South Africa’s recent downgrade to junk status by ratings agencies is set to have ripple effects in businesses across South Africa. For fleet companies, the downgrade will mean tightening belts because of higher prices for new vehicles and vehicle parts that are imported from overseas.
Our new junk status will have knock-on effects in the industry making fuel more expensive, driving up costs for freight transportation, and it could even have an impact on insurance.
As interest rates increase, fleet companies might have to reassess their vehicle acquisition processes. How can vehicle selection be carried out with an eye on minimising costs?
Vehicle procurement is very important for fleets: it affects everything from efficiency to insurance.
Effective fleet procurement requires fleet managers to assess what they need their vehicles to do, which vehicles would be best suited for the tasks required and whether all of the necessary features are present.
As technology changes Fleet Managers need to be aware of what equipment is available and whether they could be enjoying cost-saving benefits.
Fleet managers nowadays are spoilt for choice. There are many different kinds of makes and models of vehicles, a variety of features, equipment, engine capacities and so on.
Their aim is to find the best vehicle for the task at the most favourable life-cycle cost. This is where it gets tricky.
While new features such as connectivity, advanced materials and engine technology might enhance drivability, they will also affect the lifecycle costs: adding new features will not only be expensive to install and run, they might also depreciate quicker and affect the resale value of vehicles.
You may think that adding technology to a vehicle would increase its value, at the pace that our technology is advancing, but new features can become obsolete before the vehicle is resold. Maintaining vehicles with advanced technology is also more expensive.
Fleet procurement involves balancing different elements, and getting vehicles that can perform the tasks required most effectively, cost-efficiently, and safely.
This time-consuming process needs to include an understanding of a wide range of factors such as tyres, fuel, insurance, maintenance and parts as well as the various types of support services offered.
Our fleet management team is equipped with unique expertise and experience in the vehicle procurement field.
We understand the painstaking effort involved in fleet procurement, and with our expert assistance, you’ll have the best vehicles for your business. The main benefit of this solution is cost-saving – optimal vehicle procurement will ensure fuel efficiency and better wear and tear of your vehicles.
We will weigh up every aspect of procurement for you and measure costs over an entire period of service, including expenses such as maintenance and breakdowns.
Find out more about fleet procurement and our other solutions here.