Fleet News

First-time company car drivers and new business drive fleet increase

Cars parked in a car park

New business, concerns around public transport and employees before offered a company car for the first time are expected to drive fleet growth this year, new research suggests.

Data from the Arval Mobility Observatory barometer shows that company car and van fleets are more optimistic about growth than before the pandemic.

When asked whether they expected the number of vehicles they operate to increase or decrease in the next three years, the response was eight percentage points higher (39%) than 2020’s survey.

Large fleets were much more positive about their prospects. Among companies with more than 500 employees, more than half (59%) are expecting fleet growth, compared to almost a third (32%) among small and medium sized enterprises with 10-99 staff.

The top three reasons for the envisaged increase in fleet size are led by company growth or development of a new activity that requires vehicles (67%), a safer commute for employees due to coronavirus (34%) and company cars before offered to employees who are not currently eligible (32%).

Shaun Sadlier, head of Arval Mobility Observatory in the UK, says the research shows that fleets are more optimistic about growth now than before the pandemic hit.

“After the events of the last year, this is welcome and points to a high degree of resilience in the marketplace in which fleets operate,” he added.

“This positivity is much more noticeable among larger fleets than smaller ones. A potential explanation for this disparity is that bigger organisations have strategically identified the likelihood of fleet growth in a world where low taxation on EVs is set to increase company car uptake, as well as converting cash allowance takers to salary sacrifice schemes.

“SMEs have perhaps not yet had the time to devote to these areas and may well be focussed on overcoming the effects of the pandemic.”

Just over one in 10 of respondents (11%) said they expected their fleet size to decrease. Almost half (49%) said the fall will be due to the impact of Covid-19, followed by 38% who say it is because of plans to increase home office working and almost one a quarter (23%) says it down to drivers choosing a cash allowance.

However, when looking at data overall, Sadler said: “These figures are very good news for the company car sector, which undeniably looks set to be given new life by the increasing adoption of EVs and their associated environmental benefits.”

This latest research comes in the wake of research from the Arval Mobility Observatory also suggesting a huge surge in demand for operating leases over the next three years.

More than half of businesses (51%) are ‘certainly or probably’ planning to introduce or increase their use of operational lease to fund their vehicle fleet by 2024, up from just 26% in 2020. In 2019, the proportion was just 12%.

One in five (20%) said they would ‘certainty’ be increasing their use of leasing, up from just 6% a year earlier.

WHY DO YOU THINK THAT THE TOTAL NUMBER OF VEHICLES ON YOUR FLEET WILL INCREASE?

67% Because our company is growing or developing a new activity that requires vehicles.
34% To provide a safe commute for employees due to COVID-19.
32% Our company plans to offer vehicles to employees without current eligibility.
27% Our company plans to propose shared vehicles to employees.
23% Because of HR-related need such as talent, recruitment, retention, etc.
11% Because of tax decreases.

WHY DO YOU THINK THAT THE TOTAL NUMBER OF VEHICLES ON YOUR FLEET WILL DECREASE?

49% The impact of COVID-19.
38% We plan to increase home office working.
23% Because drivers are choosing a cash allowance.
18% Fewer employees will have access to company cars.
17% Because of tax increases.
15% Business is declining.
7% The introduction or development of alternative mobility solutions.
3% Because of CSR policy.
 

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