Mumbai: Toyota's growing share of Europe's car market is mainly driven by private sales, as the carmaker has yet to win stronger presence in corporate fleets. According to London-based independent market analyst Datamonitor's research, European Fleet Sales Database 2006, reveals that last year just over three per cent of all passenger cars sold to corporate buyers in Western Europe were Toyota.
European Fleet Sales Database 2006 identifies the volume of car fleet sales sold through the rental, fleet and retail sectors across the leading seven European markets - Belgium, France, Germany, Italy, the Netherlands, Spain and the UK. The database also highlights manufacturer fleet penetration for all major manufacturers in Europe.
According to the research, Europe's best-selling corporate car brand last year was Opel, with business accounting for 60 per cent of its total sales in Europe's seven largest car markets. Second is Volkswagen while Renault and Ford closely contest the third position.
By comparison, the Japanese carmaker's share of the retail market is 5.5 per cent. "With two thirds of its sales absorbed by private buyers, Toyota has a very profitable sales ratio, but if it wants to increase total volumes, the company needs to pursue the corporate route a bit harder," says Jugoslav Stojanov, automotive analyst with Datamonitor. "The most efficient channel to do this in Western Europe are leasing companies that specialise in financing and management of corporate fleets, where Toyota still has a comparatively small share," he added.
Half of Europe's Car Sales Go to Business
According to Datamonitor in 2005, nearly half the new passenger cars sold in the seven largest markets on the continent were bought by legal entities, ranging from car rental companies and large corporations through to governments and small companies.
The penetration of corporate sales tends to increase when the going gets tough for the retail market. Last year, private buyers largely held off purchases of new cars due to low confidence in the economic recovery. "The retail market doesn't worry too much about high mileage and losses in residual value," says Stojanov. "Business users, on the other hand, need to replace cars more often because of high usage, depreciation and expiry of leasing contracts. In addition to that more and more small and medium-sized firms seem to be funding their purchases on long-term rental which secures more dynamic replacement rates and, in turn, higher annual sales."