2025 Commercial Fleet Outlook: Steady Growth Expected but Tariffs a Potential Speed Bump?

This commentary reviews the 2025 Outlook for Commercial Fleet companies.

Key highlights include:

-- Morningstar DBRS expects a stable credit rating environment for commercial fleet management companies in 2025 with the sector continuing to benefit from economic growth, as well as the return to normalized production levels at the original equipment manufacturers.

-- Solid growth is coming from large corporate clients moving from self-managing their fleets to outsourcing them as commercial fleet companies are generally more cost-effective and have better expertise and scale.

-- Following solid financial performance through 9M 2024, we expect commercial fleet management companies to generate sound earnings in 2025, underpinned by fleet growth that is expected to outpace economic growth, continuing expansion of service fee-related revenues, strong credit performance, and disciplined cost management.

"Looking ahead, commercial fleet management companies could further enhance their growth by making further investments to become more efficient in their operations and safety. Moreover, by leveraging technology to simplify the complexities of managing a large fleet, commercial fleet management companies would improve their client's experience as well as entice new customers," said Anthony Tran, Assistant Vice President, NA Financial Institution Ratings.