Motability's operational subsidiary Motability Finance (MFL) is planning to take responsibility for the maintenance management, residual value risk, refurbishment and disposal of all vehicles on its fleet from next March thereby creating the UK's biggest contract hire operation. Ford, Peugeot, Rover and Volkswagen have yet to sign up to the new scheme amid fears that MFL's plans will see it dispose of more than 150,000 cars a year on the open market - cars which under the current scheme are bought back by dealers for pre-agreed prices - causing residual value chaos.
All four manufacturers remain in top-level talks with Motability chairman Lord Sterling and all say they want to provide Motability cars. Ford and Peugeot have written to their dealers informing them that as of March 1, 1999 they will no longer participate in the Motability programme. Rover said it would be writing to its dealers to keep them informed of developments, although it has yet to officially tell them it is withdrawing from the scheme.
Ford and Peugeot's move effectively means that they will stop taking orders for Motability cars this month. Meanwhile, Volkswagen's head of fleet sales Vince Kinner said the manufacturer was still considering its position and was seeking clarification from the charity on a number of issues. Between them, they account for half of Motability's fleet, and the decision to turn their backs on a sector which accounts for more than 6% of the new car market indicates their hostility to MFL's proposals.