ega-makers' monopoly
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• by Peter Lawton An emerging wave of "mega-manufacturers" is threatening small buyers' purchasing power, according to fleet management and contract-hire specialist Let Transfleet.
Let sales director Simon Haggart says numbers could dwindle to as few as six manufacturers by the end of 1999 and four within a few years. The fewer manufacturers there are, Haggart warns, the more they will be able to dictate prices and service standards. He says Lax, which will buy around 2,000 vehicles this year, could act as a butter and pass on savings it makes on bigger purchases.
"At the most basic level It leads to decreased competition which can all too easily be followed by higher prices and lower service standards," he says. "The customer will simply wield less power."
Manufacturers agree that the current trend for mergers will continue but deny that it spells bad news for small buyers. Volvo describes the process as "a global fact of life" while Scania, which has been in the news for resisting attempts at a buy-out from Volvo, called it an "inevitability".
Scania UK sales director Tony Ballinger says: "We are in a delicate position at the moment. There will be further consolidation in the market but more than that, who knows?" But far from driving up costs, the major manufacturers say that consolidation means buyers can buy the latest technology at more affordable prices thanks to shared development costs.
They also refute the idea that fewer companies would mean less competition unless Only one player was left— something Haggart concedes will not happen.
Renault press officer Robin Dickeson points to the importance of branding: 'Scania may be mopped up by VW or Volvo, but the brand won't disappear and this will keep competition fierce—and it's as fierce as it gets in this country,"