Fleet News

Special feature: 2008 forecast

Phill Tromans talked to top industry figures to find out their expectations and hear their advice for the year ahead.

Adrian Rushmore, managing editor, EurotaxGlass’s

“We will probably experience a more difficult trading climate in 2008 as used car customers become slightly more difficult to attract and convert.

“The greatest change in supply is reflected by the size of the three-year-old car parc, some of which will be due for replacement.

“New car sales in 2005 fell so there may be fewer cars arriving in the wholesale market next year.

If retail demand is also down, this will reduce the number of cars due to be part-exchanged.”

Julie Jenner, chairman, ACFO

“The Government is to be congratulated on deciding to introduce in April a lower 10% tax band for company cars with CO2 emissions of 120 g/km or less.

“However, we would like to see more incentives to encourage the uptake of low-emission vehicles.

“The Government needs to do more to provide ‘carrots’ to truly encourage low emission motoring rather than simply increasing company car tax rates and Vehicle Excise Duty levels.

“There is no justification for complaining about the high cost of fuel if the fleet manager has no idea of how much might be being wasted.

“Even where fleets have controlled their fuel use and costs, the increase in pump price is still an issue, and a major problem for the fleet budget.

“An awareness of how the fuel is being used will help to identify the areas for quick wins by looking at allocation policies and the way employees drive.

”Businesses now need to understand the fleet-specific implications of the Corporate Manslaughter Act.”

John Lewis, Director general, BVRLA

“Business mobility is essential for UK organisations and their employees.

“In 2008, the BVRLA will continue not only to defend business mobility but also to argue the case for commercially viable, socially acceptable transport that is lower emitting and driven more safely and in closer adherence to the law.

This must be taken up by industry and the press as well.

“The challenge for next year will be in assisting the industry’s customers to change and adapt to the new way of thinking and behaving.

“Fiscal incentives will help drive that behaviour and we will, in the 2008 Budget, see changes in authorised mileage allowance payments and in the reform of Corporation Tax allowances.

“It is absurd that we still do not have mandatory disclosure of CO2 emissions for LCVs.

“The BVRLA will not rest until these figures are published so fleets have another tool to help make the right decision.”

Colin Whelan, business research manager, CAP

“Fleets face a challenging year in 2005. Two issues dominate the agenda – costs associated with emissions and the risk of a slowing eco-nomy causing downward pressure on residual values.

“Last year’s pre-Budget report was light on detail and consultations continue around the issue of tax relief based on CO2 emissions.

“But one thing is certain – the government will continue to press forward toward the goal of penalising high-emission cars.

“For fleets operating cars above 165g/km it seems inevitable that taxation costs will increase.

“It is important to get a clear picture of existing total emissions in order to be best placed to respond when regulatory changes begin to bite.

“Residual values may not be as robust as they have been.

“The hard slowdown as winter 2007 kicked in was painful for fleets as auction conversion rates dropped, along with performance against CAP Clean as supply levels rose.

“Cars must therefore be presented for disposal in the best possible way.”

Nick Purkis, senior consultant with RSA’s consulting risks division

“Corporate manslaughter will be the big issue to start the year.

“While in terms of its impact on the way companies operate, the Corporate Manslaughter Act will change very little, the media focus on workplace safety will ensure that more companies tighten up their fleet safety procedures.

“It will only take one high profile corporate manslaughter prosecution to driver home the issue of fleet safety to the boardroom.

This will be helped by the national launch of the Department for Transport’s “Driving for Work Business Champions Scheme” early in 2008.”

David Faithful, solicitor, Lyons Davidson

“I believe 2008 is going to be the year when all fleet managers will finally accept the need to manage work-related road safety.

“The introduction of the Corporate Manslaughter and Corporate Homicide Act in April, coupled with the revamp of the fleet appendix to the Association of Chief Police Officers’ manual into investigation of road death, will come to haunt poorly-run fleets.

“My prediction is that the majority of fleets will have taken action to manage their risk, some perhaps reluctantly.

“By 2009 I believe that the fleets who have not taken any steps at all will be in the minority.

“For the proactive, reduction in accidents and claims costs – even by the end of 2008 – will result in financial directors asking why fleet mangers did not start the process sooner.”

David Brennan, managing director, LeasePlan

“2008 has the potential to be another challenging year for fleets.

“Of course, many issues will spill over from 2007, including duty of care, running sustainable green fleets and rising oil costs.

“These will all continue to be high on the fleet manager’s agenda.

“This all has to be seen in the context of an economy that’s set to face a lot of pressure in the coming months.

“Interest rates will play their part, and the credit crunch may well have an impact, but it’s far too early for anyone to predict their effects with any certainty.

“Given this landscape, I anticipate that fleet managers will look increasingly towards their providers for more expert support and guidance.

“The hallmark of the world class leasing provider will be increasingly defined by its capability to guide clients seamlessly through these matters, allowing them to focus on their core business whilst delivering excellent service.”

Simon Protano, head of driver and fleet solutions, RoSPA

“Companies will at long last have to take their duty of care to employees more seriously as the Corporate Manslaughter Act comes into force from April.

“Businesses that have a driver training programme in place will expect suppliers to offer something different to continually stimulate employees and provide a real added benefit.

“Driver CPCs – certificates of professional competence – will be introduced in September for the PCV (passenger carrying vehicle) industry.

“This will raise the standards of professional drivers.”

Christopher Macgowan, retiring chief executive, Society of Motor Manufacturers and Traders

“2007 has been a good year for new car registrations for the fleet buyer and private motorist alike.

“With uncertainty surrounding the current credit crunch, we are likely to see some caution in 2008 by consumers – despite the recent cut in interest rates – and private registrations may ease off.

“However, industry is likely to remain robust and the impact on businesses’ car acquisitions should be minimal.

”Where we may see the effect is when a lease ends and the motorist decides not to renew due to the higher rates (maybe buying nearly new instead).”

Chuck Ives, head of fleet, Network Rail

“2008 will bring a number of major issues that fleets and those responsible for fleet management policies will need to be aware of and address.

“The first is the new London low emission zone, charging fees for older vehicles with less efficient engines, which starts to be effective from February onwards.

“This will form part of wider requirement for fleets to have an effective green policy and reduce their vehicles’ carbon footprint.

“This will be quickly followed by the changes to existing laws covering corporate manslaughter in April and in particular the requirement for fleets and fleet managers to have robust policies to ensure that their fleet vehicles are maintained correctly.

“I believe grey fleets and the control and management of them is becoming and will remain a major issue.”

Mark Chessman, deputy managing director, Lloyds TSB autolease

“There will be a number of issues and regulations that are likely to impact on fleet behaviour, particularly the Corporate Manslaughter Act which will certainly affect how fleets operate.

“Forthcoming Government changes to approved mileage allowance payment (AMAP) rates and capital allowances should also bring greater clarity to a previously ‘grey’ area of the market.

“Completion of the Government reviews of AMAP rates and capital allowances will also remove an area of current uncertainty from the market.

“In terms of fleet industry issues that will bring changes to the sector next year, I predict an increased pressure and focus on fleet organisations and managers to strike a balance in terms of their environmental impact.

“The industry will also be keeping a close eye on how the expected credit crunch affects consumer confidence and residual values.”

Jon Walden, managing director, Lex

“I expect Gordon Brown’s Government to resign and an election will be held. Interest rates will drop by 1% in an effort to ward off recession and the cost of petrol will go up by 7%-10%.

“London mayor Ken Livingstone’s efforts to increase congestion charging will be met by widespread protest – which he will ignore – and used car values will drop by 2%-3%. “In overall terms, I think these changes, if they happen, will have two impacts. The level of uncertainty in business generally will increase, and operating costs for fleets will rise by more than the rate of inflation.”

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