20th January 2019
What will feature on the agenda of fleet managers in 2019?
While Brexit scenario-planning is unarguably having an impact particularly on larger entities as the March deadline looms ever closer, many organisations can do little more than adopt a business as usual approach, absorbing as much guidance as they can along the way, while technology in the automotive sector moves at a faster rate than ever. Leaving the small matter of Europe aside despite the potential changes involved such as insurance cover outside the UK, we look at the year ahead for day-to-day fleet management in 2019.
The trend from BCH to PCH
Company car leasing, which was once a formality for many organisations, is shrinking because of various factors. Now in full swing, HMRC’s Optional Remuneration Arrangements (OpRA)1 mean that a vast number of personnel offered cash-for-car allowances and salary sacrifice vehicles that emit over 75g/km CO2 are taxed based on whichever is the higher benefit between the cash value and the car’s taxable P11D figure2. This taxation change has been having a significant impact on fleets.
Household brand Xerox3, for example, has reported to Fleet News that OpRA has seen its cash allowance-takers grow from 800 to 1,250, which the firm’s GB fleet manager Val South attributes to its car ownership scheme now being subject to tax and National Insurance whereas former approved mileage allowance payments (AMAP) were not. As a result, some Xerox staff decided to turn to leasing their cars through personal contract hire (PCH), which attracts benefit-in-kind (BIK) tax but still works out more cost effectively for many.
Honda4 was brisk at the start of 2019 to state that it expects grey fleet and end-user purchasing to continue rising while the new fleet car market will carry on reducing following a 7% contraction in 2018. The Japanese marque’s fleet sales operations manager Marc Samuel told BusinessCar that they “are seeing more professionals using their own cars for business travel and end-users assuming more responsibility for fleet management”, especially amongst the SME community where fleet management is absorbed by another role rather than a dedicated employee or department.
Fresh statistics from the BVRLA covering Q3 2018 reinforce this tangible trend, with a 7.2% decrease in business car leasing compared to a 19% rise in personal contract hire. OpRA’s introduction is only one factor, with continually rising and punitive BIK tax widely regarded as another, the now 4% diesel surcharge very much at the heart of the angst. Unaware RDE2-compliant models would be launched from H2 2018 onwards, many employees whose company cars leases became due for renewal in 2017/18 chose to take the PCH route, which also generally means greater freedom over make and model choice. There are downsides to the growing migration from business to personal contract hire, though, as organisations still have a duty of care over their drivers’ grey fleet vehicles, while PCH contracts don’t typically include maintenance and servicing by default. Moves by organisations to bolster their grey fleet databases and demonstrate greater attention to such vehicles and drivers is something we welcome, as it contributes to upholding ever higher levels of road safety.
WLTP’s effects felt as alternative fuel evaluation continues
For fleets that still place their trust in traditional contract hire, the landscape ahead in 2019 looks equally uncertain, with the introduction of new WLTP tests, which laudably have motorists’ bests interests in mind, having resulted in many otherwise obvious models like the Mercedes 350h and Volkswagen GTE ranges being suspended6 and OEMs’ line-ups significantly simplified. While the understandably popular Golf and its siblings are currently still closed to ordering, the pausing of Kia’s Optima Sportswagon7 plug-in hybrid is now over, with the advent of a revised model. With a great variety of other new hybrid, plugin and electric cars arriving throughout the year, along with increasing numbers of RDE2-eligible diesel variants, fleet managers’ outlook for 2019 in terms of model choice is now looking decidedly rosier.
ULEZ, CAZ and fleet cost-savings
Cost-savings will likely be sought by many organisations until the Brexit outcome has become clearer and various dynamics have settled down somewhat, so limiting business travel to essential journeys only has become the norm in some cases, while other entities will increasingly adopt alternative mobility solutions from car-sharing and short-term rental to multi-modal journeys. Throughout 2019, fleet management will increasingly morph into travel strategy, and alongside the ‘how?’ and the ‘why?’ in terms of vehicular choice and journey purpose, ‘where?’ will become an ever more important focus as clean air zones (CAZ) are gradually introduced across the UK, starting with the London Ultra Low Emissions Zone (ULEZ) on April 8th, which is expected to impact van fleets even if Euro 6 engines will enable many newish company cars to avoid the charges. Not all grey fleet cars, including those bought by means of cash allowances, will be Euro 6-compliant, though, which will require fleet policies to be updated for 2019 to place the ensuing fine-paying responsibility on the owners of such cars. Bristol and Southampton are amongst the first batch of UK cities set to introduce a CAZ, which fleets based near or whose drivers regularly enter such locales will need to be mindful of.
Alternatively-fuelled vehicles and in particular plug-in hybrid and electric iterations are decidedly de rigeur, but we see 2019 as a year in which fleet managers and decision-makers will place more of an emphasis on vehicles’ wholelife costs, their viability in terms of the mileages involved, and their suitability for the jobs comprising each role8. With the Plug-in Car Grant now focussed on pure EVs, it’s conceivable that fleets previously contemplating switching to PHEVs may now consider petrol or even return to diesel if fully-electric vehicles don’t fit their activities, because of apathy, infrastructure and temporal disadvantages still linked to plugging-in.
Connected cars and vehicle safety technology
Data is abundant in today’s world of the ‘connected car’ and we see the year ahead as a time in which in-car personal assistants9 like Alexa, Siri and OEMs’ in-house systems like ‘Hey Mercedes’ are increasingly promoted or at least recognised by fleet managers who are keen to leverage technology wherever possible to make their drivers’ lives more efficient.
Safety is very evidently being boosted with each new model introduced, the new Ford Focus, for example, featuring eCall, which automatically phones emergency services in a relevant event, with Ford and Vodafone collaborating to enable equipped cars to communicate and inform each other of accidents10. Car-to-cloud IoT systems will increasingly feature in forthcoming models with, for instance, ZF partnering with Microsoft to bring predictive maintenance11 to the world of fleet management, which will aid in minimising the time vehicles are off the road. It’s important that fleet managers keep abreast of such developments during 2019 by reading news and insights on fleet publications’ websites, along with attending seminars and taking time out for training.
Telematics, which is at the heart of Trak Global Group’s businesses, will become ever more important for fleet managers, with 40% of professionals surveyed by Shell12 citing harnessing such technology to be a top priority for them. In addition to benefits such as improving vehicles’ efficiency and reducing fuel spend, telematics and big data interpretation also play a significant role in driver training including EV adoption and charging discipline, while gamification and other incentivising of good driving skills not only keeps employees motivated but also reduce wear and tear on vehicles, and keep at-work drivers and other road users safe. Telematics data proves instrumental to our fleet clients and insurers in the cases of collisions and thefts, and it’s expected that throughout 2019 corporate vehicles’ black box or app-based solutions such as our Appy Fleet platform will be augmented by dash-cams and also in-cab cameras, availing fleet managers with the full gamut of information.
We also expect accident rates amongst at-work drivers to reduce further during the year ahead because of the standard fitment of autonomous emergency braking (AEB) to a burgeoning variety of models, allied with the increased will of fleet managers to recommend or mandate AEB’s inclusion in cases where it’s optional. Found by Euro NCAP to reduce rear-end crashes by a substantial 38%, AEB also contributes to minimising damaged goods in transit, vehicle downtime and other uninsurable losses.
Following much-welcomed campaigns by Ford, Mercedes-Benz Vans and other organisations such as the automotive charity BEN, we also anticipate mental health and general driver wellbeing to be brought to the fore even more regularly and prominently over the twelve months ahead, as driver fatigue, stress, depression, anxiety and other challenges all become ever more intrinsic parts of updated fleet management policies.
- August 2019 (2)
- July 2019 (4)
- June 2019 (5)
- May 2019 (4)
- April 2019 (5)
- March 2019 (1)
- February 2019 (2)
- January 2019 (6)
- December 2018 (5)
- November 2018 (3)
- October 2018 (1)
- September 2018 (2)
- Trak Global Group has acquired Intelligent Mechatronic Systems Inc (IMS), North America’s leading insurance telematics business
- Trak Global Group helps raise a record £10,000 for charity at the 13th annual Anoush Cup
- Read our PaceNotes blog post on Gov.uk
- Trak Global Group achieves Investors in People accreditation
- Are the UK and Europe’s clean air zones anticipated to be successful and what influences are shaping their development?
- How autonomous, electric and shared mobility vehicles plus IoT connectivity are shaping tyre development