Fleet Europe Special Benelux - France

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Special Benelux – France

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WESTERN EUROPEAN EXPOSURE IN FLEET AND MOBILITY MANAGEMENT Welcome to this special edition of Fleet Europe magazine, zooming in on fleet management development in Benelux and France. In this issue, we’re taking a closer look at four of the most mature fleet markets in Europe.

In this special edition of Fleet Europe magazine, we explore the type of decisions you and your international team might face when managing fleet and mobility programmes in Belgium, the Netherlands, Luxemburg and France.

Since the introduction of fleet management and leasing back in the 1970s, Western Europe has been at the forefront of fleet development. Linked to economic welfare and business expansion, the concept of the company car – both as a perk and as tool – was quickly and easily adopted.

This was of course facilitated by the presence of global car manufacturers (in France), international leasing companies (in the Netherlands and France) and international and European headquarters of many multinational companies (in both France and the Benelux countries).

You will find chapters explaining the economic conditions and dynamics of each country, together with information on financing, legislation and taxation, and fleet and mobility trends.

Thanks to all our contributors for their support in making this special issue of Fleet Europe Magazine happen.

Last but not least, if you want to keep up to date with the latest news, may I suggest you join our online community at www.fleeteurope.com.

These markets have not just been at the forefront of the introduction of the company car concept in Europe. They are also attractive test markets for smart and shared mobility solutions, B2C initiatives and flexible fleet and mobility services. Nevertheless, there are also crucial differences between the four markets, based on culture, business preferences, taxation and legislation.

Steven SCHOEFS Chief Editor, Fleet Europe

COLOPHON EDITORS

Steven Schoefs – Chief Editor - sschoefs@nexuscommunication.be Céline Gilson – Project Coordinator - cgilson@nexuscommunication.be

CONTRIBUTORS

Stijn Blanckaert, Frédéric Blin, Dieter Quartier Cover: Cible

SALES & MARKETING

David Baudeweyns – Sales Director dbaudeweyns@nexuscommunication Julien Domken - International Key Account Manager jdomken@nexuscommunication.be Saskia Lannau - International Key Account Manager slannau@nexuscommunication.be

Vincent Degives – Marketing Manager vdegives@nexuscommunication.be Virginie Emonts – Sales and Marketing Assistant vemonts@nexuscommunication.be Aline Verpoorten – Internal Sales Assistant averpoorten@nexuscommunication.be Laura Petit – Sales and Marketing Assistant lpetit@nexuscommunication.be

Pictures: ©Shutterstock Expert contribution: company car taxation with the support of Erwin Boumans and BDO Network – www.bdointernational.com Layout: Cible – contact@cible.be

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SEAT (2), ŠKODA AUTO A.S. (4), LeasePlan België (7), KBC Autolease (9), Daimler AG (10-11) Renta Solutions (17), ARI (21), Athlon International (23), BMW Group (29), Alphabet (51), Adam Opel AG (34), Volkswagen AG (3839), Citroën (43), Nissan Europe SAS (51), Arval (58), ALD Automotive (68).

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ANOTHER WAY TO EXTEND YOUR CAR PARK The New Å KODA KAROQ.

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Combined fuel consumption and CO 2 emissions according to the legislation of the concerned country y

CONTENT 6-22 COUNTRY FOCUS BELGIUM Economy Growth in a complex political environment................... 6 Automotive Market Fleet-driven and dominated by European brands.................................................................................................................................. 7 Fleet Market Mature market under political pressure................. 12 Finance & Leasing Close competition in top-heavy lease market...............................................................................................................................14 Fleet Management Elaborate car policy as a must have for fleets...........................................................................................................................16 Taxation ...........................................................................................................................18 Trends A myriad of new possibilities but which one will prevail?............................................................................................................................ 20 Tips & Tricks “Innovation is key”....................................................................22

24-31 COUNTRY FOCUS GRAND DUCHY OF LUXEMBOURG Economy Discrete, rich, small. Luxembourg is it all.................... 24 Automotive Market As many cars as inhabitants..............................25 Fleet Market Leasing companies push market share German premium brands...................................................................................................... 26 Taxation ..........................................................................................................................28 Trends Dynamic market at the forefront of new trends............ 30 Tips & Tricks Operational lease as trending funding method............................................................................................................................. 31

32-52 COUNTRY FOCUS NETHERLANDS Economy Dense, farming, growing and exporting........................ 32 Automotive Market A and B: it’s plain to C...............................................35 Fleet Market The land of mainstream estates........................................40 Finance & Leasing Leasing is King.............................................................. 44 Car Policy Rich and mature............................................................................. 48 Trends Wanted: cost control and flexibility...................................... 49 Taxation ......................................................................................................................... 50 Tips Anything but Double Dutch...................................................................52

53-62 COUNTRY FOCUS FRANCE Economy Dirigist or not, an economic giant..................................... 53 Fleet Market Transformation in corporate fleets............................ 54 Finance & Leasing The promising operational lease market.. 56 Car Policy Taking control with the car policy.................................. 59 Taxation ......................................................................................................................... 60 Trends Step by step towards integrated mobility...........................61 Tips Do’s and Don’ts in Fleet Management........................................ 62

20 years of Fleet Europe Mature markets in spawn innovation..................................................................................................................... 64

FLEET EUROPE SPECIAL BENELUX FRANCE

5

ECONOMY

BELGIUM

Growth in complex political environment Stijn Blanckaert The Port House in Antwerp, a new iconic landmark in Belgium’s main seaport, designed by renowed architect Zaha Hadid.

As a founding father of the European Union, Belgium has always worked closely with its neighbours. The economical outlook is positive although federal debt stays high and the political situation is complex.

VITAL COUNTRY STATISTICS

Population 11.267.910 Capital Brussels

Governance Constitutional Monarchy GDP (PPP): $ 496.477 million World ranking GDP (PPP): 24th GDP (per capita): $ 41.096 World ranking GDP (pc): 17th

Currency euro (EUR) Unemployment rate 7,6% Inflation rate 1,9%

6

Boxed in between the North Sea, The Netherlands, Germany, Luxemburg and France, Belgium lies in the heart of the European continent, and with 11.267.910 inhabitants (2016) living on a total of 30.528 km2 (3.454 km2 of territorial North Sea not included) it is densely populated (369 inhabitants/km2). The Flanders region, covering 40% of the territory, houses 60% of the population.

The politically complex country has a federal government and is divided in three administrative regions (Flanders, Wallonia and the Capital Region of Brussels) and three cultural communities (Dutch, French and German) and has a history of peaceful communitarian compromises.

Brussels, the capital of Belgium and the European Union, and also the seat of NATO, is the economical centre of the country.

The seaports of Antwerp and Zeebrugge (Bruges) connect to the North Sea, and a dense network of rail- and motorways make it a transit-country for all kinds of transport throughout Europe.

The Gross Domestic Product of 409.4 billion € (2015 figure) is driven by an economical activity that mainly consists of “services” for 69,3%, followed by “industry” (14,6%).

The agricultural sector is in rapid decline, with a market share that fell 10,4% between 2014 and 2015 and now only accounts for 0,55% of the total economy.

Within the services sector, the subsectors “transport, commerce and hospitality industry” account for 25,5% of total production, followed by “administration

and education” with 19,3% and “business services” with 17,9%.

With 1,9% in August 2017, inflation is slightly higher than the European average (1,5%), and with 7,6% vs. 9,1% the unemployment rate is lower than the Eurozone average (July 2017). The federal debt of 105,9% of the GDP (2016) is high, compared to neighbours like Germany (68,3%) or The Netherlands (62,3%), but does not compose an immediate threat for the economy.

TAXSHIFT Economically, three trends characterize the economy. First, there is the aging problem: people live longer and the population growth is declining, which leads to lower productivity. Secondly, Belgium is confronted with a growing degree of digitalization having an effect on employment and as a third the globalisation and political changes all over the world have a considerable impact. To counter the negative effects, the Belgian government decided to raise the age of retirement from 65 to 66 years in 2025 and 67 in 2030, put a “tax shift” in place (trying to stimulate the economy by lowering the cost of labour and taxes for companies and counting on a payback effect), and skipped one of the automatically induced salary raises following the rise of Belgium’s consumer price index.

The mentioned “tax shift” aims to (partially) fix the actual situation where Belgium is a world champion of labour cost. The fiscal burden on labour accounts for 56% of the total salary cost, which is considerably higher than in all other European countries.

FLEET EUROPE SPECIAL BENELUX FRANCE

BELGIUM | AUTOMOTIVE MARKET

Fleet-driven and dominated by European brands Stijn Blanckaert

With 539.519 registered new cars and lcv’s, 7,7% over the 2015 figure, 2016 was a record breaking year for Belgium’s automotive market. 2017 promises to be even better but diesel is on it’s way back.

The Belgian automotive market is very large in relation to the size of the country and its population. At the end of 2016, Belgium’s car fleet counted 5.669.764 cars, and the registration of just under 540.000 new cars for about 11.250.000 inhabitants means that in average one in 21 Belgians registered a new car in 2016. This tendency is not new, since for several years now, the Belgian car market is booming, mainly thanks to the flourishing fleet market with companies accounting for just under 50% of all registrations of new cars. 47% of cars are registered by private persons, about 3% by self-employed people.

and registrations was remarkable, with 501.066 new cars in 2015 and the mentioned 539.519 in 2016.

After an all time registrations record in 2011 (572.211 new cars), thanks mainly to the governmental support measures following the international economical crisis, the Belgian car market cooled down to “normal” figures in 2012 (486.737), 2013 (486.065) and 2014 (482.939). During the past two years however, the increase in sales

THE DECLINE OF DIESEL A clearly identifiable trend is the decline in sales of diesel powered vehicles. Whereas diesel cars still accounted for nearly 80% of registrations ten years ago, they only made up 62% of registrations in 2014 and 60% in 2015. Last year, that figure fell to 52% and during the first six months of 2017, for the

2017 also promises to be a very good year, since at the end of June, 322.302 new cars had already been registered, predicting a new all-time record at the end of December.

The positive result this year is mainly driven by a substantial increase in registrations in the Flemish region (+12.518 vs. end of June 2016), while the Brussels’ region-registrations were stable (+694) and Wallonia registered 516 cars less than in 2016.

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BELGIUM | AUTOMOTIVE MARKET

BELGIUM: EVOLUTION OF THE NEW CAR MARKET

486 065

501 066

486 737

482 939

500 000

539 519

600 000

2012

2013 2014 2015 2016

400 000 300 000 200 000 100 000 0

TOT 10 BRANDS AND VOLUMES JANUARY-JUNE 2017 BRAND

01/06/2017 MARKET REGISTRATIONS SHARE

Volkswagen

36 208

9,18%

Renault

35 689

9,05%

BMW

31 379

7,96%

Peugeot

30 302

7,68%

Opel

27 446

6,96%

Mercedes

27 428

6,95%

Audi

23 965

6,08%

Citroën

19 080

4,84%

Ford

17 574

4,46%

Hyundai

14 401

3,65%

TOT 10 BRANDS AND VOLUMES 2016 (FULL YEAR) BRAND

01/12/2016 MARKET REGISTRATIONS SHARE

Renault

55 871

10,36%

Volkswagen

53 021

9,83%

BMW

40 227

7,46%

Opel

38 470

7,13%

Peugeot

37 593

6,97%

Mercedes

33 586

3,23%

Audi

33 225

6,16%

Ford

25 317

4,69%

Citroën

25 154

4,66%

Hyundai

21 859

4,05%

Brussels by night. With more than 5,6 million cars in a country of only 30.528 km2, you better get used to traffic jams.

first time since 1997, the diesel market share dropped below 50%, to 46,5% of total new car registrations.

The benefactor of this evolution is –of course- the petrol engine car, with alternative fuels such as electric, hybrid or fuel cell cars steadily gaining interest but at the end of June 2017 still accounting for less than 10% of the market (6% of registrations in Flanders, 4% in Brussels and 2,9% in Wallonia).

The difference between the regions is due partly to the stronger presence of fleets in Flanders and Brussels on the one hand, and on the other hand there is the influence of car taxation and more in particular the registration tax which is calculated differently in Flanders than in Brussels and Wallonia.

Since 2012, the Flemish government put in place a registration tax based on the environmental impact of the vehicle rather than on its power output and cylinder capacity -as is still the case in Brussels and Walloniawhich lead to much lower registration taxes on modern and “clean” cars with Euro 5 and 6-engines. Leasing companies, even when based in Flanders, however, still have to use the “old” registration tax-rules as applied in Wallonia and Brussels.

EUROPEAN AND PREMIUM The Belgian car market is clearly dominated

by European manufacturers, and the only segment lead by a non-European car maker is the most important one of the market, the SUV-segment. This segment, with the

Hyundai Tucson as best selling car, accounts for more than 25% of the car market, a 5% increase versus 2015. The growth of the SUV-segment has had a negative effect on the market share of estate cars (11 to 13% decrease) and mpv’s (6 to 8% less).

In 2016, Renault lead the classification of registrations with 55.871 registered new cars or a 10,4% market share, closely followed by Volkswagen (53.021 cars and 9,8%), BMW (40.227 cars or 7,5%), Opel (38.470 cars or 7,1%) and Peugeot (37.593 cars or 7,0%). The first non-European brand in the top 10 was Korea’s Hyundai, with 21.859 cars and a market share of 4,1%.

In the first half of 2017, Belgium’s best sold car was the Volkswagen Golf, and VW also claims the leadership of total new car registrations, having dethroned Renault, with BMW still on third but Peugeot surpassing Opel.

Remarkably, BMW, as a premium brand, holds third place in the ranking, with Mercedes-Benz in sixth, and Audi in seventh place. (June 2017) The strong presence of these more expensive brands in the top ten is mainly caused by the important market penetration of company cars which are not only easier to fit into lease budgets than into private budgets (thanks to the fact that they have a higher residual value and thus a lower lease rate) but also are replaced every 42 months on average compared to the average replacement term of about 7,5 years for a privately owned car.

Source: Febiac

8

FLEET EUROPE SPECIAL BENELUX FRANCE

BELGIUM | AUTOMOTIVE MARKET

“FAKE” REGISTRATIONS FALSIFY STATISTICS It needs to be said that the total number of new car registrations in Belgium is systematically higher than the real number of new cars put into traffic, due to the fact that some manufacturers like Renault and the Fiatgroup have made a habit of registering new cars for the sake of their position in car sales’ statistics, without them being sold to an end customer. Every year, a few thousands of new cars are registered, deregistered and sold to large automotive resellers who

(mostly) export them and sell them as “new but already having been registered before”, distorting the statistics and showing an exaggerated figure in new car registration figures.

Cars are an important source of income for the government, since in 2016, the Belgian car fleet accounted for a total of 18.833 billion euro in taxes, contributions and fines, of with excise taxes on fuel totalled 5.223 billion euro and VAT made up for 9.291 billion euro.

EVOLUTION OF NEW CAR REGISTRATIONS PER ENGINE TYPE PETROL

DIESEL

LIQUIFIED PETROLEUM GAS

HYBRID POWERTRAIN

COMPRESSED NATURAL GAS

ELECTRICITY

OTHER

TOTAL

2012

145 640

335 519

192

4 749

75

562

0

486 737

2013

164 220

315 217

159

5 824

145

500

0

486 065

2014

173 228

299 182

135

8 310

917

1 166

1

482 939

2015

189 254

300 322

117

9 357

656

1 360

0

501 066

2016

239 319

279 425

152

16 430

2 138

2 055

0

539 519 Source: Febiac

9

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BELGIUM | FLEET MARKET

Mature market under political pressure Stijn Blanckaert

Representing almost half of all new car sales, the fleet market is of great importance to Belgian car importers.

But tension rises as more and more political pressure is being put on the attribution of company cars.

With 267.661 new cars registered to companies and 15.901 to the self employed, Belgium’s fleet market accounted for no less than of 52,6% all new registered cars in 2016.

283 562

250000

262 176

300000

150000

239 988

239 645

283 562

262 176

239 645

200000 0

239 988

250000 50000

Number of cars registered to companies and self employed

247 977

150000 300000 100000

247 977

BELGIUM: FLEET MARKET EVOLUTION

200000

2012

2013 2014 2015 2016

2012

2013 2014 2015 2016

100000 50000 0

52,6%

52,3%

2012

2013 2014 2015 2016

20

49,6%

47,4%

40

% of total new registrations

50,9%

60

0 60

52,6%

52,3%

49,6%

47,4%

1220

50,9%

40 Source: Renta and FOD Mobiliteit

For the last five years already, Belgium’s fleet market represents half of all new cars sold, with consecutive fleet vs. private market shares of 50,9% (2012), 47,4% (2013), 49,6% (2014) and 52,3% (2015).

The reasons for that remarkable penetration of company cars vary.

First of all, there is the particularly high fiscal burden of employment in Belgium, combined with the more interesting taxation of company cars, making it more economical for companies to offer employees a car rather than a salary raise. This situation has led to the proposal of many “cafeteria plans” in which employees who did not have a company car before are offered the possibility to choose one in exchange for a moderate salary reduction or instead of being paid a bonus.

Another reason for the large number of company cars is Belgium’s service-oriented economy, in which much more employees have the right to a company car than in the making industry for example. Furthermore, Belgium has always been at the forefront of new ways of financing cars, with the development of a mature and highly competitive leasing market in particular, making lease rates very competitive.

Although about half of all new cars are sold to companies, only about 20% of all cars driving in Belgium are considered to be company cars. This is due to the fact that company cars have an average lifespan of some 3,5 years, whereas private cars are kept at least twice as long.

Representing the fleet sector, spokesman Frank Van Gool of Renta, the Belgian association of leasing and rental companies, emphasises that “given the more regular renewal of the fleet, company cars are the most economical and the safest on the road, structurally upholding the country’s automotive economy.” The average age of cars registered to companies is indeed 3,77 years (2,03 years for cars in leasing and 4,92 for cars bought by the fleet owner), whereas private cars have a much higher average age of 9,63 years. The average CO2-emission of newly registered Belgian fleet cars was 112 g/km in 2016, compared to 119,2 g/km for privately owned cars.

The market for light commercial vehicles is a lot smaller than the one for passenger cars, with a total of 709.653 lcv’s on the road in 2016, compared to 5.669.766 cars.

The lcv-market is dominated by companies and the self employed. It is steadily expanding, with a two digit-growth in 2015 (+14,7%) and 2016 (+11,5%) totalling 61.208 new lcv’s in 2015 and 68.165 ones last year. In the lcv market, diesel is still king, with 94,8% of all 2016 registrations.

POLITICAL PRESSURE ON COMPANY CARS For some time now, fuelled by remarks of the European Commission, the widespread attribution of company cars in Belgium is increasingly being questioned.

FLEET EUROPE SPECIAL BENELUX FRANCE

BELGIUM | FLEET MARKET

Whether Belgian government’s Cash for Car-proposal will be a success, remains to be seen.

Europe accuses the Belgian government of “oversubsidising” company cars by allowing high fiscal deduction rates and interesting benefit in kind taxation for company car costs and thus adding to traffic congestion and environmental pollution. The fleet sector, through spokesman Frank Van Gool, responds to that criticism that “only about one third of cars in traffic jams are company cars, which on average are less than four years old and have an average CO2-emission of only 115 g for all newly registered cars.”

“Furthermore,” he says, “public transport or other alternative transportation is only an option for some 20% of all employees.” A discussion in which the last word has still to be spoken.

CASH4CAR In order to try to lower the number of (company)cars on the road, the government plans the introduction – as a first – of a “cash for car”-scheme from 2018 on.

Employees that benefit from a company car today can, if they want it and their employer agrees, trade it in in exchange for an extra monthly salary of some 300 to 700 euros, relative to the value of the car handed in, that is less taxed than a normal salary would be. This surely can FLEET EUROPE SPECIAL BENELUX FRANCE

be a beneficiary alternative for those who almost never use their company car and have alternative transportation possibilities, but critics say it won’t make any difference since the employees who will hand in their company car will almost certainly buy another –older and more polluting- car themselves. A study conducted by human resources-service provider Acerta among 380 employers predicts only twenty per cent of employees could be interested.

The introduction of the WLTP-method for measuring consumption and emissions that is gradually replacing the old NEDC-calculation method since September 2017 leaves a lot of uncertainty about the Total Cost of Ownership of Belgian fleets, because no decisions have been made yet regarding the impact of these changes on company car taxation. Not related to the new way of determining consumption and emission figures, Belgian government has already announced though that from 2020 on, automotive fleet-taxation will be altered, putting the 120% deductibility of electric cars to an end and limiting the fiscal deductibility of company cars in general.

It remains to be seen what the result of

these changes will be.

BELGIAN FLEETS GO PREMIUM Belgian fleets are invaded by premium brands, with BMW (2), Mercedes (4) and Audi (5) in the top five, and Volvo as a real alternative in eighth place. Volkswagen leads the local fleet sales market, and French carmaker Renault holds third place with other European generalists like Opel (6), Peugeot (7), Skoda (9) and Ford Ford (10) behind it, leaving no more than crumbs for Asian competitors such as Hyundai, Nissan, Kia or Toyota.

In Belgium, full electric cars such as Tesla or the Nissan Leaf are almost uniquely sold to companies, since they are the only ones to benefit from a fiscal deductibility of 120% of all car costs, making them financially affordable, even though their retail prices remain higher than those of ICE-cars. Even though this fiscal stimulus is important, only 5.194 full electric cars were present in Belgium’s total fleet in 2016, representing no more than 0,1% of the total car park.

13

BELGIUM | FINANCING AND LEASING

Close competition in top-heavy lease market Stijn Blanckaert

Belgium has always been a test market for the introduction of new financial products. The competition between the main service providers in its extremely competitive leasing market is extremely tight.

While in 1996, Belgian leasing companies owned and operated a fleet of some 95.000 cars in full operational lease, this figure has grown to over 370.000 in 2016.

On the present day, about half of all Belgian company cars are being acquired through off balance-lease solutions such as financial renting and full operational lease, with on balance-financing (financial lease, bank loan) and cash buying decreasing in popularity.

FINANCIAL RENTING OFTEN PREFERRED BY SME’S Financial Renting, with a residual value that exceeds 15% of the investment value, allows companies to keep the investment outside of the balance sheet. “Off balance” financing avoids the impacting of credit lines and overcharging of the balance sheet, making it a very popular way of financing company cars among SME’s.

Financial Renting offers the owner or his company the possibility to acquire the car after its normal leasing period of four or five years, allowing a profit on resale or simply the possibility to keep on using it.

While, for a long time, the residual value determined in the leasing agreement was in effect limited to 16 or 20% of the price of the car, recent trends go towards higher residual values, of even up to 30%. These allow customers to benefit from a lower leasing cost, keeping the option of buying the car after its lease, but in the mean time also increase the leasing company’s residual value risk. However, since these higher residual values allow lower rates and make providers more competitive, more and more of these schemes are being offered.

14

Adding services like maintenance, tyre service and insurance to the leasing cost makes this financial formula look quite like full operational lease, with the added possibility of acquiring the car in the end. Though the residual values can be as high as 30% of the initial investment, they still remain lower than the ones used in full operational lease.

Financial Leasing, with a residual value of less than 15% of the investment value, is not very popular for cars in Belgium.

FULL OPERATIONAL LEASING FOR LARGE FLEETS As good as all large Belgian fleets have opted for full operational lease because of the competitive rates in the mature Belgian market, with a number of well known (international) companies being challenged by local players. The advantage of having a no risk, all-in rate, combined with the ease of not having to manage the entire fleet process itself, has made this solution the number one choice for fleet managers in Belgium.

Whereas the “Open Calculation” model, in former days heavily promoted by LeasePlan, has been popular for quite some time, it has lost its momentum in recent years, and is now almost extinct in Belgian lease fleets.

Today, given the fierce competition between the providers, tariffs and rates are so close, leaving little or no margin for cash backs, that the additional cost of Open Calculation is no longer worth the investment for most company fleets.

At the end of June 2017 Arval and LeasePlan were the numbers one and two on the Belgian lease market, followed by Alphabet FLEET EUROPE SPECIAL BENELUX FRANCE

BELGIUM | FINANCING AND LEASING

The Belgian full operational leasing-market is highly competitive.

and and local player KBC Autolease (KBC Bank-owned). ALD Automotive figures in fifth place and Athlon holds sixth position. The first captive leasing company in Belgium is Volkswagen D’Ieteren Finance, a joint venture between Volkswagen Bank and the Belgian VW-Audi-Seat-Skoda importer. BMW Financial Services comes eighth, and Belfius Auto Lease (subsidiary of Belgian bank Belfius) and J&T Autolease (independent leasing company) complete the ranking.

These ten largest Belgian operational lease companies total 324.931 cars, which is some 88% of the total Belgian operational lease-market. The Belgian car-leasing market is clearly “top heavy”, leaving only a small percentage of the market for the companies outside the top ten.

The Belgian leasing market is under pressure, not only because of the competition between the big players, but also because of the political and fiscal pressure on company cars.

With the Belgian government proposing alternatives like “cash for car” for 2018 and announcing a revision of company car taxation by 2020 at the latest, the result could be a decline in the number of company cars offered to employees, logically putting at risk the business models of the leasing companies. Therefor, almost all of them are working on alternatives and new products, such as combined offers of a leasing car and a bicycle, a car FLEET EUROPE SPECIAL BENELUX FRANCE

and a subscription to public transport, an electric car combined with an ICE-model for a few weeks per year and combinations of the above.

For the moment, the breakthrough of these alternative solutions and services has its time coming, but all providers will be ready when the market will be.

PRIVATE LEASE AS AN ALTERNATIVE Following recent evolution in the Dutch fleet market, Belgian leasing providers also have begun to offer Private Lease and Personal Lease as an alternative financing solution for private customers. LeasePlan, together with Media Markt, has offered Opel and Nissan cars in private lease for

very competitive rates in 2015 and 2016, as has and does Directlease. Furthermore, most car brands offer private lease to their customers, making good use of the fact that leasing is a service and not a “consumer credit”, allowing easier access to the product with less legal burden. The real breakthrough of private lease has still to come, but once more, government decisions like the “cash for car” offer for employees having a company car could jumpstart this market, since a lot of them will replace their company car with a (cheaper) private car, that could be acquired in private lease, given the “all in” price of the latter and the fact that company car users are used to this sort of formula.

BELGIUM - RANKING OF OPERATIONAL LEASE COMPANIES - 06/2017 1. Arval 2. LeasePlan

>50.000 >50.000

3. Alphabet Belgium

>45.000 <50.000

4. KBC Autolease

>45.000 <50.000

5. ALD Automotive 6. Athlon Car Lease

>45.000 <50.000

7. D'Ieteren Lease

>25.000 <30.000

8. BMW Financial Services

>20.000 <25.000

9. Belfius Auto Lease

>15.000 <20.000

10. ICLH (J&T + Directlease)

>10.000 <15.000

Total Top 10

>25.000 <30.000

356 284

Sum total Renta 2017

376 569

Sum total Renta 2016

350 264

% 2016-2017

7,51%

Source: Renta, association of leasing and rental companies

15

BELGIUM | FLEET MANAGEMENT

Elaborate car policy as a must have for fleets Stijn Blanckaert

In Belgium, fleets manage more than 1.000.000 company cars. All the more reason for fleet managers to structure their attribution wisely and organize fleet management accordingly through elaborate car policies.

A complete car policy can be legally binding and is a must in order to avoid disputes.

3 TIPS FOR A GOOD CAR POLICY 1. Do not simply copy a car policy from someone else.

2. Ask your leasing company for help.

3. Be complete. All fleet aspects should be covered.

16

Managing fleets of dozens or hundreds of company cars cannot be done professionnally without a well elaborated car policy.

Belgian companies managing fleets of more than 50 cars have understood this, but in smaller fleets, the lack of an official car policy can cause problems.

More than in other countries, a lot of Belgian employees have “benefit cars”, that are attributed solely as a means of income, in order for the employers to be able to attract the right profile for the job or evade the high fiscal burden on classic salary. For example, in Belgium almost no IT consultant or financial manager has to do without a company car, even if they don’t really need one for their professional activities. The other category of company vehicles, the so called “tool cars”, are meant for salesreps, technical support teams, merchandisers and the lot. Most of them also can be used for private purposes, as do the benefit cars.

A company car only forms a part of the salary package if private usage of it is allowed. In that case, the employee is taxed on the benefit in kind the car represents.

There are no exact figures on the number of company cars in Belgium that can be used for private purposes, but Belgian car federation Febiac estimates that 90 percent of leasing cars and 50 to 70 percent of all other cars registered to companies can also be used privately.

The importance of a genuine, elaborate car policy is key. Without it, employers and employees have difficulties determining what to do in case of traffic fines, accidents, function change, resignation or dismissal and so on. Belgian car policies include the rules of engagement relative to

the company’s car and lcv fleet. They list and explain the criteria for the attribution of a car, what to do in case of (long) absence, the rules in relation to private and corporate use of the car, the use of a fuel card (is it allowed to fill the tank during weekends or abroad for example), what to do in case of mechanical breakdown or an accident (call the hotline of the leasing company, not the dealership nor the assistance provided by the carmaker), the choice of brands, models, engine types, accessories and optional equipment, what to do in case of fines and so on.

LEGALLY BINDING OR NOT? In what way such a car policy is legally binding for the employee? The car policy can be a part of the employment contract.

That is the case when the employer asks the employee to sign it or when it is referred to in the contract. In that case, the only way to modify it is by common agreement between the parties. On the other hand, it is possible to see the car policy as a single sided document in which the employer instructs the employee with regards to the do’s and don’ts. It is perfectly legal for the boss to do so based on his authority as an employer. In this case, the approval of the employee is not required to change the rules of the game.

Even if it is possible to change the rules in the policy (with or without the employees’ consent), the document delivers a certain assurance to both parties and guarantees a clear and consistent treatment of the matter, reducing possible disputes to a minimum.

FLEET EUROPE SPECIAL BENELUX FRANCE

ADVERTORIAL

CONCEDED EDITORIAL SPACE

Renta Solutions now ready to conquer Europe Renta Solutions, a success? That's an understatement. The company's four platforms make life so much easier (and cheaper) for fleets, and for dealerships/tire fitters, that it has completely conquered its home market in Belgium and Luxembourg. Next step: taking that winning formula to the rest of Europe.

Founded in 2005, Renta Solutions catered to a need in the Belgian lease industry for greater efficiency in its dealings with maintenance, repair and tire shops. The solution: MRT, an ICT platform that provides maximum flexibility, autonomy and automation.

REQUESTS FOR APPROVAL “Basically, MRT automates the requests for approval of maintenance & repairs from workshops to our clients, the lessors, rental companies and corporate fleets”, says Erik Maes, General Manager of Renta Solutions. “This saves time, effort and money. And it was such a great success that we replicated this principle with other, subsequent platforms”.

In 2008, a second platform was added: REI – Renta Electronic Invoicing. Automation of invoicing facilitated the payment between fleets, rental and lease companies on the one hand and the MRT sector on the other, among other ways by reverse billing. “This not only benefits the fleetowners, but also the service centres and tire shops, so everyone wins”, says Maes.

CENTRALISED PROCESS A third platform was added in 2014: ORD, short for Order Register Deliver. “In line with the previous platforms, we decided to offer a centralised, digital process to FLEET EUROPE SPECIAL BENELUX FRANCE

deal with the purchasing and registration of vehicles – again to facilitate the procedure, gaining time and money for all parties involved”.

FMS, the fourth platform went live in 2015.

“Short for Fines Management Services, this platform is a beauty”, says Maes. “In Belgium, company cars are registered to the company or lessor, not the driver. As a result, up to 3.300 traffic & parking fines a day went to vehicle lease companies, who then had to pass them on to their drivers.

With government and police authorities, we've negotiated a system to deliver these fines directly to the driver”.

PRIVACY PROTECTION Not only do the fines get processed and paid faster – a win for government – but companies no longer have to deal with the admin of traffic fines. There's also a win for the drivers: their privacy is better protected.

These four main platforms, constantly refined and improved, have earned Renta Solutions an almost total dominance of the Belgian and Luxembourg market. Its products are in use for over 400.000 lease vehicles – about 93% of the national total.

No less than 2,900 vehicle dealers (98% of the total) and all of the tire fitters use Renta Solutions. The annual number of digital transactions runs up to over 3.4 million.

Erik Maes, General Manager of Renta Solutions

BODYWORK AND REMARKETING Clearly, while Renta Solutions constantly aims to offer better services, it cannot get much bigger in Belgium (or Luxembourg, where it is also present). That's why the company sets its sights on expansion – first targets: France, Italy and Germany. “Our aim is to offer all four platforms, of course modified to suit the needs and wants of the local market”, says Maes. “We're also investigating to offer platforms for both bodywork and remarketing. This will allow us to cover the entire life-cycle of the vehicle, making our services even more attractive”.

MORE INFO www.rentasolutions.org

17

BELGIUM | TAXATION

Company car taxation & incentives in Belgium The basis of company car taxation in Belgium is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects.

Expected future developments are also briefly listed, if any. #1 CAR TAXATION Registration tax Taxable event

The registration of a vehicle in Belgium. A car registration in Belgium is required for the use of a vehicle on Belgian public roads by a person that has its permanent address in Belgium. Also in the event of a change in ownership the car needs to be re-registered in Belgium.

Taxable person

The person who has registered the car in its name, i.e. the owner or principal user of the car (natural or legal person).

Tax due

The registration tax is a regional tax and therefore differs for non-leasing vehicles between the Flanders, Brussels and Walloon region. For vehicles registered by leasing companies, the system of the Brussels region applies. > in the Flemish region the tax is calculated based on various environmental features of the vehicle, also taking into account the age of the vehicle; > in the Brussels region the tax is calculated based on the cylinder capacity, power of the engine and age of the car; > in the Walloon region the tax is calculated in the same way as in the Brussels region. However, an eco-malus system is in place for all cars with a CO2 emission exceeding 145g per kilometer.

Taxable period

#4 COMPANY CAR VAT due on private use of company cars

The registration tax is due in full upon the first registration or re-registration of a vehicle in Belgium.

Annual circulation tax Taxable event

The fact that a vehicle is registered in Belgium.

Taxable person

The person mentioned on the registration form of the vehicle.

Tax due

The annual circulation tax is also a regional tax where the amounts vary between the Flanders, Brussels and Walloon region. The tax is based on the volume of the cylinder and the power of the vehicle.

Taxable period

The annual circulation tax is due on a yearly basis.

Annual supplementary circulation tax Taxable event

The fact that a vehicle that runs on LPG or other liquid hydrocarbon gases is registered in Belgium.

Taxable person

The person mentioned on the registration form of the vehicle.

Tax due

The tax is based on the fiscal horsepower of the vehicle.

Taxable period

The annual supplementary circulation tax is due on a yearly basis at the same time as the annual circulation tax.

Kilometer charge for heavy goods vehicles of over 3,5 tons Taxable event

The use of Belgian highways and certain regional and municipal roads by vehicles with a maximum authorized total weight of more than 3,5 tons.

Taxable person

The owner of the truck.

Tax due

The kilometer charge is calculated using a device, a so-called “On Board Unit (OBU)”, in the truck.

Taxable period

The tax is due when using the concerned roads.

#2 INCOME TAXES From a corporate tax point of view only mobile telephone equipment and financing (interest) costs are fully deductible. For fuel costs, electricity costs for charging electric driven cars and taxi costs a 75 % tax deduction is allowed. For all other car costs the level of tax deduction is depending on the CO2 emission of the vehicle concerned.

In any case the VAT deduction on car costs is limited to 50 % (cf. supra). When the employee pays a contribution for the private use of the car, the company is deemed to provide a “rental service” to this employee subject to VAT. Company car in personal tax returns – benefit in kind The private use of a company car triggers the taxation as a benefit in kind. The yearly benefit in kind is calculated as 6/7 of the catalogue value of the car, multiplied by a percentage linked to the CO2 emission rate of the concerned car. The catalogue value of the car is also multiplied by a percentage in function of the age of the car. In case the employee pays a contribution for the private use of the car, the contribution is deductible from the benefit in kind.

#5 INCOME TAXES – DRIVERS’ PERSONAL TAXATION Private car in the personal tax return Private use The car costs related to the private use of a vehicle are not deductible in the personal tax declaration.

Commuter traffic The deduction of car costs regarding commuting traffic is limited to EUR 0.15/km. In case the taxpayer opts to deduct his actual expenses, the deducted commuting costs cannot exceed the taxable benefit in kind.

Business kilometres The car costs regarding business kilometers are deductible for maximum 75 %. Only the costs for fuel, finance costs and costs for mobile telephone equipment are fully deductible in the personal tax declaration.

#6 ELECTRIC VEHICLES • Belgium wants to promote the use of electric cars by way of a range of premiums and increased tax deductions: - the Flemish region grants premiums up to EUR 4,000.00 when a private individual purchases or leases a zero-emission car; - also the Brussels region grants a premium when purchasing low-emission cars; - costs for fully electric vehicles can be deducted at 120% in the corporate income tax declaration (and also for hybrid vehicles, increased tax deduction rates are available – taking into account their reduced CO2 emission norms); - furthermore electric cars are exempt in the Flemish region and pay the minimum tax in the Brussels and Walloon region when it comes to car registration and annual circulation taxes; - as the taxable benefit in kind is depending on the CO2 emission the benefit in kind is remarkably lower in case of a full electric car, but can also be very beneficial for hybrid cars.

#7 FUTURE DEVELOPMENTS • On 1 February 2017 the city center of Antwerp turned into a low-emission zone (LEZ) and as from next year, 2018, also Brussels, Mechelen and Willebroek will turn into low-emission zones. Ghent plans to turn into a low-emission zone as from 2020; • In 2018 there will be the introduction of a “cash for car” system, making it possible for employees to trade in their company car in return for extra cash, which will be taxed more beneficially than a salary increase. However, it remains to be seen how successful this system will be, as it does not really address the current mobility issues people are confronted within Belgium; • Following a major reform of the corporate income tax regime, the beneficial tax regimes for especially (false) hybrids will be abolished by 2020; • Finally, it also to be expected that the implementation of the new WLTP standards will (need to) lead to an adjustment of the car registration and annual circulation tax systems.

#3 VAT Deduction The deduction of input VAT on car costs equals the share of the professional use (in %) of the vehicle but cannot exceed 50 % of the amount of paid VAT. In order to calculate the percentage of professional use of the car, the taxpayer can choose to apply following methods: 1. a ride administration via manual input or in an automated manner; 2. the application of following formula: % private use = ( (commuting distance x 2 x 200 + 6.000) / total yearly kilometers ) x 100 3. the application of a lump sum deduction of 35 %

Contact Erwin Boumans Partner Indirect Tax BDO Tel 0032 (0)2 778 01 00 erwin.boumans@bdo.be

Hire purchase The hire purchase qualifies as a supply of goods for VAT purposes. Meaning that the VAT is due at the beginning of the “rental period” on the full rent price.

Leasing A lease agreement is treated as a supply of services, meaning that the lessor pays VAT on each lease instalment.

18

FLEET EUROPE SPECIAL BENELUX FRANCE

FLEET EXPERT?

THIS IS FOR YOU! WIKIFLEET is a free collaborative encyclopaedia about car fleet management. It provides essential knowledge of what you need to know about fleet markets in the world. For each country, we have selected 12 chapters that will help you understand the fleet market and guide you to make the best strategic choices for your fleet management.

From the economic environment to the latest trends, with a view on the automotive market, the taxation and legislation or the environment and mobility aspects of the fleet management, WIKIFLEET got you covered!

Visit now www.globalfleet.com

BELGIUM | TRENDS

A myriad of new possibilities but which one will prevail?

Stijn Blanckaert

Ideally located in the heart of Europe, Belgium serves as proving ground for all kinds of new mobility solutions, start ups and trends. But not all of them are as successful as they would like to be.

CASH FOR CAR: WINDOW DRESSING?

Private Lease of a Porsche might still be a long way, but more modest cars are offered to Belgian customers with growing success.

THREE TRENDS IN BELGIUM 1. Cash for Car: from 2018 on employees can trade in their company car for extra cash 2. Private Lease: interest is growing but the real breakthrough still has to come 3. Diesel is dying: the market share of diesel steadily decreases in favour of petrol cars 20

Looking at the Belgian market, a trend that cannot be ignored is the on going pressure put on company cars by ecologists, the European commission, and all kinds of activists. Company cars, and benefit cars in particular are being blamed for traffic jams, pollution and so on. To (help) reduce traffic congestion, the Belgian government decided to put in place a “cash for car”-proposal, from January 2018 on. Employees who benefit from a company car will be able to trade it in for an advantageously taxed extra monthly salary, if their employer agrees. The monthly amount is expected to vary from some 300 to 700 euro, depending on the list price of the traded-in vehicle.

Whether this formula will be a success or not remains to be seen, since only those who do not need their car and can get everywhere using public transport or bicycle are likely to be really interested. A lot of critics think that employees who will trade in their company car will simply buy a cheap private (second hand) car instead, which will not only be more polluting but will still be stuck in the same traffic jams as before.

PRIVATE LEASE: HERE TO STAY? Those who would opt for cash in return for their company car might also be seduced by a new car in private lease. After being as good as inexistent for years, a personal leasing car as an alternative to classic car financing by private persons has made its entry to the Belgian market since 2016, following the Dutch example. LeasePlan

and Directlease are the main Belgian promoters of this service, regularly putting in place temporary deals in collaboration with retailers such as MediaMarkt (electronics retailer) and Gamma (DIY-stores) proposing fully equipped small cars (Opel Corsa or Karl, Toyota Yaris and so on…) in full operational lease with prices below 200 euros (36 months and 30.000 kms), including the financing, maintenance and tyres, insurance and road side assistance.

This success inspires others, such as the automotive brands itself, to propose the same formula to their customers. This form of leasing is expected to finally make its breakthrough and is considered the future for leasing companies who seek alternatives to traditional company car leasing.

THE LIST IS LONG The list of mobility trends visible on the Belgian market is long. Other than the two discussed, one could look at the combined leasing solutions offered by almost all leasing companies (bicycle and car lease, public transport-pass combined with a leasing car, the lease of an electric car with the possibility to use an ICE-vehicle for some weeks every year and so on), at the imminent death of diesel as fuel for passenger cars (and the replacement of it with petrol, hybrid-petrol or fully electric cars), the trend among young people to pay for the use rather than for the ownership of a car, car sharing and alternative taxi-solutions (Uber for example) and so on.

One thing’s for sure: every year, lots of new mobility initiatives are launched but only a few of them will really be successful. If you know which ones, hurry up and invest in them!

FLEET EUROPE SPECIAL BENELUX FRANCE

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BELGIUM | TIPS AND TRICKS

“Innovation is key” Stijn Blanckaert

Ronny Van den Driesch is the Audit & Vehicle Manager of Carglass® (company name Belron), an international player in the automotive industry offering glassand bodyrepairs for cars and trucks. He manages a fleet of 130 passenger cars and 100 light commercial vehicles, mainly from the VW-Audi-group and Ford, of which about 40 are in full operational lease and the others in financial lease (on balance).

Working with LeasePlan, KBC Autolease and Volkswagen D’Ieteren Finance (VDFIN) as suppliers, he uses the XPO-fleet software tool to manage his fleet in a structured manner.

Ronny Van den Driesch, Audit & Vehicle Manager of Carglass® advises fleet managers to innovate.

As a fleet manager who manages an lcvas well as a passenger car fleet, with both benefit and tool cars, his advice is to clearly differentiate the rules of the game by category.

For tool cars and LCVs, serving as a work tool as well as a means of personal transport in the case of passenger cars, he advises

to make a fixed choice for a specific model meeting the needs of the company, thus limiting the complexity of interior and exterior modifications for the professional equipment to be installed (cars are branded and equipped with specific tooling), and ensuring better fleet discounts (because of the greater volume) while making switching of cars between drivers easier.

For benefit cars, Carglass® uses a budget and a limited list of cars to choose from, based upon a car policy that forms an integral part of the employment contract.

Van den Driesch emphasises the need for a fleet manager in Belgium to really understand the complexity of automotive (fleet-) fiscality and its consequences on the Total Cost of Ownership of the fleet, and advises not to work with too many (leasing-) partners for your fleet, in order to keep an overview of things and to be able to guarantee a certain level of service.

DO'S

DON'TS

• Make good use of the expertise of leasing companies or external consultants if the knowledge is not present in your company. Hiring a full time fleet manager is only feasible for (very) large fleets.

• Complicate things. Limit the number of partners. The possible limited financial gain of using a multitude of partners will also increase the burden of management and complicate fleet reporting.

• Consider the Total Cost of Ownership, taking into account all taxation and hidden costs, and do not simply opt for the cheapest leasing proposal.

• Change your fuel supplier too often. Keep on benchmarking but take into account that minor economies can cost more in administrative follow-up (changing of all fuel cards) than they yield.

• Take into account that free choice within a budget is a strong motivator for benefit cars, and that a fixed model for tool cars can make things much easier (accessories, stickering…)

• Overdo your car policy. The key information should outlined in a few pages, nobody will read car policies of 20 pages and more.

• Invest in safety, the environment and innovation. It does not only motivate employees, but also increases productivity, helps the company to be sustainable and carries out a positive image.

22

FLEET EUROPE SPECIAL BENELUX FRANCE

ADVERTORIAL

CONCEDED EDITORIAL SPACE

Athlon Mobility Management: a holistic view on TCM Athlon’s Mobility Management service - helps customers reduce mobility costs and increase the mobility ‘return on investment’. The customizable mobility reporting system supports customers with gaining insight into all their mobility related expenses and process flows.

The Athlon Mobility Management Service is our solution to help our customers achieve three main mobility objectives: realize cost savings, improve sustainability and using mobility as a key instrument to be an employer of choice. The concept of mobility stretches well beyond the limited number of people that actually qualify for a car lease. One of the trends we see is that corporate clients require integrated mobility solutions for all employees, not just those with a company car. An increasing number of large corporations is now pursuing this mobility agenda.

ATHLON’S SOLUTION TO COMPLEX CHALLENGES Business mobility is a complex topic, you are dealing with multiple suppliers and more internal stakeholders when you include all forms of transportation for all employees.

You also have to manage many different mobility profiles when offering customized corporate mobility solutions.

Finance directors are constantly looking to reduce the total cost of mobility. This becomes more challenging when these costs are spread across different areas of the business. While they often know what they spend on lease cars, other mobility costs are not as transparent.

This is where mobility management comes in – companies need a tool to control it in a proper, cost-efficient way. The Athlon Mobility Management service (MoMas) takes a holistic view on mobility and brings together all these different costs, making the total cost of mobility transparent.

the financial business controls and knowledge on how different services, products and solutions affect an employee’s mobility budget. This gives a clear insight into the total cost of mobility for a department or even a certain employee.

The Athlon Mobility Management solution is built to manage all forms of transportation and all types of contracts. MoMas is web-based and is currently operational with more than 40 customers and over 40,000 mobility contracts.

Learn more about what we can do for you at www.athlon.com You can also contact Kees Swildens, New Mobility Director Kees.Swildens@Athlon.com

ABOUT ATHLON Athlon is an international provider of operational vehicle leasing and mobility solutions. We are headquartered in Almer, the Netherlands and have a global presence via our own Athlon branches and strategic partnerships.

Athlon International Veluwezoom 4 / 1327 AG Almere / The Netherlands

The Athlon solution is employee-centric and ultimately enables finance directors to keep better track of total mobility costs. MoMas effectively manage the mobility package of each employee. It is a custom-made application with a focus on cost control and workflow management. It brings together FLEET EUROPE SPECIAL BENELUX FRANCE

23

GRAND DUCHY OF LUXEMBOURG

ECONOMY

Discrete, rich, small.

Luxembourg is it all Stijn Blanckaert

The Central Bank of Luxembourg. Almost half of the Grand Duchy’s GDP originates in the financial sector.

With only 2.586 km2, the Grand Duchy of Luxembourg is one of the smallest countries in Europe, but with a GDP per capita of $102.831,- it is also one of the absolute richest, thanks to its interesting fiscal climate.

VITAL COUNTRY STATISTICS

Population 576.200 Capital Luxembourg

Governance Constitutional Monarchy

GDP (PPP): $ 58.065 million World ranking GDP (PPP): 75th GDP (per capita): $ 102.831 World ranking GDP (pc): 1st

Currency euro (EUR)

Unemployment rate 6% Inflation rate 1,97%

24

One of the main poles of attraction of Luxembourg, the Grand Duchy surrounded

by Belgium, Germany and France is its particularly interesting fiscal climate, making it sort of a “tax paradise”, although the Luxembourg government complied with European and international rules concerning the banking secret. The country is a full member of the European Union since the absolute beginning and replaced the Luxembourg Frank with the Euro currency from the start of the latter.

The head of state is Grand Duke Henri, and as such Luxembourg is the only country in the world to still be headed by a Grand Duke. It is a constitutional monarchy with an elected parliament. There are three official languages, Luxembourgish, French and German. In 50 years, the population grew by 68%, making it an exception among its direct neighbours. This growth is mainly caused by immigration, leading to the situation where 46,7% of the population is of non-Luxembourgish origin. Apart from about 307.000 Luxembourgers, no less than 93.100 Portuguese and 41.700 Frenchmen live in the Grand Duchy. All together, Luxembourg has 576.200 inhabitants.

The economy of the Grand Duchy depends largely on the financial sector, where almost half of the GDP of the country originates.

About 150 different banks operate in or

around the capital, conveniently called Luxembourg and not to be confounded with the Belgian province of Luxembourg, adjacent to the Grand Duchy. The capital itself has 111.300 inhabitants and is by far the most important city of the country, followed

by Esch-sur-Alzette (33.300 inhabitants).

Today, the Grand Duchy of Luxembourg is the most important European marketplace for investment funds (second in the world behind the USA), and has the greatest number of private banks in the Eurozone.

EU SEAT FOR TECH GIANTS Apart from the financial sector, there still is a strong steel industry with the ArcelorMittal group, employing 4.260 people in Luxembourg; and many international companies such as Amazon, AOL, eBay, Paypal, Skype and Apple iTunes that have their European seat in the Grand Duchy, thanks to the interesting taxation laws and favourable investment climate.

Tyre producer Good-Year also has its European head office in Luxembourg (3.250 employees).

Luxembourg, measuring no more than 82 km by 57 km, has 85,3% of agricultural and wooded area, and only 0,6% of watercourses and waterbody. 168.700 people work but don’t live in the Grand Duchy.

This remarkable number of non-resident borderers, called “frontaliers”, consists mainly of French (81.300), German (41.900) and Belgian (41.700) workers. With 6%, the unemployment rate in Luxembourg is rather low.

FLEET EUROPE SPECIAL BENELUX FRANCE

GRAND DUCHY OF LUXEMBOURG | AUTOMOTIVE MARKET

As many cars as inhabitants Stijn Blanckaert

The Grand Duchy of Luxembourg counted 518.281 registered vehicles in 2016, or about 1 per inhabitant. An impressive figure, but are they all driven by Luxembourgers?

LUXEMBOURG: EVOLUTION OF THE NEW CAR MARKET

46 473

30000

49 793

40000

46 624

50 398

50000

50 561

60000

20000

All categories together, Luxembourg counted a total of 518.281 registered vehicles in 2016, which is 2,84% over the 2015 figure of 503.991. According to the SNCA (Société Nationale de Circulation Automobile), the total number of registered cars on the road last year consisted of 201.730 passenger cars, 189.202 lcv’s, 65.776 trucks and 31.569 two- or three wheeled vehicles of which 19.485 motorbikes. This increase in registered vehicles shows an automotive market in good health.

Just before the global crises touched the worlds’ economy including the one of the Grand Duchy, 2008 was the best year ever for the Luxembourg automotive sector, with 52.359 registrations of new passenger cars and commercial vehicles, a figure that has never been reached since.

2015 was a lesser year, with only 46.743 registrations, following a VAT increase.

10000 0 2012

2013 2014 2015 2016

TOT 10 BRANDS AND VOLUMES 2016 (FULL YEAR) BRAND

01/12/2016 MARKET REGISTRATIONS SHARE

Volkswagen

5 775

11,42%

BMW

5 361

10,60%

Mercedes

4 576

9,05%

Renault

4 530

8,96%

Audi

4 153

8,21%

Peugeot

2 419

4,78%

Opel

2 313

4,57%

Ford

2 082

4,12%

Skoda

1 921

3,80%

Hyundai

1 838

3,64%

Source: Paperjam.lu

Only five times, the Luxembourg market counted more than 50.000 new registrations, and 2016 was the fourth best year ever with a total of 50.561 cars. Up till now, 2017 is very promising, since at the end of July, already 33.475 cars were put into traffic.

Over the last ten years (2017 not included), on average 49.441 cars and commercial vehicles were registered on the Luxembourg market.

Last year (2016), the best sold passenger car brands in the Grand Duchy were Volkswagen (5.775 cars), BMW (5.361), Mercedes (4.576), Renault (4.530) and Audi (4.153). Clearly, the Luxembourg car market is dominated

by German brands, and the premium ones in particular. In this European brands-inspired market, the first overseas carmaker is Hyundai, in 10th place, with 1.831 cars sold in 2016.

FLEET EUROPE SPECIAL BENELUX FRANCE

BMW, Audi, Mercedes. The automotive market of the Grand Duchy is clearly premium-oriented.

In the lcv market, Renault leads the provisional 2017-ranking (totals at the end of July) with 521 Kangoo’s, Trafics and Masters, followed by Ford (347), Volkswagen (325), Peugeot (316) and Fiat (308). Clearly, with total figures below 1.000 one or a few good bulk deals can make a brand jump from fourth to first place at once, so the competition is fierce.

NO APPETITE FOR EV AND HYBRID As is the case in most countries, the penetration of diesel cars is decreasing, although only slightly in Luxembourg. Today, 64,4% of the country’s car fleet is diesel-driven, and 34,8% have petrol engines. That leaves only 0,81% for full electric of hybrid cars (coming from 0,18 in 2010).

The 2015 UE-target of 130 g average CO2-emissions was met by the Grand Duchy’s fleet, and is at 127,5 g at the moment, but without special measures, the 2021-target of 95 g will not be met.

Since a little under 170.000 people work but don’t live in the the Grand Duchy of Luxembourg, of whom quite a lot do drive a Luxembourg-registered company car (benefiting from the attractive taxation), many of the registered cars don’t stay in the country overnight.

25

GRAND DUCHY OF LUXEMBOURG | FLEET MARKET

Leasing companies push market share German premium brands Stijn Blanckaert

Size apart, the fleetmarket in the Grand Duchy has all the characteristics of its big brothers in neighbouring countries, with an extra emphasis on German premium brands, driven by leasing companies.

Following a recent study by consultant KPMG, on the 1st of January of 2017, all together, 22% of all registered cars in Luxembourg, or 84.898, are company cars, an increase of 4,6% since 2016. This already high and still growing penetration of company cars has its effect on the average age of the countryâ&#x20AC;&#x2122;s car fleet. With 7,7 years in average, that figure lies a full 2 years under the European average age and is also lower than that of neighbouring countries Germany (9 years on average), Belgium (8,8) and France (8,8).

Of those 84.898 company cars, 45.678 are bought, 12.970 are in financial leasing and 26.250 are in operational leasing, still according to KPMG. Since 2015, the spread of market shares between diesel and gasoline cars started making a reverse movement, with petrol gaining in market share to the detriment of diesel.

Although on the 1st of January 2017, hybrid and electric cars, with 3.165 vehicles on the road or 0,8% of the fleet, still have a market share of under 1%, their volumes increase (11,21% up between 2016 and 2017). The target of 10% renewable energy in the transportation sector is supported by the deployment of a network of 800 charging

26

stations (with 1.600 charging points) across the country, to be completed in 2020.

FISCAL REFORM AFFECTS DIESEL 2017 marked a fiscal reform in the Grand Duchy, impacting the calculation of the benefit in kind for drivers of company cars.

Since this year, the benefit in kind does no longer solely depend of the investment value of the vehicle, but also of its CO2-emissions and type of engine. The old method, taking into account 1,5% of the vehicle price as benefit in kind, got replaced by a new way of calculation in which the percentage of the price to be used as taxation basis differs from 0,5% for electrical or hydrogen vehicles, to 1,8% for the most polluting diesels, with always a lower percentage for petrol fuelled cars or hybrids and cars running on CNG. This modification in taxation will further contribute to the decrease of diesels in the corporate fleets of Luxembourg. As such, that could be beneficiary for the environment, but less so for what the objective of reducing CO2-emissions is concerned, as diesels emit less CO2 than petrol engines.

LEASING BOOSTS PREMIUMS MARKET SHARE The Luxembourg car leasing sector is represented by Mobiz, the Rental and Mobility Business Association, the new name of the organisation that was formerly known as FLEET EUROPE SPECIAL BENELUX FRANCE

GRAND DUCHY OF LUXEMBOURG | FLEET MARKET

In Luxemburg, premium brands dominate the vehicle fleet market and there are no signs that this will change in the near future.

FLLV, representing the main providers of long and short term lease, counting twenty two members managing some 37.500 leased cars and lcv’s. The most important lease companies in the Grand Duchy are international players such as ALD Automotive, LeasePlan, Alphabet, Arval and Athlon, but local companies also play their role.

The most important period for the automotive market is the yearly ‘Autofestival’ which takes places in February. All over the Grand Duchy, car dealerships extend their opening hours and present their newest models and offer special discounts. Since a lot of companies wait until this period to place their orders for new company cars, it has become the year’s most important moment for the renewal of fleets in Luxembourg and the busiest time of year for the leasing companies.

GERMAN PREMIUMS RULE FLEETS It is through those leasing companies that the German premium brands were and are able to gather such important market shares in Luxembourg.

Asked about that, Dominique Roger, Managing Director of ALD Luxembourg, said in the online economical medium Paperjam.lu that “The importance of premium cars in particular comes from FLEET EUROPE SPECIAL BENELUX FRANCE

the leasing-customer profile that is mainly concentrated in high responsibilities or even executive functions.” Roger says that “other factors also contribute to their success. These manufacturers offer increasingly wide and attractive ranges and good conditions for corporate fleets.

The residual values of these vehicles are also stronger.”

He concludes that ‘the Luxembourg market is pretty heckled up and I think we are moving towards a more complex constellation. Tax reform, by favouring less polluting vehicles, should make things happen.

The sector also approves these measures and the Mobiz players are committed to supporting the government's policy of moving towards less harmful engines, such as gasoline or hybrid plug-in, for example, rather than diesel.”

DID YOU KNOW? 1. According to KMPG, there are 84,898 company cars in Grand Duchy of Luxembourg 2. Not even 1% of the fleet is Electric or Hybrid 3. Taxation is changing and should give alternative powertrains a boost 4. The international players are dominating the vehicle lease market 5. Fleets love premium brands, German premium brands

27

GRAND DUCHY OF LUXEMBOURG | TAXATION

Company car taxation & incentives in Grand Duchy of Luxembourg The basis of company car taxation in Luxembourg is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any.

#4 COMPANY CAR

#1 CAR TAXATION

VAT due on private use of company cars

Road tax Taxable event

The tax is due on all vehicles that are registered in Luxembourg.

Taxable person

The person mentioned on the car’s registration document, i.e. the owner or the holder of the vehicle.

Tax due

The tax due is calculated based on either the engine capacity for vehicles first registered before 1 January 2001 or on the CO2 emission for vehicles first registered after this date.

The tax can be calculated on the simulator provided by the Automobile Club du Luxembourg (https://www.acl.lu/ Mobilite/Taxe-sur-les-vehicules-routiers).

Taxable period

The road tax is due every year and can be paid yearly or half-yearly.

Where a company puts vehicles at the disposal of its employees and the employees can also use them for their private needs, the company is deemed to supply services for consideration for VAT purposes except if the company did not deduct VAT borne on the acquisition lease of the car.

Company car in personal tax returns – benefit in kind The taxable benefit in kind should be valued at a fair market value. However, if the allocation of the company car is not compensated by a decrease in the gross salary, the taxable benefit may alternatively be calculated taking into account a lump-sum valuation method, whereby the CO2 emission level and engine type of the car are taken into consideration. With the tax reform 2017, the lump-sum valuation of the benefit in kind for electric vehicle is considerably lower than for other vehicles.

Annual circulation tax Taxable event

#5 INCOME TAXES – DRIVERS’ PERSONAL TAXATION

A stamp tax of EUR 50 (EUR 100 in case of personalized plate numbers) is due upon registration

Private car in the personal tax return

Taxable person

Owner or holder of the vehicle.

Commuter traffic

Tax due

EUR 50 / EUR 100 (EUR 24 for the re-use of a personalized plate number)

Commuting expenses are deductible on a lump-sum basis (i.e. no actual commuting expenses can be claimed).

Taxable period

Indefinite

Business kilometres

#2 INCOME TAXES From a corporate tax point of view, all costs relating to cars –leased or owned – are in principle 100% allowed for deduction as a business expense for both Luxembourg corporate income tax (CIT) and Luxembourg municipal business tax (MBT), to the extent that they are in line with the business purpose of a Luxembourg tax resident company.

#3 VAT

The reimbursements by the employer of expenses incurred by an employee exclusively on the behalf of his employer do not qualify as taxable employment income provided that such reimbursements are not made on a lump-sum basis (i.e., disregarding the distance travelled). On the contrary, a lump-sum reimbursement of costs or the reimbursement of commuting expenses by the employer always qualify as taxable employment income.

#6 ELECTRIC VEHICLES Electric vehicles are subject to a flat road tax of EUR 30. A specific lump-sum valuation method applies for the benefit in kind valuation.

Deduction VAT on car costs incurred for business purposes is in principle fully deductible, in so far the business activities for which the car is used are not exempt from VAT (without entitlement to VAT credit).

Hire purchase

Contact Erwan Loquet Partner BDO Tax and Accounting Tel 00352 45 123 436 Erwan.Loquet@bdo.lu

This transaction is deemed to be a supply of goods. The VAT is due on the total amount of instalments once the lessee takes possession of the vehicle.

Leasing • If the leasing agreement provides the option for the lessee to purchase the car at the end of the contract, the lease itself is to be considered as a supply of services.

The VAT must be calculated on each instalment paid. If at the end of the contract the option to purchase the car is used, the sale of the car is treated as a supply of goods. The taxable basis for the sale is the option price of the vehicle.

• If the leasing agreement does not provide an option to purchase the car at the end of the agreement, the rental agrewement is to be considered as a supply of services. The VAT due is to be calculated on each instalment paid.

28

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GRAND DUCHY OF LUXEMBOURG | TRENDS

Dynamic market at the forefront of new trends Stijn Blanckaert

Chargy.lu: Luxembourg’s distribution network operators create a network of 1.600 charging points for electric vehicles by 2020.

Notwithstanding the modest size of the country, heaps of new initiatives see the light of day in Luxembourg. From autonomous driving, over augmented reality-aided studies to the installation of a nation wide network of EV-chargers, to name but some.

THREE TRENDS IN LUXEMBOURG 1. The Chargy.lu-network will provide 1.600 charging points for EV’s by 2020 2. Autonomous and connected driving project with Germany and France 3. Creation of new mobility initiatives by leasing companies 30

TESTING GROUND By the first semester of 2018 the Grand Duchy’s highways and a number of roads in the centre and the south of the country will be used as a testing ground for autonomous and connected driving.

The Luxembourg government has signed a cooperation agreement with neighbouring countries Germany and France in which they agree to create a common digital experimental site for automated driving and connected technology, which, alongside the Luxembourg territory, will cover roads in France (Metz region) and Germany (Saarland). Through the agreement, the three countries want to promote the development and testing of automated and connected driving technologies, in the framework of a cross-border vision and in a real environment. The experimental site will enable the testing of innovative technologies on all road categories (highways, roads, urban roads) as well as the exchange of experiences on legal and technical problems encountered in the cross-border use of automated and connected driving technologies.

ALD’S EXPERIENCE CENTRE Furthermore, Luxembourg’s leasing companies are developing new mobility pro-

ducts and initiatives in a rapid pace, with ALD Luxembourg for example announcing the creation of an experience centre in the Grand Duchy in which they want to help companies to better understand their employee mobility needs. Using augmented reality masks, that give a technological note to the exercise, ALD invites companies to discuss internally to establish the best leasing policy. Like in the Netherlands, ALD sees the experience centre on mobility as a testing environment for new mobility solutions.

ALD was already trying to diversify by offering bikes and electric steps for longterm rental, with modest results though.

Since last year, when the service was proposed, ALD Luxembourg has only rented 25 bicycles to companies. Their electric step-project is a bit more successful, with 50 contracts signed since the opening of the service a few months ago.

A NATIONWIDE CHARGING NETWORK In order to actively support the breakthrough of electric cars, the distribution network operatiors in Luxembourg decided to put in place an infrastructure of charging stations under the name “Chargy”. In 2020, the Chargy network will include 800 public charging stations for electric cars and hybrid plug-in vehicles in Luxembourg, with 2 charging points each. Nearly half of these stations will be installed at Park & Ride car parks and the remainder in public municipal car parks. Each charging station will include 2 charging points and the network will eventually offer 1.600 parking spaces reserved for electric vehicles. When completed, every municipality in the country will have at least one charging station.

FLEET EUROPE SPECIAL BENELUX FRANCE

GRAND DUCHY OF LUXEMBOURG | TIPS & TRICKS

Operational lease as trending funding method Stijn Blanckaert

In order to get a better view on the particularities of the Luxembourg operational leasing market, we interviewed the new Commercial Director of LeasePlan Luxembourg, Alessandro Tutucci.

Mr Tutucci, where does LeasePlan stand on the Luxembourg leasing market?

Alessandro Tutucci, Commercial Director of LeasePlan Luxembourg

ADVICE FOR FLEET MANAGERS 1. Luxembourg has a user chooser market. The benefit in kind calculation changed recently and impacts the buying power of the driver.

Acquire expert advice when setting up your car policy.

2. Officialise your car policy.

Mention the do’s and the don’ts. Good agreements make good friends.

3. Opt for an “all inclusive” full service leasing contract. Marginal gains found in unbundling do not compensate for the supplementary hassle, risk and communication problems following the dissection of the leasing contract.

LeasePlan is a strong player in the leasing market in the Grand Duchy. We hold second place in a total operational lease market that counted 37.500 cars at the end of 2016. All in all, the Grand Duchy is estimated to count about 100.000 company cars, so we can say that with one third of all company cars, the weight of the leasing sector is important. I can confirm that the operational lease market is doing very well in Luxembourg, with a steady increase in order intake and total portfolio. At LeasePlan, 80% of our leasing contracts are “all inclusive”, incorporating insurance, assistance, tyres, maintenance and repairs. It is our goal to be the outsourcing partner for companies who want a no hassle fleet management. For what the type of leasing companies is concerned, captive leasing companies have a much lesser market share than the multibrands.

Did the recent benefit in kind-calculation changes have an impact?

We are observing the usual strong demand in the SUV-segment, which as such is clearly not impacted by the fiscal changes, but in the mean time, it is clear that the biggest diesel engines, being the most expensive for their users for what the benefit in kind is concerned, losing a bit of market share, to the benefit of hybrids and petrol cars. This is a first in Luxembourg. But all in all, we are not witnessing a total turnover in the type of cars ordered by our customers.

What are the typicalities of the Luxembourg market that we don’t see elsewhere?

A specific factor is that our (leasing-)market is very premium-oriented, with a few brands

FLEET EUROPE SPECIAL BENELUX FRANCE

taking the bulk of orders. Furthermore, in our “user chooser”-market, the degree of personalisation of the ordered cars is larger than elsewhere, with more individually ordered extra equipment and options.”

What will the future bring for leasing in Luxembourg?

It is clear that we are facing a transition, from a market that is oriented on the car as the solution for the company’s mobility issues to a market in which the car is a part of that solution. We have in mind that a mobility mix solution could be a differentiator in the near future, with solutions such as a car combined with an e-scooter or e-bike or a public transportation subscription as well as car sharing. Even more important are the environmental issues, with the omnipresent focus on CO2-emissions and the increasing importance of hybrids and electric vehicles, at LeasePlan, we are fully commited to be part of this future. As such, LeasePlan is one of the founding members of the EV100-initiative that brings together forward looking companies to accelerate the transition to electric vehicles.

Being part of EV100 means that we publicly commit to do what we can to achieve net zero emissions from the corporate automotive sector by 2030. We are developing a comprehensive offering to help our customers gradually switch to electric vehicles. As such, for ourselves, we decided to electrify our employee-carfleet by 2021, to show that change really is possible.”

LeasePlan is one of the founding members of the EV100-initiative that brings together forward looking companies to accelerate the transition to electric vehicles. We publicly commit to do what we can to achieve net zero emissions from the corporate automotive sector by 2030.

FE: “Do you believe in the potential of private lease for your market?”

AT: “Such a product does not exist yet in Luxembourg. It may be something for the future.”

31

ECONOMY

NETHERLANDS

Dense, farming, growing and exporting Stijn Blanckaert

An important piece of the export puzzle, in the Netherlands, is indeed the port of Rotterdam, the largest in Europe.

With a population density of 412 people per km², the Netherlands ranks fourth worldwide amongst the +30,000 km² countries. Yet, it is the second largest exporter of food and agricultural products on the planet, after the U.S.A. Its fertile soil and mild climate play an important part, but so does the entrepreneurial tradition.

VITAL COUNTRY STATISTICS

Population 17.02 million Capital Amsterdam Governance Unitary parliamentary constitutional monarchy GDP (PPP): $ 907.6 billion World ranking GDP (PPP): 28th GDP (per capita): $ 53,139 World ranking GDP (pc): 13th

Currency euro (EUR) Unemployment rate 5,1% Inflation rate 1,4%

32

It is also a good place to live: in the 2017 United Nations World Happiness Report, the country comes in sixth. Known as a very flat and watery country, the Netherlands has reclaimed 17 percent of its territory from the sea and from lakes, using elaborate drainage systems to preserve the land. With more than a quarter of this territory lying below sea level, it is hardly surprising that the country is very conscious about climate change. On many levels, sustainability is usually high on the Dutch priority list.

TRADERS BY NATURE If there is one nation associated with the term mercantile, it must be the Dutch. Its economy is highly export-oriented – the Netherlands is one of the 10 leading exporting countries in the world. Food represents the largest slice of the pie, followed by chemicals, metallurgy, machinery, natural gas, petroleum-derived products and electrical goods. Big Dutch names with a global resonance are Heineken, Unilever, DSM, Akzo, Royal Dutch Shell, Philips and TomTom.

transshipment. It is a hub amidst a welldeveloped road, waterway and railway infrastructure, allowing goods to travel easily to and from the heart of Europe. In total, the Netherlands has 140,000 km of roads, including 2,750 km of expressways.

In Europe, only Belgium has a denser road network.

A HOTBED FOR ICT AND TECH INVESTMENT BrabantStad, a, economic coalition between the cities of Breda, Eindhoven, Helmond, ‘s-Hertogenbosch and Tilburg and the province of North Brabant, attracts much investment in ICT and technology. One in four people in this metropolitan region is employed in these sectors. BrabantStad is home to 1.5 million people and yields one fifth of the country’s industrial production.

The Netherlands remains a leading European nation for attracting foreign direct investment. It is also one of the five largest investors in the U.S.A. Looking at the growth figures, the Dutch national bank expects the economy to progress by 2.5 percent this year. It has been growing for 13 quarters in a row and is expected to continue thriving for the next three years. With the unemployment rate dropping, wages are likely to rise between 2017 and 2018.

An important piece of the export puzzle is indeed the port of Rotterdam, the largest in Europe. Its core business revolves around petrochemical industry and general cargo FLEET EUROPE SPECIAL BENELUX FRANCE

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Christel Reynaerts, CEO Alphabet Netherlands

Erik Swerts, CEO Alphabet Belgium & Luxemburg

INNOVATING ACROSS BORDERS Therefore Alphabet is embracing innovation networks across borders to detect trends and act quickly. The company’s international network is a great foundation to strengthen the company’s innovational powers. Alphabet has offices in 19 countries and manage over 650.000 vehicles and has a 3rd market position in The Netherlands as well as in Belgium. “We combine our international vision with thorough knowledge of the local markets. Our international success is based on our constant exchange over many borders, our regional structures and our extensive local market expertise.” says Erik Swerts, CEO Alphabet Belgium & Luxemburg.

leasing. In Belgium, Alphabet is looking to embrace this concept as well.

ALPHAFLEX The Benelux is often ahead when it comes to innovation beyond car leasing, like for instance AlphaFlex, the mobility budget solution of Alphabet. “With this comprehensive product, we can serve customers with their need for mobility. Employees can choose between a company car, bike or mobility card to meet their mobility needs in the best possible way”, says Christel Reynaerts, CEO Alphabet Netherlands.

ONLINE STRATEGY The online strategy from Alphabet is also aligned on an international level. The stateof-the-art app AlphaGuide, that Alphabet offers for free to drivers, is available in several Alphabet countries. We find it of utmost importance to constantly improve this innovative tool on an international level, to learn from each other and add local further functionalities so that it is useful, efficient and effective for our drivers.

Mobility in the Benelux is very mature and business mobility needs in both Belgium and The Netherlands are similar. That’s why both countries often join hands. “We develop products together and learn from each other when it comes to further optimizing this product,” adds Erik Swerts.

These examples showcase that Alphabet very much capitalizes on its strong international position. “We can serve our customers on a multi-country scale, and at the same time all local Alphabet offices learn from each other to constantly improve our offer”, concludes Christel Reynaerts.

STREETSCOOTER Another example is the innovative StreetScooter; an electric van which enables transport within Dutch metropolitan areas. Alphabet Netherlands was recently chosen by Deutsche Post, developer of StreetScooter, as its exclusive partner for

FLEET EUROPE SPECIAL BENELUX FRANCE

MORE INFO www.alphabet.com

33

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NETHERLANDS | AUTOMOTIVE MARKET

A and B: it’s plain to C Dieter Quartier @DieterQuartier

The Dutch will be buying some 420,000 new passenger cars this year, which is roughly 12 percent more than in 2016.

The majority are A and B segment petrol cars.

THE AUTOMOTIVE MARKET (YEAR TO DATE AUGUST 2017) TOP 10 BRANDS 1. VOLKSWAGEN 2. RENAULT 3. OPEL 4. PEUGEOT 5. FORD 6. KIA 7. TOYOTA 8. BMW 9. SKODA 10. MERCEDES

TOP 10 MODELS 1. RENAULT CLIO 2. VOLKSWAGEN POLO 3. KIA PICANTO 4. VOLKSWAGEN UP 5. OPEL ASTRA 6. OPEL KARL 7. VOLKSWAGEN GOLF 8. FORD FIESTA 9. NISSAN QASHQAI 10. TOYOTA AYGO Source: JATO Dynamics

2016 was a very weak year for the Dutch automotive market. In fact, the Netherlands was the only market in the EU which saw its sales volumes drop last year – 15 percent, to be precise. The reason was the tax change that came into effect on January 1st 2016, prompting many consumers to buy a car in the final months of 2015. On average, 35 in every 1,000 EU citizens purchased a new vehicle in 2016. In the Netherlands, that number was just 28 – in Belgium, it was 60.

Today, the Dutch car market represents some 8.2 million units. About 7.1 million of these cars are registered to private owners, i.e. 88 percent. The average age of a car in the Netherlands has increased from 8.4 years in 2006 to 10.2 years in 2016. An important phenomenon that might reverse this trend is that more and more consumers are switching to private lease. The attractive rates (starting at €180 per month for a 3-year/36,000 km contract) and all-inclusive approach are convincing both young and older drivers.

A COLOURFUL PALETTE Zooming in on the favourite car brands of the Dutch, there is a clear preference for European badges. Nearly 40 percent of new cars come from Germany, 20 percent are made in France, 15 percent are imported from Japan and 8 percent from South Korea. Volkswagen, Renault and Opel are on top, with market shares of 10.6, 9.20 and 8.3 percent, respectively (August 2017, YTD). Remarkably, KIA (n. 6) and Toyota (n. 7) each take 5.7 percent of the pie and have seen their share growing by nearly 49 percent and 27 percent, respectively.

FLEET EUROPE SPECIAL BENELUX FRANCE

Although it is still at number one, VW is actually losing market share in the wake of the NOx issue. Peugeot, too, is seeing its sales grow, but not at the same speed as the competition. At number 8, BMW is the most popular premium brand (4.7 percent), with Mercedes (3.8 percent) and Audi (3.7 percent) fighting for tenth position. The latter two seem to be ‘buying the market’, looking at the 21.6 and 19.2 percent increase in sales compared to last year, whereas BMW ‘only’ grew by 11.9 percent.

COMPACT HATCHBACKS RULE In the top 10 of the best-selling models in the Netherlands, 4 are A-segment (small) cars, 3 are B-segment (city) cars, 2 are C-segment models and 1 is a compact SUV. The evolution in sales shows that the A and B segment together have remained relatively stable at about 40 percent. The C-segment is slightly shrinking, but not to the same extent as the MPV category. Buyers of a people carrier seem to be switching to compact and midsized SUVs, but the Dutch are less cross-over crazy than the rest of Europe.

The hatchback is by far the body type you well encounter most on Dutch roads (about 54 percent of all new car sales). Mainly thanks to the mature company car market, estates come second (some 18 percent).

Interestingly, the sedan is not losing terrain in the Netherlands: it remains stable at 5 percent. Finally, the average sales price of a new car is roughly € 31,000.

35

NETHERLANDS | AUTOMOTIVE MARKET

NEW CAR SALES EVOLUTION BY VEHICLE SEGMENT

New car sales evolution by vehicle segment Totaal

2013

%

2014

%

2015

%

2016

%

416.797

100

387.579

100

448.931

100

382.825

100 18,3

Mini (Citroën C1, Ford Ka)

88.172

21,0

70.800

18,3

72.357

16,1

69.832

Subcompact (Peugeot 208, Opel Corsa)

91.833

22,0

88.624

22,9

98.125

21,9

88.498

23,1

Compact (Ford Focus, Volkswagen Golf)

107.228

25,7

101.265

26,1

127.872

28,5

82.196

21,5 11,2

Midsize (Audi A4, Peugeot 508)

46.101

11,1

43.616

11,3

51.541

11,5

42.938

Large midsize (Volvo V90, BMW 5-serie)

11.255

2,7

10.314

2,7

10.560

2,4

9.151

2,4

635

0,2

821

0,2

840

0,2

1.084

0,3

Limousine (Audi A8, Mercedes-Benz S-klasse) Sporty Models (Mazda MX-5, Audi TT) Sportscar (Ferrari, Porsche) Upper premium (Rolls Royce, Bentley) Midsize MPV (Renault Scenic, Volkswagen Touran) Large MPV (Renault Espace, Ford S-Max) Lower SUV (Hyundai Tucson, Volvo XC60)

675

0,2

370

0,1

568

0,1

530

0,1

1.157

0,3

1.714

0,4

1.540

0,3

1.365

0,4

273

0,1

342

0,1

187

-

83

-

29.774

7,1

23.261

6,0

25.765

5,7

20.341

5,3

1.382

0,3

1.016

0,3

1.335

0,3

1.805

0,5

29.479

7,1

36.474

9,4

44.781

10,0

49.687

13,0

Uppper SUV (BMW X5, Range Rover)

4.563

1,1

4.473

1,2

9.235

2,1

9.609

2,5

LCV (Renault Kangoo, Peugeot Partner)

4.136

1,0

4.438

1,2

4.186

0,9

5.373

1,4

134

-

51

-

39

-

333

0,1

Miscellaneous

Source: RDC and RAI Vereniging

PASSENGER CAR SALES BY BODY TYPE IN % Passenger car sales by body type in % 2010

2011

2012

2013

2014

2015

2016

Hatchback

62,4

61,6

61,3

61,0

56,9

53,3

53,6

Estate

16,5

18,0

19,3

17,1

20,4

23,1

18,4

SUV

5,4

5,2

5,2

8,1

10,2

11,6

14,3

MPV

8,4

8,3

6,8

7,0

6,3

6,3

6,6

Sedan

4,7

4,7

5,2

5,1

4,4

4,3

5,0

Bus

0,7

0,6

0,7

0,5

0,6

0,5

0,8

Cabrio

0,9

0,7

0,7

0,6

0,5

0,5

0,6

Camper

0,3

0,3

0,3

0,3

0,3

0,3

0,4

Coupé

0,7

0,6

0,6

0,3

0,4

0,3

0,4

Source: RDC, RAI Vereniging

Although the Dutch are tall people they prefer compact and smaller cars. The Renault Clio is very popular.

36

FUEL PREFERENCE AND EMISSIONS Between 2015 and 2016, the share of petrol has increased from 57.6 percent to no less than 71.8 percent – and it keeps on rising.

Logically, diesel is losing out. From 28.9 percent in 2015, it fell to 18.9 percent last year. That has a negative impact on the average CO2 emissions (NEDC) of the Dutch new car fleet. Between 2007 and 2015, they have continuously decreased, from 165 g/ km to 102 g/km. In 2016, this number went up to 107 g/km.

Another important factor in this respect is also the demise of the plug-in hybrid as a company car as a result of the changed BIK calculation. Mitsubishi Outlander PHEV, Opel Ampera, VW Golf and Passat GTE, Audi A3 e-tron: they all came, saw and conquered from 2012 to 2015, when they represented 8.9 percent of new car registrations. In

2016, the market was mostly returning to conventional petrol cars. Still, regular hybrids a.k.a. Hybrid Electric Vehicles (i.e. those that cannot be plugged in) also have the wind in their sails. Models like the Toyota Prius, Hyundai Ioniq Hybrid and Kia Niro have more than doubled the HEV segment’s size.

ELECTRIC: YES, CNG: NO Last year, just 1 in every 100 cars was an EV – which is not much of a progress compared to 2014 (0.8 percent). With the arrival of the Hyundai Ioniq Electric, the revamped e-Golf, BMW i3 and Renault Zoé, but especially the second-generation Nissan Leaf, 2017 is promising to be an electrifying year. In the first half of 2017, sales of full EVs rose by 80 percent, increasing their market share to 1.5 percent. Only 10 percent of them are being bought by private customers,

FLEET EUROPE SPECIAL BENELUX FRANCE

NETHERLANDS | AUTOMOTIVE MARKET

though: they have no incentive to do so, contrary to company car drivers. The Tesla Model S remains the most popular electric vehicle.

there are only 150 stations that distribute compressed natural gas. In a country that holds a quarter of Europeâ&#x20AC;&#x2122;s natural gas in its territory, that is strange, to say the least.

As far as other alternative powertrains are concerned, LPG is no longer the popular fuel it used to be. Today, less than 0.2 percent of new cars burn liquefied petroleum gas. CNG is a greener fuel than LPG, but it is hardly supported fiscally in the Netherlands. Moreover,

CAR REGISTRATIONS AND FUEL MIX - IN % Car registrations (sales): fuel mix 2010

2011

2012

2013

2014

2015

Petrol

75,4

67,4

64,4

63,5

64,2

57,6

71,8

Diesel

20,4

28,2

28,4

24,9

27,1

28,9

18,9

0,6

1,3

1,7

0,5

0,3

0,1

0,2

LPG

2016

Hybrid tech: HEV

3,3

2,7

4,2

5,6

3,7

3,3

2,9

PHEV

-

-

0,2

4,1

3,1

8,9

4,9

REEV

-

-

0,6

0,7

0,1

0,1

-

MEV

-

-

-

-

-

0,2

-

Full EV

-

0,2

0,2

0,6

0,8

0,7

1,0

0,1

0,1

0,2

0,1

0,8

0,2

0,2

Biofuel

CNG

-

0,2

0,1

-

-

-

-

Hydrogen

-

-

-

-

-

-

-

Due to taxation changes and BIK calculation, sales of new hybrid vehicles an specifically PHEVs dropped since the end of 2015.

Source: RDC and RAI Vereniging

AVERAGE CO2 EMISSIONS NEW PASSENGER CARS The rise in CO2 emissions in 2016 is linked to the sales of less diesel vehicles and more petrol cars.

Average CO2 emissions new passenger cars Year

Avg. CO2

Year

2007

165

2012

Avg. CO2 119

2008

157

2013

110

2009

147

2014

108

2010

136

2015

102

2011

126

2016

107

gr CO2 /km 180 170 160 150 140 130 120 110 100 90 80 2007 2008 2009 2010

2011

2012

2013

2014

2015

2016

Source: RDC

FLEET EUROPE SPECIAL BENELUX FRANCE

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NETHERLANDS | FLEET MARKET

The land of mainstream estates Dieter Quartier @DieterQuartier

The Dutch fleet market is growing – but only thanks to private lease. The typical company car is an Opel Astra Sports Tourer, powered either by a thrifty petrol or a diesel engine.

Plug-in hybrids are dead, but their place is not being taken by EVs.

TOTAL MARKET PASSENGER CARS (ABSOLUTE NUMBERS) 600.000

Another trend impacting the industry is the growing number of the automotive sector’s own registrations – demo cars, pre-registered cars, and so on. Today, they represent a fifth of the market. Compared to 2016, the segments fleet, rental and leasing have increased.

500.000 400.000 300.000 200.000 100.000 0 2009

2010

2011

2012

2013

2014

2015

2016

08/2017 YTD

Total

387.408 482.633 555.846 502.479 416.717 387.569 448.927 382.516

288.164

Business

165.073 190.642 241.771

225.891 188.998

181.318

240.818 184.223

152.710

Private

182.703 237.822 248.472 199.996 166.232

141.283

135.324 129.844

88.363

64.968

72.785

47.091

Automotive sector 39.632

54.169

65.603

76.592

61.487

Source: Aumacon

The Opel Astra Sports Tourer is the preferred fleet car in the Netherlands.

40

Of the roughly 425,000 new cars that are expected to be sold in 2017 – some 12 % more than in 2016 – 53 percent is ‘business’ (in August 2017), compared to 46 percent last year. The word deserves to be put between quotation marks, as basically, the growth of the business segment comes almost entirely from the rise in the number of private lease contracts, causing a shift in the registrations. In September 2017, the Netherlands saw the closing of the 100,000th private lease contract.

68.449

BRAND AND MODEL PREFERENCE While on many other markets diesel has a lower TCO than petrol as soon as a car drives 25,000 km per year, in the Netherlands the average tipping point lies at 35,000 km. This is indeed due to the fact that the country has the highest diesel tax of all European countries. With Benefit in Kind (bijtelling) being calculated on the basis of CO2 emissions and list price of the vehicle, it is especially fuel-efficient vehicles of mainstream brands that roam Dutch roads. The average list price of a company car is about € 42,000 including VAT. Volkswagen is by far the market leader (13.1 percent), followed by Renault, Opel, Peugeot and Ford. The best-selling premium brand in the Netherlands in BMW (5.4 percent), but Audi (5.1 percent) is not far behind. The most popular company

FLEET EUROPE SPECIAL BENELUX FRANCE

NETHERLANDS | FLEET MARKET

TOTAL MARKET PASSENGER CARS BY OWNER TYPE (MARKET SHARE PER SEGMENT) 100% 90% 80% Automotive sector

70%

Rental

60%

Lease registered to the client

50%

Leasing company

40%

Fleet

30%

Self-employed

20%

Private

10%

THE DUTCH FLEET MARKET TOP 10 TOP 10 BRANDS 1. Volkswagen 2. Renault 3. Opel

0% 2009

2010

2011

2012

2013

2014

2015

2016

08/2017 YTD

Source: Aumacon

4. Peugeot 5. Ford 6. Skoda 7. Toyota 8. BMW 9. Audi 10. Kia

car is the Opel Astra (3.5 percent), which outdoes competitors VW Golf (2.9 percent) and Renault Mégane (2.7 percent). The fact that the rest of the top 10 is invaded by A- and B-segment cars, is indeed mainly the consequence of the private lease phenomenon.

FUEL AND TRANSMISSION Two thirds of Dutch company cars have a manual gearbox, but automatic transmissions are gaining interest year by year. With 25 percent of the market, the C-segment is by far the biggest, but it is contracting.

SUVs are becoming more popular in the Netherlands, especially in the B segment (Renault Captur, Opel Mokka X), but to a far lesser extent than in its neighbouring countries, Germany and Belgium. The reason is mainly CO2.

The rise in the A and B segment (small and city cars) is primarily due to the booming private lease business. The latter also has an impact on the fuel mix. Diesel went down 16 percent in 2017 (08/2017 YTD), while petrol rose by the same percentage. Apart from that, drivers who used to have a plug-in hybrid are now massively switching back to petrol. The hybrid segment shrank no less than 67 percent compared to last year.

FLEET EUROPE SPECIAL BENELUX FRANCE

LCVS: SLOW GROWTH Compared to passenger cars, vans and derived vehicles of up to 3.5 tonnes are selling at a far lower pace. Dutch companies bought 3.5 percent more LCVs from January to August 2017 vis-à-vis the same period last year, while the car market expanded by 13 percent. The Dutch LCV growth figure is also below the EU average of 4.3 percent. As in the car segment, Volkswagen is the most popular brand. Mercedes is runner-up, while Renault and Ford are fighting for third position.

TOP 10 MODELS 1. Opel Astra 2. VW Up 3. VW Golf 4. Renault Clio 5. Renault Mégane 6. VW Polo 7. Opel Karl 8. Toyota Aygo 9. Skoda Octavia 10. Ford Fiesta

Top 10 of LCVs in 2016 (source: VNA) 1. VW Caddy 2. VW Transporter 3. Mercedes Sprinter 4. Mercedes Vito 5. Opel Vivaro 6. Renault Trafic 7. VW Crafter 8. Ford Transit Custom 9. Renault Kangoo 10 . Peugeot Partner

41

NETHERLANDS | FLEET MARKET

BUSINESS MARKET â&#x20AC;&#x201C; BY VEHICLE SEGMENT 100% Other 90%

M-UPPER UTILITY

80%

L-LOWER UTILITY

70%

K-UPPER MPV

60%

J-MEDIUM MPV

50%

Luxe (F/G/H/I)

40%

E-EXECUTIVE

30%

D-UPPER FAMILY

20%

C-LOWER FAMILY B-CITY

10%

A-SMALL

0% 2009

2010

2011

2012

2013

2014

2015

2016

08/2017 YTD

Source: https://www.aumacon.nl/wp-content/uploads/2016/05/NZO2017.pdf

PLUG-IN HYBRIDS: BACK TO BLACK? Until 2016, plug-in hybrids were very popular in the Netherlands because of the low benefit in kind (called bijtelling in Dutch) they represented. The Dutch government wanted to stimulate the use of alternative powertrains, but realised that in practice, people were not charging their batteries, burning as much fuel as any other car, but taking advantage of the tax system.

Like in many other Western European countries Volkswagen Group is scoring very well with Volkswagen as number 1 brand in the Netherlands.

42

Since January 2017, plug-in hybrids are treated the same as conventional cars in terms of BIK, i.e. a taxation basis that equals 22 percent of the list price. Today, only full EVs and hydrogen vehicles get a tax break, namely a bijtelling of 4 percent.

With electric vehicles being expensive and their offer still limited, leasing companies see fleets returning to petrol and diesel. At the end of August 2017, just 2 percent of cars in the Dutch business segment are powered by electricity alone.

FEWER BUT GREENER AND MORE REPRESENTATIVE CARS According to the 2017 Nationaal Zakenauto Onderzoek (National company car research), 70 percent of companies allow their employees to opt for an electric vehicle. The same study shows that company car drivers who already drive a car with a low BIK (between 0 and 7 percent, i.e. mainly plug-in hybrids), are more inclined to switch to full electric than other drivers. VNA (the Dutch car leasing companies association) has seen the interest in EVs rise from just 7 percent in 2016 to 13 percent this year. Interestingly, 37 percent of all companies interviewed expect a decline in the number of employees receiving a company car. Eco-consciousness, employee satisfaction and representativeness have become key factors in mobility policy.

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43

NETHERLANDS | FINANCE AND LEASING

Leasing is King Dieter Quartier @DieterQuartier

Next to the UK, the Netherlands is probably the most mature leasing market in Europe. After companies, private customers too are starting to make the switch.

TOP 10 OF LEASING COMPANIES (source: Aumacon)

1. LeasePlan 2. Volkswagen Pon Financial Services 3. Athlon 4. Alphabet 5. International Car Lease Holding 6. ALD Automotive 7. Arval 8. Business Lease Nederland 9. Terberg Leasing 10. Hilterman Lease

According to 2016 data provided by the Dutch leasing association VNA, 8 percent of all cars on Dutch roads (or one in 12.5 vehicles) are leased. In the case of LCVs, this is even 17.5 percent, or one in six.

Together, cars and LCVs represent some 800,000 units. Looking at new vehicle sales, more than 45 percent were leased in 2016. That should hardly come as a surprise, with LeasePlan being founded in the Netherlands in 1963.

The same VNA data show that in total, 908,500 passenger cars in the Netherlands are registered to a legal person, i.e. 11.3 percent of the total active fleet. 582,000 of them, or 64 percent, are leased, while the rest is funded by other means, e.g. outright purchase, finance lease, and loans.

There are hundreds of players in the lease arenaâ&#x20AC;&#x201C; a rich diversity of big financial institutions, international companies,

a lot of independents, and dealer-based operational lessors, resulting in a very competitive market. The clear majority of all cars leased (92 percent) belong to the members of the VNA. LeasePlan, Athlon, Alphabet, ALD Automotive and Aval are the largest international companies in the Netherlands. VW Pon Financial Services is the biggest captive.

THE CLASSIC FORMULAS With interest rates being low, outright purchase is by far the least popular way to fund a car in the Netherlands. The advantages of this formula are that you are the owner, that you are not tied to a contract and that you can deduct the investment and all related costs. The operational and financial risks, however, are not covered, and the car must be reported on the balance sheet.

THE SUCCESS OF OPERATIONAL LEASING IN 2016 79,2 % Lease to Business 10 % Operational Lease to Private customers 4,8 % Finance Lease 6,1 % Fleet Management

A mature market like the Netherlands has since more than 30 years discovered and implemented the outsourcing principle when it comes to vehicle fleet financing.

Source: VNA

44

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NETHERLANDS | FINANCE AND LEASING

A classic loan has the same financial, administrative and operational implications as outright purchase, with the added advantage of not having to use a large amount of the company’s capital.

The interest costs can be deducted. In most cases, this is the formula with the lowest interest rates.

Finance lease (5 percent of all contracts managed by VNA members) is a popular method to fund a car amongst smaller companies. The car appears on the balance sheet, because the lessee has the intention (but not the obligation) to buy the car at the end of the lease. The vehicle is usually registered in the customer’s name. This contract can be either strictly ‘financial’ or include a number of services, such as maintenance, service and repair, tyres, insurance, and so on.

Operating lease (89 percent of all contracts managed by VNA members) is the most convenient option. All risks are covered, including the residual value risk, there are no unexpected costs and all administration and operational management is done by the leasing company, which invoices a fixed amount per month. The car does not appear on the balance sheet – for now, because this is bound to change when the new lease accounting standard comes into effect.

In the case of fleet management (6 percent of all contracts managed by VNA members), the client owns his own fleet, or has a finance solution elsewhere, and asks the leasing company to operationally and administratively manage his cars.

LEASED FLEET IN THE NETHERLANDS 2015-2016

Leased fleet in the Netherlands 2015-2016 Passenger Cars

LCVs

Total

2016

646 200

151 800

798 000

2015

614 700

141 300

75 500

% Evolution

+5,1%

+8,2%

+5,7%

Share of leased fleet in total car park

8%

17,50%

8,90%

Source: VNA

The vehicle fleet parc in the Netherlands continues to grow, although the growth is less coming from corporate customers but is in the first place supported by the success of private lease and new more flexible lease formulas.

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45

NETHERLANDS | FINANCE AND LEASING THE AVERAGE AGE OF A LEASED CAR VERSUS A LEASED LCV LCVs Passenger cars 34 32 30

In the Netherlands leased vehicles are on average half a year older than leased passenger cars.

28 26 24 22

2007

2008

2008

2010

2011

2012

2013

2014

2015

2016

Source: VNA

2010

2011

101

92

99

104

116

125

135

CO2 EMISSION EVOLUTION

2012 2013 2014 2015 2016

Average CO2 emissions (gr/km) of new leased passengers cars Source: RDC

OPERATING LEASE: SHORTER AND MORE FLEXIBLE In 2016, the average theoretical contract duration was 46.9 months in the case of a car and 55.4 months as far as LCVs are concerned. Remarkably, new contracts closed in 2016 have a lower average theoretical duration: 42.5 months for cars, 49.7 months for vans. The actual contract duration is lower than the theoretical one: 37,4 months for cars, 47 months for vans.

With the rising demand in flexibility, many lessors are offering short term lease or formulas that allow an easy switch or adaptation in duration and mileage.

The average age of a leased car has increased from some 22 months in 2007 to 26 months in the years following the financial crisis.

Since 2010, it has been coming down to 22 again. A similar trend can be seen in the LCV segment: from 28 months in 2007, the average age went up to more than 32 months in 2012, to come down again to 30 months in 2016.

PRIVATE LEASE: BOOMING BUSINESS The Dutch operating lease market is slightly shrinking, but lessors are happy to see that the decline is being compensated by the remarkable rise in private lease contracts. According to Dutch leasing association VNA, September 2017 saw the barrier of 100,000 B2C long-term rental contracts being reached.

With ever more people willing to step away from ownership and the offer getting larger, the industry expects the trend to continue and even pick up speed.

Interestingly, private lease does not play an important role in corporate mobility. Employees who have a mobility budget, for instance, hardly ever opt for a vehicle leased in their name.

Private lease programmes offered through the employer are mainly used for the (second) private vehicle of the employee.

46

In terms of mileage, the theoretical number of kilometres per annum was 27.700 in 2016 for cars and 23.300 km for vans. That is considerably less than in 2015. The real annual mileage of cars and vans having reached the end of their lease in 2016 was 33,200 and 30,500 kilometres, respectively. Compared to 2015, thatâ&#x20AC;&#x2122;s a difference of â&#x20AC;&#x201C; 1 percent and + 8.6 percent.

CO2: IN REVERSE Last year, the average CO2 emissions of a new leased passenger car amounted to 101 g/km, which is 6 grams lower than the national average. The amount of diesel cars that are leased certainly plays a part. Here too, this means a break in the downward trend. In 2015, the average leased car emitted 92 g/km. The explanation lies in the fact that plug-in hybrids, which have a very low NEDC CO2 emissions level, have fallen from grace.

THE PRIVATE LEASE BOON IN THE NETHERLANDS New contracts Existing contracts 26.000

11.500

30.000

5.200

7.1001

9.100

9.900

33.300

2013

2014

2015

2016

60 x 1.000 55 50 45 40 35 30 25 20 15 10 5 0

Number of private lease contracts with VNA members.

VNA is the Dutch vehicle lease association.

Source: VNA

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NETHERLANDS | CAR POLICY

Rich and mature Dieter Quartier @DieterQuartier

The leasing-oriented Dutch fleet market is governed by comprehensive and advanced car policies.

Cost remains an important driver, but sustainability also stands high on the priority list.

Many companies in the Netherlands have already limited the number of fleet suppliers.

According to the local ALD Automotive branch, more than 60 percent of all company cars in the Netherlands are leased.

It stands to reason that most companies, from SMEs to international corporations, have a clear idea on how to select, assign and manage vehicles. The amount of company cars on Dutch roads is above the European average. The typical fleet car is a C-segment estate, e.g. Peugeot 308 S.W., Renault Mégane GrandTour or Opel Astra Sports Tourer.

STANDARD PRACTICE On the one hand, tool cars are common in a service-driven economy. On the other hand, benefit cars are a popular perk, not least in the typical high-profile industries such as ICT, pharmaceutical, consultancy, financial services, and so on. Still, with traffic congestion being a major issue, multimodality and mobility budgets are being tried and tested from Maastricht to Groningen. Such mobility packages allow for more flexibility and stimulate employees to use public transport.

Tendering is common in a mature market such as the Netherlands. “Many companies work with a limited number of suppliers, both in terms of leasing and vehicles.

However, there is something to be said for sole suppliership because it allows you a more comprehensive and standardized view on all aspects”, explains Hans Den Hollander, Manager Car Fleet EMEAR at Cisco Systems. Like in most Dutch companies, Cisco’s lease budgets include all cost aspects, also fuel and the installation of a Wallbox in the case of a plug-in vehicle.

GREENER AND SAFER CO2 capping across all vehicle categories, from the technician’s tool car to the director’s limousine, is standard practice.

The CO2 limits are evaluated and adapted on a regular basis, taking into account

48

technological progress. At the same time, the list of mandatory safety features (ADAS) is increasing. “Interesting in this respect, is that more and more companies, including Philips, strongly advise their employees not to use their phone whilst driving”, says Pim de Weerd, Global Commodity Manager Mobility at Philips.

When an accident does occur, some employers charge a deductible to their employees when they are at fault. However, Dutch labour law states that employers cannot do so when the accident happened during working hours, unless there is a written agreement and certain conditions are met. The interpretation of this rule leaves room for discussion.

3 KEY FACTS 1. The Dutch BIK amounts to 22 percent for regular cars and 4 percent for electric cars (with a price limit of €50,000). Plug-in hybrids are no longer fiscally advantageous.

2. With a well-developed charging infrastructure, the Netherlands is an ideal market to promote electric vehicles. Leasing companies offer a suite of services to support e-mobility.

3. In general, employers limit the amount of kilometres a company car can be used for private purposes around 10,000 km. Interestingly, commuting mileage is considered ‘business’.

FLEET EUROPE SPECIAL BENELUX FRANCE

NETHERLANDS | TRENDS

Wanted: cost control and flexibility Dieter Quartier @DieterQuartier

Eco-consciousness, convenience and cost-control are at the heart of Dutch society. Electric vehicles enjoy a favourable climate, but telematics are a delicate matter.

The main Dutch fleet trends are the rise of private lease and the demise of plug-in hybrids. The share of plug-in hybrids has dropped from 15 percent in 2015 to less than 5 percent in 2017, according to ALD Automotive. Realising that many company car drivers did not bother to charge their PHEVs and therefore burnt (nearly) as much fuel as a conventional car, the Dutch government decided to eliminate the advantageous tax treatment.

“What we expect is that PHEV drivers are switching back mainly to petrol and diesel”, explains Liam Donnelly, General Manager at Arval Netherlands. “Some go all-electric, but the offer of full-electric vehicles is still limited and their disadvantages, such as range and price, persist. This is likely to change in the next two years, helped by an expanding charging infrastructure.” Carel Bal, Regional Director Benelux at ALD Automotive, concurs: “The advantage of having pushed drivers to opt for a plug-in hybrid a few years ago, is that the infrastructure is already there today – and it keeps on growing”.

COST VERSUS PRIVACY Dutch companies keep close tabs on the cost aspects, something telematics (could) help them with. LCV fleets have been remotely monitored for years. In the case of passenger vehicles, however, workers’ councils, legislation and a strong public resistance to Big Brotherism make the implementation of telematics problematic. “For many customers, the key advantage resides in the FLEET EUROPE SPECIAL BENELUX FRANCE

registration of private mileage”, explains Carel Bal. “It won’t be long before telematics are more mainstream.”

“With cars being ever more connected, either through the driver’s smartphone or by the infotainment system, we believe this resistance from the employees will fade away as they start to see the benefits”, says Liam Donnelly. A concrete example of telematics effectively yielding a financial benefit to the employees is a group programme with common fuel saving targets. If the targets are met, the employees receive a bonus.

DIGITISATION AND FLEXIBILITY According to ALD Automotive, fleets are focusing on a good balance between costs, sustainability and employee satisfaction.

An important development in this respect

is that companies are looking for ways to offer more flexibility and choice, and not only in terms of vehicle selection but also in contract duration. E-bikes, mobility cards, private lease via the employer: all are finding their way to the new mobility package.

Digitisation plays a crucial role.

Instead of having to call or take physical action, drivers can manage their vehicle and gain access to all relevant information via online platforms and convenient driver apps. From vehicle selection and ordering to accident administration, from finding the nearest tyre centre to making a service appointment: a few taps and swipes suffice.

The fiscal climate for full electric vehicles is still OK in the Netherlands; for plug-in hybrids this is no longer the case.

49

NETHERLANDS | TAXATION

Company car taxation & incentives in Netherlands Stijn Blanckaert

The basis of company car taxation in the Netherlands is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any. #4 COMPANY CAR

#1 CAR TAXATION Car registration tax (BPM)

VAT due on private use of company cars

Taxable event

The registration of a vehicle in the Netherlands. A car registration in the Netherlands is required for the use of a vehicle on Dutch public roads by a person that has its normal place of residence in the Netherlands.

As stated above regarding the deduction of VAT; the VAT taxable person must make a VAT adjustment based on either the actual private us of the vehicle at the end of the year or a lump sum adjustment (if the actual private use is not known).

Taxable person

The person mentioned on the car’s registration document, i.e. the owner or the principal user of the car (private person or legal entity).

Tax due

The BPM due is calculated based on CO2 emission (grams per kilometer) of the vehicle.

Taxable period

The BPM is due in full upon the first registration of the vehicle in the Netherlands.

Road tax (Motorrijtuigenbelasting) Taxable event

The holding of a vehicle.

Taxable person

The private person or legal entity in whose name the vehicle is registered.

Tax due

The taxable amount of the road tax is based on the weight of the vehicle. This amount is increased with an additional fuel tax for diesel cars and cars with dual fuel capacity. Furthermore each province in the Netherlands adds a percentage as mark-up to the amount of the road tax due.

Taxable period

The road tax is due on a quarterly basis.

Company car in personal tax returns – benefit in kind In case of private use of a company car a taxable benefit in kind needs to be determined. This normally equals to 22% of the catalogue value of the car. However, for cars registered from 1 January 2017 onwards, this % could be increased to 35% (for cars older than 15 years) or decreased to 4% (for cars with 0 C02 emissions). For cars registered before 1 January 2017 a different range of %’s was in use, depending on the CO2 emission level of the vehicles.

#5 INCOME TAXES – DRIVERS’ PERSONAL TAXATION Private car in the personal tax return Private use The costs are not deductible.

Commuter traffic Commuting is considered to be business use. A private individual can declare 0.19 per kilometer with the employer.

Business kilometres A private individual can declare 0.19 per kilometer with the employer for each business kilometer.

#2 INCOME TAXES A taxable person for corporate income taxes is in principle entitled to depreciate the value of motor vehicles and deduct operational costs if the vehicle is used in the cause of the business as an asset. The general depreciation is limited to a maximum charge of 20% per annum.

Contact Caroline van der Woude Tax Partner BDO Tel 0031 (0)229 259760 caroline.van.der.woude@bdo.nl

#3 VAT Deduction A VAT taxable person is in principle entitled to deduct all input VAT incurred on the operational costs of company cars (purchase VAT or VAT on lease instalments, VAT on petrol and repair costs etc.). For private use and non-business use a year-end adjustment should be made based on provisions of deemed supplies.

Hire purchase The hire purchase is treated as a supply of goods, meaning that the VAT is due at the beginning of the “rental period” on the full rent price.

Leasing • An operational lease agreement is treated as a supply of services, meaning that the lessor pays VAT on each lease instalment including finance costs and under conditions excluding BPM and Road Tax. • A financial lease is treated as a supply of the motor vehicle. This means that the lessor must pay VAT at the beginning of the lease period on the full lease amount including the option price but excluding finance costs and under conditions excluding BPM and Road Tax.

50

FLEET EUROPE SPECIAL BENELUX FRANCE

NETHERLANDS | TIPS

Anything but Double Dutch Dieter Quartier

@DieterQuartier

Cisco Systems, Philips, Arval and ALD Automotive hardly need an introduction. Their fleet experts and top managers have a few words of clear advice for those who are unfamiliar with their market.

Hans den Hollander, Manager Car Fleet EMEAR at Cisco Systems

“Without a doubt, electric mobility is the best way forward – it is behind the corner and now is the time to get ahead of the game. The Netherlands is an ideal environment to go all-out with EVs: the infrastructure is there, and so are the tax incentives. Don’t forget to include the installation of a Wallbox at the employee’s home, and make sure there is a split-billing system for the electricity. ”

“Familiarize yourself with the Dutch fiscal system – and stay informed, because it has changed considerably the past few years. Be aware of the WLTP, which will have an impact on the CO2 emissions of new cars starting in 2018 and might require you to review your vehicle categories and your fleet’s CO2 limits.”

Liam Donnelly, General Manager at Arval Netherlands

“Don’t just copy-paste your car policy from another country. Make allowances for local differences, also in terms of equipment. Embrace advanced driver assistance systems (ADAS), such as autonomous emergency braking, lane keep assist and adaptive cruise control. They can lower your accident rate and indeed your TCO, considering the indirect costs of an incident.”

“In the Dutch market there is an increasing need for flexibility and choice, the challenge is to find solutions that meet both fleet managers and driver’s needs. ALD, for instance, has developed ALD Choice, the first ‘digital lease showroom’ which allows employees to choose the mobility solution they want, at a fixed monthly price. Everything revolves around the employee, not the car. You can even opt for a young second-hand car, which offers cost advantages for both company and driver.”

52

Pim de Weerd, Global Commodity Manager Mobility at Philips

Carel Bal, Regional Director Benelux at ALD Automotive

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ECONOMY

DOSSIER

FRANCE

Dirigist or not, an economic giant Frank Jacobs

Very important is France's home-grown automobile manufacturing industry, with big names such as Citroën, Peugeot and Renault having a major impact worldwide.

France's new president Emmanuel Macron wants to rid his country's economy – the third-largest in the EU after Germany and the UK – of its reputation for 'dirigisme'.

Will he succeed?

The French state has partially or fully privatised Air France, France Telecom, Renault, Thales and other former state-run companies – but the government still has an interest in strategic sectors, including power and public transport. At 56% of GDP, France's 'dirigist' government spending is second-highest in the EU.

FRANCE'S VITAL STATISTICS

Population 67.5 million Capital Paris (17.2 million in metro area) Governance system unitary senatorial semi-presidential republic

GDP: $2.83 trillion (2017 IMF estimate) GDP ranking: 9th (2017 IMF estimate) GDP (per capita): $42,300 (26th, IMF 2016)

Currency euro (EUR) Unemployment rate 9.7% (October 2017)

France's previous president Hollande poured millions of euros in schemes to increase competitiveness and create jobs, and enacted measures to make the country's labour market more flexible – so far with limited success.

PUBLIC DEBT Low growth and high spending have pushed up France's public debt from 89.5% of GDP in 2012 to 96% in 2016. France's GDP grew less In 2016 (1.1%) than the year before (1.3%), but unemployment fell slightly (from 10.2% to 10%). Youth unemployment remains high, at 24% (in Q4 2016).

But France is an economic giant by many measures, including the number of Fortune Global 500 companies in the country: 31, ranking it 4th behind the U.S., China and Japan. And many French companies dominate their global industries, from cosmetics leader L'Oréal over banking giant Société Générale to energy multinational EDF.

FLEET EUROPE SPECIAL BENELUX FRANCE

AUTO INDUSTRY Tourism is a major industry in France, the most visited country in the world. In 2016, no less than 86 million foreign tourists spent time and money in France.

Equally important is France's home-grown automobile manufacturing industry, with big names such as Citroën, Peugeot and Renault having a major impact worldwide, as well as dominating the home market. PSA (Peugeot, Citroën, DS, Opel) is Europe's second and the world's 6th-largest automaker.

CLEARING HURDLES President Macron now has the task to clear the hurdles that are keeping France’s economy from growing and once again performing at world-class level.

Much of that effort – such as investing in education – will only have an effect on the long term. But Macron is also betting on short-term measures, such as cutting payroll taxes to boost employment.

However, the success of both short- and long-term reforms will depend on whether Macron manages to convince or defeat France’s powerful lobbies for “more of the same”, on both the employer and employee side of the table.

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FRANCE | FLEET MARKET

FRANCE

Transformation in corporate fleets Frédéric Blin Stijn Blanckaert

It comes as no surprise that French cars dominate the fleet market in France.

More unexpected is the continued domination of diesel powertrains as they are increasingly under scrutiny from changes in legislation.

IN BRIEF National marques dominate French corporate fleets unequivocally. Foreign premium vehicles are popular, too, particularly among micro-enterprises and SMEs. Diesel powertrains take up the lion’s share, benefitting from a fiscal advantage that is to be phased out by 2020. This change will shake up the fleet energy mix.

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In 2013, at a time when the French car market reached its lowest point since 1997 with only 2.15 million new registrations of both passenger and light commercial vehicles, a 5.5 % drop compared to 2012, the corporate fleet market proved to be resilient, suffering only a 2.3 % decrease. These numbers haven’t gone unnoticed in the automotive world and have spurred the introduction of business trim levels by manufacturers such as Jaguar that hitherto didn’t offer them.

While national marques hold the first places in the corporate sales charts (see table), foreign premium models are also performing quite well. A notable advantage in this segment is their high resale value. They are also very popular among micro-enterprises and SMEs – a market segment targeted by leasing companies looking for a new growth path (see article on finance).

Asian marques such as Hyundai and Kia have previously used a similar strategy to their benefit. For both marques, Arval’s parent company BNP Paribas started offering operational leasing: Kia Leasing in 2011 and Hyundai Leasing in 2013.

FRENCH BRANDS DOMINATE FRANCE Nevertheless, Asian and premium marques’ corporate sales numbers remain well below the results of French national marques.

The first three places in yearly sales are firmly in the hands of Renault, Peugeot and Citroën, well ahead of their competitors with around 60 % of sales. The strongest selling passenger cars are in the lower segments with models such as the Renault Clio and Peugeot’s 208 and 308. The first foreign model in 2016, in ninth place, is the VW Golf. Light commercial vehicles show a similar result: Renault takes first place in

corporate sales with its Kangoo and business trim Clio, followed by the Citroën Berlingo. The first foreign manufacturers enter around tenth place with the Iveco Daily and Fiat Ducato.

CORPORATE CAR SALES IN FRANCE PLACE BRAND

TOTAL

LCV

1.

Renault

245,323

107,976

2.

Peugeot

169,225

54,499

3.

Citroën

113,101

52,301

4.

Volkswagen

60,981

13,107

5.

Ford

44,495

17,304

6.

Mercedes

38,828

16,886

7.

Fiat

35,453

14,952

8.

Nissan

30,797

5,649

9.

Opel

29,789

6,106

10.

Audi

23,618

754

11.

BMW

25,473

429

12.

Toyota

18,150

3,519

13.

Iveco

10,950

10,950

14.

DS

8,913

476

15.

Dacia

7,765

1,731

16.

Skoda

6,890

316

17.

Volvo

7,531

138

18.

Mini

6,226

178

19.

Seat

4,878

392

20.

Kia

6,841

170

Registration of new passenger vehicles and new light commercial vehicles - Corporate sales ranking of the Top 20 brands in 2015 Source: CCFA. December 2015.

FLEET EUROPE SPECIAL BENELUX FRANCE

FRANCE | FLEET MARKET FOCUS ON COST AND CO2 In general, the resilient market for corporate car sales in a difficult economic context following the 2008 crisis can be explained easily. Whatever the economic circumstances, companies need to keep up their car fleets: their sales people need to move about and managers need to be motivated to join the company or to stay aboard.

Even though the impact of the economic downturn has been less pronounced on corporate sales volumes, it did have consequences on fleet management. Companies have started paying even more attention to their vehicles’ cost. This is reflected in tougher price negotiations when buying new vehicles: company cars are bought at an average price that is several hundreds of euros lower than the price on the general French market. More importantly, they have started paying attention to their fleet’s TCO more systematically, keeping a close eye on fuel consumption and CO2 emissions.

Those emissions are reflected in taxes paid to the state: the company car tax (TVS) that is due each year and the yearly revised bonus (credit) or malus (tax) when buying a vehicle. This bonus-malus tax presents companies with a double challenge. First of all, selecting cars in the car policy whose emissions are in the neutral bonus-malus zone or that offer a bonus (credit). The second is significant: drawing up a car policy without knowing how emission levels will be taxed or credited from one year to the next. This fluctuation has had an enormous impact on sales of hybrid powertrains by companies.

TAX ALIGNMENT DIESEL AND PETROL In 2013, hybrid powertrains were eligible to a two-year company tax (TVS) exemption and a bonus of up to 5,000 euros for rechargeable hybrids. Toyota’s Yaris, Auris and Prius have particularly benefitted from this policy. As did Lexus, whose fleet sales were hybrids in 99 % of all sales. This no longer held true in 2016. The bonus dropped to 1,000 euros for rechargeable hybrids and disappeared altogether for hybrids. Hybrid sales to companies suffered dramatically, with a 17.5 % decline in 2016. Conversely, the continued support measures have helped electric vehicles even though they have trouble convincing companies. In 2016, they represented 0.98 % of corporate fleets, compared to 1.11 % nationwide.

Another fiscal measure that will change the playing field in the next few years: FLEET EUROPE SPECIAL BENELUX FRANCE

diesel and petrol will be aligned fiscally by 2020. Until now, only diesel tax could be recovered by companies at the rate of 80 % for their passenger vehicles and 100 % for their light commercial vehicles. This anachronistic situation helped push diesel-powered vehicles to the top of corporate sales systematically.

The dropping popularity of diesel cars on the French market from 2013 onwards was only reflected in corporate sales to a very limited extent. This powertrain represented 87 % of company PCs and 97 % of LCVs compared to 67 % of the market globally. Today, this number has dropped to 85 % PC+LCV for companies and 56 % on the general market.

The new fiscal order promises car policy evolutions in the next few years. Powertrain choices will evolve to better reflect the vehicles’ use.

CORPORATE SALES TOP 3 PER SEGMENT IN 2016 CITY CAR 1.

RENAULT TWINGO

PETROL

6,363

2.

FIAT 500 CITY CAR

PETROL

3,370

3.

RENAULT ZOE

ELECTRIC

2,479

TOTAL SEGMENT

20,169

SUPER MINI 1.

RENAULT CLIO

DIESEL

30,540

2.

PEUGEOT 208

DIESEL

16,886

3.

CITROEN C3

DIESEL

9,025

TOTAL SEGMENT

149,916

The first three places in yearly sales are firmly in the hands of French brands, Renault, Peugeot and Citroën.

SMALL FAMILY CAR

1.

PEUGEOT 208

DIESEL

27,984

2.

RENAULT MEGANE

DIESEL

13,876

3.

CITROEN C4 PICASSSO DIESEL

12,389

TOTAL SEGMENT

155,268

LARGE FAMILY CAR

1.

RENAULT KADJAR

DIESEL

10,161

2.

PEUGEOT 508

DIESEL

9,377

3.

NISSAN QASHQAI

DIESEL

7,808

TOTAL SEGMENT

88,572

COMPACT EXECUTIVE CAR

1.

RENAULT TALISMAN

DIESEL

5,433

2.

RENAULT ESPACE

DIESEL

5,223

3.

VOLVO XC 60

DIESEL

2,590

TOTAL SEGMENT

39,392

EXECUTIVE CAR

1.

AUDI A6

DIESEL

1,585

2.

BMW X5

DIESEL

1,085

3.

MERCEDES GLE

DIESEL

1,072

TOTAL SEGMENT

13,977

Source: OVE

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FRANCE | FINANCE AND LEASING

The promising operational lease market Frédéric Blin Stijn Blanckaert

For their fleets, the largest French companies resort to operational leasing almost exclusively but this isn’t well-suited to smaller companies even though they could present an undisputed growth potential.

In France, operational leasing is the option of choice for car fleets. 60 % of company cars put on the roads each year are registered by leasing companies, whose combined car fleet is estimated at 1.3 million vehicles. The advantages are self-evident: the leasing companies provide new vehicles and take care of their resale at the end of the lease. In addition to this, French companies benefit from accounting advantages this financing method offers: expenditure is spread out over a longer period of time and rents aren’t included on the balance sheet, freeing lending capacity. In 2016, the French association of leasing companies SNLVLD valued the average lease contract price financed per car at € 21,257 for an average 40-month length. However, in spite of this financing method’s undeniable appeal in France, its popularity is not shared by all companies alike.

OPERATIONAL LEASING IN FRANCE Total fleet parc (April 2017), Source: SNLVLD OPERATIONAL LEASING

FLEET MANAGEMENT

TOTAL

ARVAL

293,376

13,447

306,823

ALD

281,727

18,2103

463,830

DIAC

215,997

121,716

337,713

CREDIPAR

199,926

24,435

224,361

LEASEPLAN

97,315

10,097

107,412

ALPHABET VOLKSWAGEN Financial services ATHLON NATIXIS car lease FAL

88,866

-

88,866

55,431

-

55,431

24,664

3,119

27,783

19,394

1,184

20,578

17,569

15,172

32,741

CMCIC

9,746

-

9,746

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Micro-enterprises with less than ten employees and SMEs with between 10 and 259 employees are reluctant to take the plunge. According to figures of the Observatoire du véhicule d’entreprise (OVE), a company car watchdog financed

by Arval’s parent company BNP Paribas, only 6 % of vehicles used by micro-enterprises and 24 % of those used by SMEs are financed through operational leasing. The reasons for this reluctance are plentiful.

Among the most frequently mentioned: the fixed contract length that is incompatible with these structures’ lack of certainty about their economic future. Another recurring argument against operational leasing: its restitution charges are poorly understood and are judged to be excessively high.

SKEPTICISM Small companies that do take the plunge are often deterred by the price to pay at the end of the lease and decide not to repeat their leasing experience. The light commercial vehicles most often used by these companies are indeed badly suited to a valuation at the end of their lease. Besides damage to the vehicle, customisations that are generally meant to be paid off over the vehicle’s life are often incompatible with fixed-term contracts. The SNLVLD numbers seem to confirm that light commercial vehicles are not suited to operational leasing. Between 2009 and 2016, the LCV share in operational leasing fleets dropped dramatically, going from 30.2 % of total operational leasing vehicles to 21.8 % today while the share of company cars remains at a steady 11 % during this period and the share of passenger cars keeps going up, from 56.9 % to 67.4 %.

FLEET EUROPE SPECIAL BENELUX FRANCE

FRANCE | FINANCE AND LEASING OPERATIONAL LEASING IN EVOLUTION Operational leasing market evolution since 2012, Source: SNLVLD variation in %

2014

variation in %

2015

variation in %

2016

variation in %

2012

2013

PC market new registrations

1,898,872

1,790,473

1,767,407

1,885,565

1,983,735

LCV market new registrations

384,119

367,331

372,055

379,419

410,077

Total market new registrations

2,282,991

2,157,804

-5,48

2,139,462

-0,85

2,264,984

+5,87

2,393,812

+5,69

Fleet market new registrations (PC+LCV)

681,649

666,419

-2,23

687,813

+3,21

731,519

+6,35

790,495

+8,06

Registrations Operational Leasing in Fleet market

416,727

396,376

-4,88

427,687

+7,90

445,360

+4,13

494,219

+10,97

Nevertheless, small companies with fleets of under 500 vehicles offer car leasing companies an excellent opportunity for growth in a market where their services have saturated the large company market for the most part. Countless initiatives are taken to seduce them. Leasys, formerly FCA Fleet Services France, has been offering a lease since the start of the year, Befreepro, offering companies an option to terminate their contract from 24 months onwards and applicable to all group vehicles. Strategies for growth also increasingly rely on digital tools: ALD started offering a quick inquiry form on its website in September, targeting fleet managers looking to draft a car policy, suggesting models and prices according to criteria of their choice: environmental impact, budget, comfort, … A tool that is equally suited to companies and to private consumers, confirms ALD, opening doors to another growth path.

The idea of paying rent has been popularised by manufacturers’ advertising campaigns targeted at the general public.

Indirectly, captive leasing companies benefit, too. They are easily accessible to small companies thanks to their dealer network and they are ideally placed to guide prospects to operational leasing offers.

CONSOLIDATION Seducing these customers is all the more important today, at a time when clouds are starting to appear on the operational leasing horizon in France. A first setback is the planned introduction of an IFRS 2016

FLEET EUROPE SPECIAL BENELUX FRANCE

accounting norm requiring companies to include what they spend on car fleet leases on their balance sheet. A number of experts expect this requirement to push large fleets away from operational leasing in favour of purchasing or finance leasing and fleet management, a management option that has been growing rapidly on the French market. Today, more than 370,000 vehicles are managed this way, compared to a little over 220,000 in 2010. This growth came about in part after the 700,000-vehicle state fleet started gradually moving towards this management method starting in 2010. Companies are also increasingly opting for this finance method, particularly once they have phased out the fleet manager’s position. However, other voices claim the market will keep its balance between the different finance methods.

Even without its accounting advantage, operational leasing still has major benefits for companies: vehicle resale is taken care of and rents are reasonable thanks to low interest rates.

All operational leasing players need to maintain this advantage at a time when the sector is increasingly being integrated.

In 2016, Parcours was taken over by ALD, GE was absorbed by Arval and multibrand leasing company Athlon by Daimler.

Henceforward, 90 % of multibrand activity in France is controlled by four players: ALD, Arval, LeasePlan and Alphabet.

An interesting discussion with regard to the future popularity of operational leasing is the IFRS16 introduction in January 2019.

57

ADVERTORIAL

CONCEDED EDITORIAL SPACE

PDM: turning challenges into opportunities In France, companies employing more than 100 people on a same site need to establish a Company Mobility Plan, or Plan de Mobilité Entreprise (PDM) by January 1st 2018.

Promoting alternative mobility and optimising the use of your fleet are at the core of this important project – which does not have to be an ordeal. On the contrary.

According to ADEME, cars were used for 75 percent of all home-work commuting in 2016. On top of that, 50 percent of CO2 emissions of companies were caused by work-related car trips – on site, between sites, external meetings, commuting, and so on.

Indeed, there is a long way to go to turn this situation around.

“Many companies have already been thinking about their mobility”, says Barbara Gay, Director of Consulting at Arval France. “The PDM requires them to take concrete steps and go further, up to the point of thoroughly analysing their entire organisation.” And that is no task to be taken lightly.

Barbara Gay, Director of Consulting at Arval France © X. Muyard Arval

For more information, please contact: Mathilde Aureau mathilde.aureau@arval.fr

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FROM REFLEXION TO ACTION Arval helps companies to turn the challenges related to the PDM into opportunities to improve the employees’ well-being and companies’ performance. Less stress and time lost, lower transport costs, perhaps even fewer vehicles in the fleet: the results can be beneficial to both employer and employee.

It all starts by a global analysis to chart the employees’ mobility. This analysis revolves round four themes: road safety, productivity, environment and image. Regarding the third theme: the PDM has to include three measures to enhance environmental performance, more particularly to limit CO2 emis-

sions. Choosing the right means of transport for the right use is paramount, and so is vehicle selection.

“You should for instance consider alternative powertrains, something Arval can help you with by running TCO analyses and even organising test days. Such events also ensure a maximum buy-in from the employees”, explains Barbara Gay. “Another route worth exploring are driving courses to enhance safety and fuel-efficiency, plus telematics to help drivers stay on the right track.”

SHARING IS SAVING A more challenging, but possibly also more rewarding exercise, is setting up a car-pooling and car-sharing scheme. In the year 2018, a vehicle that remains stationary for 90 percent of the time is no longer acceptable, and neither is the fact that cars are being used individually for most of the time. Here, too, telematics are of great added value. Think of geolocation, plotting and rethinking routes, mileage reporting, and so on.

“Last but not least, mapping all the mobility solutions in, around and outside the city means you can find ways to make them connect,” concludes Barbara Gay. “Where there is a gap, it might be interesting to provide a shuttle, or an e-bike. There are many possibilities to make the PDM a success – all you need to do is explore them.”

From audit to the implementation of effective measures, from defining targets to designing a roadmap to get there, all the way through to regular assessment: Arval Consulting accompanies you from a to z.

Whether you are an existing Arval client or not, our expertise is at your service.

FLEET EUROPE SPECIAL BENELUX FRANCE

FRANCE | CAR POLICY

Taking control with the car policy Frédéric Blin

The car policy of French companies is structured around several key elements and important issues, such as the satisfaction of employees and the image that the car gives to the company, but above all optimising Total Cost of Ownership.

NOT TO BE MISSED IN THE CAR POLICY 1. For reasons of image, French companies avoid ostentatious vehicles.

2. With a concern for optimising TCO, fleet managers do not hesitate to choose service providers outside of their long term lease contracts.

3. SUV’s are now very popular for business and family use.

The domination of French brands in the car policies of companies within the country is often explained by a question of image. For many companies, and particularly those which have a connection to the automobile industry, it is a question of showing ‘loyalty’ to French production. It is also a way of expressing a certain degree of modesty compared to foreign cars, which may be considered as more ostentatious, even for the top of the range models.

J’ADORE LA FRANCE For certain subsidiaries of French companies, the choice of French brands is quite simply made obligatory, thanks to the framework contract which has already been drawn up.

And of course for large companies, image is not the only preoccupation. The interest in turning to French brands also lies in the guarantee of substantial discounts on the cars. The choice of French cars also provides the assurance that national companies will benefit from an extensive dealer network which will be able to take care of after-sales services. Where small companies are concerned, this local element is also important and can go as far as being a determining factor in the choice of vehicles for the fleet.

There remains the fact that even though economic considerations are essential, the car policy is also a means of attracting and retaining staff, whose contracts sometimes even prove to be determining in outlining the car policy. The attractiveness of a car policy often lies in particular in offering cars in the ‘business’ versions proposed by the manufacturers, exclusively for the business market.

FLEET EUROPE SPECIAL BENELUX FRANCE

For many companies, include French brands in their car policy is a question of showing ‘loyalty’ to French production.

SAY HELLO TO SUV’S The options they include guarantee not only the comfort of employees, but also the resale price and more modest rental levels.

Options available may be restricted by the company: if the driver wants more, they are at his or her cost. There is of course a limit when it comes to CO2 emissions. In general terms, the number of SUV’s in fleets is increasing, which responds to the expectations of employees for both professional and family use. Diesel remains in a strong position in these fleets, of course, for reasons of TCO. Optimising the car-policy remains at the heart of the way it is drawn up. This most often involves breaking up the long term rental contract. This is a growing trend among fleet managers who find the services being offered too expensive.

They are therefore turning to independent suppliers, which are proposing a growing number of services: management of summer-winter tyres, on-site repairs, access to washing services, reduced price maintenance via fuel cards…

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FRANCE | TAXATION

Company car taxation & incentives in France The basis of company car taxation in France is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects.

Expected future developments are also briefly listed, if any. #1 CAR TAXATION Vehicle registration tax Taxable event

The registration of a vehicle. The registration of a vehicle is required when either a new or second-hand car is put into free circulation on French public roads or whenever a vehicle changes ownership and is intended to be used on French public roads.

Taxable person

The person in whose name the vehicle is registered, i.e. the legal owner of the vehicle.

Tax due

Registration tax is based on the cylinder capacity of the vehicle (expressed in taxable, or fiscal, horsepower), the power of the engine (kilowatt hours) and the age of the car (under or above 10 years). The tax due could be proportional or fix. The amount of the proportional tax depends on the unit rate, by horse power, fixed for each region by the Regional Council.

An online simulator for calculating the total tax cost is available on the French Authorities official website https://www.service-public.fr/simulateur/calcul/ cout-certificat-immatriculation

Taxable period

Whenever a vehicle is (re-)registered by a new owner/user.

Supplementary taxes for vehicles with high CO2 emissions for vehicles registered since 1st June 2004 Taxable event

The taxes on polluting vehicles are the CO2 Tax and the éco-taxe (also called Malus). They only apply to private cars (véhicules de tourisme) registered since 1st June 2004. The éco-taxe (Malus) and the CO2 tax apply to acquisition or the renting (lease with option to buy at least of 2 years) of private cars, depending on their CO2 emissions. An annual tax on the detention of a polluting vehicle may be also levied if a certain threshold of emission is reached.

Taxable person

For the CO2 Tax and the éco-taxe, the person in whose name the vehicle is registered, i.e. the legal owner of the vehicle.

Tax due

The CO2 Tax and the éco-taxe due are based on either the number of grams of carbon dioxide emitted per kilometre for private cars (compliant with EU standards) and depending on the Tax horsepower of the engine for the others. For cars compliant with EU standards emission is calculated depending on multiple criteria.

An official simulator to estimate the emission CO2 of the vehicle is available https://www.service-public.fr/particuliers/vosdroits/F19911

Taxable period

Whenever a vehicle is (re-)registered by a new owner/user.

#2 INCOME TAXES For passenger vehicles used privately or for mixed use the annual depreciation rate is typically 20 % to 25 %.

There are, however, some exceptions. For example, vehicles acquired between 1 January 2007 and 1 January 2010 and which run on electricity, natural gas or LPG may be depreciated fully over 12 months.

#3 VAT Deduction • VAT incurred on the purchase price or car lease rentals is not usually deductible where the vehicle is used for the transport of people.

• Vehicle spare parts, accessories and services of any type whatsoever cannot be deducted when related to vehicles not eligible for VAT deduction. VAT on car park charges, motorway tolls and % of the VAT on energy are deductible.

Summary of the VAT deductibility (reclaimable %) related to the energy used by vehicles in the table below for 2017 : Fuel

“Standard” vehicles (vehicle used for the transport of people)

Utility vehicles (e.g. tractors, etc..)

Petrol (essence SP95, SP98)

10 %

0%

Gazole (diesel) & superéthanol E85

80 %

100 %

GPL (PGL and GNV)

100 %

100 %

Electricity

100 %

100 %

#4 COMPANY CAR VAT due on private use of company cars The private use of a car which is also a business asset does not normally give rise to a taxable “self-supply” unless the car is eligible for VAT recovery and VAT was actually recovered on the purchase of the car.

Company car in personal tax returns – benefit in kind Employers can estimate the value of the fringe benefits either based on the actual costs incurred (including fuel, depreciation, insurance and maintenance) or on a lump-sum basis.

“Écopastille” supplemental tax for vehicles registered after 1 January 2008 Taxable event

The “écopastille” crit’air is available for all the vehicles from 1st July 2016 ; the écopastille is required to drive in Paris. Necessary to be able to circulate when there are pollution peaks. The ability to circulate will depend on the colour of the ecopastille. An official simulator is available on-line https://www.certificat-air.gouv.fr/simulation

Taxable person

The owner of the vehicle

Tax due

Total cost 4.18 euros

Tax on company cars Taxable event

The taxable event includes the owning, leasing or using of vehicles by companies with a registered office or establishment in France.

Taxable person

The above mentioned companies.

Tax due

With respect to cars compliant with EU standards owned, leased or used from 1 January 2006 that were put into circulation from June 2004, the tax amount varies depending on the CO2 emissions rate.

For cars that do not meet the above conditions (e.g., cars used and possessed after 1st January 2006 but put into circulation before June 2004), the amount of tax depends on the taxable horsepower.

Taxable period

60

The tax on company cars is an annual tax, quarterly payable.

#5 INCOME TAXES – DRIVERS’ PERSONAL TAXATION The private use of a company car (including journeys to and from work) gives rise to a benefit in kind (“avantage en nature”), subject to social security contributions and personal income taxes for the beneficiary.

Employers can estimate the value of the fringe benefits either based on the actual costs incurred (including fuel, depreciation, insurance and maintenance) or on a lump-sum basis, whereby the rules differ depending on whether the car has been purchased by the employer or is being leased/rented.

#6 ELECTRIC VEHICLES Individual using electric cars are entitled to a tax credit equals to 30 % of the cost of installation of a plug-in system at home.

Contact Carine Duchemin Tax Partner cduchemin@djp-avocats-bdo.fr

FLEET EUROPE SPECIAL BENELUX FRANCE

FRANCE | TRENDS

Step by step towards integrated mobility Frédéric Blin

As employees approach it reluctantly, on-board telematics have trouble gaining traction in fleets. Nevertheless, a number of opportunities could contribute to the growth of these devices and their associated services.

In 2016, after a trade union took them to court, the Paris appeals court ordered operator Orange to remove the on-board devices they used to track their employees’ driving without geolocation from 20,000 fleet vehicles. Quite a setback for the operator, not only because of the number of cars involved but also because of the symbolism. The on-board devices were Océan brand… the Orange subsidiary specialised in on-board telematics solutions.

This incident reveals a lot about the difficulty French companies encounter when trying to introduce telematics tools in their fleets. Organisations defending employees’ rights are extremely wary of all that could go towards “policing” car journeys or, as was the case for Orange, “permanent and excessive surveillance”. In the face of this lukewarm reception, with the notable exception of delivery companies, telematics technicians prefer to fit tools that aid drivers, for instance to improve a vehicle’s environmental performance. However, fleet managers still have little to gain as they lack time to follow up driving styles over time or to organise eco-driving challenges to motivate employees and change their bad habits.

Gradually, the situation is changing. As on-board e-call devices are being fitted more widely, on-board data could start being accessed more easily by the fleet manager and employees’ perception of these devices could take a positive turn.

FLEET EUROPE SPECIAL BENELUX FRANCE

WHERE IS THE MOBILITY MANAGER? City dwellers are already more receptive to the possibilities of telematics technology. They are more aware of environmental issues as they are faced with access restrictions to city centres, pollution peaks, …

They care less about company cars and as users of connected tools they are open to car sharing, carpooling and company mobility credit. Leasing companies and captive leasing companies are offering a growing choice of services in this regard.

This growing offer is also in agreement with a legal obligation for companies of more than 100 employees to draw up an employee transport plan by 1 January 2018, destined to promote alternative means of transport for professional journeys and for employees’ daily commute.

However, this measure will not be very effective. Paradoxically, its compulsory nature takes away any image benefit a company might draw from such measures if done on its own volition. Also, the “mobility manager” that is to replace the fleet manager and who should be the service providers’ contact to promote their new services remains extremely rare in French companies.

By 1 January 2018, the bigger companies in France have to define an employee transport plan in order to promote alternative mobility modes.

FROM FLEET TO MOBILITY MANAGEMENT Three initiatives that may change fleet and mobility management - Widespread adoption of e-call devices - Requirement to draw up employee transport plans in 2018 - Access restrictions to city centres

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FRANCE | TIPS

Do’s and Don’ts in Fleet Management Frédéric Blin Stijn Blanckaert

The fleet management market in France is evolving rapidly and the role of the suppliers is to provide ad hoc services.

But the pace of change in companies is slow and providing services is not enough for them to succeed.

DO François-Xavier Castille, General Manager, Arval France “Today, we focus a great deal on advising our clients about vehicles and the changes to the energy landscape which are coming with the decrease in the use of diesel and the increase in petrol, hybrid and electric powertrains, and also on questions allied to fiscal issues, particularly with IFRS 16. We also have to assist our clients with new modes of mobility: mid-term rental, car-sharing, car-pooling, bike-pooling…”

Jean-Loup Savigny, Sales and Marketing Director, LeasePlan France “The most important element in fleet management remains ownership cost. The acquisition of new models has to be considered from a more general TCO approach: fiscal issues, maintenance, end of contract fees. And the social aspect of the fleet must always be kept in mind too: it can motivate employees, avoid recruitment costs…And finally, the environmental aspect of the fleet and its impact on the company’s image has to be considered.”

Fabrice Denoual, Assistant General Director, ALD France “International clients and large accounts generally in France are mature when it comes to long term renting. This is a characteristic of the French market. There is potential for development with very small companies, SME’s, and independent professionals. Today, the total fleet in France amounts to five million vehicles, of which 1/3 is under long term renting and the rest remains to be persuaded.”

DON’T François-Xavier Castille, General Manager, Arval France "French business has been less receptive than the private market when it comes to the change to electric vehicles, car-sharing, the move from diesel towards petrol…

But it is clearly our role to assist our clients with these changes. Full service leasing, which has remained unchanged for ten or fifteen years, has recently been shaken up. Today, new services are spreading very quickly within companies: the number of cars in car-sharing, for example, has very rapidly grown from a few dozen to a few hundred.”

François-Xavier Castille, General Manager, Arval France

Fabrice Denoual, Assistant General Director, ALD France

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Jean-Loup Savigny, Sales and Marketing Director, LeasePlan France

Jean-Loup Savigny, Sales and Marketing Director, LeasePlan France “Where fleet management is concerned, it is important not to be too hasty. In telematics, for example, it is pointless to equip the cars in a fleet where there is no previous experience of mileage checking, of contract optimization… Undertaking these prior phases enables familiarisation with new equipment such as telematics. Changing too quickly, especially in France, runs a high risk of not being understood internally and of destroying the process of change.”

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5

MATURE MARKETS SPAWN INNOVATION

STIJN BLANCKAERT AND DIETER QUARTIER

Few sectors are as dynamic as fleet management. What we thought was professional in 1997 would be considered amateurism at best today. TCO, CO2 and online reporting became buzzwords already years before the turn of the millennium, but corporate mobility today encompasses much, much more.

At the end of the nineties, multi-brand leasing companies still had to convince fleet owners that full service off balance leasing was in fact an interesting solution.

It was at that time that LeasePlan worked its way to market leadership through its open calculation lease contract, in which – at the end of the lease – the actual cost of the car was compared to the budgeted one, with possible refunds if the result was positive.

Today, in the “low lands”, but also in France, operational leasing has become the standard for medium to large car fleets, but open calculation has lost its interest following the rapid decrease of lease rates caused by fierce competition on the market.

TCO-driven The Total Cost of Ownership becomes the main preoccupation of fleet managers in the noughties. Knowing that a car’s operational leasing price only accounts for two thirds of the TCO, with fuel consumption and taxation ever increasing their slice of the pie, fleetowners no longer choose their car fleet based on the price tag or monthly lease rate alone, but also consider CO2 emissions.

recently, that meant switching to diesel engines, which were believed to be ‘better for the environment’. Dieselgate in September 2015 proved us wrong.

From fixed & diesel to electric & flexible Today, international fleet managers no longer see diesel as the sole solution but increasingly opt for petrol, hybrids and even electric cars. It is yet again the Netherlands that play a pioneering role, this time by making EVs – and only EVs – fiscally attractive and by installing sufficient charging points (more than 30,000 today).

Apart from the electrification of fleets, the near future will be about mobility, which stretches further than company cars alone. Already today, service providers (and not only lessors) switch to “mobility solutions” that, instead of a lease car, offer the combination of a car and a bicycle, public transportation or shared car solutions.

More than ever, the mobility of employees is becoming a complex but ever so captivating subject, which requires flexibility, creativity and responsiveness – core values that are fostered in mature markets like Benelux and France.

Indeed, most European member states have in the meantime installed carbon dioxide related taxation rules, pushing car manufacturers to innovate and invest in emission-limiting technologies. Until

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FLEET EUROPE SPECIAL BENELUX FRANCE

Change has been constant in the past two decades, but it happens at an increasing speed. Especially the past 3 years have seen dramatic evolutions in the way fleets are being managed. Taxation, new technologies, industrial breakthroughs and environmental issues all play an important role.

Where do we come from and how did we get here?

The obsolete NEDC is replaced by the more realistic WLTP for vehicle type approval in the EU. The new test cycle yields higher official CO2 figures and therefore necessitates changes to company car taxation.

The following years will reveal which influence WLTP will have on the TCO of car fleets.

2017

20 YEARS OF EVOLUTION

2016

Private Lease becomes increasingly popular. Low margins are compensated through high volumes. The Netherlands pioneers, Belgium follows, the rest of Europe will soon do the same. Leasing companies have become “professional risk managers” rather than “vehicle renters”.

2015

Dieselgate sends a shock wave through the automotive landscape. From now on, the omnipresent diesel will no longer be the unquestioned choice for car fleets.

Electric and hybrid cars suddenly gain interest.

00-2002 20

The Y2K-bug proves to be no more than a glitch, the dotcom bubble bursts but the internet survives. Online leasing fleet reporting and offer calculation see the light of day to become increasingly important and even indispensable today.

1997

1998

The European Block Exemption Regulation (for automotive and aftermarket), where lessors were now the ‘end client’, allows direct negotiation with manufacturers.

However, the effect has not been entirely positive.

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20 0 8

The financial crisis spreads from the financial sector to the global economy. Car sales plummet and governments try to resuscitate the market with car scrappage schemes and other incentives. The focus on CO2 emissions results in a further increase of diesel market share.

At the end of the 20th century, operational leasing gains ground rapidly to the detriment of on-balance lease. LeasePlan (at the time still written in two words, i.e. “Lease Plan”) pioneers with its open calculation leasing formula.

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CAREL BAL

REGIONAL DIRECTOR BENELUX AT ALD AUTOMOTIVE

Leasing has become much more diverse and professional. From fulfilling a mere need for finance and risk coverage, it has evolved into a comprehensive range of services aimed at entirely unburdening the client. This aspect is more important than ever, with the rising complexity that comes with managing a fleet. The integration of electric vehicles, sustainability, taxation, private lease, telematics: all these things increase the client’s need for guidance and outsourcing.

This outsourcing trend is likely to gain momentum in the coming years. Simultaneously, we see the development of integral mobility management. Some clients ask us to manage the entire mobility of their company, including that of people not having a company car. In such a case, the partnership with the client takes an entirely new shape and becomes far more strategic. In this context, private lease and business lease are likely to converge, with services extending beyond the car alone.

“Towards integral Mobility Management”

MICHEL VAN DEN BROECK, CAR LEASING AND FLEET MANAGEMENT EXPERT AND FORMER MD OF LEASEPLAN BELGIUM

“Optimised service delivery for the customer”

Looking back at the past two decades, the service delivery to the lessee has become faster and more complete thanks to ICT developments, such as reporting, e-commerce, on-line quotation tools, and so on. At the same time, the back-office organisation of lessors has improved considerably, increasingly using industry community solutions for operational efficiencies.

Services have developed to be much more than ‘vehicle lifecycle management’. Also, the traditional relationship

lessor-fleet manager has been extended with direct lessor-driver communication, discharging the fleet manager from operational ‘mailbox’-type roles between lease company and driver.

Lessors are today more positioned as architects of the complete logistical chain, from selection/ordering of the vehicle to the final remarketing. In addition, lessors are now expected to take up the role as advisor in multi-modal mobility developments and vehicle technology developments for the fleet.

PATRICK MARTINOLI,

DIRECTOR OF VEHICLE FLEET MANAGEMENT AT ORANGE

The main evolution for our company was the integral switch from outright purchase to operational lease, including all services. As our fleet grew, we realized that important savings could be made by unbundling some services, such as tyres, glass, fuel cards and insurance.

Following the events that raised question marks about diesel, we decided last year to implement an energy mix in our policy, which will have a considerable impact on our fleet – which until recently consisted for 99,9 percent

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of diesel cars. Employees that drive less than 12,000 km per year are stimulated to opt for an EV. If they drive between 12,000 and 22,000 km, we advise petrol or hybrid.

We believe that car-sharing is an integral part of this energy switch, because it allows drivers to take the vehicle that is adapted to their needs at all times – an EV to go to the city, a diesel for long-distance travel. From 1,500 shared vehicles today, we target 5,000 units by 2020.

“Welcome to electrification and car-sharing”

FLEET EUROPE SPECIAL BENELUX FRANCE

TOWARDS THE NEXT TWO DECADES Chances are that Benelux and France will be the region where new developments in fleet management will materialize first.

But what are they?

The end of the ‘universal car’ Many fleet managers, including Patrick Martinoli from Orange, believe that for many cases, the one-driver-one-car model can be replaced by shared vehicles. These can be booked with an app, allowing the user to choose the vehicle that fits his or her needs at a given moment in time. This will reduce the fleet size and thereby the need for parking space on the one hand, but increase the usage rate and therefore mileage and cost per vehicle on the other.

Holistic mobility approach Instead of a vehicle budget, people will be offered a mobility budget, in which the role of the car will probably reduce over the years. “Companies want to offer more freedom of choice, and this will lead to a more

SPECIAL

holistic take on mobility”, says Carel Bal from ALD Automotive. “The distinction between employees with a company car and those without, will fade. The driver will have more to say, and mobility goes further than cars alone. For companies, this means a tighter cooperation between HR, Finance, Fleet, CSR.” Data: manna and concern Without a doubt, fleet management will increasingly be driven by data.

“Telematics and analysis software will offer companies and drivers valuable insight and convenience, but it requires employers to take important steps towards data protection and privacy”, says Carel Bal. Which automatically brings us to GDPR. “I do not see a bigger challenge than Y2K or the introduction of the Euro”, says Michel Van Den Broeck. Fellow countryman Michel Claus believes block chain will have a considerable impact on how all stakeholders interact.

IFRS and private lease The fact that not the entire lease will be off-balance and that lessees will have to put future remaining lease instalments on their balance sheet (and hence reduce ROE), may play in the hands of private lease.

“The fiscal regime is becoming less favourable for company cars, we can expect an evolution towards privately leased cars, like in the UK”, explains Michel Claus. “The driver becomes the customer, but the rates are negotiated by the employer.”

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