Fleet News

Survey shows slowdown in diesel leasing orders

RESEARCH has found that the rise in the number of diesel cars ordered from the leasing industry started to slow in 2004 and could level out at a steady 50% this year.

In 2003, Lex Vehicle Leasing found that 50% of all car purchases were diesel compared to 56% in 2004. It believes that finally the diesel market may be cooling down after years of sustained expansion.

Experts are divided on whether this slowdown could shore-up residual values, or whether cars powered by the fuel will drop in value as the first wave appear in huge numbers on the used market this year.

Steve Jones, Lex Vehicle Leasing’s pricing manager said: ‘We have seen diesel purchases stall a little over the past 12 months and while the share of our fleet is still growing we can see it beginning to plateau out. Recent changes announced by the Chancellor in his pre-Budget statement to add the 3% penalty to Euro IV diesels from January 2006 could also see more drivers switching back into petrol next year.

‘Calculations have identified a number of ranges where the petrol will have a lower tax bill and a lower rental than the equivalent diesel after the rule change – the new 3-series is a good example.

‘However, the penetration of diesel in the upper medium and premium upper medium sectors is still huge – Passat is 93% diesel, and A4’s not far behind for example.

‘At the moment we’re still enjoying high secondhand values with common-rail diesels being relatively rare, but this year should see a big shift.’

The slowing down of diesel sales is also predicted at a number of the other major leasing companies.

David Kershaw, director of operations at Lloyds TSB autolease, said: ‘Early indications show that the diesel content will continue to increase on the Lloyds TSB autolease fleet during 2005. 2004 saw the biggest increase on the diesel fleet but in 2005 it will begin to flatten out.’

LEX has compiled a list of its most popular fleet cars in 2004, with the new Volkswagen Golf hitting the top of the chart in its first year.

The Golf GT TDI was the favourite model among drivers, while Honda’s strong growth in the corporate sector was signalled with the Accord in sixth place and the Civic in 10th.

The Audi A3 also made its debut on the list at number eight. Vauxhall and Ford had four models between them in the top 10, while the outgoing BMW 3-series and Volkswagen Passat retained their places on the list.

Steve Jones, Lex Vehicle Leasing’s pricing manager, said: ‘For the past three years we have seen a different car at the top of our list, which shows that drivers are constantly re-evaluating the make and model of car they drive.’

Top 10

Top 10 most popular company cars on the Lex fleet
1 Volkswagen Golf
2 Ford Focus
3 Ford Mondeo
4 Vauxhall Astra
5 BMW 3-series
6 Honda Accord
7 Vauxhall Vectra
8 Audi A3
9 Volkswagen Passat
10 Honda Civic

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