The post-pandemic years have been significantly hard for the Turkish fleet industry. Now, under hyperinflation and high interest, the market is slowly recovering. The hesitation of fleet managers towards new mobility and short-term leases is high, followed by slow adaptation to telematics and electrification. Nevertheless, the steady growth continues, and awareness of electrification and innovation is growing, says Okşan Öztürk, Managing Partner of Filo Broker.
Turkey displays a puzzled picture of its fleet market and the slowly rising EV market. Following the pandemic, the fleet and lease industry was hit by hyperinflation, resulting in lower purchasing power. While electrification and innovative fleet management technologies became well-known in Turkey’s vast industrial and business landscape, budgeting concerns, lack of awareness and a low risk-taking stance pushed Turkish fleets to stick to traditional methods, primarily long-term leasing.
“Fleet Leasing Perception and Satisfaction Research,” published by Filo Broker, a fleet management company based in İstanbul, clearly shows the trends in the Turkish fleet industry while demonstrating a market trying to align with sustainability and innovation amid an economic crisis.
Long-lease contracts dominate the market
The study covers Turkey’s most commercially active areas: the Marmara region, including İstanbul; Central Anatolia, including Ankara; the Aegean region, including İzmir; and the Mediterranean region, including Adana and Mersin.
The industries covered in the study are retail and trade (30%), manufacturing (27%), services (10%), transport and logistics (9%), construction (6%), health care services (5%), IT and informatics (3%), and education (2%).
According to the study, many departments get involved in the decision-making process of vehicle purchasing. The general manager (28.6%) or the administrative affairs manager (22.3% %) makes the purchase, followed by fleet managers (14.7% %).
The average number of employees of companies involved in the study is 1631, while an average of 207 employees are allocated a vehicle, representing 13% of the workforce.
The average number of company vehicles is 215, while small fleets primarily prefer leased vehicles:
Number of company vehicles % 10-30 16,7 31-99 25 100-199 25 200+ 33,3
Number of leased cars (%) 1-9 13,3 10-30 37,7 31-99 7,6 100-199 16,3 200+ 25,3
The long lease tradition still dominates the Turkish fleet market, as 92,7 of the fleets prefer leasing over 12 months, while only 7,3 of fleets lease some of their vehicles for periods shorter than a year:
Monthly fleet costs (TRY) Euro (%) 35.000 – 80.000 TL €1,010 – €2,308 6,0 80.000 – 155.000 TL €2,308 – €4,743 4,0 155.000 – 230.000 TL €4,743 – €6,638 5,7 230.000 – 305.000 TL €6,638 – €8,802 10,0 305.000 – 600.000 TL €8,802 – €17,306 13,0 600.000 – 1.200.000 TL €17,306 – €34,632 18,3 1.200.000 – 3.000.000 TL €34,632 – €86,581 13,3 3.000.000 – 5.000.000 TL €86,581 – €144,303 8,3 5.000.000 – 10.000.000 TL €144,303 – €288,602 6,0 10.000.000 – 15.000.000 TL €288,602 – €432,903 7,7 15.000.000 – 21.500.000 TL €432,903 – €620,494 7,7
According to the study, the average monthly cost of a current fleet is 3.691.092 TRY (€106,520), including leasing, fuel and toll prices.
The average monthly cost per vehicle is 13.267,82 (€382,91).
“The main driver for TCO is surely the fuel expenses. Additional expenses include toll charges, parking and supplementary invoices,” says Öztürk.
In Turkey, the maximum rental period is 48 months, and according to 2023 figures, 40% of the 250,000 vehicles leased that year were leased for 30-42 months.
Monthly maintenance of fleet vehicles according to fleet size
Number of cars Cost (TRY) Euro Avg number of leased car Avg number of leased car 10-30 ₺208.066 €6,005 48,3% 9 31-99 ₺494.972 €14,286 48,7% 22 100-199 ₺1.540.200 €44,453 49,7% 66 200-299 ₺2.795.625 €80,697 55,0% 124 300-399 ₺4.808.333 €138,795 66,7% 217 400-499 ₺6.637.500 €191,595 68,8% 300 500-599 ₺11.083.250 €319,938 100,0% 516 600-799 ₺13.880.000 €400,671 92,6% 642 800+ ₺18.529.261 €534,881 100,0% 862
Long-term lease contracts are complex to change, like it was hard to switch to leasing from purchasing, says Öztürk. “In 2007, when I entered the fleet ecosystem, it was still too hard to switch to leasing from purchasing. Changing this behaviour was difficult; many fleets believed owning a vehicle was too valuable. Today, I believe the fleet ecosystem needs more time. The pandemic remarkably changed how we do business as hybrid working styles became widespread. Under the changing market conditions, increased budgets and hybrid working style, we have changed our business to full-scale mobility consulting as Filo Broker.”
Driver training is lacking
Fleets focused on driver training have not yet reached considerable levels in the Turkish fleet ecosystem, as 51,7% of the companies do not perform driver training activities.
“Many of our customers use our Leased Vehicle Usage Training, informing fleets about the period between leasing a car and the contract’s end. We often underline one fact to our customers: Tender processes involve intense negotiations, but an invoice caused by a user mistake spoils all of them. Awareness is always critical for savings.”
Many fleets don’t exceed the mileage limit while performing periodic checks on the total distance travelled:
Companies leasing vehicles within mileage limits 82% Companies regularly check the mileage limits of their vehicles 91,3% 72,6 of the companies do a monthly check, 20,1 every three months, and 7,3% once every six months.
Monitoring of the milage is mainly performed through:
Company portal 30,3% Vehicle recognition system 23,7% Apps 22,3% GPS 16,4%
Only 16,4 of the fleets state that they pay fees for excess mileage, while 95,6% don’t receive funding for staying below the limit.
Some fleets trace mileage manually
Fleet monitoring and data gathering are mainly performed using traditional methods, including Excel reporting. The lack of reporting results in 37,7% of fleet managers not tracing non-lease expenses.
Fleet monitoring methods (%) Online apps and software 39,7 Tracking systems / GPS 36,7 Reporting from employees and drivers 14,7 Excel reporting 3,3% 57,3% of the fleets do a monthly report, 20% less than a month, and 18,7% do several reportings in a month.
“This is still an open wound,” says Öztürk, adding, “In a digital world, some fleets still trace mileage manually.” Filo Broker uses an internal system and apps to track mileage, receiving desired statistics through a click. “This is how we react before a loss occurs for our customers.”
“Fleet expenses come after the wages, and unfortunately, fleet leasing has always been a costly model of purchasing in the adaption process,” says Öztürk. Fleets returned the vehicles before the contract ending period and paid excesses. The same happened with mileage and the additional services that were never used. “That is why fleets must go over the expenses during the lease period and open space for savings,” she says.
Mixed feelings about EVs
According to the report, 22% of fleets have electric vehicles (EVs), while 66,3% are not considering adding EVs in the short term. Of the remaining ratio, 24% plan to lease an EV, and 9,7% plan to purchase one.
Lease preferences:
Tesla 30,6% Tender offering 26,4% Nissan 5,6% Peugeot 5,6% Renault Zoe 4,2% Ford 2,8% Volkswagen 2,8%
Purchase preferences:
Ford 41,4% Audi Q8 E-tron 27,6% BMW 6,9% Tesla 6,9% TOGG 6,9% BMC 3,4% Tender offering 3,4% Renault 3,4%
Why do fleets hesitate to lease or purchase an EV?
Lack of charging infrastructure 28,2% Not necessary for the time being 21,6% High upfront costs 18,1% Not a part of short-term strategy 12,6% Lack of widespread adaption & services 11,1% The current lease term continues 4% Risk of accidents & maintenance 3% Concerns over spare parts 3%
53% of the companies believe that adding EVs to their fleets is a bonus to their reputation, primarily if driven by senior managers. Besides reputation, the majority of the companies want to pursue sustainability goals:
Why EVs are needed in fleets? Environmental reasons 57,3% Reducing carbon footprint 41% Tracing tech innovations 4% EVs are reputable 5%
From the perspective of senior managers, EVs are not a too urgent investment for several reasons:
EVs won’t make a substantial change 35,4% EVs are expensive 23,4% EVs are not yet popular 7,8% EVs are not needed for brand image 7,1% The manufacturing process of EVs is harmful 5%
Filo Broker always encourages fleets to adopt EVs and ease the electric transition. “We have developed the ‘Transition to EV Consultancy’ module. Also, constant events and reporting on electrification aim to increase awareness in the industry. There are 93,000 EVs on Turkish roads, most of which are in the Marmara region. But expect this figure to reach 193,000 by the end of the year,” says Öztürk.
Depending on the market conditions, mainly the persistent high interest rates and inflation, the majority of the fleets in Turkey prefer leasing in the long term:
Leasing 61% Purchasing 19,3% Reducing fleet size 19% Provide allowances 12,3% Downgrade models in fleet 10,3% Don’t add a new car through leasing 8,7%
Leasing is the preferred type for fleet expansion for 58,7% of the fleets, while 41,3% prefer self-owned cars, stating that it is more profitable and reliable and carries investment purposes.
Reasons for leasing for fleet expansion, on the other hand, are as follows:
Less expensive 26,1% Tax redemptions 25% Tracking & monitoring is easier 18,7% Cost-effective 15,9%
Used cars are a less likely option
Fleets in Turkey do not favour used cars, as 84,7% of the fleets don’t have one, while only 15,3 have used cars in their fleet. This stance is the same for future planning, as 87,8% of the fleets do not consider used vehicles for their fleets.
The figures show that fleets in Turkey stay close to long-term leasing due to economic concerns while urgently seeking to adapt telematics for data gathering and reporting. Awareness towards electrification is strong, yet again blocked by several problems. Eventually, the substantial expansion of fleets and transition to electric in the Marmara region is expected to spread across the country in the following years, supported by the growing number of EV brands and telematics suppliers. New mobility solutions remain too weak; however, they are still not a favourable option in industrial zones’ highly intense road network.
The main photo is courtesy of Shutterstock, 2004654584.
Source link : https://www.fleeteurope.com/en/financial-models/europe-turkey/features/fleets-turkey-favour-traditional-methods-under-changing?t%5B0%5D=Fleet%20Management&curl=1
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Publish date : 2024-05-09 03:00:00
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