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Tue 31 Oct 2006 08:00 PM

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Decline in outsourced fleet management

The phenomenal growth of outsourced fleet management is starting to slow down, according to recent research conducted by Datamonitor.

The report, ‘The Future of Outsourcing’, examines how the logistics industry can successfully move forward and learn lessons from the latest boom in outsourcing.

The research discovered that growth in the outsourcing of fleet management services in Europe is starting to decline.

Datamonitor expects the region’s market for outsourced fleet management services to reach 6.67 million vehicles by 2010, representing a 3.6% growth over the 5.5 million vehicles in 2005.

Traditionally, fleet management companies have targeted outsourcing services at customer segments where the penetration of outsourcing services is already high. However, this decline in market growth represents a restriction in the growth potential of fleet management companies.

To maintain high levels of outsourcing with medium and large size corporate clients, Datamonitor says companies need to adopt successful customer retention strategies, because the overall costs involved in retaining a customer are far lower than those incurred trying to expand the client base.