Fleet News

Industry still undecided on importing cars from Europe

THE real-life practicalities of running company car fleets have deterred UK businesses from exploiting European pre-tax car price differentials and buying cars abroad.

Issues such as short warranty periods, lack of dealer support and the difficulty of ensuring full UK specification on foreign-sourced cars have led hands-on fleet executives to maintain buy-in-Britain policies.

Fleet News' Fleet Panel members also suggest that up-front acquisition savings would be consumed by poorer residual values of imported vehicles, arguing that cheap does not necessarily equate to cost-effective in terms of wholelife costs.

Furthermore, delays in delivery of parallel imports and the fact that company car drivers pay benefit-in-kind tax on the equivalent UK price of a car, regardless of its foreign acquisition price, make buying abroad an uncertain exercise from a human resources perspective.

Yet just over half the members of the Fleet Panel say they would consider buying cars abroad if they could access equivalent warranties, ensure full dealer support, order genuine UK specified cars, and feel confident about the residual values of the imports.

Not surprisingly, therefore, foreign buying exercises have been largely limited to executive cars where the savings are most substantial and where the driver is more of an 'individual' than the driver of mainstream fleet cars and therefore prepared to wait for delivery.

Would you consider buying cars in another country and importing them to the UK if they were cheaper?

##Panel August 1--none##

'Yes we would import cars and we have done so. However, the question of 'cheaper' is one that has to be considered very carefully. In order to make a balanced decision regarding acquisition via the import route, then the financial argument must be sound and must, by necessity, include the full effects of potential increased depreciation, warranty exposure and funding restrictions in certain situations. If the sums add up the import option can make perfect sense, but it is worth remembering the old adage that 'the Devil Is In The Detail.'
Peter Eldridge, fleet manager, Motorcare Holdings

'I have been importing cars from Europe for some time now and have found savings sometimes in excess of 33%. I have not experienced any problems with disposal whatsoever and would recommend importation to anybody who has the time to do their homework.'
Paul Harding, assistant facilities manager, Designers Guild

'No. It would be better to support UK dealers. After all, if everybody bought everything from the cheapest place, there would be no UK economy and therefore no jobs.'
Paul Adey

'No, not while the current attitude from manufacturers/local main dealers only allowing a one-year warranty on imported cars is in place. If this attitude changes and reliability of delivery schedules from overseas improves, then we will consider it.'
Paul Trup, Argonaut Games

'No, unless the savings are substantial. The loss of possible warranty cover, time factors, red-tape, and other costs would not make it an attractive proposition to me unless savings amounted to £1,500-plus.'
Richard Warner, company secretary, Seco Tools

'Yes. We would certainly purchase cars outside the UK if they were cheaper but cost savings would have to be considerable to offset any increase in administration. We would have to be sure there are no grey areas so that no problems would arise at a later date.'
John Clarke, Fleet Services, Telewest

'Yes, so long as wholelife costs were lower, delivery times were not prohibitive and warranties/specification were the same.'
Ian Smith, group accountant, CPiO Limited

'No. The cars may be cheaper but in my experience it can create problems regarding warranties, etc so it would have to be a mega-deal to tempt me.'
G.O. Details supplied

'Our managing director probably would consider it but our fleet management team would hate it.'
Sally Miles, Sanctuary Housing Association

'Probably not. If we were a larger fleet and I was a specialist fleet manager we might consider it.'
Tony Cock, financial director, British & Brazilian Produce

'No. Although the purchase cost of the vehicle would be cheaper, there is additional time and administration required to get the vehicle into the UK. We actually contract hire all our vehicles, but where possible I nominate local dealers who I know and can trust if I experience any problems with the vehicle after delivery. You would not get this service if you made your purchases outside the UK.'
Joanne Hanafan fleet manager, King UK

'Just because a vehicle is cheaper doesn't necessarily mean that the wholelife costs are cheaper. For example, we know that warranties are not as long in Europe as they are here in the UK. There may also be an issue with residual values on imported vehicles. Also it is alleged that some parts have different codings making it difficult to acquire or identify parts. We must look beyond the fact that they may be cheaper to buy initially.'
David Bent, national fleet manager, Fowler-Welch

'We only purchase from sources who are prepared to negotiate realistic prices. In return we offer loyalty.'
Reg Dixon, Niftylift

'No. We did look at it briefly a few months ago, but by the time we worked it out with all the additional costs, etc it was hardly worth it.'
Diane Miller, fleet manager, Kingston in Business

'Probably – but the issue for fleet operators isn't just 'cheaper' – it's 'better value'. Key facts that must be considered are availability, security of the whole commercial transaction, on-going support (especially with changes to Block Exemption), guaranteed parts availability and so on. Driver satisfaction must be considered. The price paid does not affect the driver's benefit tax, so that is not any part of the debate. And there are the issues of true wholelife costs, and availability of all the operational services that are claimed to be essential to fleets - contract hire, guaranteed residual value, accident management, one-stop shopping, etc. And insurance costs.'
Stewart Whyte, managing director, Fleet Audits

'Possibly. What is cheaper? List price or capital cost? If buying abroad could guarantee right specification, UK warranty terms, acceptable delivery time and a hassle-free, non-stressful procurement procedure, then it is worth considering. However, I believe that our current suppliers will have to match these prices (if cheaper) as they will need to sustain their sales volumes and maintain the loyalty of their customer base.'
Di Rees, business services manager, LEO Pharmaceuticals

'Yes, but preferable would be an end to the wrangling of Governments, manufacturers and franchisees to deliver transparent pricing across the European market. How can the average buyer make sense of the fact that it is cheaper to buy a Jaguar in Germany when it could have been delivered from Coventry?'
Paul Witten, director, eBay motors

'What happens when the block exemption arrives? Any dealer can sell any model with no intention of giving aftercare support. UK law basically says 'Take it back to whom you bought it from' and they should arrange to rectify any problems in consultation with the vehicle importer or manufacturer. UK dealers invest vast amounts of capital in their training and full aftercare support to totally support the manufacturers' products, and we want to try and save a 'Euro buck'...and complain when we don't get 100% aftercare. If UK prices come down, and EU imports become cheaper, what will happen to the fleet asset values in three years' time – a total collapse. It will lead to fleets and contract hire companies having to write off millions because the projected residual value at disposal is too high in three years time for the second-hand buyer.'
Brian Wilson, director, Regent Consultants Leighton Buzzard

'Yes, we would consider importing and we have done, but only for a limited range of cars. Most of our fleet is on contract hire so the question is: will contract hire companies buy from abroad? If they're not doing it, does that mean it's true that the savings are over-rated?
Dave Gill, fleet manager, JM Computing

'Yes, I think it's a good idea to buy a new car from an importer if you can save a good amount of money, as long as the vehicle is completely UK legal. If the Europeans can buy cars for a good deal cheaper than the UK buyers, why not?'
David Liggins, Avondale Honda, Northampton

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