Key fleet issues are fuel costs, servicing, emissions and Brexit
Two new surveys have focused on the coming year to identify some of the key fleet issues facing businesses in 2017. These include rising fuel costs, controlling carbon emissions and concerns over the impact of Brexit on prices.
In the first study, automotive glass specialist Autoglass carried out a survey of 250 fleet managers to discover what was at the top of their list of fleet issues for the coming months.
Worries over fuel costs
The survey found that while worries about the cost of fuel and service and maintenance were at similar levels to a previous survey in 2014, concerns about CO2 emissions had notably increased in prominence, jumping from 12th on the list of issues in 2014 to third in 2016.
Concerns about tax and regulation had also increased, arguably in response to rises in company car taxation from April 2017.
On average, the fleet managers surveyed rated the following concerns in order of importance:
|December 2016 Rank||Average (out of 10)||vs. 2014|
|Fuel costs and efficiency||6.63||6.94 (1)|
|Service and maintenance costs||6.41||6.37 (2)|
|CO2 emissions||5.9||4.38 (12)|
|Driver safety / behaviour||5.88||6.12 (3)|
|Limited budget / resource||5.8||5.73 (4)|
|Extending vehicle life||5.67||5.54 (7)|
|Residual value||5.59||5.15 (9)|
|Regulatory changes||5.54||5.03 (10)|
|Fleet productivity||5.43||5.72 (5)|
|Accident management||5.36||5.17 (8)|
|Keeping up to date with the latest vehicle technologies (e.g. ADAS)||5.25||n/a|
|Driver satisfaction with company choice list||4.8||4.57 (11)|
The change in priorities was even more evident in the percentage of respondents who scored their level of concern about each aspect of fleet management as 8 or more out of 10.
In 2014, only 13% scored CO2 emissions as an 8 or above compared with 24% in the latest survey. On the same measure, tax rose from 26% to 34%, and regulatory changes from 15% to 27%.
Brexit concerns over prices
In the second study, the British Vehicle Rental and Leasing Association indentified a number of key concerns for fleets for 2017.
The first was the climate of uncertainty around Brexit and the UK’s withdrawal from the European Union. The BVRLA said any further devaluation of the pound would put major cost pressures on the fleet supply chain as prices of vehicles, tyres and parts will almost certainly rise.
The Association also expected to see a small increase in sales in the traditional fleet leasing market during 2017, but believes sales growth for vans will be much stronger, at around 10%, year-on year.
This will be led by the continued growth of online retailing and the trend for companies to downsize from small HGVs to reduce their compliance burden.
SME growth and CO2
The SME and consumer markets will continue to drive most of the organic growth in fleet leasing, while the BVRLA also predicts double-digit growth in personal contract hire volumes for some of its members.
In terms of CO2 emissions, the BVRLA believes that new vehicles supplied by leasing companies will continue to become even greener and outpace the reductions seen in the wider new car market.
However, the Association thinks that the impact of rises in Vehicle Excise Duty and Company Car Tax will dissuade many drivers from choosing a ULEV.
Fall in diesel take up
The shift from diesel to petrol and electric powertrains will also gather pace in 2017, believes the BVRLA, with diesel’s share of the new car market falling towards 65%.
Diesel will come under particular pressure in urban areas as more cities announce their clean air strategies and the government is forced to re-draft its national plan.
The Association predicts that the government will give serious consideration to a national diesel scrappage scheme that targets the oldest, most polluting vehicles to get them off UK roads.
Lease accounting and servicing
After years of discussion, 2017 will finally be the year firms start getting ready to implement the new lease accounting rules, says the BVRLA. The Association says it will continue to work with accounting standard setters to ensure the new lease accounting standard is implemented sensibly and in the least burdensome manner.
At the same time, the Association predicts that the fleet sector will see a raft of innovative connected services introduced in the next 12 months, primarily in the area of servicing, maintenance and repair.
Manufacturers will be keen to rollout these new services in a bid to drive more business to their franchised repair networks.
Meanwhile, an explosion of smartphone-based fleet management and driver apps will bring the cost, emissions and road safety benefits of telematics within the reach of every fleet operator.
Ahead of a new General Data Protection Regulation (GDPR) which comes into effect in 2018, this year will also see an increased focus on how UK firms ensure compliance with the regulation. This will become an absolute priority as vehicle and driver data usage increases in importance and relevance with ownership of data being the key issue.
At the same time, the Association believes there will be concerted attempts to tackle the issue of the nation’s grey fleet, which will lead to an increase in the uptake of corporate car club and mobility services.
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