of the General Data Protection Regulation (GDPR), which notably impacts on the sharing and using of personal vehicle user data. What’s more, fleets must be aware that on 1 January 2019, new international lease accounting standards will be introduced, which require leased assets to be reported on company balance sheets. The above list is far from exhaustive and I’ve not even touched on Brexit and the impact that no trade deal could have on fleet operations, notably in respect of potential new vehicle delivery and spare parts order delays due to border customs changes and price increases. Encouragement to go green From a ‘green’ perspective fleet decision-makers require encouragement to introduce plug-in vehicles with powerful financial arguments essential to drive environmental policy changes. However, for UK fleets electric vehicles remain a conundrum. What’s more, plug-in hybrid cars are, for a significant number of fleet managers, the proverbial duck out of water, operating predominantly outside of their economic efficiency zone with the typical view being that higher operating costs – and specifically fuel bills – would be the result when compared with equivalent diesel models. The corporate sector is responsible for buying the majority of new cars in the UK – a 55.8 per cent market share last year according to the Society of Motor Manufacturers and Traders. But for fleet managers to drive along the plug-in vehicle road in significant volume, they must feel confident about electric vehicle technology and vehicle recharging as well as plug-in vehicle residual values and operating costs. They must also resist company car benefit-in-kind tax ‘loophole’ vehicle choices – specifically plug-in hybrids – that were not fit‑for‑purpose and not be drawn into poor fleet vehicle decision‑making due to fuel type ‘demonisation’ of diesel in recent months. Plug-in vehicles must be attractive to mainstream fleet operations in terms of technology and cost and currently there remains too many unknowns across a sector that remains embryonic in terms of sales. ICFM members want to see clear government strategy that they can ‘hang their hat on’. It is key for fleet managers to meet operational requirements. But fleet professionals need to have the right tools for the job and need to look to the future and be able to react and set policies. Moving forward there is no definitive right fleet fuel, but vehicle operations will feature a mix based on fitness-for-purpose. To move away from the traditional internal combustion engine, fleet decision-makers require encouragement to introduce plug-in vehicles with powerful financial arguments essential to drive environmental policy changes. Shifting business model Meanwhile, the worlds of fleet management and travel management are colliding at a rapid rate, driven by technology and ‘big data’ that will underpin BMaaS and the move to a total cost of mobility concept – understanding the full cost of employees travelling from A to B and not just the vehicle cost. Telematics is becoming far more key and there is greater reliance on a communications platform. The business model is shifting to car services because of ‘big data’. The industry is moving from being asset – the vehicle – driven to be focused on employees and their movements. Massive momentum is being built so fleet managers need to think about their operational model. Companies could look to set a mobility budget for each employee that will influence the mode of transport they take – company car, car club, car share, car hire, public transport or whatever – based on a range of factors including fitness-for-purpose, cost, convenience and safety. Employees will be able to access travel options via their own portal, make bookings and keep a track of their budget. The journey to mobility on demand is occurring very quickly. There will be ‘big bangs’ aplenty over the next 12 months, which will, ICFM believes, be a watershed period in the history of fleet. L
WLTP and its impact on fleet operations
Leasing & Rental
SPONSOR’S COMMENT
The move towards WLTP is now in full flow and manufacturers are all frantically trying to get their house in order ahead of the switch on 1 September. This is causing unprecedented turbulence within the fleet industry as some manufacturers are increasing their prices, upping their CO2 ratings and declining orders. The consequence being increased costs to companies with vehicle fleets, increased BIK tax for some drivers and, for other drivers, the disappointment of a declined order. To put the scale of the problem in perspective, there are somewhere in the region of 11,000 different cars available to order at the moment. Drivers and companies need accurate data to make a decision and the leasing sector is reliant on receiving that data for its quotation and ordering systems. The situation is made worse because some new models being introduced have significantly higher CO2, so any old model stock is disappearing quickly. Normally, when a model is discontinued, the replacement/new model is released before the stock of the old model is utilised. However at the moment, we are seeing old model availability diminish completely, even before the release of the replacement model for ordering. The situation is complicated further because, in some instances, there is not a discontinued model with a new replacement model. It is simply an increase in CO2 (and sometimes price) to an existing model and this makes it almost impossible to administer – especially when we have seen CO2 increases of 30 per cent (or £30 per month in Class 1a NIC). It is also worth noting that manufacturers are also reducing their published MPGs in line with the increases in CO2 ratings, albeit not necessarily at the same time. Grosvenor Leasing is recommending companies with fleets not to make any radical changes just yet. But you should be warned that drivers who are no longer able to order the vehicle they were hoping for may face disappointment and time-wasted. We are preparing new whole life cost lists over the coming weeks that will identify any significant movements applicable to the vehicles on our clients’ policies and, in the meantime, we are reviewing each order on an ‘order by order basis’.
James Parnell is Grosvenor Leasing’s head of purchasing with over 10 years fleet sector expertise. FURTHER INFORMATION www.grosvenor-leasing.co.uk James Parnell
FURTHER INFORMATION www.icfm.com
Supported by
Volume 114 | GREENFLEET MAGAZINE
47