John Lewis, the new director-general of the British Vehicle Rental and Leasing Association, told an assembled audience of leasing company managing directors and leading industry executives, that the industry had faced a series of difficult challenges. He committed the association to campaigning for the industry and called on the Government to stand back from trying to 'interfere' with the new car market.
'During the unacceptably long periods of uncertainty over car pricing, used car values were only going to head one way and what was thought would be a drop became a total slump,' said Lewis. 'Governments should not under any circumstances interfere in markets, especially when they demonstrate so clearly that they know so little of the drivers in the market.'
The call came as he predicted a 'light at the end of the tunnel' for leasing firms, with residual values predicted to fall less steeply as confidence returns to the car market after the Government finally published its Supply of New Cars Order 2000. But he added to the weight of opinion that the Government will be the biggest loser from the campaign over car pricing, as it could lose up to £200 million in revenue because of lower list prices - the figure on which company car tax is based.
He also threw his support behind Jon Walden, managing director of Lex Vehicle Leasing, who is campaigning for a better deal for high mileage drivers under the new CO2-based company car tax regime from 2002.
Following the 'pretty unpleasant' year of falling residual values, Lewis added: 'We as an industry have to get better at forecasting residual values. Given the normal factors used in the RV forecasting process, the present slump would not have been easy to predict. This is the first time in our history that we have seen a radical dislocation of the economic cycle from the cycle in used car prices.
And he urged leasing firms to develop services aimed at the future shape of the company car market to cope with forthcoming changes in health and safety legislation, which would focus attention on ensuring fleet drivers were safe behind the wheel, and the growing use of telematics.
Lewis was one of three expert speakers at the event - sponsored jointly by Kwik-Fit Fleet, KPMG and Henley Systems, with Mark Cowling, chief economist at CAP Motor Research, providing an in-depth insight into the used car market, and Richard Watson, tax partner at PricewaterhouseCoopers, presented details of the FN50 survey to the audience.
Fleet News editor Ashley Martin told the audience: 'This table acts as a measure of size, but it should not also be assumed that it is a measure of success.'