Road to recovery

Recent developments in fleet vehicles are serving to ensure the company car lives on

If the current state of Britain’s company car market could be summed up in song, you would probably imagine it in the miserabalist mode of Leonard Cohen.

Uncertainties over taxation changes, linked to exhaust emissions, are causing fleet managers to shudder at the idea of ordering new vehicles (what happens if you get lumbered with 500 of the wrong ones?). Droopy residual values, and the ongoing cash-for-cars debate are adding to long faces in the world of fleet vehicles.

Yet should company car proponents really be looking sad? According to the Society of Motor Manufacturers and Traders, company cars took 54.6 per cent of Britain’s total new car market last year.

Given that total British new car registrations are currently hovering at about 2 million annually, this represents a lot of metal, and a lot of employees for whom the convenience and status of a work-provided set of wheels remains undiminished.

Yes, change is coming to the company car park, and with this in mind Personnel Today has drawn up a list of five positive fleet developments.


1. Choice


The choice of cars deemed suitable for fleet use has never been wider, with once-unlikely marques ranging from Skoda to Mercedes all keen to secure business sales. This slots in well with the onward march of user/chooser policies, and it is now rare to find cars with specifications which do not give a nod to business driver requirements – everything from airbags to air conditioning. Gone are the days of matt brown paint and plastic seats – today’s fleet offerings are generally fitted with the right options and painted in colours that will attract private buyers when the time comes to sell them on.

Paul Simpson, South of England national leasing manager for Mercedes Benz, says specification levels of quality marques such as his have been improved by fleet industry requirements – drivers are less prepared to tolerate stripped-out specifications from prestige German brands. Air conditioning is also considered essential in today’s fleet vehicles. “The standard specification is rising and we are adding value to our cars as a result,” he says.


2. Motivation


James Langley, client development manager for fleet management business PH* Vehicle Management, thinks the remuneration value of the company car is as strong as ever. “Choice is seen as one of the ultimate ways of retaining staff,” he says.

This has led to a whole range of formerly out-of-bounds brands, such as Mercedes, Audi and BMW finding their way into company car parks. To compete, so-called bread and butter marques such as Ford and Vauxhall have added equipment, improved build quality and less easily defined dynamic elements of their cars.

Many staff are surprisingly knowledgeable about such minutiae and view having the right car as something of a workplace badge of honour. Tales of good employees leaving jobs because they didn’t like their cars are sometimes true.


3. Convenience


In 1999 a Europe-wide poll of company car drivers by fleet management company Lease Plan found that almost 63 per cent of UK respondents put convenience at the top of the list for sticking with a firm’s car. This was despite fewer of them believing it was cheaper to have a company car than owning one themselves – 41 per cent in 1999, compared to 50 per cent the year before.

“For most companies outside the major metropolitan areas, the company car is still the most hassle-free way of getting people to work,” says Andrew Cope, managing director of contract hire company Zenith. He describes fleet vehicles as very people-friendly, and when staff take a “cash for cars” option, they tend to operate on different budget levels, choosing cheaper, older, less appropriate vehicles.

In terms of providing a straight staff benefit, Cope says many employees used to a company car found related paperwork and duties onerous, and the costs involved an unwelcome surprise. Often, the convenience of letting their employer take care of these things is something they feel is worth paying for.


4. Technology


One of the current vehicle industry buzzwords is “telematics” – a broad term that can be applied to satellite navigation systems, which are becoming faster, easier to use and more accurate. They are filtering into cars like the Toyota Yaris supermini and are part of a batch of equipment that can let you know where a car is located and the route it is taking, when it is due for a service, and send and receive messages to and from its driver.

This so-called black box technology has a civil liberties element which has yet to be resolved (when does overseeing become spying?), but provides a degree of staff accountability and logistical advantages for an employer. Indeed, PHH Vehicle Management is fitting driver monitoring units – branded Fleet Command – to all its vehicles, and three car makers are thinking of offering this as an option.

A more immediate technological aid for the modern company car driver is the fuel card. Keith Greenhead, PHH fuel division director, reckons some 66 per cent of them use fuel cards – up from under 50 per cent in the early/mid-1990s. “With the increased cost of fuel they focus on the expense and make people look at how to get a better grip on this,” says Greenhead, who believes the cards make administration easier, allow control over where fuel is bought and encourage economical driving.


5. The future


The trend towards downsizing company cars, in particular from Vectra- to Astra-sized models, has largely been ameliorated by the fact that the smaller cars give little away in terms of performance, refinement and creature comforts. They are also more tax efficient. Models like the Astra, Focus and Golf are all highly regarded, and new credible alternatives, such as the second generation Nissan Almera, will soon be with us.

The car makers are also proving adept at producing vehicles that meet prevailing legislative trends, such as the likely arrival of excise duty based on CO2 exhaust emissions. Makes such as Vauxhall, Volvo and Ford have all moved to offer dual fuel gas/petrol powered models, which spew out far less CO2, and already sell in real numbers – Vauxhall will find buyers for 3,000 duel fuel cars a year. At least five petrol companies are working towards offering 200 filling stations apiece with liquid petroleum gas pumps, making this fuel – which is also much less heavily taxed – easier to obtain.

Diesel is also much more CO2 emission-friendly, although mutterings about the potentially carcinogenic nature of the “particulates” it emits could see it hit by a special levy. Even so, the latest engines are making big strides in economy cleanliness and refinement – BMW scores well here. VW has just launched a very economical three-cylinder Polo 1.4 diesel – an average 64.2mpg is claimed. And Peugeot has an exhaust “dirt” trap for diesel versions of its upcoming 607 saloon.

All this means the company car is changing, but given its undiminished practical and motivational advantages, reports of its demise are premature.

By Martin Gurdon

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