|
Leasedrive Velo Group 2011 predictions – ten key fleet trends
8 December 2010
Leasedrive Velo Group, one of the UK’s largest independent privately-owned vehicle management groups in the UK, predicts ten key trends for 2011. This follows on from its white paper entitled ‘A vision of fleet management in 2015. Predictions on how the fleet industry could look in the future’ published in January.
Commercial director, Roddy Graham said: “2011 should see some glimmer of hope for the fleet industry as a whole although those heavily exposed to a public sector client base will inevitably feel the cold. We believe there will be great opportunities for organic growth and growth through acquisition, as we have ourselves shown! The winners will be those that invested in systems and people during the recent recession ready for the upswing!”
1. Further Industry Consolidation
“Leaseway Vehicle Rental became the first FN50 casualty when it called in the administrators at the beginning of December. Until then, remarkably, the FN 50 had escaped unscathed with no contract hire company going out of business. During the recent recession, we saw some contract hire companies close their doors to new business, others down-sizing their fleets, some losing money, independents struggling for funding and others looking to divest themselves of their fleet. Further consolidation within the industry would therefore seem inevitable.”
2. Grey Fleet Concerns
“Driven by a blend of concern for meeting duty of care considerations, reducing costs and being perceived to be greener, more organisations will turn their attention to the potential grey fleet time bomb. In some organisations, and particularly the public sector, it has almost grown out of control, is a drain on precious cash and proving a real money earner for high mileage ‘at work’ employees. Grey fleet will become an increasing concern with a call for specialist fleet advice to deal with it.”
3. Higher Pump Prices = Lower Business Travel
“From a high of $147 in July 2008 to a low of $37 a barrel at various times in 2009, the price of oil has risen steadily since with the odd downward exception. This has certainly been reflected at the pumps! Currently, oil is trading at $89 a barrel. An important price resistance band is $89 to $92. If the price rises above this, it is likely to climb further with many expecting it to be around $100 a barrel next year. This will be fuelled by worldwide demand, primarily driven by China, the world’s second largest economy after the USA. Demand from the former is expected to increase by five per cent with demand from the latter remaining stable. Then there are all the other growing markets such as India and the emerging South American countries. And should things turn ugly towards Iran, expect the flow to slow down and the price to rise further. Inevitable high pump prices will lead to a squeeze on business travel where possible.”
4. Climate Change Cloud
“Climate change will continue to dominate the world agenda but political willpower to lower emissions always stalls at the negotiating table. We’ve seen it at Kyoto, in Copenhagen and now at the latest talks in Cancun. While the willpower flags, the global thermometer continues to rise. We still expect a sudden knee-jerk reaction once scientists drive their message home for the nth time. When that time arrives, expect vehicles to be forced to comply with even tighter emission regulations, changing the fleet mix for good.”
5. Lower CO2 Emission Models + More Salary Sacrifice Schemes
“With a buying trend towards more fuel efficient and lower polluting cars, the most popular vehicles are proving to be those with CO2 emissions of 120g/km or less, employees taking advantage of the reduced Benefit in Kind (BIK) tax brackets. With over 600 cars on offer under 120g/km, these tick all the right green boxes for employers by reducing the carbon footprint across the fleet and lowering fuel costs. They also improve an employer’s CSR standing and enhance their duty of care. With so many attractive models and tax inducements, no wonder we are seeing more salary sacrifice schemes introduced!”
6. More Funding Availability
“Funding for independent leasing companies has proven at best difficult and at worst downright challenging with many having to turn business down due to lack of suitable access to funds at the right price. With funders down by nearly half compared to three years ago, due to shortage of liquidity, it is hoped that next year we should see a gradual easing of the situation with improved confidence and new funders entering the market attracted by the low risk and good returns on investment.”
7. Electric Vehicle Growing Pains
“Spurred on no doubt by the Nissan Leaf being voted 2010 European Car of The Year, 2011 will see electric cars make their first serious in-roads into the vehicle mainstream with most vehicle manufacturers launching electric models as part of their new car model ranges. However, while the vehicles may prove a surprising green alternative to petrol or diesel versions, expect horror stories to hit the media headlines as vehicles grind to a halt out of power and more pedestrian casualties resulting from silent approaches.”
8. Rising Workplace Parking Levies
“Exeter and York city councils are set to follow Nottingham in introducing workplace parking charges. The Workplace Parking Levy (WPL) went live in the Lace City in October with all employers providing ten or more car parking spaces for staff required to apply for a licence. The council has stated that WPL will raise £14m per year, so expect many more councils to follow suit as they seek ways to replenish their reduced coffers following Government budget cuts.”
9. Flexible Vehicle Rental
“The significant rise in rentals for our mid-term Stopgap rental product is a good barometer of increased business recruitment activity. And more flexible short, medium and long-term rental schemes are definitely becoming increasingly popular, especially to cover employee probationary periods and as an alternative to a pool car fleet. Where a company relies on employees using their own vehicles on company business they are probably paying more out in expenses than they should and exposing themselves to charges of not fulfilling their duty of care responsibilities. Renting vehicles for ‘at work’ drivers can save costs and eliminate the grey fleet risk.”
10. More Fleet Management Outsourcing
“We anticipate a steady rise in fleet management specialists. More medium and large-sized organisations are increasingly turning to fleet outsourcing. Specialist fleet management companies can offer a wide range of expertise, backed by the latest in fleet technology. As organisations focus on their core activities, they are more likely to be disposed towards outsourcing non-core functions.”
|
 |
See also...
Press releases
Biographies
Images
Media contacts
History
Key facts
Archive news
|
