Fleet News

Diesel 'reaches peak' in fleet

Diesel may have reached saturation point as the fuel of choice for company cars, according to GE Capital Solutions, Fleet Services in its quarterly Company Car Trends (Q2 2007) report.

Growth in diesel use appears to be finally falling away following many years of dramatic increases, with just 1.6% of fleets reporting a rise in the number of diesels on their fleet compared to 25.1% for the same quarter in 2006. Similarly, the percentage of fleets reporting a decrease in diesel use has risen from 2.2% 12 months ago to 9.3% today.

Petrol - which has been in long-term decline - appears to be stabilising or even showing a slight upward turn, with a net 2.7% of fleets showing an increase in the number of petrol vehicles compared to 12 months ago.

LPG - once seen as probably the most viable short to medium-term alternative to petrol and diesel for fleets - is showing a net decrease in use of 9.7% against Q2 of 2006.

However, interest in electric vehicles is higher than last year, with a net gain of 3.0% while a catchall ‘other’ category of fuel use by fleets is showing an increase of 4.9%.

Rich Green, managing director at GE Capital Solutions Fleet Services, said: "For fleets, the issue of fuel choice is closely linked to three issues - cost, tax burden on drivers and the environment. Fleets today are struggling to achieve the best balance between these factors.

"Over the last few years, diesel has been the clear winner in this decision-making process, offering the lowest carbon dioxide emissions, minimising driver tax bills and being extremely economical to run.

"However, the picture is changing. A new generation of petrol engines is offering economy and emissions figures that can almost rival some of the most popular diesel models, so there is scope for petrol to gain ground. Also, the thinking on alternative fuels appears to change almost daily."

Mr Green said many fleets were in flux when it came to fuel. The emphasis on biofuels seen in the most recent Budget had provided some signposting toward the direction in which the Government would like them to move but these fuels raised a number of questions.

He said: "The Government clearly believes that biofuels are the way ahead but, in the short-medium term, there is not much that fleets can do to proactively adopt them. The five percent mix biofuels that can be used by most vehicles without modification will be adopted easily but there are few cars on the market today that can use the higher mix grades, even if they could be bought at the pump.

"In the meantime, fleets are showing some interest in electric and other vehicles, though not adopting them in large numbers. At the same time, LPG appears to be gradually falling by the wayside long before it has made the impact that was once widely predicted."

Company Car Trends is produced every quarter for GE Capital Solutions, Fleet Services, by an independent research agency and is based on responses from a sample of 684 respondents. (GECSFS: August 30).

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