July 25, 2016

Huge growth in new car models requires care in setting fleet policy

Fleet policy | Shorter life cycles and frequent updates call for expert guidance

A proliferation of new model derivatives from all the major motor manufacturers has made selecting the vehicle mix for the perfect fleet policy an increasingly demanding task and one that benefits from expert guidance.

The numbers of new models available in the UK car and light commercial vehicle markets is currently at its highest ever level, as manufacturers look for a competitive edge in an increasingly congested arena.

As a result, model life cycles have reduced while facelifts and updates have become more frequent. Also, new sectors, such as the much-publicised and very successful SUV/crossover sector, have developed in response to changes in customer tastes.

How many new models are there to choose from?

The latest figures show that there are now around 12,000 new car models and some 8,000 new light commercial vehicle variants available in the UK from around 40 vehicle manufacturers. That’s a staggering amount of choice. Plus, there is a growing number of vehicles with alternative powertrains including pure electric vehicles, range extenders, plug-in hybrids and diesel or petrol hybrids.

At the turn of this century the numbers were far less, with only around 7,000 car and van model derivatives available. But in recent years, that number has escalated rapidly as manufacturers have looked at new ways of bringing vehicle variants to market and stealing a march on the competition.

What’s behind the rapid growth?

This proliferation of new model derivatives has its roots in changes in design and manufacturing processes, allied to a host of joint-manufacturer collaborations.

The latest digital design and display techniques make the task of designing attractive-looking models faster and easier, so that the time from concept to production model is much reduced.

At the same time, computerised crash testing using virtual reality and employing algorithms, speeds up the process of ensuring modern cars comply with the latest safety regulations.

And component sharing between manufacturers, based around joint research and development, allows new models to be brought to market on common platforms with often very little bespoke underpinning.

Meanwhile, manufacturers have access to the very latest computerised data showing in minute detail the vehicle offerings from their competitors. This allows them to react very quickly to trends and changes in the market and to seize on any of the new opportunities that come their way.

Changes in consumer demand

Once, the hatchback was the most popular single type of car bought by the British motor buying public. But one of the most recent market trends has been a move to the newer-style SUVs and crossovers that have proliferated throughout the market.

Latest figures show that the most popular type of car in the UK in 2015 was the SUV with a 22.5% share of the market, and that the most popular single model in this sector was the Nissan Qashqai.

Early in the new millennium, Nissan began working on a 4×4 crossover – dubbed ‘crossover’ because it straddles several different car types – which went on to become the Qashqai.

Today, the Sunderland-produced Qashqai is the UK’s largest volume manufactured car, with Nissan workers churning them out at the rate of 350,000 a year.

And most, if not all, of the major manufacturers now have at least one SUV offering in their model line-up to ensure they capitalise on this latest trend in new car buying.

What does this mean for fleet policy?

Given the backdrop of new models, shorter lifecycles and more frequent face-lifts, what should fleet operators do to ensure that they not only stay ahead of the game but optimise the vehicle mix for their fleets?

This is where the expert advice from a fleet management specialist can play a key role in helping select the most suitable models from the huge assortment available.

A fleet management specialist will be completely up to speed with the very latest new models and the most recent developments – and should also know what’s expected in the coming months.

Thanks to this depth of knowledge, a specialist should be able to help select the optimum models for your fleet policy, mindful of the job needs of the business.

This specialist support should also be able to help link predecessor models with their successors, so that updating the fleet with the correct models is a seamless transition process.

It also allows fleet policy lists to be defined for set periods, with updated models replacing the older ones, provided the changes are within set criteria and not outside the bounds of the existing fleet policy.

At the same time, the fleet management specialist can also ensure that manufacturer discounts and support carry over to the new models and is accurately calculated in any analysis of the car policy and the whole life costs of the selected vehicles.

What’s the best fleet mix?

CLM’s advice to its clients on the optimum mix of fleet vehicles usually centres around the job needs of the business and the type of driving that is carried out.

For example, for fleets with a large percentage of high mileage journeys, typically on motorways, for say a national sales force, diesel vehicles remain the most cost effective option due to their lower fuel consumption and longevity.

However, growing sentiment against diesels because of their higher output of dirty gasses, such as nitrogen oxides, may mean in the future that they face increased restrictions on areas of use, including bans from the centres of some conurbations.

This may alter perceptions of the suitability of diesel power, long the workhorse of the UK fleet industry, and make other means of propulsion more acceptable. One of the beneficiaries may conversely be petrol, for so long the bridesmaid.

But, for fleets with mainly low mileage needs, often around towns and cities, the latest generation of lean-burn, petrol-engined models, with their lower fuel consumption and reduced CO2 outputs, may now present the best option – not least because their capital outlay is lower compared to diesel equivalents, which usually carry a front-end price premium.

However, for fleets that operate in a largely urban environment with a lot of stop-start driving, the best option may be a mix hybrids, range extenders and pure EVs. The final choice comes down to the flexibility of the fleet and a variety of factors including pricing, recharging arrangements and range.

If you would like to discuss the right mix of vehicles for your fleet, please get in touch.