When it comes to providing an international perspective on the latest car and fleet sales developments, JATO Dynamics is in a leading position.

The international organisation provides the global automotive and leasing industries with up-to-the minute news, research and data on vehicle specification, pricing and sales and is partnered with virtually every one of the world’s major car manufacturers and many of the leading leasing companies.

The firm is also looking to further develop the leasing side of its operations according to Jens-Uwe Berg, market development manager for global leasing, adding that while most of the major leasing companies in mainland Europe are in JATO’s portfolio, many of those in the UK are under-represented. ‘That’s an area that I intend to address,’ he says.

Based on the firm’s data, JATO believes that fleet sales are now picking up, following the “doom-and-gloom” period in 2009 and part of 2010.

‘Leasing contracts have started coming back – and in some markets they are almost reaching pre-crisis levels. This is obviously reassuring,’ says Mr Berg.

He adds: ‘There have, in the past, been many lease extensions but these are now starting to return to where they were. In markets such as the UK, Germany, France and Spain, it was reaching the point where it was becoming non-viable to run vehicles for any longer. People are also having to look at different methods of fleet management and funding and when it comes to containing the cost-element of running a fleet, currently this is mostly achieved by downsizing; from Mondeo down to Focus level, for example.’

How has all this affected the remarketing of fleet cars? Gareth Hession, VP of research, explains: ‘Because the number of cars going to rental companies is down, the “churn” of late-plate cars into the used market has also been significantly down and depreciation profiles have been changing. There’s more demand for a two-year/low-mileage car than for a four-year/high-mileage car – it makes sense to get that early return back to market, particularly with the bigger fleets. In fact, a number of clients who have taken longer contracts in an attempt to save money have found that in today’s market, you can get a shorter-duration contract for pretty much the same rental position.’

He stresses that much of what happens in the UK comes down to the exchange rate. ‘If, because of the exchange rate, the UK becomes a favourable market for manufacturers wanting to dispose of their excess capacity, there is a higher late-plate churn and a deterioration of residuals. If the UK isn’t a dumping-ground for excess stock then the dynamic is somewhat different.’

Elsewhere in Europe, although some fleet markets are showing signs of resurgence, the larger markets in Europe are finding the current climate difficult, according to Mr. Hession.

‘Germany, France and the UK for example, but generally Europe is stagnant while America is recovering gradually.’

‘China is now the largest world market at over 13 million units. This is particularly interesting when you consider the capacity of the European plants and what the demand-mix actually is. If you are a prestige brand – such as BMW, Audi or Mercedes-Benz – there is the ability to export to emerging markets and utilise your capacity in a weak European market. Those manufacturers have reasonably good plant-efficiency.

‘But volume manufacturers find it hard to export profitably into China. Their challenge is production capacity that they can’t fulfil. Some manufacturers have a hugely optimistic production-plan capacity that doesn’t seem achievable. ’

He believes that in the medium term, the trend will be towards downsizing. ‘People will look for premium brands and for something that sets them apart. There’ll still be a successful marketplace for premium manufacturers – particularly of the small car sold at a high cost – such as the MINI. You’ll also see individualisation and accessories becoming as important as the options.

‘But you have to ask what happens to the value of “premium” when you get to that point. We already have a situation where the BMW 3 Series sells more than Mondeo. The ability to provide something that sets their customers apart is an interesting challenge for manufacturers – certainly from a residual value position. But you do have to question just how sustainable it is for a 3 Series or an A4 to be worth so much more than a Mondeo…’