BVRLA News, January/February 2016 by BVRLA

January/February 2016

www.bvrla.co.uk

BVRLA News The bimonthly newsletter of the British Vehicle Rental and Leasing Association

2016: a big year for BVRLA members? It is wise to assess the previous 12 months before planning the year ahead, and that’s just what the BVRLA has been doing.

In January this year, we crunched the numbers, and can now reveal that membership grew in 2015. BVRLA members are now responsible for record numbers of cars, vans and trucks. This growth will put our industry in the spotlight in 2016. Meanwhile, the Volkswagen emissions crisis means that the automotive industry as a whole must get used to working under increased scrutiny from the government, the media and the public.

Looking ahead to the next 12 months, the BVRLA believes there will be a continued focus on ultra-low emission vehicles. The Department for Transport has already announced Bristol, London, Milton Keynes and Nottingham as the recipients of a £40m investment to boost the take-up of plug-in vehicles. In March, the Chancellor will have the opportunity to use the VW emissions

crisis as an excuse to raise Vehicle Excise Duty. He could also suggest further tweaks to the emissions-based taxation regime, which has been so successful in getting motorists out of high CO2 vehicles that the government has seen its revenues falling. Throughout the year, automotive lobbyists and legislators will try to thrash out a new agreement that will create a secure, standardised and fair technology framework for sharing vehicle data between manufacturers, vehicle owners, the independent aftermarket and other third-party service providers. Fleet owners will have to deal with the aggressive market strategies of certain original equipment manufacturers (OEMs) who see their connected car platforms as a key opportunity to gain a direct relationship with the customers of rental and leasing companies. OEMs are also trying to gain a bigger share of the vehicle repair and servicing, breakdown and mobility services markets, competing directly with the offerings provided by rental and leasing companies. Fleets are also likely to grow increasingly more frustrated with government agencies such as the Driver & Vehicle Licensing Agency (DVLA) and Driver & Vehicle Standards Agency (DVSA) as budget cuts result in them inevitably delaying the introduction of some digital fleet services. On all these issues, the BVRLA will be working with policymakers, vehicle manufacturers and other stakeholders in the automotive industry to ensure members can conduct their business as usual. u

Lease accounting changes After ten years of deliberations, new accounting standards rules have finally been published. Find out what they mean for you. page 4 BVRLA Parliamentary reception highlights Fleet figures met ministers and members of the Transport Committee at a BVRLAorganised House of Commons event. page 5 2015 in numbers: our sector’s contribution Statistics for the past year show growth in the BVRLA’s membership and the total number of vehicles on UK roads. pages 6-7 BVRLA standards: what happens next? With five new sectorspecific Codes of Conduct introduced in January, BVRLA Compliance Officer Natasha Howard explains what members can expect next. page 8 Annual Dinner 2016: sponsors confirmed Which companies are helping make our biggest social event possible? page 9 How did we do? Statistics on the BVRLA Conciliation Service, RISC and forums. page 10

• Promoting responsible road transport since 1967 •

BVRLA Fleet Technology Congress Wednesday 6th July - Williams F1 Conference Centre, Grove, Oxfordshire

2016

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Technology Roadmaps

Working with Fleet Technology

Next Generation Supply Chain

What should fleets expect from future vehicle powertrains, autonomous systems and connected services?

What are the SMR, data compliance, security and risk implications of connected, autonomous and electric vehicles?

How are our automotive industry partners moving with the times?

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Promoting responsible road transport

The BVRLA team Chief Executive Gerry Keaney 01494 545716, gerry@bvrla.co.uk Secretary to the Chief Executive Kate McLaren 01494 545709, kate@bvrla.co.uk Management Accountant Bharti Ladwa 01494 545708, bharti@bvrla.co.uk Director of Communications & External Relations Toby Poston 01494 545700, toby@bvrla.co.uk Media & Communications Officer Jamie Fretwell 01494 545710, jamie@bvrla.co.uk Marketing & Communications Administrator Tamsin Stuczynska 01494 545707, tamsin@bvrla.co.uk Director of Member Services Nora Leggett 01494 545713, nora@bvrla.co.uk Learning & Development Specialist Gursh Gill 01494 545719, gursh@bvrla.co.uk Marketing & Administrative Executive James Mansfield 01494 545720, james@bvrla.co.uk Director of Policy & Membership Jay Parmar 01494 545706, jay@bvrla.co.uk Membership Manager Greg Theaker 01494 545705, greg@bvrla.co.uk CRM Project Lead Robert Burford 01494 545702, robert@bvrla.co.uk Senior Policy Advisor Patrick Cusworth 01494 545712, patrick@bvrla.co.uk Legal & Policy Executive Amanda Brandon 01494 545701, amanda@bvrla.co.uk Compliance Officer Natasha Howard 01494 545718, natasha@bvrla.co.uk Conciliation Service Manager Sallie Catchpole 01494 545715, sallie@bvrla.co.uk Conciliation Service Officer Stephen Dix / Sarah Philp 01494 545711, stephen@bvrla.co.uk / sarah@bvrla.co.uk

Driving ahead: the number of BVRLA members is at a ten-year high

Comment By Gerry Keaney, BVRLA Chief Executive

BVRLA members hit the ground running in 2016 The BVRLA’s membership and members’ fleet sizes hit record levels in 2015, reflecting an industry that is growing in popularity and influence. The automotive industry is experiencing impressive growth, with the Society of Motor Manufacturers & Traders (SMMT) reporting record new vehicle registrations. As our own statistics show, you collectively operate close to 4.5 million vehicles on UK roads. This might suggest that there has never been a better time to be in the rental and leasing industry, but that doesn’t mean that we have a smooth year ahead. Nor can we rest on our laurels.

more audits and give customers real confidence when they hire a vehicle from a BVRLA member. Regulators will be busy as well. The Financial Conduct Authority (FCA) is changing its complainthandling requirements from June 2016, and the International Accounting Standards Board (IASB) has published its plans for large companies to bring their operating leases onto the balance sheet. Meanwhile, the Driver & Vehicle Licensing Agency (DVLA) continues to digitise its services, and the government’s motoring taxation regime is placing an unfair burden on company car drivers. We are working hard to address all these issues, leaving you to focus on your core business. u

We have started the year by introducing our new compliance programme and revised Codes of Conduct. This will result in

The British Vehicle Rental & Leasing Association River Lodge, Badminton Court Amersham, Buckinghamshire HP7 0DD Tel 01494 434747 Fax 01494 434499 Email info@bvrla.co.uk Web www.bvrla.co.uk © Copyright BVRLA 2016. BVRLA News articles may be used copyright free by members provided that an acknowledgement is given.

Honorary Life President Freddie Aldous Chairman Simon Oliphant

Vice Chairman Peter Cakebread Honorary Treasurer Brian Back

BVRLA News | January/February 2016

NEWS

New lease accounting rules revealed at last After a ten-year review, the International Accounting Standards Board (IASB) has published its new International Financial Reporting Standard (IFRS), which will come into effect from 1 January 2019. The new standard adopts the ‘right of use’ model – which differs substantially from the current arrangement. At present, businesses do not have to report operating leases in company accounts. Under the new model, a lessee (leasing customer) would identify the right to use a leased asset on their balance sheet and incur a corresponding liability for future rental payments. The BVRLA secured significant changes to the original proposals for the new standard, including some major simplifications. As a result, short-term hire vehicles, informal vehicle

VW plans its next steps to answer the emissions question

extensions and ancillary leasing services (eg maintenance) do not have to be reported. Fleets will also have the option to report leases on a portfolio level rather than individually. The new standard will only apply to listed entities and public sector organisations that report under International Financial Reporting Standards Many UK companies report under UK generally accepted accounting principles (GAAP) and will be unaffected until such time as these converge with the IFRS standard, although they will need to be prepared.

Volkswagen will shortly publish details of when vehicles affected by its emissions issues will receive their fix.

BVRLA Chief Executive Gerry Keaney said: “Bringing leased vehicles onto the balance sheet will not erode the key benefits of leasing for the sector.” u

The BVRLA has another meeting scheduled with Volkswagen to discuss how to co-ordinate the service updates. The association is also working on obtaining clarification about how the fixes will be made available to affected drivers, including the possibility of a mobile repair to reduce vehicle downtime.

Further information www.bvrla.co.uk/advice/leaseaccounting

On the issue of potentially inaccurate CO2 figures, the BVRLA understands that a number of SEAT and Audi models had their CO2 figures revised upwards in December.

2016 Budget submission With George Osborne delivering the 2016 Budget next month, the BVRLA has called on HM Treasury to treat company car drivers more fairly. In its submission the association has urged the government to carry out a wholesale review of the current system of company car taxation, recognising the benefits these vehicles bring in terms of reduced emissions and tax revenues. The association also highlighted a variety of concerns, including company car tax and the delayed abolition of the 3% diesel supplement. It also made recommendations on first year

allowances, electric vehicles and improving safety in new vehicles. Since George Osborne became Chancellor in 2013, 30,000 fewer employees have chosen a company car. The BVRLA estimates that the planned 2% increase in company car tax from 2017-18 will result in HM Treasury receiving an additional £626.94 per diesel company car that year. The delay in removing the 3% diesel supplement on company car tax from April 2016 to April 2021 will cost every company car driver an additional £882.26 in 2018-19 – a 21.71% increase compared to 2013-14. u

The company is currently getting approval from the relevant authorities for all the fixes required for the NOx-related service action. It has confirmed that owners of Amarok pick-ups will have their vehicles worked on in March.

This will not affect existing vehicle owners, but leasing companies with vehicles on order for customers should have been contacted by the Volkswagen Group about potential changes to the Vehicle Excise Duty and company car tax payable. The BVRLA has sought clarification from the Volkswagen Group on these issues, and will notify members of the results in due course. u Further information Members can stay abreast of the latest developments in the VW emissions story via the BVRLA website: www.bvrla.co.uk

January/February 2016 | BVRLA News

FEATURE

Ministerial briefing: Transport Minister Robert Goodwill addresses attendees at the BVRLA’s Westminster reception

Parliamentary reception raises transport issues Transport Minister Robert Goodwill has told BVRLA members that the government will work with the vehicle rental and leasing sector to find solutions to the UK’s major transport issues. BVRLA Chief Executive Gerry Keaney presented the industry’s policy recommendations to Goodwill and other Members of Parliament at a Parliamentary reception in the House of Commons before Christmas. Goodwill told attendees: ”I am very grateful to the BVRLA for organising the discussions which have culminated in this evening’s reception. There really is no

substitute for getting the experts around a table and thrashing out some good ideas.” Since the event, several of the BVRLA’s proposals have been acted upon. The very next day, the government announced the structure of the new Plug-in Grant, which will come into effect from March 2016, and confirmed an additional £400m of funding to last until March 2018. In January, the Department for Transport announced the winners of the Go Ultra Low City Scheme. Bristol, London, Milton Keynes and Nottingham will share £40m to introduce a number of in-life incentives for ULEVs. u

Policy proposals 1 Encourage the take-up of Autonomous Emergency Braking and consider making fitment of this technology mandatory for new vehicles. 2 Introduce a national framework surrounding urban Clear Air Zones in order to provide fleets with consistency and certainty. 3 Investigate the possibility of adjusting current road designs to encourage smoother traffic flow, thus reducing accidents and the resulting hold-ups, which produce increased NOx emissions. 4 Continue to support ultra-low emission vehicles via the Plug-in Grant. 5 Support the further encouragement of car clubs across all major cities, with the aim of minimising unnecessary car journeys and reducing emissions and congestion. 6 Consider in-life incentives, including free or subsidised parking; or green express lanes in congested areas to encourage the take-up of electric vehicles.

Lobby group: the Westminster reception aired exciting transport proposals

BVRLA News | January/February 2016

RESEARCH & INSIGHT

BVRLA members 2015

Fleet size by vehicle type 2015

NOTE: 2014 figures for LCV and HGV adjusted to reflect a reclassification of some HGVs to LCVs by one member (LCV 631,208 & HGV 91,438)

2015 in numbers We’ve crunched the numbers and they show impressive growth in the vehicle rental and leasing sector over the past 12 months. Jamie Fretwell presents the key figures. Both the BVRLA and the industry it represents had another record year in 2015, according to our latest annual membership and fleet size report. The association saw a net gain of 74 new members across all sectors last year, with another surge in the Leasing Broker and Rental Broker categories. The total BVRLA member fleet continued its rise: up 16% to 4.47 million vehicles. most sectors saw strong growth, with car numbers

passing three-and-a-half million for the first time. The combined member fleet now accounts for one in every nine cars, one in every five vans and one in every five trucks licensed to operate on UK roads. Once again, a large part of this expansion came from personal leasing, which now accounts for 1.4 million vehicles – a 32% increase on 2014. Most fleet categories reported steady organic growth, but once

again there were major new additions from captive leasing companies in the personal car and corporate LCV leasing areas. u

For further information on the BVRLA’s research and statistical services, contact Director of Communications & External Relations Toby Poston. Contact Toby Poston 01494 545700 toby@bvrla.co.uk

January/February 2016 | BVRLA News

Short-term rental fleet size 2015 Overall, short-term rental fleets reported singlefigure percentage growth in 2015, but there was double-digit growth in vans and trucks.

NOTE: Growth rates are based on readjusted figures for 2014 (LCV 139,235 & HGV 20,479)

Personal leasing fleet size 2015 BVRLA members operated more vehicles on personal leases than ever before, with record growth in car, van and truck numbers.

Corporate leasing fleet size 2015 Corporate car leasing fleets grew by 11%, mirroring the growth trend reported across the sector in 2015.

BVRLA News | January/February 2016

NEWS

Dart Charge faces its faults

Five flavours: the BVRLA Code of Conduct recognises sectoral differences

Governance campaign will raise awareness of Code of Conduct As well as strengthening the BVRLA Code of Conduct for 2016 by creating five variants tailored to each sector of members’ activity, the association is launching a comprehensive governance programme. This will not only enforce the Code of Conduct, but it will also give members a health check on their business, feedback, free access to tailored guidance, legal advice and details on industry best practice.

Highways England said it would: › review the refund process and see if the fleet team can help BVRLA members with their refunds.

Members will shortly receive a newsletter as well as a copy of the Code(s) of Conduct most relevant to their business. These will detail the audit process and provide other guidance. Members with questions about the Codes of Conduct or the governance programme should contact BVRLA Compliance Officer Natasha Howard. u

› consider if its website can be changed to allow users to pay multiple penalty charge notices (PCNs) in one transaction. At present, there is an interval of 10 minutes between transactions. Members expressed their concerns about the number of PCNs they have to deal with more than once due to processing errors and the PCNs being sent for old offences.

Contact Natasha Howard 01494 545718 natasha@bvrla.co.uk

BVRLA secures extension to Driver CPC exemption Following extensive BVRLA lobbying, the government has now changed the legislation concerning the Driver Certificate of Professional Competence (CPC). Previously, the only drivers exempt from requiring a Driver CPC were those who occasionally delivered and collected commercial vehicles within 50km of their base. The BVRLA was able to demonstrate that this was restrictive for rental

In December the BVRLA and a delegation of members met with Highways England and its service provider Sanef to discuss concerns about the operation of Dart Charge – the toll system for motorists crossing the River Thames east of London.

companies, causing some to incur additional costs or even exit the market. The Department for Transport agreed and, on 24 January, amended the legislation to increase the exemption distance to 100km from the drivers’ base. u Further information Full details can be found in the BVRLA fact sheet Driver Certificate of Professional Competence, available for download from the BVRLA website: www.bvrla.co.uk

Highways England said that the backlog of older PCNs should have been cleared by the end of January 2016, but the BVRLA has not been able to confirm or deny that this is the case. The legislation governing Dart Charge does allow it to issue PCNs at any time. There is no time restriction, as there is with other road traffic offences, such as a parking violation. Highways England also said that appeals against PCNs can now be submitted via its website. The BVRLA’s promise form can be submitted as evidence of a hire or lease agreement. u Further information www.dartford-crossing-charge. service.gov.uk www.bvrla.co.uk/advice/guidance/ dart-charge

January/February 2016 | BVRLA News

NEWS

Sponsors support our Annual Dinner With less than one month to go, this year’s BVRLA Annual Dinner is set to be a great night with an excellent group of sponsors and speakers confirmed. As previously announced, the BVRLA has lined-up acerbic broadcaster Jeremy Paxman as the keynote speaker for the evening, while comedy will be supplied by acclaimed stand-up Jimmy McGhie. Such a fantastic line-up wouldn’t be possible without the support of some generous sponsors, CCAS, Enterprise Rent-A-Car, Lombard, MS Automotive (London) Ltd, moDrive, Paragon, Volkswagen Passenger Cars and VRS.

other while enjoying a few drinks and a three-course meal.

The event takes place on Thursday 3 March at the London Hilton on Park Lane. For members of the vehicle rental and leasing industry, the black-tie dinner provides a fantastic opportunity to connect with each

The Annual Dinner is also an exciting celebration of the achievements of the sector’s most deserving staff, with awards on the night for the industry’s unsung heroes and the top performers in the BVRLA’s training courses. u

Annual Dinner 2016: another full house at London’s Hilton on Park Lane

To add yourself to the waiting list, contact Nora Leggett at the BVRLA. Contact Nora Leggett 01494 545713 nora@bvrla.co.uk

Fleet Technology Congress to return Following a keynote address by For the third year running, the BVRLA Chief Executive Gerry BVRLA will explore the impact of Keaney, delegates will hear from new technology a range of speakers on the fleet on three key topics: industry BVRLA at its Fleet Fleet Tech nolo Technology › Technology Congress gy Wednesday 6 July - Williams F1 Conference Congress. roadmaps Centre, Grove, Oxfordshire What powertrains, Taking place at autonomous the Williams systems and F1 Conference connected services Centre in Grove, should fleets Oxfordshire, on expect in the Wednesday 6 future? July, the event will once again › Working with bring together fleet technology the great and A look at the the good of the implications of vehicle rental connected and and leasing industry. autonomous They will discuss the technical vehicles in relation to data and operational issues impacting compliance, security and our sector. other risks. th

2016

Technology Roadmaps

What should fleets expect from future vehicle powertrains, autonomous system connected service s and s?

Working with Fleet Tech nology

What are the

SMR, data

compliance, security and risk implications of connected, autonomous and electric vehicles?

Next Generat Supply Cha ion in

How are our automotive industry partner s moving with the times?

Find out more

bvrla.co.uk/e

vents

Promoting respons ible road transpor

BVRLA News | January/February 2016

› Next generation supply chain How the sector’s automotive industry partners are moving with the times, with a particular focus on servicing, maintenance and repairs. Tickets for the Congress are on sale now, and the BVRLA also has a number of sponsorship opportunities available for members. u

Further information www.bvrla.co.uk/events/fleettech-congress To sponsor or attend the Congress, please contact BVRLA Director of Member Services Nora Leggett. Contact Nora Leggett 01494 545713 nora@bvrla.co.uk

NEWS

TOM and RVR forums secure big backers The BVRLA’s Technical and Operational Management (TOM) and Residual Value and Remarketing (RVR) forums have the backing of three major fleet players in 2016. More than 330 people attended BVRLA forums in 2015, and the events look set to remain popular in 2016 following the news that BCA, MG Motor UK and Manheim are to lend their support. As a car manufacturer with an impressive facility in Longbridge, MG Motor UK is excellently placed to host the TOM forums. At these events, members are able to discuss the issues surrounding the

Complaints rose in 2015

operation of a fleet of vehicles – from AdBlue and tyres to telematics and lubricants. Used vehicle specialists BCA and Manheim will add their expertise in remarketing at the RVR forums, when members can hear about a range of topics including the residual values of electric vehicles. u To find out more about this year’s TOM and RVR forums, and to book places, visit the ‘Forums’ page of the BVRLA website: www.bvrla.co.uk Contact Nora Leggett 01494 545713 nora@bvrla.co.uk

The BVRLA’s UK Conciliation Service received nearly 1,000 complaints in 2015 – up 22% on the previous year. It handled 997 complaints in 2015 – up from 815 in 2014 and 543 in 2013. Last year’s increase was attributable largely to the rental sector, which saw a 21% increase in complaints. The leasing sector received 10% more complaints. 37% of the complaints were upheld and 62% were found in favour of the member. Just 1% were unresolved. The average time taken to resolve a complaint fell to 15 days – half of the BVRLA’s 30-day target. u

RISC’s record usage The BVRLA’s RISC database saw a 90% increase in searches in 2015 compared with 2014, with members accessing the system 669,397 times. BVRLA Director of Member Services Nora Leggett said: “With the introduction of an improved version of RISC in late 2015, we have seen a dramatic increase in both usage and users.” u Further information The BVRLA organises its Asset Management and Risk Control Forum for members to learn from recent scams and get advice about detecting fraud. The next forum will be in Northampton on 19 April: for details, visit www.bvrla.co.uk/events. For more information on RISC, visit www.bvrla.co.uk/RISC

RISC in 2015 On an average day… BVRLA members post five incidents on RISC. In an average week… the BVRLA receives three contacts from aggrieved renters whose details have been posted on RISC. In an average month… there are 217 RISC matches – that’s the number of potential vehicle thefts and frauds the community of RISC users has prevented.

January/February 2016 | BVRLA News

MEMBERSHIP

Professional development Training options rise for members In 2016, the BVRLA will continue to deliver professional support to members who do not have dedicated training and development staff. The association is also devising training initiatives to enhance the professionalism and profitability of all members. Commenting on the plans for 2016, BVRLA Learning & Development Specialist Gursh Gill said: “We have a full schedule of courses planned, and already this year we have delivered training both here in the UK and in Poland.”

The association has also launched two new courses: an Introduction to Daily Vehicle Rental and Selling, Regulation & Compliance for Leasing Brokers. These sectorspecific courses are already proving to be popular. A number of members have also requested accreditation days for their central support teams, and the BVRLA continues to offer the Institute of the Motor Industry’s Driver Support and Technical Support courses at members’ premises. u

New members Rental M & A McManus (County Tyrone)

S & J Self Drive Hire (South Ockendon)

Leasing Broker Covase Ltd (Upper Basildon)

Transport Management Contracts Ltd

Peregrine Asset Finance Ltd (York)

(Pontefract)

New associate member APD

Since 2003, APD has been at the forefront of the delivery of awardwinning customer experience and supplier management programmes, supported by business insight and research. Its bespoke Contact.360 program has been widely adopted in the automotive sector and underpins

business-focused CRM and CEM strategies for clients in over 52 countries and 26 languages. APD support its clients with a dedicated team of subject-matter experts and analysts.

www.apd-research.com

Professional Fleet Consultant Development Programme 9-10 March & 4-5 May Chesham This intensive training programme aligns the rental and leasing sales functions to the requirements of a modern fleet manager. Sales executives, sales managers, account managers and new business development managers would all benefit by attending. Introduction to the Vehicle Fleet Industry 16 March Stokenchurch An invaluable introductory course, this highly interactive programme incorporates group activities, discussions and visual presentations to deliver relevant knowledge. BVRLA Fair Wear & Tear 13 April Midlands This industry-specific programme provides a working knowledge of the BVRLA’s Fair Wear & Tear Standards. It promotes industry guidelines and best practice, with classroom training and practical exercises. Selling Contract Hire 27-28 April Stokenchurch This programme is for sales professionals who oversee vehicle fleets. Delegates will learn the benefits and opportunities of contract hire products and services. Contact Gursh Gill 01494 545719 gursh@bvrla.co.uk

BVRLA Events BVRLA Annual Dinner Asset Management & Risk Control Forum CV Show BVRLA Broker 200 Kart Race

London Hilton on Park Lane

3 March

Shoosmiths Northampton

19 April

The NEC, Birmingham

26-28 April

Daytona Milton Keynes

18 May

For enquiries about events, contact events@bvrla.co.uk Full details of all BVRLA events can be found online: www.bvrla.co.uk

BVRLA News | January/February 2016

Expert speakers | Personal Development | Networking

Throughout the year the association gathers experts and practitioners from across our membership to encourage discussion and debate and share information and best practice. Subject areas include residual value and remarketing, technical and operational management, and credit and risk management.

For more information on BVRLA forums and other events, please call us on: 01494 545713, email us at: nora@bvrla.co.uk or visit: