Fleet News

Fleet sales rocket to new all-time record

SALES of new cars to fleets have hit record levels in the first quarter of this year, dispelling fears that the new company car tax system would have a negative impact on the fleet sector.

Indications of company car drivers selecting smaller cars (so-called downsizing) and a 51.6% increase in diesel sales during the first three months of 2002, suggest employees are preferring to select cars that deliver lower benefit-in-kind tax bills, rather than turning their backs on company cars.

Official figures released on Friday showed that fleets and businesses (organisations with respectively more than and fewer than 25 cars) together bought more new cars than the private retail market during the first three months of 2002.

A bumper March market of 423,727 new car sales - the highest March on record - took the first quarter sales tally to 722,718 units, up 7.1% on the previous best of 675,083 sales achieved in 2001.

The fleet sector grew its sales by 7.3% in the first quarter compared to the first three months of 2001, accounting for 296,704 new cars and 41.1% of the market, while sales to businesses were up 15.7% to 70,460 units, a further 9.7% of the market.

Christopher Macgowan, chief executive of the SMMT, said: 'Eighteen months of new car market growth has been bettered only by 30 consecutive months of falling prices.'

While official car prices have fallen, fleets report that transaction prices have remained reasonably constant in the past 18 months, and the record levels of sales will fuel fears of a residual value downturn in three years' time.

In the short term, however, the strong performance of the fleet and business sectors will provide a welcome fillip to a fleet sector uncertain of how employers and their drivers would react to the new emissions-based company car tax system.

Popular company cars such as the Ford Focus and Mondeo, Vauxhall Astra, Volkswagen Golf and BMW 3-series all feature among the 10 best-selling models in the UK between January and the end of March, with the Focus topping the monthly sales chart for the 23rd successive month.

Significantly, the BMW 320d is now the best-selling model in the 3-series range, overtaking the petrol-powered 318, an illustration of the sharp rise in diesel sales throughout the market.

The SMMT reports that diesel sales for the first quarter accounted for 30% of business sales at 21,083 units (2001: 12,367), 28% of fleet sales at 82,997 units (2001: 53,704), and 15% of retail sales at 53,328 units (2001:37,727). Fleet diesel sales rose by 55% year on year, and business diesel sales were up 70%, as company car drivers prioritised diesel's low carbon dioxide emissions as a way to lower their benefit-in-kind tax bills.

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