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South Africa's Fleet Market Shows Signs of Growth

March 08, 2016

The South Africa fleet management sector is a highly competitive sector. While only comprising 11% of the entire vehicle population of 11.5 million vehicles, approximately 70% of all new cars purchased are for the corporate market, according to research by Gatestreet Ltd.

Of South Africa's corporate fleet of 1.3 million passenger cars, an estimated 100,000 vehicles are on a full management leasing (FML) arrangement. While this figure remains low in comparison to international standards, there is a growing market awareness of the need for fleet management products and services. Companies are expected to provide integrated systems which encompass all aspects of managing a fleet, including the provision of finance, driver management and training, maintenance of the vehicles, the payment of fines, and e-toll administration, according to the researchers.

With fleet operating costs currently increasing at 12% per annum and input costs expected to increase as a result of the fall of the Rand, fleet management companies are considering the acquisition of companies essential, as well as the implementation of cost-cutting strategies. Expansion into sub-Saharan Africa is viewed as a promising opportunity as there is less competition and the promise of good returns, according to the researchers.

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