State of the industry: Fleet agenda dominated by the need to control costs

Tuesday 2 December 2008, 12:22

Senior industry figures tell Sarah Tooze what the effects of the faltering economy will be

Phil Peace, director of sales, Hitachi Capital Vehicle Solutions

Fleet is one area where there may be opportunities to reduce costs.

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However, it is unlikely these savings will be achieved by reducing financing costs and fleet managers need to think creatively.

Areas to review include CO2 controls, extending contract lives, making better use of pool vehicles, or implementing alternative schemes to the traditional company car.

Ian Tilbrook, managing director, ING Car Lease

The new tax laws in April 2009, along with the impact of the current financial climate, have really focused minds on fleet costs.

We are seeing a big shift in the number of fleet managers opting for cars under the magic 160g/km of CO2 threshold, which is easier thanks to the rise in the number of models within this bracket.

Using wholelife cost analysis as a basis for model choice is also becoming more common.

Bill Raynal, managing director, Tracker

With income lines no longer growing, fleet managers will be under more pressure to hold costs and find savings that will add to the bottom line.

It is essential to have the right processes and tools in place to ensure road transport solutions are as cost-effective as possible, without jeopardising the health and safety of employees.

The only light on the horizon is the continued fall in the price of oil.

John Lewis, director general, BVRLA

While the credit crunch and recession are affecting everybody, our members are taking a pragmatic approach and focusing on issues that they can do something about.

They are liaising with customers to work out what they need in the current economic environment.

At the remarketing end of operations, they are trying to find some high-quality, reliable data on the used car and van market and exploiting all avenues to maximise sale values.

Lorraine Farnon, UK sales director, Europcar UK Group

The rental industry’s fortunes are inextricably linked to those of the car makers so the past few months have been tough and it’s not improving.

We anticipate increased holding costs for vehicles and the possibility of manufacturers moving away from the hire market altogether.

With tax increases looming, ‘challenging conditions’ is an understatement.

It’s vital that as an industry we work with our customers to ride out this storm and manage the cost increases.

Adrian Rushmore, managing editor, EurotaxGlass’s

The used car market is likely to be the first to recover from the current sales downturn, followed by a steady – albeit modest – improvement in retail sales of new cars.

However, fleet registrations are expected to remain lacklustre, at least until late 2009.

Companies are feeling the financial squeeze and, once they make policy decisions around their business activities, they tend not to reverse them very quickly.

This has obvious implications for corporate fleet purchasing.

Marcus Puddy, head of consultancy services, Lloyds TSB Autolease

Cost management has clearly been the number one priority caused by the double whammy of the liquidity crisis and legislation forcing operators to adopt tax-efficient, low emissions policies.

This is set to continue following the pre-Budget report confirmation of a new capital allowance scheme in April.

There are numerous complexities, but we have anticipated many of the changes and are helping customers realign their fleet policies in good time for the transition.

Paul Holmes, head of risk management, AA Business Services

In the last quarter the volatility of fuel prices has been a challenge for all fleet managers, especially when it comes to budgeting for next year.

In addition, it is essential for any fleet manager to put a cap on any leakages on fuel usage.

Managing fuel and fuel usage can be achieved in many ways, including having quality fuel management information and providing advice, guidance and, potentially, structured training for all fleet drivers to minimise fuel usage throughout the company.