BVRLA News, August/September 2011

BVRLA News

www.bvrla.co.uk August/September 2011

The newsletter of the British Vehicle Rental and Leasing Association

Industry unites to tackle soaring motor insurance The BVRLA is working with its members and the motor insurance industry in response to some alarming increases in self-drive hire insurance premiums this year.

The cost of all types of motor insurance has increased by around 40% this year, with insurers claiming they have been losing money for years due to a big increase in injury claims, many of them fraudulent. As a result, many insurers have left the sector, restricting competition. In September the Office of Fair Trading (OFT) issued a call for evidence on the issue.

A recent survey of BVRLA rental members found that 90% had seen an ‘unjustified’ increase in their motor insurance within the last year. The cost of renewal quotations, policy restrictions (ie number of vehicles, age of customers), and lack of competition were the top three concerns.

In response to suggestions from members, the BVRLA has added a list of insurance brokers to its website. It is also working on best practice guidance and an industry template that rental members can use to help demonstrate their risk management profile to a prospective insurer.

The association is also making insurers aware of its RISC (Rental Industry Secure Customer) database as an example of the steps rental members are taking to limit their exposure to risk. The system enables rental companies to legitimately share information with other BVRLA members in order to gather data about prospective renters and assess the risks involved.

The BVRLA will work with the Association of British Insurers (ABI) to better understand the lack of competition in the market and what can be done to improve the situation.

“We have some good relationships with brokers that have served our industry for many years,” said BVRLA chief executive John Lewis. “I hope that our ongoing discussions with them, combined with the other steps we are taking, will eliminate some of the hurdles currently facing BVRLA members.

“However, until the government and the insurance industry can find a solution to the soaring level of motoring-related insurance fraud and frivolous claims, we may all have to get used to higher premiums.” n

Industry Conference 2011 Transport Minister Mike Penning, the man responsible for roads, road safety, freight and logistics, and motoring agencies, including the DVLA and VOSA, will be speaking to members at this year’s BVRLA Industry Conference.

Now in its third year, the vehicle rental and leasing industry’s flagship conference and networking event will reconvene at the Heritage Motor Centre in Gaydon, Warwickshire on Thursday 1 December. Speakers include:

❱ Andy Salter, managing director, Road Transport Group ❱ David Smith, economics editor, The Sunday Times ❱ Nigel Underdown, head of transport advice, Energy Saving Trust ❱ Martin Ward, manufacturer relationships manager, CAP To download further information and a booking form, click here

In this issue 2012 launch for online safety recall service The BVRLA has picked Ebbon-Dacs to run a free-for-members online vehicle safety recall system page 2 Electric vehicles: price still restricts take-up Manufacturers need to reduce their EV prices if they want to energise demand, the BVRLA has warned. page 3 VOSA plan penalises non-ATF users Higher fees are planned for operators getting their vehicles checked at a VOSA site page 4 Auction houses review car grading The National Association of Motor Auctions wants a grading standard for used cars page 5 Euro 5 sets the agenda for new vans The October deadline for new vans to meet Euro 5 emissions levels has led to a slew of new diesels that are claimed to be significantly more fuel-efficient than the ones they replace page 6

— Promoting responsible road transport since 1967 —

Comment New online safety recall Insurance premiums are one of those ‘once a year’ issues that have a habit of sneaking up on you unexpectedly.

A number of rental members have received a very nasty shock this year, with self-drive hire insurance premiums rising by 40, 60 or even 100 per cent. Some members have even been turned away.

Like funding after the Credit Crunch, motor insurance has suddenly become a very scarce and expensive commodity.

The insurance industry has lots of excuses, but the BVRLA will be working hard to get to the root of the problem and find out if anything can be done about it.

Toby Poston Editor Toby Poston, toby@bvrla.co.uk 01494 545700 Production Manager Steven Prizeman, steven@bvrla.co.uk 01494 545710 Advertising Nora Leggett, nora@bvrla.co.uk 01494 545713 © Copyright BVRLA 2011 BVRLA News articles may be used copyright free by members provided that an acknowledgement is given.

BVRLA River Lodge, Badminton Court Amersham Buckinghamshire HP7 0DD T 01494 434747 F 01494 434499 E info@bvrla.co.uk W bvrla.co.uk Honorary Life President Freddie Aldous Chairman Neil Cunningham Vice Chairman Kevin McNally Honorary Treasurer Brian Back Chief Executive John Lewis

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service for 2012 launch

The BVRLA is partnering with Ebbon-Dacs to launch a free-formembers online vehicle safety recall management system in 2012.

Although the UK has a good record of vehicle safety recalls being rectified, fleet owners are facing rising costs in administering and managing the notifications from each motor manufacturer. In light of this, the BVRLA has been working closely with members, motor manufacturers and the Vehicle and Operator Services Agency (VOSA) to develop an industry-wide recall system.

The aim of the BVRLA was to encourage development of a service which would be free to access by members and motor manufacturers, who would benefit from the reduced financial and administrative burden of notifying fleet owners.

After considering a number of commercial organisations put forward by the BVRLA, the Technical and

Operational Management Committee unanimously voted for Ebbon-Dacs as the chosen supplier. Its web-based system facilitates a centralised input of recall data by all manufacturers, which BVRLA members or their appointed agents can retrieve.

The database will require fleet data from members so that the information can be compared and a report can be produced, showing all vehicles that are subject to a new recall notification, as well as highlighting those with outstanding recalls. The new system also has the potential to cover nonsafety recalls and customers will have the option to purchase a product for notifying drivers.

Support and commitment from members and manufacturers is vital to ensure the information is kept up to date. Fleet owners and motor manufacturers will test the service during its pilot stage in May 2012 and it is expected that it will be widely available from August 2012. n

Rise in contract transfers prompts concern over lease-swapping sites BVRLA members have reported a surge in the number of customers seeking to transfer lease agreements to a third party.

The increase has been linked to the emergence of lease-swapping websites which allow people to advertise their lease and then guide interested customers through the process of taking it over.

Members are advised to examine any transfer requests carefully to be sure that they are bona fide and also implement the necessary safeguards to ensure that clauses in the contract are still observed.

Members may want to consider the reasons why customers are attempting

to free themselves from their lease obligations so that they can offer support or alternative options.

One website, www.swap-a-lease. co.uk, contains a list of BVRLA members which it claims support “lease contract transfer novation”.

The BVRLA is looking into the issue and whether there is a potential threat to consumers that should be reported to the Office of Fair Trading. n Members wanting further information on this issue should contact legal and policy director Jay Parmar.

Contact Jay Parmar, jay@bvrla.co.uk 01494 545706 BVRLA News | August/September 2011

Electric vehicles: price still restricts take-up Electric vehicle manufacturers need to reduce their prices if they want to energise demand, the British Vehicle Rental and Leasing Association has warned.

According to the Society of Motor Manufacturers and Traders (SMMT), just 812 buyers have taken up the government’s £5,000 Plug-in Car Grant so far this year, suggesting that electric vehicles are still too expensive for most consumer and fleet buyers.

“More than a dozen new electric and hybrid vehicles are set to hit the UK market over the next year, but most of them will be decorating showrooms unless manufacturers are more realistic on pricing,” said BVRLA chief executive John Lewis. “Ultra-lowcarbon transport is a necessity and electric vehicles have a big part to play in getting us there, but these vehicles

are simply too expensive for most fleets at the moment.”

A simple calculation of running costs by the BVRLA suggests that a Nissan Leaf would cost £5,000 more to run than an equivalent diesel car over the typical three-year, 36,000-mile life cycle for this type of car.

BVRLA business guide to electric vehicles

“With existing concerns over range anxiety and residual values, potential customers will need to see some real cost benefits if they are to adopt this

exciting new technology in significant numbers,” said Lewis. “With the retail car market in the doldrums, it is the fleet market that is responsible for nearly 60% of new registrations in the UK. Fleet customers don’t buy on sentiment – cost is their main criterion.”

Earlier this summer the BVRLA and the SMMT held a joint workshop to answer many of the questions fleets had about electric and hybrid vehicles. As a result, the BVRLA has published a Business Guide to Electric Vehicles, which answers many of the most pressing questions about operational issues like charging, batteries, servicing and repairs, range anxiety and safety. It also indicates the potential financial implications of running an electric vehicle. n The BVRLA Business Guide to Electric Vehicles can be downloaded here.

New Code of Conduct aims to protect and inform customers

Leasing brokers: expert guidance

The BVRLA Code of Conduct has been reviewed and updated, providing a clearer picture of the standards customers can expect.

The BVRLA has introduced a new, easy-to-read, ‘Key Facts’ template that leasing brokers can use to explain leasing quotations to their customers.

The revised code will take effect on 1 January 2012. Some of the main changes are: Rental ❱ Customer information – in response to recommendations made by the Office of Fair Trading (OFT), the code has been amended to ensure greater transparency during online booking. This includes clarifying what is included in the price, making terms and conditions available before a rental takes place, and explaining when excess charges become due and how much they are. ❱ Frequent renters – customers must confirm their legal entitlement to drive a rental vehicle and declare any endorsements or medical restrictions on their licence. ❱ Pricing – customers must be advised of the battery recharge policy for electric vehicles BVRLA News | August/September 2011

Leasing ❱ Vehicle suitability – the vehicle being leased must be fit for the purpose specified. ❱ Duty of care – customers must be informed of safety features and given advice on vehicle maintenance. ❱ End of lease charges – customers can be sent photographic evidence of any disputed damage so that it can be used to support an independent review. This will help remove any need to hold a vehicle pending sale.

Commercial vehicle ❱ Customer support and advice – recognising the role that members play in providing customers with advice and guidance on the safe and legal operation of a vehicle, including guidance on towing trailers, using a minibus and recording drivers’ hours. n The Code of Conduct can be downloaded from the BVRLA website by both members and non-members.

The template was developed by the BVRLA Leasing Broker Committee as part of its ongoing work to support the sector. It is envisaged that the one-page document will be used at the quotation stage to help customers understand what they are committing to.

Also available for leasing brokers is an updated guide to standard contracts and quotations containing advice and sample clauses that can be used when drafting the terms and conditions for a standard broker contract or quote.

It covers topics such as connected contracts, cancellation, cooling-off and the Data Protection Act 1998, as well as a checklist for compliance with the Money Laundering Regulations 2007. n Members can download both documents from the BVRLA website.

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VOSA price plan penalises non-ATF users The Vehicle and Operator Services Agency (VOSA) is proposing a two-tier pricing strategy for test fees which will mean higher prices for operators getting their vehicles checked at a VOSA site.

VOSA wants to raise HGV annual test fees by 4% at its own test sites, but reduce them by 4% for operators using an independent Authorised Testing Facility (ATF). The agency claims that its historic £36.8m deficit is the main reason for the increase, but it is also using the new pricing structure to help it close more of its testing stations by encouraging operators to use ATFs instead.

The BVRLA has criticised the price hike, questioning why operators should

pay for VOSA’s past failure to manage its finances effectively. The association believes that more beneficial cost savings could be made by allowing annual tests to be carried out by independent VOSA-accredited testing staff instead of civil servants with rigid working times. The new strategy could also penalise operators who either don’t have an ATF nearby or have one that does not provide open access.

BVRLA members have already voiced concerns over the disparities between VOSA and non-VOSA sites. Some have reported that the ATFs are charging a supplementary fee per vehicle, making them less cost-effective. The 4% decrease could help to offset this cost, but a lack of technical back-up at the ATF sites has been highlighted,

potentially driving people back to VOSA sites if not adequately addressed.

A further problem members have found with ATF sites is the inability to use pre-funded accounts, resulting in a time and administrative burden of setting up additional accounts and requesting cheques/bank transfer payments.

Availability at VOSA sites was also flagged as being difficult to attain, even when booking one month in advance.

Following the closure of its consultation on 28 July, VOSA is set to announce its final decision on its pricing proposals later this Autumn.

The BVRLA will continue to lobby for more open access test sites and for any increase in fees to be abolished once VOSA’s deficit is cleared. n

Association welcomes Emma and Rob to the team Two new members of staff have joined the BVRLA: Emma Fox and Robert Burford.

Robert joins the Member Services Department and will administer the BVRLA’s vehicle mileage database, the residual values and SMR data survey and RISC. He also takes charge of sales of VE103Bs and publications. n

Emma has been part of the Legal and Policy Department for the past month, taking over the responsibilities of Amanda Brandon while she is on maternity leave. Her principal roles are helping members with queries on legal issues and assisting committees.

Contact Robert Burford Emma Fox robert@bvrla.co.uk emma@bvrla.co.uk 01494 545702 01494 545711

BVRLA calls on Treasury to clarify company car tax With more company cars being leased on four-year terms, the BVRLA has urged the government to publish rolling company car tax bands for at least five years so that fleets can make informed choices.

As well as providing more tax certainty for fleets, the association has also called on HM Treasury to complete the job of making the company car tax system technology neutral. It has removed many of the complicated penalties and discounts for using specific fuels, but the BVRLA believes that it should go further and eliminate the 3% surcharge on diesel cars.

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“Apart from protecting the Exchequer, we can see no other justification for retaining this outdated penalty,” said Jay Parmar, BVRLA director of legal and policy, following a recent meeting with HMRC officials. “Diesel cars are more fuel-efficient and, in many cases, as clean as their petrol equivalents. The government’s justification for retaining this will be further weakened by the introduction of hybrid-diesel cars.”

The BVRLA has also warned the government that its tax regime needs to keep pace with technological advances. For example, tax treatment on company-provided fuel does not recognise how to treat electricity used

to charge a company electric vehicle (EV) where there is some private use.

Perversely, there will be a taxable benefit to be paid by the employer for an employee who uses a privately owned EV for business use. This is because, although advisory fuel rates are not currently applicable to company EVs, approved mileage allowance payment (AMAP) rates can be claimed by an employee using a privately owned EV for business miles.

There is still an unanswered question of what P11D value will be used for an EV where the battery is leased and not sold with the vehicle. n BVRLA News | August/September 2011

Auction houses review car grading The National Association of Motor Auctions (NAMA) is working on a standardised grading system for the condition of used cars. It hopes that an industry-wide standard will help eliminate some of the inconsistencies in the way auction houses grade vehicles, and is keen to get feedback from auction vendors. In response, market guide publishers Glass’s and CAP are introducing major changes to their forecasting and valuation systems. BVRLA News spoke to some of the main parties involved to get more details.

BCA Tony Gannon, communications director “BCA has led the industry by developing a comprehensive and objective vehicle appraisal system that is used to grade every single vehicle entered for sale at our centres nationwide – including cars and commercials and whether they are being sold in physical auction or via our range of online channels.

“As members of NAMA we are party to the discussions on the confluence of condition standards across the industry and work is progressing towards this.”

Manheim Craig Mailey, marketing director “Manheim Remarketing currently uses a grading system (supported by images) to assist buyers when a full vehicle condition appraisal is not available on the car. Details are available to physical and online buyers on the Manheim Remarketing website.

Manheim has been heavily involved in the development of a grading standard

by NAMA and it is its intention to have grading on all vehicles.”

CAP Chris Crow, chief editor “The system changes we are making mean we will be obtaining more information and analysing it more quickly.

“We already analyse over one million pieces of transactional data but we have been over-reliant on auction data in the past. We are now speaking to other remarketing companies to get more information on vehicles being sold by manufacturers, dealerships and car supermarkets. This will free-up more time for our editors to spend in the field talking to traders, leasing and rental companies and manufacturers.

“We welcome the new grading system being introduced by auction houses.

We have our own grading system which has become the industry standard and we have introduced more definitive condition criteria in an attempt to end any uncertainty over what qualifies as a CAP Clean vehicle.“

What are BVRLA members saying?

“This auction grading policy will allow them to better describe the vehicle’s condition to somebody wanting to purchase it online. However, it will also give the auction house ammunition to go back to the seller and get the vehicle’s reserve lowered.

“It is likely to lead to the competitive advantage of the smaller leasing companies (which know their used vehicle stock, inspect and prepare it) being reduced as the larger, less involved companies will now put in rather more effort.”

“This new grading system will enable us to better compare the performance of the different auction houses we use.”

BVRLA News | August/September 2011

Glass’s Adrian Rushmore, managing editor “We are rebuilding our valuation system from scratch. Our all-new valuation engine will use observation data including two-and-a-half million dealer-advertised prices and one million auction prices, applying statistical models to automate the valuation process. Our editors will then sanity-check the results. We will also take into account variables including condition, mileage, year and plate, colour, options and provenance.

“We will replace the A to E or the 1 to 5 of the auction grading systems with a High, Average and Low value, according to the condition of the car.

“There is little doubt that condition grades will form an indispensable element in the remarketing of used cars over the next two years. This is because the communication of better-described cars promotes buyer confidence.

“For vendors there is more clarity around the actual condition, which creates a more informed view of setting realistic reserve prices. If we can align our values to this new approach then we will be helping to oil the wheels of the remarketing sector, with market prices being recognised and achieved more often at the first time of asking.”

Auctions: will a new grading system eliminate inconsistent descriptions of used cars?

What does the BVRLA think?

“We are naturally concerned that the auction houses could undervalue vehicles by putting them in a lower condition category in order to avoid any challenges from buyers,” said BVRLA chief executive John Lewis.

“What appear to be missing so far are proposals on how auction houses can correctly promote low-emission vehicles to enhance their appeal to potential buyers.”

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Euro 5 sets the agenda for new vans

by Neil McIntee There’s a flurry of activity in the panel van market and the reason is the impending October deadline for new vans to meet Euro 5 emissions levels. The good news for operators is that this new breed of diesels is claimed to be significantly more fuel-efficient than the ones they replace.

Volkswagen Crafter Having taken the Transporter to Euro 5 when it introduced the current range at the beginning of 2010, VW waited until the end of July this year to launch heavily revised versions of its big brother, the Crafter.

Along with a facelift and detail changes to the cab, the predecessor’s 2.5 litre five-cylinder diesels have been replaced by a range of four-cylinder 2.0 litre powerplants, derived from those found under the bonnet of Transporter – and the Amarok pick-up 6

for that matter. There are four power outputs on offer: 109hp, 136hp, 143hp and 163hp (although the 143hp won’t be available until November).

The old Crafter diesels were Euro 5-rated, but required regular top-ups of AdBlue to achieve compliance. This is not the case with the new engines. It’s one of the reasons why VW claims it has managed to reduce servicing and maintenance costs by up to 25%.

Continuing with the good news, it also believes they are up to 33% more fuelefficient than their predecessors and consequently have a roughly similar drop in CO2 emissions. These figures are improved further in the CR35 BlueMotion models thanks to a longer final drive ratio, Stop/Start technology, battery regeneration courtesy of energy recovery during braking, and cruise control.

Fiat Ducato Already available in mainland Europe, Fiat’s revised Euro 5 Ducato range is due to hit showrooms in September.

The 2.3 litre (130hp and 148hp) and

3.0 litre (177hp) diesels have been revised extensively and there’s even a brand new 115hp 2.0 litre, but this will not be coming to the UK because extensive re-engineering would be required for right-hand drive markets. It’s replaced by a 110hp version of the 2.3 litre on this side of the Channel.

Fiat claims a fuel economy improvement of 9-14% over the old Euro 4 engines and service intervals for these new powerplants have increased to an impressive 30,000 miles. Further reductions in fuel consumption can be achieved by specifying the Stop & Start system, available as an option with the 130hp and 148hp models. On urban routes it’s claimed that this can bring fuel savings of up to 15%.

Ducato’s cab has also received a significant makeover. There are new colour combinations for the plastic parts of the fascia, which are now darker and more uniform, and the centre console has undergone a complete redesign.

BVRLA News | August/September 2011

Ford Transit: Euro 5 plans still under wraps, but better fuel consumption is likely

Volkswagen Crafter: 33% more fuel-efficient than predecessors Iveco Daily: remodelled interior and instrumentation

Ford Transit No discussion of panel vans is complete without mention of the Transit. Ford is leaving it to the last minute to announce details of the transition to Euro 5.

What is known is that the current 2.2 and 2.4 litre diesels will be replaced by versions of the same global 2.2 litre unit to be found under the bonnet of the new Ranger pickup, which is scheduled to go on sale in the UK in December. All the new powerplants will feature a diesel particulate filter.

Switching to one cubic capacity fourcylinder engine makes a great deal of sense for the front-, rear- and allwheel drive Transit and expect power outputs to mirror those of the current range. The five-cylinder 3.2 litre will be retained, having been re-engineered to meet Euro 5.

Undoubtedly, Ford will be claiming significant reductions in fuel consumption when the Euro 5 Transit is launched to the press in September.

BVRLA News | August/September 2011

Fiat Ducato: Stop & Start system is said to bring fuel savings of up to 15%

Mercedes-Benz Sprinter Mercedes is sitting pretty with the Sprinter. It was well ahead of the game, updating Sprinter and taking it to Euro 5 over two years ago.

will be dropped from the ranges.

(Nissan will replace the Interstar with the NV400 in October.

PSA Peugeot Citroën Citroën and Peugeot will be announcing full details of the Euro 5 Relay and Boxer engine line-up close to the October deadline. A new 3.0 litre diesel has already broken cover, which is hardly surprising as it’s the same unit as found in Fiat’s version of the same vans, the Ducato.

Nissan/Renault/Vauxhall Launched last year, the all-new Renault Master and Vauxhall Movano are currently available with either Euro 4 or Euro 5 diesels. The former

Iveco Like Mercedes, Iveco has been taking Euro 5 in its stride for a while with its Daily. Like Fiat’s Ducato, however, it sources its engines from Fiat Powertrain Technologies – Iveco is an integral part of the Fiat group – and has announced that a new generation Daily will be on sale in the UK from 1 November this year. On top of a new range of diesels, Iveco has also given the Daily a radical makeover with a new front-end and detail changes to the cab interior and instrumentation. n Euro 5 for Vans (Fact Sheet 580) can be downloaded here.

Neil McIntee is editor and co-director of VansA2Z, an independent video-led website dealing with all things light commercial.

It provides news, launch reports, reviews and buyers’ guides, road tests, features and full specifications for every LCV on sale in the UK, as well as a four-vehicle comparison facility.

It can be found at www.vansa2z.com

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How vehicle manufacturers approach the fleet market

by Thomas Chieux (left) and Steve Young

Representing more than 50% of new car registrations in the UK, the fleet market is critical to the success of almost all manufacturers.

The days of the ‘basic fleet’ model with minimal features at a lower list price have long gone as fleet buyers focus more closely on residual values and the attractiveness of the car at resale. As a consequence, the key differentiators between manufacturers for fleet business are through the channels and the approaches that are taken to protect residual values.

There are three distinct manufacturer strategies to the fleet and leasing market, which can be described as ‘Opportunistic’, ‘Full Line’ and ‘Life Cycle’, with each one reflecting the strategy towards the fleet market and the organisation and support which sits behind it.

These strategies drive the initial offer, the sourcing and pricing of repair and maintenance work, and the pricing and remarketing channels for large volumes of used cars. Recognising a change in strategy can help people working in the fleet industry highlight potential new threats and opportunities.

OPPORTUNISTIC This strategy is largely driven by the business situation at a point in time. If the brand has excess supply and faces resistance from the dealer network to accept higher wholesale volume, it will look to the fleet sector to absorb significant volumes of excess cars. As a result, the business is ‘deal driven’, focusing on the up-front transaction price and any buy-back terms on offer, often ‘short churn’ daily rental-related.

BVRLA News | August/September 2011

There is little need for a formal fleet sales organisation in either the manufacturer or the dealer network, with many requirements outsourced to third-party contractors.

Opportunistic strategies combine ‘fleet grids’, which predefine the discounts dealers can offer on different sizes of deal, with an unstructured approach at the centre for larger deals. Occasional and often distressed deals made by Opportunistic players have an impact on residual values, as the vehicles will typically be defleeted within a concentrated period of time, with no controlled mechanism in place.

FULL LINE The Full Line strategy sees a focused approach to all fleet segments. Dealers are targeted at smaller fleets, whilst the largest fleets are handled centrally through an account management structure and direct negotiation of terms and supply schedules, with or without dealers’ involvement in predelivery inspection and handover.

Because of the breadth of its market coverage, the Full Line organisation manages relationships with multiple finance providers (as the scale is beyond the ability of the captive finance company), and operates a range of dealer frameworks – from a set additional margin for sales to small fleets through to agreed handling fees for providing fulfilment support to manufacturer-arranged direct sales.

Unable to control all deals because of their scale, these brands will compete and collaborate with leasing and contract hire companies in order to win fleet business. They operate a comprehensive range of after-sales support to suit all segments, including network-wide discounts on labour and parts. Full Line manufacturers are

unable to exert full control over the remarketing of their vehicles, but use limited buy-backs, approved used car programmes and residual value-driven policies to control the mix of supply into daily rental fleets.

LIFE CYCLE In the Life Cycle strategy the focus is on protecting residual values at individual vehicle level, to produce a lower total cost of ownership and maintain the perceived exclusivity of the brand. This is achieved by being selective over the customer segments addressed and by keeping tight control over all fleet deals, with the dealer playing only a supporting role in supplying and servicing the fleet client.

Life Cycle players tend to have clearer roles for staff and dealers according to the type of business, with defined propositions of pricing, service support and finance, using in-house providers.

They will take a more rigid and closed approach to their dealings with leasing and contract hire companies.

Life Cycle brands try to bundle tailored service packages in with the initial sale, hoping to keep the customer in the franchised network at premium prices. With lower volumes and a tighter customer focus, they manage residual values closely by retaining as much finance business as possible within the captive finance house, using buy-backs, reconditioning used cars to a high standard before remarketing, using a range of comprehensive used car programmes and channels, and actively managing the used car inventory to avoid surges of supply which can depress prices. n Steve Young is managing director of ICDP, the international automotive research and strategic advice organisation.

Thomas Chieux is a senior researcher for ICDP in France.

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Golf Day provides a bright spot in Summer calendar

The BVRLA Golf Day, sponsored by BCA, was held at Frilford Heath Golf Club near Oxford on Wednesday 7 September – and luckily the weather was kind to the golfers, despite a week of heavy downpours. BVRLA membership administrator June Dyer reports The individual and team Stableford competition began with a shotgun start and some very respectable scores were achieved as the Red course was in fantastic condition, especially on the greens.

After some four hours or so of blood sweat and tears – well, thankfully no blood – everybody returned to the club house to enjoy a hearty hot carvery lunch and wait with bated breath for the results of their morning’s endeavours.

BVRLA chief executive John Lewis announced the winners and association chairman Neil Cunningham presented the prizes.

The spoils went to the following:

Individual Winner Ian Lawrence, United Rental Group (pictured inset, right) Terry Birch of Kwik-Fit Fleet was runner-up, with Nigel Fletcher of ALD Automotive in third place.

Nearest the Pin Keith Davies, Compass Contract Hire Longest Drive Jonathan Wool, Towergate Insurance Team Competition Citroën Cup Winners BVRLA Guest Team The BCA team was runner-up and Kwik-Fit Fleet came third. n

Thwack!

Let battle commence A picture of concentration: Anne Gallagher, winner of the Ladies’ Prize, considers her options

Let’s go to work: The BCA team look like they mean business …it’s still lost…

…never mind! Start again.

Photos: David Hanson

A lost ball…

Park and fly: How many miles to the gallon?

BVRLA News | August/September 2011

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Fleet profile: Honda Making life easier for leasing If customer satisfaction and reliability were the sole criteria for a successful company car there would be a lot more Hondas on UK fleets.

The Japanese car maker won the What Car? Reliability Survey for an astonishing sixth time in a row this year and is the only manufacturer to have three cars in the top 10 of the JD Power customer satisfaction survey (Accord [2nd], CR-V [4th] and Jazz [10th]).

Unfortunately these are not the only criteria for fleet buyers and Honda has seen a gradual erosion in its share of the fleet market, from 3.5% in 2008 to 2.4% in 2010. More recently it has been hampered by Japanese tsunamirelated supply problems, the lack of a low-emission diesel engine for its popular Civic model and a vacant position at the head of its fleet team.

Back in April, the company appointed Ed Hummel, formerly national leasing manager at Volkswagen, as its

new corporate operations manager.

Four months into the role, Hummel has a clear strategy for growing Honda’s share of what he calls ‘true fleet’, which strips out shortterm rental, Motability and dealer registrations. He is targeting a rise in fleet sales to 30,000 by 2014 (23,000 in 2010) and a 3% share of the sector.

So how is he planning to get there?

Leasing companies “We need to make it easier for leasing companies to recommend and sell our products,” says Hummel. His 18-strong fleet team includes three leasing managers and he wants them out on the road more, not just meeting with leasing companies but actually working from their offices from time-totime. This way, he hopes Honda can get closer to the 15 leasing companies responsible for 80% of its fleet volume.

Honda’s Hummel: wants ‘three-year business, not six-to-nine months’

After sales As you would expect for a carmaker with a reputation for reliability, Honda earns less from the after-market

than many of its rivals. But like most manufacturers, Honda wants to protect and grow aftersales business for its dealer network and Hummel feels that it can offer real benefits to leasing customers.

“The independent repair sector is getting stronger, so we need to play to our strengths,” says Hummel. “We may have slightly higher labour rates, but we set times for particular jobs and this is often less than an independent will take.”

Daily rental Daily rental is not in Hummel’s fleet strategy at the moment.

“We are interested in three-year business, not six-to-nine months,” he says. “We can’t afford the discounting that you need to offer in the rental sector, especially with the yen as strong as it is.”

Honda vehicles benefit from strong residual values and Hummel is worried that short-cycling Honda cars through the rental market could damage this status.

“Seventy per cent of sales are still to the retail market and having lots of sixmonth-old stock coming on to dealer forecourts is not what we want.” n

Honda: key fleet models

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Accord

Civic

CR-V

Fleets are likely to pick the new 2.2 litre diesel model, with emissions of 138g/km and fuel efficiency of 53.3mpg.

A new 2.2 litre diesel model due to go on sale in 2012 will take emissions below 110g/km, and be comparable with rivals like the Golf and Focus.

The fourth-generation CR-V will go on sale in Europe in Autumn 2012, with more fuel-efficient petrol and diesel engines to be expected.

BVRLA News | August/September 2011

Minimise your exposure to risk The BVRLA is holding a seminar on Asset Management and Risk Control to help members guard against fraud and recover assets.

The 22 September event, to be hosted in Oxford by BVRLA associate member Blake Lapthorn, will feature speakers from the Recovery of Goods Centre, Burlington Credit and ACPO’s Vehicle Crime Intelligence Service.

The seminar aims to help attendees develop effective strategies for recovering vehicles and other losses,

reassess consumer and corporate master hire agreements, and improve their credit controls.

Places cost £45 plus VAT per delegate, including lunch and refreshments. n Contact Fran Hampson, fran@bvrla.co.uk 01494 545703 A booking form can be downloaded here.

Forum: Technical & Operational Management Dordon, Warks.

22 September 3 November

Forum: Residual Value & Remarketing

Stratford-upon-Avon 23 November

BVRLA Industry Conference 2011

Gaydon, Warks.

BVRLA Annual Dinner 2012

London

1 December 8 March 2012

For enquiries about BVRLA forums, seminars and conferences, and to book places: contact member services administrator Fran Hampson: fran@bvrla.co.uk, 01494 545703 For enquiries about the BVRLA Annual Dinner, and to book places: contact membership administrator June Dyer: june@bvrla.co.uk, 01494 545714 Full details of all BVRLA events can be found on the association’s website: www.bvrla.co.uk

New members Rental

Autopoint Cars Ltd Fleetway Rentals MoCars NVD Ltd

(London) (Gloucester) (Wellingborough) (Leeds)

Leasing

Agnew Corporate Ltd

Professional Trailer Hire (Sheffield) Smart Platform Rental Ltd

(Hemel Hempstead) Steve’s Self Drive Hire

(Southend-on-Sea)

(Belfast)

Leasing Broker

ABC Leasing Ltd (Barry) Active Vehicle Consultants Ltd

(Whitstable) Autograph Contracts (Maidstone) Castle Vehicle Leasing (Bicester)

Concept Vehicle Leasing (Surbiton) Direct Cars UK (Cheltenham) KDFL Ltd (Twickenham) Plan (Ongar) Synergy Automotive Ltd (Harrogate)

Associate AutoDrain Ltd

AutoDrain started life ten years ago, manufacturing high-quality and costeffective equipment to depollute cars for the end-of-life-vehicle industry.

Part of our equipment range was fuel recovery products, and we realised BVRLA News | August/September 2011

that car hire and leasing companies could save a great deal of money by using our range of fuel recovery products to remove fuel from vehicles going to auction. www.autodrain.net

Selling Contract Hire 5-6 October

Aimed at sales and business development professionals, attendees on this course will achieve a greater understanding of finance, taxation and vehicle acquisition methods.

They should leave with have a more focused sales technique, better able to sell contract hire against other marketplace options.

Book now: fran@bvrla.co.uk

City & Guilds Rental Operator Skills Certificate 1 November Glasgow and Amersham

BVRLA Events Seminar: Asset Management and Risk Control Oxford

Training

With BVRLA members expressing a preference for an online accreditation system, this is likely to be the last ‘classroom-style’ assessment for this qualification. Rental agents wishing to gain an industry-recognised certificate in rental knowledge and customer services skills should book a place.

Download an application form here.

Certificate in Fleet Consultancy Module One: 23-24 November Module Two: 18-19 January 2012 Aimed at sales and business development executives, this fourday training programme enables delegates to align their sales role more closely with customer needs.

The first module covers the principles of fleet management and asset and risk management, the influence of a client’s stakeholders, company culture and market segmentation. The second module covers the delivery of fleet solutions, budgetary and tax considerations, key acquisition and disposal options, supplier management, and health and safety.

Book now: fran@bvrla.co.uk

ATA Technical Customer Service Advisor Dates on demand This accreditation for individuals in technical service departments, valid for five years, intends to boost professional development. Testing, through role-plays and written exercises, aims to recognise not only the industry knowledge delegates have built upon in their workplace but the ability to put it into practice.

Book now: fran@bvrla.co.uk

13

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