Fleet News

Minimal impact to fleets predicted as uncertainty surrounds digital switchover

Manufacturers are committed to tuning in to next-generation digital radio by the end of next year.

Volkswagen has joined Ford and Vauxhall by fitting digital radio (DAB) units to all its 2013 model-year cars as standard.

This decision has increased P11D prices by several hundred pounds, according to the latest listings.

The 99g/km Golf Bluemotion with DAB, for example, goes from £19,390 to £19,960, although some of this increase is inflationary.

But uncertainty over the date of the switchover is prompting market intelligence and valuation expert CAP to recommend caution.

“We have more than 30 million cars on the road with radio equipment that doesn’t receive digital signals,” said manufacturer relationships manager Martin Ward.

“We still don’t know just when the UK will be ready to tune in to DAB and our view is that there would be such a backlash if analogue broadcasting were to suddenly become unavailable that it is never likely to be turned off.

“As for residual values, we really can’t see any uplift for cars that come with DAB radios.”

Initially scheduled for 2015, the switchover date has yet to be confirmed and is not due to be finalised until next year after Government officials have assessed the level of national digital coverage.

Continuing uncertainty

But when it does arrive, all national broadcasters will cease analogue transmissions, leaving only local radio stations to use FM channels.

Society of Motor Manufacturers and Traders chief
executive Paul Everitt told Fleet News: “I agree that the subject of DAB is surrounded by uncertainty, but this only concerns when it is going to happen rather than if it will happen. Our industry is committed to making digital available in all new vehicles by the end of 2013 and this can be done by a variety of methods with the increase of connectivity on the move.

“Irrespective of any uncertainty, we take the view that
we could be told next year that the switchover could happen in 2015, so it is best to make plans on the basis that it will happen rather than assuming it won’t.

“There will be a lot of activity in the run-up to switchover and immediately after it. Our industry is able to meet this and we regard it as an opportunity.

“It would be too late in the game to arrive at 2015 and find that non-digital-equipped vehicles are difficult to sell or have impaired residual values.”

However, there are a range of digital radio adaptors entering the market that will allow existing radios to be converted to DAB.

Digital radio adapter

For example, Alpine Electronics has launched a digital radio adapter called the EZi-DAB, a professionally
installed digital radio adapter for almost any car, which costs around £250.

It connects to any existing car stereo providing digital radio reception, as well as the ability to connect and
control iPod, iPhone, iPad and many compatible USB devices.

Nevertheless, next year’s switchover date announcement will be based on achieving national signal coverage equal to that of FM and local coverage reaching 90% of the population and major roads.

It will also hinge on 50% of the population listening to digital radio on TV, radio or mobile phone.

Volkswagen UK spokesman Rory Lumsdon said: “The plan for switching off analogue radio may have been pushed back, but our research makes it clear that car buyers want the latest electronic features and our move has been triggered by customer demand.

“In two years’ time, we think cars with DAB will be
more valuable.”

Currently, around 5% of UK vehicles have DAB radio equipment and in April, it came as standard on 26% of new models and was optional on more than 50%.

Digital take up needs to accelerate

According to CAP, DAB was available on 127,064 model derivatives in Q1 this year, compared with 26,924 model derivatives in Q1, 2010.

“We’re delighted with the Volkswagen development and are encouraged by the level of take-up – but we are keen to see it grow more quickly,” said Digital Radio technology and marketing development director Laurence Harrison.
 

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