Fleet News

BVRLA criticises motor industry plea to government

Relationships have soured between the lease and rental industry and the motor industry after the Society of Motor Manufacturers and Traders (SMMT) and the Retail Motor Industry Federation (RMIF) called on the government to introduce a range of measures, including several that would affect fleets.

The SMMT and the RMIF sent a joint letter to the chancellor, Alistair Darling, and business secretary, Lord Mandelson, pleading for help to stimulate demand for new cars.

Within in the letter were several recommendations that would, if introduced, directly impact the country’s fleet and lease operators.

However, the British Vehicle Rental and Leasing Association (BVRLA), which was not involved in drafting the letter, has said the two associations should have consulted with it first.

BVRLA members buy more than 44% of the vehicles produced by SMMT members.

“We represent the interests of more than two million business car drivers and the 10 million people who use a rental car in the UK each year,” said the BVRLA.

“We are surprised that the SMMT and RMIF would call for these measures without discussing the issues with some of their largest end users,” said BVRLA director general, John Lewis.

“Present government tax policy is aimed at incentivising people to buy cleaner, fuel-efficient vehicles. Instead of asking the government to abandon these plans, manufacturers need to start making more of the vehicles that will help businesses benefit from them.”

Responding, an SMMT spokesman said it was defending the position of its members.

“We are confident that the measures SMMT and RMIF call for are in the best interests of safeguarding the components supply chain, vehicle manufacturers and retail distribution networks.”

The letter recommended the government increase capital allowances for fleet buyers, particularly for buyers of commercial vehicles, to “stimulate immediate demand”.

However, the BVRLA said this would not be the case.

“Most companies will struggle to make a profit this year, so enabling them to offset more of the cost of their vehicles against their corporation tax bill is not going to be much of an incentive in the short term.

"What firms need is better access to reasonably-priced vehicle funding from all sources, not just manufacturers’ finance companies,” said Mr Lewis.

The motor industry letter also suggests that plans to reform business car capital allowances should be shelved, as the overall impact and timing is “unhelpful”.

Mr Lewis said: “They are only ‘unhelpful’ to manufacturers who have not invested enough in producing cleaner vehicles.”

Other suggestions include allowing manufacturers’ finance companies access to the funding available to banks through the special liquidity arrangements and scrapping plans for increased VED and new first year rate.

“The motor industry faces a set of unprecedented market conditions.

"Urgent action is required to boost demand for new vehicles and ease pressure on UK automotive suppliers,” said Paul Everitt, SMMT chief executive.

Paul Williams, RMIF chairman added: “These measures would go some way to helping the revival of consumer confidence in our sector.”






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