Fleet News

2006: what’s in store for fleets

AS fleets set their sights on the year ahead, we can expect a set of fresh challenges – and the usual suspects – for the industry.

Several key issues will be on the agenda and after polling the views of major industry players it appears that four topics will dominate the headlines. The environment and how fleets can work towards a ‘greener’ offering was listed as an important issue alongside duty of care, fleet costs and consolidation within the industry, especially among the leasing firms. Fleet News looks at what changes the industry believes the next 12 months will bring for fleets.

THE ENVIRONMENT

Terry Bartlett, managing director, Inchcape Fleet Solutions
‘Greening the fleet will become the new focus. The cumulative effect of simple actions can be significant and service delivery to enhance the environmental performance of our customer’s fleets will share top billing in 2006 with a continuing focus on reducing occupational road risk.’

Tony Leigh, chairman, ACFO
‘2006 will be no less a challenge for fleet managers than any previous year. Many will see the need to become mobility managers and not just responsible for fleets. Alternative means of travel and communication will need to be integrated if the needs of the company are to be met in an efficient and economic way.’

Jim Kirkwood, managing director, DriveTech
‘Eco-friendly driving in fleets will go up the board agenda as issues surrounding fuel costs and the debate over greenhouse gases becomes mainstream. For example companies may start to adjust monthly cash allowances up or down depending on a vehicle’s CO2 emissions.’

Andrew Cope, chief executive, Zenith Vehicle Contracts
‘The environment, how to encourage, incentivise and educate drivers into taking more fuel efficient environmentally-friendly vehicles will be a key area. Hybrid vehicles are going to be a major feature for fleets over the next 12 months. The company car will also continue its slow fightback against the move over the past few years towards cash.’

Robert Hodds, managing director, Fleet Technique
‘The Government’s lack of joined-up thinking regarding a viable and sustainable transport policy will lead to yet more misery on the UK’s roads. As our traffic population continues to grow the amount of time lost sitting in unnecessary traffic jams increases. The inevitable long-term damage will be to our faltering economy.’

Roger Woodward, managing director, Cars Direct
‘The responsible disposal of vehicles will play an increasingly important part in the industry in the future. Companies will have to put in place a risk management process that ensures key points are met – who is able to acquire a vehicle, the channels of disposal, that the correct documentation is in place and the chosen disposal route falls under the Consumer Legislation Act.’

DUTY OF CARE

David Wallace, director of business services, the AA
‘After years of speculation, the corporate manslaughter legislation could become law in 2006. This means that the most senior person who has responsibility for the fleet will be accountable. If they were found to have failed in their duty of care responsibilities, the company itself could face unlimited fines.’

Garry Hobson, managing director, Masterlease
‘With the introduction of corporate manslaughter legislation the issue of duty of care should be placed firmly on the agenda in boardrooms across the country. Unfortunately, many businesses will not take the issue seriously until there has been a test case where a company is prosecuted for failing to protect its drivers on the road. Sadly many businesses still think this won’t happen to them.’

Aidan Rowsome, managing director, RAC Software Solutions
‘With the new Corporate Manslaughter Bill it will soon become easier for a company to be prosecuted if it has shown little or no regard for the safety of its workers, or members of the public. Although the Government makes it clear that the Bill is about corporate liability it will, by requiring proof of compliance with health and safety legislation, make it easier to identify when negligence lies with an individual.’

Phillip Brindle, managing director, Newtown Vehicle Rentals
‘Legislation, particularly with regard to health and safety, is likely to continue to present one of the greatest challenges for fleets. To ensure absolute compliance and accountability, every aspect of the business must be carefully assessed and steps taken to reduce risks. Replacing some or all of the existing fleet with late model, well maintained vehicles from a reputable specialist may well prove a prudent move.’

Jon Walden, managing director, Lex Vehicle Leasing
‘Duty of care is occupying the minds of fleet managers who simply want to know: ‘What do I have to do to stay out of jail?’ Contract hire companies will continue to have sleepless nights over residual values and a weakening economy is unlikely to bring much relief. On a positive note the market is hugely fragmented and offers an exciting future for those with a clear vision.’

Paul Turner, operations director, apd automotive
‘While fleet managers will remain primarily focused on managing and reducing costs as the complexity of legislation and red tape intensifies, fleet considerations are increasingly dominated by driver and vehicle safety and duty of care, as well as fears over increased costs from congestion charges and road tolls.’

Peter Cooke, professor of automotive industries management, Nottingham Business School
‘The biggest push will be towards a tighter recognition and implementation of duty of care with regard to company cars, employee provided cars and short term rental for business use. This will impact on the board with realisation that they really do have responsibility for employee mobility while at work.’

Clive Rolfe, general manager, Elite Incident Management
‘As more businesses wake up to the fact that they must manage occupational road safety, accident management companies have a critical role to play in analysing data to enable fleets to implement strategies to reduce the risks with at-work driving.’

Jeremy Hay, managing director, Essential Risk Consultancy
‘2006 will see more civil actions arising from at-work road accidents and the companies concerned will be unable to protect themselves unless their risk policies provide full audit trails. This would be a sharp reminder to any employers taking a ‘wait and see’ stance on corporate manslaughter that they may already be sitting on legal time bombs.’

CONSOLIDATION

Keith Allen, managing director, ALD Automotive
‘Consolidation and corporate activity in the UK contract hire and leasing sector, is likely to continue in 2006. Some banks are clearly looking to dispose of their vehicle leasing arms and there is the potential to see new entrants into the market. The industry is in need of investors who have a longer term vision and ability to deliver improved productivity and returns.’

Steve Underwood, business development director, Hitachi Capital Vehicle Solutions
‘The biggest challenge will be coping with the huge amount of change itself. There are some key issues emerging – a changing fleet industry landscape particularly among manufacturers and leasing companies. Also, the impact that will come from a greater understanding of the application of health and safety implications and financial changes.’

Philippe Bismut, CEO, Arval
‘We will see an acceleration of the trend towards global procurement as the centralisation of decision making on a European and increasingly global basis. Procurement departments looking for cost savings and consistent service delivery are leading this charge, meaning less flexibility for the national fleet manager. The leasing industry will have to respond to these pressures and the winners will be those who have genuine presence in multiple European markets.’

FLEET COSTS

Richard Schooling, commercial director, Alphabet
‘Employers will be looking to encourage cars instead of cash, for cost and safety reasons. There will also be a trend to offer employees better, more widely-available car benefits through schemes which offer a managed mix of contract hire and contract purchase alongside ECO, affinity and risk management elements.’

Nigel Stead, managing director, Lloyds TSB autolease
‘Fleets will need to ensure that their leasing provider differentiates itself through innovation and high levels of service, providing value for money rather than simply the lowest price.’

Neil McCrossan, vice president commercial development, National Car Rental
‘A big test for fleet managers in 2006 will be their control on costs. The increasing costs of repair, administration of fines and issues such as the minimum wage means fleets are in a time of escalating cost. Rental companies need to work much more closely with fleet managers to ensure they can continue to provide the service they need, while identifying cost savings and efficiencies.’

Stuart Gent, managing director, Avis Rent a Car
‘The cost of providing a high level of rental service to the corporate sector will continue to rise in 2006. The cost of buying cars from manufacturers is rising, as are people’s costs and customers are expecting more added value services included in their standard unit price. A proportion of these will have to be passed to the end user.’

Nigel Davis, director of corporate accounts, Kwik-Fit Fleet
‘2006 will see a cultural change in service provision across the fleet sector. Rates for all component parts of vehicle provision have been driven to the lowest realistic point. Therefore, the focus will be on the consistent delivery and quality of those services. Fleets are realising that while suppliers must be competitive cheapest is rarely best.’

Jon Olsen, chief executive, BCA Europe
‘It is fair to say that economic conditions will continue to be difficult. New car sales will probably be down and the used car market will continue to be difficult. It is a big year for new car launches next year and that can have an impact on replacement models. This means all fleets will need to focus on remarketing.’

Rob Barr, communications and planning director, Manheim Auctions
‘The pressure of discounts on new cars may well continue to affect nearly-new prices and fewer dealer trade-ins will be seen at auction, but generally the three-year-old and older car market looks to continue the stability of the end of 2005.’

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