Fleet News

2015 - the shape of things to come

Most managers in the European fleet industry have a good idea of how their businesses are likely to evolve over the next couple of years.

Barring another disaster on the same scale as September 11, they have made their predictions for 2002 and 2003, based on factors such as the outlook for the single currency, the weak German economy and the strong pound.

But how many of us know what effect macro fleet issues in 2010, or 2015 will have? How will the rise in demand for mobility, an ageing workforce and the growth in environmental issues change the business? Some of the answers are contained in a series of major reports being used for management training by leading players in the European car and fleet industries. They make for fascinating reading.

The pace of change in the European fleet business is accelerating faster than ever. Even the most experienced executives who have spent a lifetime in the industry are having to relearn their roles – as the internet, the single currency and the trend towards a pan-continental framework redefine the market.

But many of the major players in the industry – be they car manufacturers, leasing or daily rental companies, or fleet managers themselves – are trying to look beyond the immediate future to try and see what lies ahead in, say, 15 years' time.

Across Europe, managers are attending internal training courses that focus their minds on the long-term future, and force them to think well beyond the problems they left behind in the office.

One such course, which has been seen by Fleetnewseurope.com, gives a fascinating snapshot of the car and fleet industries circa 2015, and how all our lives will be affected. Over several hundred pages, employees are painted a detailed picture of how the world, the car industry, and the fleet environment will change.

On the simplest levels, population and cultural changes will be dramatic. 'Population in Europe will mature quickly, even though overall European population will start going down by 2025,' said one of the authors of the report. 'There will be increased life expectancy, and an increasing demand for health services.

'We will also see the continuing breakdown of the traditional European nuclear family – particularly in north European countries. The cultural diversity within markets will increase, and people will be taller and heavier.'

The youth-obsessed motor industry will have to learn that the young will make up a much smaller percentage of the overall population, and there will be far more old people.

In 2015, the number of people over 60 in Europe will outnumber the number of people below 25 for the first time in history – and that will have an effect on advertising, the make-up of model ranges, and the demand for new types of specification on vehicles.

'The average age of people in work will rise accordingly. There will be more infirmity and a greater number of disabled people – including those in work. Over time, model mix will be affected,' said the author.

'Car manufacturers are already starting to pre-bore all their cars to give them the capacity to be adapted for disabled use. Within a few years, this will become necessary if you wish to keep resale values at their peak.'

The effects on fleets may be a rise in demand for family cars – particularly minivans – as an ageing workforce seeks to use a single car for work and home use. But other older workers will also push up demand for sports cars as a second vehicle.

Car manufacturers – and to a lesser degree, fleet managers – will have to consider an increasing demand for effective vehicle safety and navigation systems, simpler and clearer controls and handling features, and a need to address poorer driver eyesight and hearing. Interaction with computer and internet functions will need to be more user-friendly, with increased dependence on voice-activated systems.

Car manufacturers are already developing many new technologies for a future ageing driver population.

Nissan, for example, has been working on a system that recognises when the driver has fallen asleep – even for a second – and immediately wakes him or her up.

Other manufacturers are developing monitors to make sure drivers are maintaining safe distances between themselves and other vehicles.

'All this means that cars will have to become more adaptable,' said the research author. 'For fleets, cars will have to used by different people with different needs over a period of time.

They will be easier to sell on if they are built to adapt to a wide array of drivers. Safety systems, security systems, adaptations for disabled drivers and passengers, adjustable computer and internet functions, packaging adaptations – all these will become features that build residual values for a car.'

Better diet, healthcare and living conditions are also making the average European employee taller. For example, the average height of army conscripts in Holland grew from 174cm in 1950 to 181cm by 1985. People are continuing to grow rapidly right across Europe.

But differences in physical characteristics will continue to be a problem for car manufacturers. For fleets trying to provide cars to people across Europe, the huge difference in driver height and weight between, say, Germany and Spain, makes it difficult to treat Europe as a single, integrated market.

Manufacturers that dominate sales in southern Europe – like Fiat and Seat in Italy and Spain – will continue to sell well in their core markets, but they'll be put under increasing pressure by products from Asian brands like Daewoo and Hyundai.

Premium brands like BMW and Audi are expected to continue gaining market share in northern Europe at the expense of volume, fleet-oriented brands such as Ford and Opel/Vauxhall.

Japanese-sourced cars will get bigger – not least because Japanese men and women are growing: they are 10% taller today than their grandparents.

Obesity will also become more of a problem for fleet managers and for car designers. Although Europe is well behind the USA in cases of extreme obesity, it is catching up. England, Germany, Finland and the Czech Republic have unacceptably high numbers of very fat people.

As a whole, the average weight of the European driver – both fleet and private – is growing rapidly. One in five women in the Czech Republic and England, for example, are now categorised as obese.

But then southern European countries like Italy have far less of a problem with overweight people: just 6% of Italian women are obese. Such differences will continue to grow, and continue to cause problems to a car industry trying to build cars for everyone.

'What happens, for example, to a delivery company that has to order thousands of vans across Europe – covering increasing numbers of large drivers,' said the author. Small car-based vans – such as the Corsa, Clio or Fiesta – may not be big enough to accommodate fatter drivers, so you have to start ordering cars based on employee size, rather than for the job in hand.

'The real answer will come with increasing adaptability of vans and cars. If you can adapt a small van to take a large driver or a very small driver, then things are made much easier for the fleet manager.

Once again, the future seems to lie with adaptability – not just because the vehicle can be used by lots of different people in different circumstances, but also because adaptability means higher residuals.

'All aspects of space are affected: seat belt, seat position, foot space and pedal height for example. A range of small, medium and large versions of key models may be needed for different drivers or different nations. Cost then becomes a major design and production challenge.

'The driver's seating area needs to be easily customised and flexible. Obese drivers may require single front seat cars or chauffeur-driven cars. Rather than change the exterior, it's the interior that will be adapted to an employee's needs, styles and individuality.'

Another macro population trend is the growth of singles – people who live alone. These people are emerging as a major market in Europe, and will play a central role in the future car industry.

They will stimulate more gender-linked decisions – so women, for example, will make more car purchasing decisions. They'll use e-commerce – often from the car – to organise their lives.

They'll choose cars they like, rather than cars that are right for a family. Those cars will be chosen for individual, emotional reasons. Females will demand more safety and security equipment.

Fleet managers will find an increasing demand from active employees for niche cars. Availability and delivery times must improve, as these drivers are more likely to make impulse decisions.

They'll be less concerned with brands and more concerned with specification, computer functions, and multi-purpose vehicles. Those in cities will want special features – such as cars that can detect open parking spaces and evade congestion and road charges.

With such an explosion in individuality, fleet managers are likely to remember the good old days – when they ordered 5,000 Ford Mondeos and Transits and gave them to all their employees – with a certain fondness!

As people and employees become more mobile and want a car wherever they are, the business could become more like a logistics operation than a traditional car supplier. Major fleets may link up with a logistics company to meet employee demand.

Perhaps the most important word for the future European fleet industry is mobility.

Fleet managers will have to become mobility managers, finding answers to the demands of every employee. Cars will be an important part of the fleet manager's arsenal, but he'll also be using new ways to get people moving – or getting them to communicate.

Transport, communications and mobility manager might be a better title for the fleet manager of 2015.

Changes loom on job front

Future work pattern changes will make an important impact on employee mobility and fleet organisation.

The training report focuses on a series of major trends across Europe that will alter the working landscape for good.

They include: increasing employment in the service sector – services now account for nearly two-thirds of EU jobs; raised employee expectations – including expectations for company cars and mobility solutions; women driving the job growth; increasing amounts of unconventional work schedules; changing work locations; and an ageing workforc.

Rising education levels bring rising employee expectations –and the company car will remain a key part of the employee package.

Many jobs will be reshaped to fit women's demands for flexibility. The number of women in the EU workforce will grow between 1985 and 2015 by 38% – from 58 million to 80 million.

Women have already overtaken men in educational attainment in Europe – and by 2015 will occupy 30% of top management positions in Germany, according to the Fraunhofer Insitut.

But women will also lead the demand for flexible working as they seek to spend time with their families, or cope with changed circumstances.

Home, car and work activities will need to be integrated.

'The motor industry cannot stick with attitudes of the past,' said one of the report's authors. 'It will need to take the lead on social issues – second and third cars will be needed in a family with different functions.

The motor and fleet industry will need to find ways to be more productive inside the car, to save time servicing and caring for the car, and to produce cars that can efficiently and safely transport work-related objects such as computers.

Car manufacturers will consider cross-promoting with other brands that sell benefits other than mobility.

'Employees will want a 24-hour mobility support system to fit in with their lives. Fleets will have to develop more sophisticated servicing and repair operations to allow greater flexibility.'

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