Fleet News

Fleet predictions for 2007

LEADING industry figures reveal their predictions for the year ahead.

Jim Kirkwood managing director, DriveTech

COMPANIES will increasingly adopt eco-friendly policies featuring hybrid vehicles, bio-fuels and safe and fuel efficient driver training. They should also focus increasingly on managing journey times so that measures are in place to keep costs under control when road charging becomes more widespread.

Every company should undertake a portable in-car technology risk assessment, as sat-nav, traffic monitoring systems and speed camera detectors are a significant distraction while driving.

Penalties for using hand-held phones while driving will rise to £60 and three points. Companies must ensure that no calls are made or received while driving.

With insurance premiums continuing to rise and insurance companies becoming more selective, fleets could find themselves being refused cover if they fail to take appropriate risk management measures.

The move back to traditional company cars, away from cash-for-car schemes, will accelerate as duty-of-care legislation becomes increasingly understood.

Julie Jenner, ACFO chairman

MANAGING occupational road risk and reducing the environmental impact of at-work driving will remain at the top of fleet operators’ agendas.

Fleets are looking for government to introduce financial support for green transport actions. The 2005 demise of the Powershift grants programme derailed many fleet plans to introduce environmentally-friendly vehicles. By ending Powershift while preaching the importance of environmentally-friendly transport, the government led many fleets up a green cul-de-sac.

The vast majority of companies have taken at least some responsibility for the health and safety of their at-work drivers as a result of the avalanche of publicity in recent years. Nevertheless, the Road Safety Act should be a focus for fleet managers and needs to be communicated to drivers.

The findings of HM Revenue & Customs’ review of Employee Car Ownership Schemes are expected to be announced in 2007.

The 2006 migration back to traditional company cars from ECO schemes may gather greater pace – expected savings have not been delivered, duty of care issues have intervened and administration has, at times, proved cumbersome.

The results are likely to spur a detailed examination of fleet funding policies and may also herald changes in the Approved Mileage Allowance Payments system. We can also expect the long-awaited changes to capital allowances and corporate tax relief on company cars, which will also influence chosen funding strategies.

The expected continuation of yo-yo fuel pricing must result in a focus on the operation of the most fuel-efficient vehicles.

Climate change has been described as the ‘biggest challenge of our time’ and fleets operators should aspire to reducing transport pollution.

Keith Allen, managing director, ALD Automotive

IT is essential from both a corporate and personal financial perspective that companies and drivers focus more on driving low CO2 emission vehicles.

The health and safety of at-work drivers, whether in company-provided vehicles or their own private cars, is crucial from a financial, legal and moral standpoint. However, despite the reams of publicity relating to at-work driving and duty of care responsibilities, we continue to find companies turning a blind eye to the issue.

I see little dramatic change in the overall shape of the leasing and fleet management sector in 2007. But, with an ever-growing amount of legislation and bureaucracy, fleets will be looking for more third party involvement to ensure efficient operations.

Mike Wise, sales director, Kwik-Fit Fleet

WITH more manufacturers fitting run-flat tyres to new cars, fleets should brace themselves for an increase in tyre costs.

Typically, run-flats have a lower mileage life than conventional tyres. They are more expensive and cannot be repaired following a puncture.

While run-flats are praised from a safety aspect and are convenient for drivers, fleet operators should be aware that tyre consumption will increase during a vehicle’s life.

Lorraine Farnon, divisional vice-president & UK sales director, National

ROAD pricing will not eliminate the need for more roads. It is down to the government to ensure that the money made from the scheme is put back into the transport and road network.

Business vehicles make up a large percentage of all the traffic on Britain’s roads. The government is basically placing the burden of road pricing squarely on the shoulders of British business, but at what cost?

The environment and cutting emissions has really come to the fore with the publication of the Stern report.

The Corporate Manslaughter bill is due to go through Parliament early in 2007 and will add a heavy burden to businesses that have not prepared themselves.

Jason Francis, managing director, Jaama

CONTROL is the absolute priority for fleet operators in 2007 as budgets tighten and legislation impacting on vehicle operations grips even tighter in respect of occupational road risk.

With all vehicle-related fiscal rules having an environmental focus, the ability to effectively manage journey patterns, travel times and distances is essential to achieve best practice implementation and ultimately cost savings.

Maximum control and the availability of information can only be achieved if fleet operators have utilise the latest web-enabled software.

Gerry Lynch, managing director, First Fleet

WE will continue to see the emergence of a two-tier used vehicle marketplace. Increasingly professional defleet operations, such as those run by manufacturers and by many contract hire and leasing companies, will invest in ensuring vehicles are in ready-to-retail condition.

They will also increasingly embrace the rapidly emerging array of new routes to market, including more and more online channels. Those corporate fleets that fail to take similar steps will be left in the vehicle disposal slow lane.

Major vehicle operators will rationalise supplier numbers and look to their chosen partners to provide a more integrated range of solutions, particularly in relation to in-life and defleet vehicle management. Those services must also be web-enabled to boost efficiencies.

Peter Tatlock, managing director, Masterlease

ONE of the biggest challenges will be for companies to develop green vehicle policies that are popular with drivers.

Incentivising employees to choose a greener option will be key. Businesses also need to take much more control of the environmental impact of their fleet. Reducing the cash option is one way of doing this because research shows opt-out drivers are more likely to choose higher polluting cars.

There is no doubt that road charging will be a hot topic for debate because the proposals would have such enormous impact on business. In fact, a national road charging scheme could completely change the way we live and work.

Finally, the much-awaited corporate manslaughter bill has recently been passed by the House of Commons, so we can expect to see those companies who have been waiting for this legislation to finally take action on risk.

Andy Leech, business leader, cfc solutions

A MAJOR developing trend that we are seeing is the use of fleet software to monitor the environmental impact of company vehicles.

Fleets that are doing this tend to be among the most forward thinking generally and using technology to make their operations greener is a natural step. Without fleet software, they would find it difficult or even impossible to measure the improvements that they want to make in areas such as fuel consumption and CO2 output.

Additionally, we expect debate to really get underway about the technology that the government will eventually employ for its national road charging scheme. This technology will have an impact on every fleet in the country so, as an industry, we must do everything possible to ensure that the final solution meets our needs as closely as possible.

Colin Bruder, managing director, Network Automotive

THE fleet market remains as competitive as ever for motor manufacturers and this will certainly not ease during 2007.

Because of this, we expect to see continuing efforts by manufacturers to exploit every fleet sales channel available. For example, we could see smaller manufacturers bidding for blue light, diplomatic and tax free sales as well as redoubling their efforts in the more traditional routes to market like Motability and driving schools programmes.

Mike Waters, head of market analysis, Arval

THE dominant issue for many fleet agendas in the year ahead will be Corporate Social Responsibility.

This is not just a business issue, it is a fleet issue and the ramifications of CSR activity should reverberate through fleet policy; influencing vehicle provision, driver training and broader fleet management initiatives.

The Stern Report, followed by announcements in the pre-budget statement, indicate that climate change is likely to become as important to fleet managers as vehicle choice. The key for any company is striking the balance between economic growth, social progress and environmentally aware operations.

Flexibility will also be of growing importance to fleets next year. Led by changing customer demands and fuelled by market forces, companies will look to increase the flexibility and mobility of staff. This will put an onus on fleet providers to meet the needs of all types of business drivers.

Dr Belinda Howell, CEO, Greenstone Carbon Management

COMPANIES will increasingly measure their carbon footprints and become aware of areas for improvement in carbon emissions.

With climate change at the fore, organisations will be held accountable by their stakeholders to act responsibly to reduce their impact on the environment, particularly with regards to transport and business travel.

There will be increased pressure to reduce the average CO2 level of new fleet cars, with stricter company car tax bands based on emissions.

Employees who use their own cars for business purposes will be incentivised to use low emission models, with the possible introduction of additional Authorised Mileage Allowance Payments for cars emitting under 140g of CO2 per km.

Road user charging may well become a very real possibility as the ultimate tax on travel. The industry needs to get ready to be a whole lot greener.

Roger Williams, head of major fleets and leasing, AA Business Services

RISK management and the environment will continue to be important issues for the fleet industry.

We expect many businesses to take action on risk management, not just because of the proposed corporate manslaughter legislation, but because of the enormous cost savings that can be achieved.

This financial benefit will also be one of the main drivers for fleets to take action on the environment as they look to reduce fleet running costs.

One of the biggest contributions that fleets can make is not just changing vehicle choice but seriously looking at how they can reduce overall fuel expenditure. If all companies trained their employees to drive more economically, UK businesses could save over £2.2 billion in fuel costs.

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