The financial repercussions of the COVID-19 outbreak have hampered development in the transport and logistics sectors. As a result, the global automotive fleet market witnessed a negative growth rate in 2020. However, the financial slump that businesses are experiencing necessitates the need to reduce transport and logistics expenses and risks in the long haul, which will contribute to the growth of the global automotive fleet market. As a result, the global automotive fleet market is anticipated to expand from 2017 to 2025 (forecast period).
An automotive fleet is a collection of vehicles owned and maintained by a government agency or a private firm. Occasionally, the government or private corporation in charge of the automotive fleet prefers to lease the vehicles.
Businesses that depend on vehicle fleets struggled during the COVID-19 outbreak as a result of lockdowns and prolonged restrictions on the transit of non-essential products. Moreover, disruptions in the supply chain in the sourcing of automotive parts triggered operational challenges and impacted the maintenance and repair of vehicles. As a consequence, all services given by participants operating in the automotive fleet market showed a declining trend in 2020.
Nevertheless, the COVID-19 pandemic has also provided an opportunity to highlight the advantages of robust automotive fleet systems, particularly in light of e-commerce growth. Businesses that could deliver efficiently when contactless and remote monitoring of shipments was required scored better than their competitors. As a result, demand for the automotive fleet has increased. Moreover, the global automotive fleet market is likely to rise dramatically following the pandemic.
Advent of Electric Vehicles to Open Up New Growth Prospects
The transition to battery-electric vehicles will quicken in the coming future as more EV goods become available. OEMs are expected to sell out their entire EV production output over the next several years due to pent-up demand among early adopter retail customers and many organizations’ commitments to transition to all-electric fleets. This is a major factor projected to boost the global automotive fleet market. Many, for example, have signed the EV-100 Pledge, which commits 120 member organizations to convert their fleets to EVs and install charging stations for workers and customers by 2030. Furthermore, 50 large firms, including FedEx, Wal-Mart, Unilever, Amazon, Johnson Controls, Coca-Cola, and others, have stated that they will be carbon neutral by 2040.
The global automotive fleet market is aided by the fact that most OEMs’ product pipelines include an increasing number of vocational EVs in their product lineups. However, in order to make the transition to EVs a success, there must be a competitive and vibrant used-vehicle market for EVs that are inexpensive to lower-income individuals, who are the usual consumers of used fleet vehicles.
North America to Dominate Automotive Fleet Market
North America is anticipated to experience substantial growth in the automotive fleet market due to the region’s rapidly growing demand for fleet vehicles for the transportation of goods and services and the region’s developed economies, which foster the management and maintenance of automotive fleets. The United States is projected to make a significant contribution to the automotive fleet market in North America. Moreover, organizations in North America are implementing telematics to incorporate connected data into fleet management in order to reap the benefits of vehicle connectivity, which will result in cheaper fleet costs, improved safety, and reduced downtime. Furthermore, the introduction of electric and hybrid vehicles is anticipated to drive enterprises to launch new personalized mobility services in order to meet evolving consumer expectations and preferences. Such factors are expected to propel the automotive fleet market in North America.