When Handed Lemons – Kwik-Fit Fleet gains new business through operator belt-tightening
You’d have to look under a fairly isolated rock to find someone unaware of the beating the transport industry has taken in 2009, but fewer people are aware that dwindling fleet vehicle purchases have also brought some benefits. Kwik-Fit Fleet is one firm to have gained from this effect of the recession Head of Kwik-Fit Fleet Mike Wise, when talking with Tyres & Accessories, reflects that the fleet industry has been for the last 15 or 16 months totally dominated by recession affected businesses looking to cut costs, and this has proven a boon to the fast fit services provider: “Since the recession struck in 2008, an increasing number of businesses have extended their fleet replacement cycles,” he explains. “Recession-induced lengthening fleet replacement cycles have provided a major business opportunity for Kwik-Fit Fleet as tyre consumption rises and an increasing volume of MOTs and service and repair work is required as vehicles move into their fourth year of operation and even longer.”
Increase in demand for vehicle servicing and MoTs has been dramatic – in 2008 Kwik-Fit’s fleet division reported a 90 per cent year-on-year increase in vehicle servicing work and a close to 40 per cent increase in MoT work over the same period. During the first nine months of this year, the company has seen demand for fleet servicing work rise a further 54 per cent and MOT work grow by 93 per cent.
The tyre servicing side of things, it must be said, is also doing well: “It isn’t just the lengthening of vehicle replacement cycles that has increased our tyre business throughout 2009,” Mike Wise reports. “In addition, the ever-increasing corporate focus on occupational road risk management means we are seeing increasing demand for our tyre safety service. An increasing number of businesses are including regular tyre inspections of vehicles in their company car parks within their safe driving strategies. Thus the number of tyre safety inspections completed in the first half of 2009 reached almost 100,000 with mobile technicians responsible for delivering the service carrying out almost 600 more inspections per man than in the first six months of 2008, a nine per cent rise.”
Today Kwik-Fit Fleet claims a 75 per cent share of the UK fleet tyre market, however Wise points out that market share is in excess of 85 per cent when looking solely at Britain’s fifty largest contract hire and leasing companies (as measured by the industry publication Fleet News). “Across the fleet sector, Kwik-Fit Fleet is supplying services to significantly more than 2.5 million company cars and vans,” shares the head of Kwik-Fit Fleet. Many of the leasing companies utilise our tyre management service, the UK’s first outsourced facility for tyre procurement, authorisation and billing.” At present the company manages the complete tyre requirements for 45 fleets, with a total of around 1.2 million vehicles covered.
Rocketing demand for company car and van servicing, not to mention MoTs, has given Kwik-Fit good reason to expand its network of centres offering these services from 452 to 500, a process that Mike Wise says will be complete within a couple of months. Kwik-Fit Fleet also operates 220 mobile units and Wise expects demand for mobile services to continue increasing. “Once fleet drivers experience our mobile service we find that they continue to use it when required as it suits their work and lifestyle balance,” he reflects. “The increase in mobile business in the first nine months of 2009 is incremental and not substitutional. It has occurred on top of the 8.9 per cent rise in traffic through our nationwide network of centres this year.
“To meet corporate customer demand for our Mobile service, this year we have improved communications between our call centres and our technicians out on the road,” the Kwik-Fit Fleet head continues. “First we equipped our technicians with the very latest data capture hand held devices and mobile printers to allocate jobs to individual technicians giving them customer contact details plus confirming all parts needed to undertake a job. When a job is completed, customer signatures are captured electronically and then relayed back to Kwik-Fit’s central hub. A customer receipt is then printed from the in-cab printer. This has delivered a five per cent improvement in efficiency, which is equivalent to technicians undertaking an extra half-job per day on top of their normal ten daily customer visits.”
Mike Wise foresees the company holding onto the gains it has made during these tough times. “With fleet vehicle replacement cycles extending from the traditional three-years/60,000 miles due to the recession, we do not expect any widespread return to the ‘norm’ when the economy picks up,” he explains. “Our belief is that vehicle reliability in general in recent years has improved considerably, and as long as cars and vans are subject to routine maintenance then companies can operate vehicles for four years and perhaps even longer in the knowledge that operating costs will not rocket out of control.
“In addition, the running of vehicles over a longer replacement cycle means that fleet funding costs are written down over a longer period of time thus also helping cost control,” he adds. Therefore, we anticipate demand for Kwik-Fit Fleet’s comprehensive range of services to increase throughout the remainder of 2009, into 2010 and beyond. While there are always competitive pressures – particularly in relation to the pricing of vehicle parts and specifically tyres – the range of services that Kwik-Fit Fleet offers means that, in the future, it will be possible to bundle MoT and servicing together with other products to offer the ultimate vehicle maintenance programme.”