Sales up 10.4% in 2009, says Kwik-Fit Fleet

In defiance of recession trends, Kwik-Fit Fleet has reported record sales, a phenomenon it attributes to an increased use of its range of services, notably mechanical work, by ‘value-for-money focused’ companies. The fast-fit firm also has benefited from companies lengthening fleet replacement cycles since the onset of the recession, which has led to increasing demand for a variety of replacement parts, including tyres. As a result, Kwik-Fit Fleet reported a 10.4 per cent rise in sales in 2009 – up to £203.6 million from the £184.4 million recorded in 2008 – due to MoTs on company cars and vans increasing 89.7 per cent year-on-year and fleet vehicle servicing rising 54.2 per cent.

“On the back of a difficult 18 months during which the competition was fierce and we did not have any significant contract wins, our sales performance underlines the value-for-money portfolio of products that Kwik-Fit Fleet delivers to the corporate sector,” said head of Kwik-Fit Fleet Mike Wise. “Sales growth in 2009 was almost entirely due to business conducted through existing contracts and fleets deciding to extend vehicle replacement cycles. Additionally, Kwik-Fit Fleet was helped by the increasing proliferation of tyre sizes, which led to increased tyre consumption (tyre sales rose 11 per cent) as well as price inflation.

“The rise in fleet vehicle MoT and servicing work is the result of Kwik-Fit establishing a critical mass network of 500 centres nationwide carrying out this work and an increasing number of corporate customers realising the benefits of a bundled fast-fit contract embracing a wide range of services,” Wise added. “Time is money and for that reason fleets want a fast and efficient service that is convenient for their company car and van drivers. Our centres already offer seven-day-a-week extended hours opening and with a service typically available within 48 hours rather than the 14-day wait for some franchised dealers. This makes vehicle MoTs, servicing and repairs very attractive to fleet operators and drivers.

“While the cost of a service is commensurate with model-type and mileage, we estimate that the typical average cost is up to 20 per cent less than at a franchise dealer. However, for some vehicles servicing costs can be up to 34 per cent cheaper than at a franchise dealer,” Mike Wise continued.

“But, Kwik-Fit Fleet is not complacent and has kick-started 2010 with the securing of a major new three-year contract with ING Car Lease,” he added. “The deal means that Kwik-Fit Fleet has become a supplier to the Bracknell-based vehicle leasing and fleet management organisation with more than 50,000 vehicles on its books for the first time. The ING contract represents a significant breakthrough and means that Kwik-Fit Fleet is either the sole or majority share supplier to virtually all of the UK’s 50 largest vehicle leasing companies. We also anticipate that we will be able to announce further contract wins at the end of the first quarter of 2010.

“Our strategy in 2010 is to continue to grow our fast-fit business by offering businesses bundled services with MoTs and vehicle servicing to the fore. This will have the impact of driving down fleet operating costs and will also ensure convenience for drivers,” Wise stated. “Additionally, the decision of some of our competition to downsize the number of centres they operate across the UK will, we believe, further enhance Kwik-Fit’s position as the number one fast-fit provider to the UK corporate sector. As the economy picks up through 2010 and into 2011 we remain optimistic that the Kwik-Fit Fleet business will continue to expand.”

During the recession the increasing price of raw materials coupled with the weakness of sterling versus the euro resulted in tyre prices of more than 10 per cent during 2009. However, the Kwik-Fit Fleet head is optimistic that this year stability will ensue as he believes prices will only shift if there are significant exchange rate moves or a spike in oil or raw material prices. In spite of this, he warned that “tyre manufacturers have reduced production levels and, in some cases, closed factories due to reduced production levels by motor manufacturers. As a result, fleets should be aware that any shortage of some tyre sizes could trigger price rises.”