segment will experience stable growth, with a strong trend toward more fuel-efcient models. "Te delivery truck segment is becoming more fuel-efcient to satisfy sustainability eforts," said Reynolds of LeasePlan USA. ● Service Fleets: "We see service feets enjoying the most growth and expansion. It is particularly true of specialized applications. Vans and pickups are precisely upftted in a SWENSON purpose-driven design. We are fnding this stemming from both the economic recovery and the need to replace aging units," said Connie Swenson, account manager for Wheels Inc. ● Construction & HVAC Market: "Construction is a strong growth segment, as housing starts have rebounded and home values are increasing. Combined with historically low interest rates and high consumer confdence, growth in this area is expected to remain strong as well, as long as the economy continues its steady recovery," said Ghosh of ARI. A similar observation was made by Gillies of GE Capital Fleet Services. "Other vocations where consumer demand is relatively strong to increasing, which will drive demand for light-duty cargo vans includes providers of HVAC, as well as the construction and service industries," said Gillies. ● Transportation Segment: Tis segment should experience growth, as it benefts from the need to transport durable goods for the other segments, especially in oil and gas, construction, and utility," said Ghosh of ARI. "Te overall economy continues to experience steady to moderate growth, which will continue to support these and other market segments." AF TOP 5 TELECOMMUNICATION TRUCK FLEETS TOP 100 RANK COMPANY CLASS 1-2 TRUCKS CLASS 3-6 TRUCKS VANS SUVs TOTAL TRUCKS 22,975 13,408 20,848 3,087 60,318 AT&T 3 COMCAST CORP . 4,579 5,821 23,468 503 34,371 4 SOURCE: AF RESEARCH DEPT. 2 VERIZON 6,000 8,275 13,780 2,390 30,445 7 COX ENTERPRISES 4,817 782 3,917 1,024 10,540 CHARTER COMMUNICATIONS 2,811 1,787 4,410 582 9,590 10 The telecommunications industry is the second strongest vocational market in terms of feet truck sales The industry is generating strong demand for full-size pickups and compact SUVs, especially in the wireless communication sector. Another strong vocational market is the energy sector, which is experiencing explosive growth in both "upstream" and "downstream" production. A8 AUTOMOTIVE FLEET I DECEMBER 2013

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