Roland Berger: Big growth opportunities for fleet business in BRIC markets

As per the findings of a new Roland Berger study titled ‘Fleet business in BRIC and emerging markets’, there is high potential and growth opportunities in emerging markets like BRIC (Brazil, Russia, India, China) for the fleet business. However, success will come only with the right market strategies and typically, OEMs will have to tailor their fleet business to local market needs. 

The study reveals that Western OEMS are facing ever more saturated domestic markets, including the fleet segment. In Europe, OEMs are having trouble growing their market shares in this area. For example, OEM fleet business accounts for 62 percent of sales in Germany, 54 percent in the UK and 48 percent in Spain.

The picture is different in the BRICs and other emerging markets with the fleet business less well established than in Europe. For example, fleet volume in China makes up just 9 percent of the national car market; in India and Russia, the figure is 13 percent.

"This shows that the BRICs in particular still offer great growth opportunities for western OEMs," explains Marcus Hoffmann, partner at Roland Berger Strategy Consultants. "But they need the right market strategies tailored to each country. European business models cannot be transferred directly to these markets."

The potential of fleet business will be driven by trends in the international car market. The experts at Roland Berger predict that by 2019, some 20 million more new cars will be sold worldwide. The highest growth will be seen in India, with sales rising 9 percent annually, China (+7%) and Eastern Europe (+5%).

"To tap into the great potential of these markets, western OEMs should start working now on a market-specific strategy," advises Roland Berger automotive expert Jan-Philipp Hasenberg. "This first involves a precise analysis of the market: OEMs should know the structure and size of the local car market, the regulatory environment, customer needs and competitors inside out."

It is also essential for new market players to have in-depth knowledge of the fleet business in a particular country, for example the local sales and organisational structure and the current status of the fleet business. Only then can OEMs adapt their fleet strategy to suit and optimally serve that market. "Car companies should then translate this new market strategy into suitable processes and organisational structures; in other words, take account of them in their planning, acquisition and sales strategy. That is the only way for OEMs to successfully tap promising markets," Hoffmann concludes.