International Fleet World July – August 2012 by Fleet World Group

A Daimler Brand

To sum up an astonishing track record: 109 g/km COÂ˛.

The new

AmperA

pioneers are always first. Driving electricity further. With the Car of the Year 2012.

www.opel.com Fuel consumption (combined and weighted) 1.2 l/100 km; CO2 emissions (combined and weighted) 27 g/km (according to R (EC) No. 715/2007).

INTERNATIONAL

A Daimler Brand

To sum up an astonishing track record: 109 g/km CO².

Publisher Ross Durkin ross@fleetworldgroup.co.uk Editor John Kendall john@fleetworldgroup.co.uk Deputy Editor Natalie Wallis natalie@fleetworldgroup.co.uk Motoring Editor Alex Grant alex@fleetworldgroup.co.uk Editorial Assistant Katie Beck katie@fleetworldgroup.co.uk Sales Director Anne Dopson anne@fleetworldgroup.co.uk Sales Executive Darren Brett darren@fleetworldgroup.co.uk Circulation Manager Tracy Howell tracy@fleetworldgroup.co.uk Production Manager Luke Wikner luke@fleetworldgroup.co.uk Designers Tina Ries tina@fleetworldgroup.co.uk Samantha Hargreaves sam@fleetworldgroup.co.uk Internet Editor Luke Durkin durks@fleetworldgroup.co.uk

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VIEWPOINT

CONTENTS

You could argue that most large motor manufacturers deal directly with fleets for large orders, so there is nothing new in the suggestion that a company is proposing to do just that. But Emerald Automotive is proposing something different, because the company is planning to build vehicles solely for fleet users (see p44) across the world and sell directly to them. Emerald argues that most large fleets have their own service arrangements and their hybrid van will be serviced through those channels. Of course, we are discussing a product that doesn’t yet exist. It is still under development and Emerald doesn’t expect to start building the hybrid van until 2014 and a lot can happen in the meantime. It’s not just the sales model that is different either. The reason that the company is selling direct to fleets is that it says it is responding to those that have programmes to make large reductions in their carbon footprint. These fleets told Emerald that they could not source vehicles offering the kind of carbon dioxide and fuel consumption reductions that they needed to meet their emissions reductions targets. Not only that but their usual suppliers did not have vehicles in their build programmes that were likely to meet these requirements. So the project for a lightweight, hybrid vehicle able to return very low fuel consumption yet carry the kind of payload that vans with a gross weight of 3,500kg can carry today began. We shall be watching its progress with interest.

04 News Analysis 10 EV News Analysis The latest from the EV Fleet World.

12 Management Online fleet management software systems and their effectiveness?

16 Industry Analysis Dieter Fess of BF Forecasts.

18 The Environment Joining in with Castrol & BMW’s 2012 Global Challenge event.

22 Operator Profile Noske Logistics.

24 Strategy European residual value confidence.

26 Strategy How the Eurozone crisis affects fleets.

28 FLEET FOCUS: INDIA 31 Remarketing 32 FLEET PROFILE: PEUGEOT 39 Launch Report Kia cee’d / Peugeot 508 HYbrid4 / SEAT Ibiza / Emerald Hybrid Van.

46 S.W.O.T. Volkswagen CC.

48 Fleet in figures 50 2012/13 Fleet Calendar

12 18 32 44

John Kendall Editor

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IFW July/Aug 2012

news analysis

Talks on future of Bochum plant Following the recent announcement that the next generation Opel/Vauxhall Astra will be built at the GM Ellesmere Port plant in the UK, Opel must deal with the future of the Bochum plant in Germany, which was a contender for the contract. To this end, GM and the Opel management board has proposed a Germany-wide plan to the German IG Metall union and the works councils at GM’s four German sites at Rüsselsheim, Eisenach, Kaiserslautern and Bochum. The representative bodies are negotiating the company’s proposals, which include no compulsory job losses until the end of 2016, and delaying the implementation of the 2012 wage increase for the workforce. The Bochum plant will continue building the Zafira Tourer until the end of the lifecycle of the model. An agreement has been reached to hold discussions on the future of the site, which was expected to close at the end of 2015. There is no current plan to build vehicles at the plant in the future. In addition to these proposals, Opel’s management has developed a plan that the Opel management board is due to approve or reject on 28 June. This includes significant investment in the Opel and Vauxhall product portfolio between 2012 and 2016, including 23 new models, 13 new powertrains, including 3 all-new engine families and more vehicles with low-emission propulsion systems, like the Ampera. New products will include models in segments where Opel is currently not present, such as the small Mokka SUV, the Adam small car and a premium drophead coupe. The plan also includes a new product offensive, with new sales strategies, designed to lead to growth in market share.

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A new clear brand strategy is also part of the plan as are strategies to reduce material, development and production costs. This would include more effective use of the global GM organisation and the synergies from the PSA/GM alliance. Last, but not least, the plan includes a co-ordinated export strategy for the GM family focussing on important growth markets such as China, Russia and Turkey and entering new markets such as Australia. GM has expressed a clear commitment to Germany and its plants and has proposed a plan to utilise the remaining European facilities on a three-shift basis. This proposal includes the possibility of building vehicles that are not Opel-branded. This proposal could signal two possible intentions. The first would be to build Korean-sourced Chevrolet models in Europe. As transport costs continue to rise, the cost of transporting those vehicles over a long distance becomes a greater factor in the manufacturing cost base. Even if the vehicles carry higher labour costs from building in Germany, a point will come where transport costs mean that it would be cheaper to build them in Europe for European markets. The other possibility is that as the GM/PSA agreement develops and the two companies build vehicles with a high commonality of components, they could be built in either company’s plants. That said, similar arrangements already exist in the Renault/GM joint venture for light commercial vehicles. Renault builds Opel and Vauxhall badged Movano vans at Batilly in France alongside the Renault Master, and GM builds the Renault Trafic at the GM Luton plant in the UK, alongside Opel and Vauxhall Vivaros.

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Strong growth for MiX

MiX Telematics has announced strong overall growth in its full year financial results for the year ending 31 March 2012. ”The 2012 financial year has been impressive for MiX Telematics,” says Charles Tasker, head of MiX Telematics’ fleet operation, adding, ”We broke through the billion-rand sales barrier with an increase of 14.8% in revenue, while our after tax profits exceeded R100 million – so all in all some noteworthy achievements!” Subscriber growth, referring to customers who subscribe to MiX Telematics’ safety or fleet management services, remains one of the company’s key performance measures. ”Within the given period, we added 40,000 new subscribers, meaning we will soon reach 300,000 subscribers,” says Tasker. ”Looking after our customers and growing our base means we are looking after our annuity revenue, which is of course a vital element of our strategy. At present, our annuity revenue represents a healthy 57% of total revenue.” The company attributes its growing success in the fleet management arena to its growing partner network, which includes over 100 dealers worldwide and the subsequent availability of its products and services in 111 countries. Tasker said the business has made significant progress in the US, through the implementation of deals that were won last year. The US operation showed top-line year-onyear growth of 200%, while the Middle East and Australia business also performed well considering the turbulent conditions. ”In the Middle East, we welcomed two multinational oil and gas customers, which will translate into substantial future earnings,” says Tasker. In Europe, reasonable subscriber growth was reported. ”We continue to gather momentum in the bus and coach industry in Europe and we look forward to welcoming more customers like De Lijn,” says Tasker. The contract with De Lijn involves fleet management for over 1,800 buses and signifies the company’s largest bus deal outside of the United Kingdom. Notable growth came from the company’s Enterprise division. This operation services medium to large fleets in South Africa and continues to benefit from the roll-out of its customised fleet management system for Eskom, the country’s electricity service provider. ”With robust financials, a growing subscriber base and a history of operating successfully in international markets, we are confident that MiX Telematics is ideally positioned to take advantage of significant growth opportunities,” concludes Tasker.

Bynx Middle East joint venture Fleet Management Software developer Bynx has joined forces with vehicle management systems provider Arab:IT to sell Bynx products in the Middle East and North Africa regions. Bynx has appointed Daniel da Costa as regional manager, based in Dubai. Bynx products are based on Oracle’s database platform. According to Bynx, all products have been designed to meet the specific legal, financial, regulatory and cultural requirements of each country and region, such as management of road and sand tyres, management of tolls and applicable fuel cards in each area.

Allison opens new facilities Commercial vehicle automatic transmission specialist Allison opened a customer experience centre and driving track in early June at its European production facility in Szengotthárd, Hungary. The facility will allow customers to drive both on and off-highway vehicles. The company has also opened a new South American office in the Colombian capital, Bogotá. Gaston Brunicardi is the commercial affairs co-ordinator and Carlos Gallo the head of post-sales support. Allison continues its partnership with long-standing local distributor Stewart & Stevenson Colombia, which also provides after-sales support. On and off-road vehicles at the Allison Demonstration and Drive Track

IFW July/Aug 2012

news analysis

Euro NCAP to include AEB technologies from 2014 Euro NCAP has announced that its testing programme will include autonomous emergency braking (AEB) systems in its star rating system from 2014. These systems can help to avoid impacts or reduce their severity by warning the driver and supporting his or her braking response, or apply the brakes independently. Operational performance data suggests that AEB systems can reduce accidents by up to 27%. Systems usually use forward-looking radar and video systems to provide a real-time view of the road ahead. A survey by Euro NCAP has shown that these systems are completely unavailable on 79% of car models on sale in Europe and that 66% of vehicle manufacturers do not offer an AEB system on any of their car models. Among those offering the systems on premium brands as standard are Volvo, Infiniti and Mercedes-Benz, with Jaguar, Land Rover, Audi and Lexus offering them as options. Systems are made most available on executive and large family cars. Mazda, Ford, Honda and VW offer systems on volume produced models either as standard or as optional equipment. Michiel van Ratingen, secretary general of Euro NCAP says, ”A faster penetration of these technologies into new cars will make it more realistic for the European Union to reach its target to cut road deaths by 50% by 2020. Consequently, Euro NCAP has decided to include AEB assessments as part of the overall star rating from 2014 onwards and hopes that European authorities will soon require AEB as mandatory on all new vehicle types.”

Skoda makes Rapid announcement Just months after the launch of the Citigo city car, Skoda has announced early details of the new Rapid, seen last at the Beijing Show in concept form. The car, a four-door saloon, which Skoda describes as sitting between the Fabia and Octavia in size, is said to be a full five-seater. Skoda says the car will have a choice of five petrol and two diesel engines, but gives no further details at this stage. But it seems likely that diesel power will come from the 1.6TDI engine, including a low-emissions variant and petrol options will include the company’s smaller 1.2 and 1.4TSI engines. Skoda reckons that A-segment models currently account for around 36% of the global car market and saloons are responsible for 42% of that sector. The car measures 4.48m long by 1.7m wide. Skoda is reckoning on sales rising by some 50% by 2020. The car will be unveiled at the Paris Show in September. Skoda says it will offer a strong price/value ratio and will include comprehensive safety equipment.

i30 Tourer production begins Production of the Hyundai i30 Tourer has begun at the company’s Nosovice plant in the Czech Republic. The new addition to the i30 range offers 528 litres with the rear seats upright and 1,642 litres when the rear seats are folded flat. Both hatchback and Tourer models were designed alongside one another. Almost 60,000 i30s have been ordered since the new model was launched a few months ago.

Standard connector proposed for European EVs Three European industry bodies have agreed on the need for a standardised charging connector for EVs and have put forward a proposal. ACEA, CLEPA and EURELECTRIC are the European Vehicle Manufacturers Association, European Association of Automotive Suppliers and the Union of the Electricity Industry. The bodies agree that urgent action is needed to agree a common standard before the mass roll-out of charging infrastructure across the EU, and they have proposed one.

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in brief... Easier hire with National National Car Rental has formed a partnership with corporate booking tool provider KDS to speed bookings for corporate customers. A direct XML connection has been made to National’s Reservations System across its Europe and Middle Eastern area network.

Astra gets facelift and revised equipment A new saloon version, new engines, driver assistance systems and revised design are among the changes to the Opel/Vauxhall Astra range. The four-door saloon is the last addition to the Astra model line-up, giving an alternative to the five-door hatchback. The new engines will be rolled out over the next six months and will include a 280hp 2.0-litre turbocharged, direct injection petrol engine. Opel/Vauxhall will also offer the 2.0 BiTurbo CDTi diesel, launched in the Insignia from Q3 2012. This engine will offer 195hp and will be available in the five-door, Sports Tourer and GTC models. Among the smaller engines, the 140hp 1.4-litre turbocharged petrol engine is now equipped with an overboost function to temporarily give 10% more torque - 220Nm, useful when overtaking or climbing hills. From early 2013, a new 1.6-litre direct injection turbocharged petrol engine will join the line-up offering a range of power outputs up to 200hp, but offering low fuel consumption. Driver assistance systems will include a revised front camera system to improve traffic sign recognition, a lane departure warning (LDW) system, following distance indication and forward collision alert. In addition, Opel/Vauxhall will offer a rear view camera, advanced park assist system, side blind spot alert and radar based adaptive cruise control (ACC) which will include autonomous braking. Opel/Vauxhall has also announced prices for the new Mokka B-segment SUV, which is due on sale at the end of 2012. Prices will start from €18,990 for the Mokka with 115hp 1.6-litre petrol engine. Like many rivals, it will be available in front-wheel-drive and all-wheel-drive (AWD) variants, which can switch between front-wheel-drive and a 50/50 torque split for off-road use. Opel claims the AWD system weighs just 65kg. All manual transmission models will be equipped with automatic engine Stop/Start as standard. There will be three petrol engine options including the 115hp 1.6-litre, a 140hp 1.4-litre turbocharged engine, and a 140hp 1.8-litre engine specifically for the Russian market. Mokka’s with this engine will be fitted with hydraulic power steering in place of the electric system on other models. Diesel power will come from a 130hp 1.7-litre common-rail turbocharged engine. Automatic and manual transmissions will be available. The driver assistance systems launched on the revised Astra will also be available on the Mokka, including electronic stability control (ESC) incorporating traction control, hill start assist and hill descent control. Other options include advanced adaptive front lighting, based on a Bi-Xenon lighting system. Mokka will be offered with three trim levels.

Cardinus breathalyser deal Responding to the new French law requiring a breathalyser to be carried in all cars in France from 1 July, UKbased Cardinus Risk Management has produced a compliant breathalyser kit containing either one or two breathalysers carrying Norme Français approval.

Toyota hybrids top 4 million Toyota and Lexus hybrid sales around the world topped 4 million in April. Across Europe, the number reached 423,000 units. The first hybrid was the Toyota Coaster Hybrid launched in August 1997, a few months before the first generation Prius.

Mazda/Fiat sports car deal Mazda and Fiat have signed a nonbinding Memorandum of Understanding to develop and build a new roadster for Mazda and Alfa Romeo, based on the next generation Mazda MX-5 rear-wheel-drive platform. Mazda will build both models in Japan. Both manufacturers will use their own engines. Alfa production is due to start in 2015.

CX-5 gets Euro N-CAP 5 stars The Mazda CX-5 SUV has gained the Euro-NCAP 5-star top crash test rating. The car also gained the “Top Safety Pick 2012” from the US Insurance Institute for Highway Safety (IIHS) in March.

IFW July/Aug 2012

From 109 g/km CO²*– the most efficient E-Class of all time. The E 300 BlueTEC HYBRID.

A Daimler Brand

At 4.2 litres of diesel per 100 kilometres, the new hybrid offensive from Mercedes-Benz – the E 300 BlueTEC HYBRID – is setting the benchmark when it comes to fuel consumption in the luxury business class vehicle segment. The modular hybrid concept with lithium-ion battery sets new record values in terms of efficiency with economical and comfort-enhancing innovations like the ECO start/stop function. Furthermore, it wins people over with its impressive driving experience and exemplary fuel consumption figures. The new efficiency record holder is also available as an estate. Find out more at www.mercedes-benz.com/fleet

*Fuel consumption urban/extra-urban/combined: 4.3–4.2/4.3–4.2/4.3–4.2 l/100 km, combined CO emissions: 112–109 g/km. Figures do not relate to the specific emissions or fuel consumption of any individual vehicle, do not form part of any offer and are intended solely to aid comparison between different types of vehicle.

EV news analysis

Holden prepares for Volt launch Holden has announced the first 49 Volt dealers ahead of the vehicle’s Australian launch later this year, adding that customers had already placed orders for the range-extended electric vehicle. Giving country-wide coverage, each dealership will have its own charging station, plus bespoke workshop tools for the vehicle. Volt dealers will also be required to achieve at least Level 2 Green StampPlus Accreditation through the VACC Green Stamp programe, showing more environmentally-conscious energy usage, recycling processes and the reduction of toxic chemical usage. From its headquarters in Victoria, Holden is preparing for the launch by taking part in the state government’s electric vehicle trial, aiming to boost awareness of the new vehicle. Holden has had a set of left hand drive test cars on its fleet since December, but the first Australian-spec models arrived in June and will be driven by employees for a 12-week trial period, starting with the carmaker’s Energy and Environment week, a four-day promotional programme at five sites across Australia. Users will be encouraged to blog about their experiences on social networking sites. To support the trial, Holden has installed a charging point at its Port Melbourne head office, powered by 100% green energy from utility company Origin. Six further units have been installed at its Lang Lang proving ground, south east of Melbourne, for use by employees on the test programme. Recharging data from the 12-week trial will be fed back to the Victorian Government to develop supporting infrastructure for plug-in vehicles. Holden’s director of energy and environment, Richard Marshall, explained: ‘By getting involved in the Victorian Electric Vehicle Trial we hope to develop a better understanding of how people drive and recharge vehicles in Australia. ”Ordinarily the vehicle development process is shrouded in secrecy but with Volt we’re taking a different approach and encouraging the Volt evaluation drivers to talk about their cars with friends, families and online contacts.”

Diesel-rivalling Lexus GS due in 2013 Lexus will launch a low-displacement version of its new GS hybrid late next year, aimed at growing sales by lowering its CO2 emissions in line with conventional diesel rivals. The fourth-generation GS is unique in its class, launching without a diesel option in a sector where the manufacturer admits 80% of new cars have a diesel engine. Three engines will be available at launch, comprising of a 2.5litre and 3.5-litre petrol, and a hybrid which also uses a petrol engine. At 137g/km, the GS 450h is the lowest-emitting petrol-electric hybrid in its class, but has traditionally struggled in carbon-taxed European markets where it falls behind equivalent diesel models. Several are now under 120g/km, and the diesel-electric EClass hybrid will emit 109g/km in its most efficient form. The carmaker revealed few details at the GS press launch, but said the high volume of company car drivers in its segment made a low-CO2 model essential. To be competitive, the low-capacity hybrid would need to be comfortably under 120g/km to steer buyers away from diesel models, offering a similar proposition to the CT 200h, which has proved a popular part of the C-segment.

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Scholar questions electric vehicle green claims An American scholar has criticised the environmentally-friendly claims made for hybrid and electric vehicles, saying government funding should promote walking, cycling and public transport instead of subsidising ‘green’ motoring. In his book, Green Illusions, Ozzie Zehner, a visiting scholar at the University of California, Berkeley, alleges that the impact of material mining and energy use during production offset the benefits of greater efficiency during the vehicle’s life cycle. Higher use of fossil fuels during the production process is reflected by the knockon higher screen price, and moves air quality problems elsewhere, he added. ”Alternative-fuel vehicles stand to define and spread patterns of ‘sustainable living’ that cannot be easily sustained without cars,” he said. ”Suburban infrastructure maintenance and road construction induce ecological consequences beyond the side effects of the vehicle itself.”

BMW announces electric vehicle support package BMW will support its forthcoming i electric sub-brand with a comprehensive package of assistance services and products, based on feedback from its recent MINI E and ongoing 1 Series ActiveE trials. Speaking at the opening of the world’s first BMW i showroom on Park Lane in London, Ian Robertson, member of the board of management for sales and marketing at BMW AG, said the 360° Electric package would be rolled out progressively across all markets. Final discussions with fleets will address how it can be tailored to customers with their own service and breakdown arrangements. Alleviating range concerns, 360 Electric includes mobile roadside charging and intelligent satellite navigation supported by a smartphone application. For longer trips, drivers will be given access to conventionally-powered BMW models as needed, under the carmaker’s DriveNow partnership with Sixt. BMW will also offer a home charging Wallbox, installed by as yet unnamed utility company partners worldwide, with access to public infrastructure and a green energy tariff.

Green cars vital to Michigan recovery, says Ford Ford Motor Company chairman, Bill Ford, has told a Detroit conference that green vehicle technology, including hybrid and electric powertrains, could be vital for Michigan’s economic recovery by making it the global innovation centre for the emerging industries. But, he added, policymakers should ensure they’re not holding it back, commenting that personal property taxes should be eliminated and the electric grid needed to be updating. ”At Ford, we have invested nearly a billion dollars to build electric vehicles and the battery packs that power them right here in Michigan. We want this technology to become a core competency for us in the 21st century. And we are building the expertise to do that right here in our home state,” he said.

in brief... Saab to return as electric vehicle manufacturer A consortium of Swedish, Japanese and Chinese companies has signed an agreement to purchase bankrupt carmaker Saab, with plans to revive it as an electric vehicle manufacturer. National Electric Vehicle Sweden (NEVS) said it will begin recruiting new staff immediately and aims to have its first vehicle, an electric 9-3, on sale within two years.

Nissan to build electric van in Barcelona Nissan has confirmed the e-NV200 electric van will go into production during the 2013 financial year, creating 700 jobs at its factory in Barcelona and surrounding parts suppliers. Based on the conventional NV200, it uses powertrain components from the LEAF, and will be offered as a panel van or passenger vehicle.

GE Capital opens alternative fuel test centre GE Capital Fleet Services has opened a Vehicle Innovation Centre at its Eden Prarie, Minnesota headquarters, giving customers the chance to test drive electric, hydrogen fuel cell and alternative fuel vehicles on a closed track. Vehicles from 20 manufacturers, plus supporting technology are on display, with classrooms, showrooms and experts available to explain the benefits.

Renault-Nissan electrifies UN conference The Renault-Nissan Alliance supplied a fleet of its electric vehicles for use as shuttles at the United Nations Rio+20 conference, held in June, which discussed measures to reduce climate change. Comprising of Kangoo and Fluence Z.E. models and the Nissan LEAF, the cars were used to transport 50,000 delegates around the conference centre during the event.

IFW July/Aug 2012

management

A FALSE ECONOMY? Many leasing companies now offer online fleet management software for their clients, but are they of real use in running vehicles or simply a sales gimmick? Julian Kirk reports.

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easing companies are continuing to add services in a bid to make their offerings stand out in a crowded and competitive market, and free fleet software is the latest focus. Most of the major funding suppliers now offer online software which enables fleet managers to gain access to data from their vehicle operations, such as carbon emissions, cost analysis and reminders of issues such as vehicle services and MoTs. All of which sounds like a good deal, but do these systems really provide fleets with meaningful data, or are they simply a gimmick to make one funder’s package look more favourable? The specialist fleet software companies obviously think they are, and point to limitations in the offerings. Ashley Sowerby, managing director at Chevin Fleet Solutions, can see some gains for some small, straightforward fleets in taking advantage of software from a leasing company, but advises weighing-up the pros and cons. He said: ‘It is my fear that many fleet operators will enter into such agreements with the assumption that all fleet software is the same when, in fact, for fleet management software to be successful it needs to be built around a specific set of operational requirements. ‘Although similarities obviously exist, no one fleet is the same and the same is true of software. Therefore expecting a nontailored ‘off the shelf’ product to deliver the same results as an application which has been designed for purpose following analysis of an individual fleet’s specific needs, is perhaps a little naive. ‘Investing in fleet management software when it appears it can be acquired as a freebie may seem a less-than-sensible decision at face value. But, speaking with more than 20 years’ experience in developing intuitive systems which automate processes and deliver a quick return on investment, I fail to see how offering software of the same standard and capabilities could be a financially viable option. Technology has the potential to optimise processes and cut significant cost from fleet management but for it to be effective it mustn’t be approached half-heartedly.’ Mycompanyfleet’s business development manager, John Tandy, also points to the ability of specialist software to be integrated

The danger in leaving fleet software to leasing companies is that you are putting the fox in control of the chickens.

into a company’s back office functions, such as payroll and HR, along with other benefits such as avoiding solus supply deals and cutting costs. As Tandy puts it: ‘Fleet software helps look after the whole chicken coop. There is a danger in leaving it all to the leasing company that you are putting the fox in control of the chickens.’ Neville Briggs, managing director of CFC Solutions, recognises that the online tools have ‘undoubtedly improved in recent years’ but still fall far short of the very advanced level of functionality offered by a 'proper' fleet management software system. He said: ‘They do tend to be pretty limited. Fleet software has been developed over something like three decades and the leading systems are now very sophisticated. They can be adapted to just about any fleet need and are proven to deliver results in terms of cost containment, risk management and environmental responsibilities. In essence, they allow you to make the fleet policy that you write a reality, and flag up to you exceptions so that you can take management action. No leasing company system is this comprehensive.’ Briggs also points out that only a relatively small number of fleets use one finance provider, so the management data offered online by the leasing company is probably only covering a section of the fleet. He added: ‘If you use three different leasing companies as a matter of course, you will find yourself having to cobble together a picture of what is happening on your fleet from three different online systems, assuming that all three of your providers offer this service at all.’ Jaama also identifies problems in terms of companies having multiple suppliers for vehicles. Martin Evans, the firm’s sales and operations director, said: ‘Although industry figures suggest that a little over 50% of fleets lease their vehicles, numerous organisations continue to outright purchase vehicles. ‘In our experience it is only a very small number of organisations that have a single supplier for all their vehicles and related services. Consequently, it is important that organisations have their own software systems in place that can take data management reports from a number of sources and

¡ IFW July/Aug 2012

management

A FALSE ECONOMY?... ¡

marry them together for analytical purposes and exception reporting.’ For the vehicle finance and management companies, however, the software offerings are allowing their clients to focus on their core activities. Stuart Walker, ancillary sales director at LeasePlan, believes continuously monitoring the fleet to ensure vehicles are deployed effectively is essential. He said: ‘Fleet managers want tailored information that fits their specific needs. That means not only having the right technology, but also the right personnel to analyse the resulting data. This is where leasing companies can add real value. ‘We believe that fleet management is

most effective when advanced technology is combined with expert consultancy and analysis. The combination of fleet management software and human insight allows clients to understand both the internal and external factors affecting their operational costs, and also receive guidance on how to optimise their fleet.’ LeasePlan has recently redesigned its FleetReporting software interface to make it more intuitive to use, enabling customers to finely tune the information they receive in line with their requirements. It maintains the familiar ‘dashboard’ layout and delivers a high level summary of primary fleet components such as fleet size, vehicles on order and CO2 emissions, but also

now includes a new feature which allows for a breakdown of vehicles within key lifecycle stages, such as service, tax or MoT, and has included an alert to highlight overdue contracts as well as vehicles which are over or under their expected mileage parameters, or overdue for an MoT or tax disc. Another company adding increased features to its software packages is Leasedrive, which has recently upgraded its Drive:Manager system to include modules such as a fully-automated business and private mileage capture and reporting solution, and a unique car sharing feature. Roddy Graham, commercial director of Leasedrive Group, believes that outsourced solutions such as these allow businesses to

CASE STUDY TRADER MEDIA GROUP Trader Media Group has been involved in the pilot scheme for Zenith’s online fleet management tool, Pulse (winner of the Fleet World Honours 2012 Internet Award), which it describes as ”a huge step forward”. The media company says the software has made the day-to-day management of the company’s vehicle fleet simpler by providing regular reports on items such as pool cars, accidents and fines. Natalie Hulbert, the company’s head of health, safety and environment, said: ‘It helps us, working closely with Zenith, to target those employees who have a higher number of fines, accidents or don’t refuel hire cars so we can prevent re-occurrence; reducing costs and improving fleet safety. Our business has a strong focus on health and safety and the accidents analysis that Pulse provides is enabling us to further review our policies and implement changes. ‘Trader Media Group is very focused on reducing our carbon footprint, therefore the CO2 emission trending analysis it provides is invaluable. It helps us to understand how changes made to our fleet are impacting emissions and decide how to evolve choice lists. ‘Pulse is enabling us to gain a full picture of every single aspect of our fleet. We can interrogate all data, specific date ranges, view tables and graphs and also export any information that we need. It also assists with our negotiations with manufacturers as we can see trends and the impact of introducing different models to our choice lists. It is a huge step forward for fleet management software and has added great value to our organisation.’

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concentrate on their core activities. He said: ‘Vehicle fleet management companies can take out all the pain and provide plenty of gain in added value to their customers through a comprehensive fleet management service provision including readily accessible fleet management online systems. ‘Leading providers should be offering totally integrated systems encompassing a wide band width of solutions.’ Leasedrive’s approach lets companies add modules which may be of use, such as Carbon:Manager, which allows company drivers to off-set their emissions. Graham added: ‘Through this modular approach, customers can pick and choose precisely what they require. They do not

have to research the market for off-theshelf solutions but benefit from cherry picking modules, which can be tailored as bespoke solutions. A complete, consolidated package allows them to concentrate on their profitability and enjoy improved fleet savings.’ An adaptable system is also offered through Ogilvie Fleet’s MiFleet Showroom, which allows fleet managers the option of having bespoke reports run on their fleet operations. The firm’s sales and marketing director, Nick Hardy, said: ‘From the moment a vehicle joins the fleet to the day it is defleeted, every necessary action or touchpoint can be studied and investigated.

‘Fleet management can be hugely timeconsuming, particularly if ﬂeet managers are continuing to use Excel spreadsheets. All data relating to every vehicle and driver is available at the click of a mouse without the need to drill down into many report layers.’ This ability to drill down into data gives companies a helping hand when it comes to controlling costs. Ian Hughes, commercial director at Zenith, added: ‘Our Pulse system allows our customers to make fast and informed decisions – they know exactly what their fleet is costing on a day-by-day and vehicle-by-vehicle basis. It delivers significant added value, enabling cost reduction and improvement decisions to be made.’

“LEASING FIRMS COULD DO MORE”

KEY QUESTIONS TO ASK Businesses considering using software from leasing suppliers should ask the following questions: • Will I be able to capture and manage all fleet-related data or just the vehicles leased from your company? Leasing companies could be much more pro-active in a whole host of fleet management areas including vehicle recommendations, replacement cycle optimisation, whole-life costs, fleet consultancy and fleet planning, according to fleet software supplier Sofico. The firm, whose systems manage around 700,000 vehicles globally on behalf of some of the largest names in leasing, says the technology is there and that all is required is a change in mindset from some of the leasing companies. ‘These are high value activities if you do them well,’ said Roger Smith, head of Sofico UK. ‘The technology is there for leasing companies to provide this kind of high level activity, information and data, although it may need a change in mindset and organisation for some to move to this level of service. Others are much nearer to achieving this objective. ‘Modern web-delivered systems can strengthen customer relationships, increase transparency and improve efficiencies, and deliver to fleet managers the levels of service and functionality they are looking for. It is up to leasing companies to fully embrace this latest technology.’

• Will I have the opportunity to work with a dedicated development team and project manager to create a bespoke application built around my business needs, or will I need to remould my fleet operation to fit around a static, off the shelf system? • Will the software automate a number of related processes, such as KPI reporting? • Who owns the data if I choose to use a different, more competitive vehicle leasing provider in the future? Source: Chevin Fleet Solutions

IFW July/Aug 2012

industry analysis

ESP is standard equipment in all Mercedes-Benz models

Wolfsburg, we have a problem! Past problems can be bad news for manufacturers even long afterwards – it just depends how they deal with them, says Dieter Fess of BF Forecasts Thank God we predominantly still buy cars because of our emotions and less out of mere rational considerations. This can be good or bad – depending on the angles we see this from. Citroën for instance was seen as a manufacturer who builds unreliable and rust-prone cars. Citroën still suffers from that verdict from 20 years ago, but nowadays it is nothing but a cliché. Alfa Romeo is in the same league: bad quality history in the past, but for over a decade, very good endurance tests and almost zero quality issues. In one of the earlier features we’ve already pointed out that this usually has a huge impact on residual values – usually but not necessarily. Look at the eager beaver and best-in-class Volkswagen for instance. Loved by the people and the press, a great brand and strong make. In such cases, even the most respected manufacturers can make mistakes without getting punished as hard as others with even minor quality issues. The current TSI-problems for example are a threat to Volkswagen, no doubt about that. Once they have solved

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the problem with a great amount of generosity and in a business-like manner, there should be no great problem for image or residuals. But even a strong image can be a fragile thing. Opel experienced this in

with every regular service, maintenance or repair, the engine mountings of the W 124 were quietly put right. The other problems were solved with great financial efforts and the reputation still remained strong.

Mercedes-Benz even used the A-Class debacle to establish themselves as the pioneer of ESP, which became the standard equipment on every A-Class... the ‘80s, when the Omega had many problems. The market share dropped significantly and Opel – although now amongst the high quality producers – is still recovering from those times. In the past, even Mercedes had several issues regarding quality or safety. They had the challenges with the W 124 models and the so-called ‘jig-saw-effect’, which caused a heavy and unpredictable bucking of the engine. But famous were the severe safety problems that were caused by the ‘elk-test’ for the A-Class. In both examples Mercedes reacted ideally:

Mercedes-Benz even used the A-Class debacle to establish themselves as the pioneer of ESP, which became the standard equipment on every A-Class, to avoid the problems. This was the best and smartest way to handle such a big problem. So VW should learn from the given examples and provide a fast and nonbureaucratic solution for the actual upcoming ‘TSI victims’ and the ones yet to come. Yes, this costs a lot of money, but keeping the reputation and a strong brand name is worth even more.

Fall in love with the beauty. Stay together for the brains.

Hyundai i40. Think Again. With such beautiful design, it would be easy to think the Hyundai i40 is just another pretty face. But with impressive build quality, the latest technology and an unforgettable driving experience the i40 is just as beautiful on the inside as the outside. Take a test drive today. Fuel consumption in MPG (l/100km) for i40 Sedan and Wagon range: Urban 26.9-53.3 (10.5-5.3), Extra Urban 46.3-76.3 (6.1-3.7), Combined 36.7-65.7 (7.7-4.3), CO2 Emissions 179-113g/km.

the environment BMW Global Challenge

Well-oiled efficiency Telematics, spiralling fuel prices and tightening corporate purse strings – never have there been more incentives for fleet managers to select the most efficient cars and encourage drivers to adopt a gentle driving style. There’s more to the efficiency equation than a lowemissions car and a light right foot though, as BMW and Castrol demonstrated at the impressively-titled 2012 EfficientDynamics Global Challenge event. Tim Kendall reports.

When it comes to power density and achieving maximum ef iciency without sacri icing performance, BMW’s Ef icientDynamics range is right up there with the best of the current crop of downsized motors. BMW’s engine wizardry plays its part, but so does advanced lubrication technology. The purpose of the 2012 Castrol / BP & BMW Ef icientDynamics Global Challenge is to highlight this - and celebrate BMW and Castrol’s long-running strategic partnership, now in its 14th year. It’s also longhand for an eco-driving challenge. International Fleet World went along to the private roads of the Transport Research Laboratory in Berkshire, to test its mettle against a select handful of BMW

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dealers and media from around the world. A bit of learning is required before the track time though, so the irst stop is Castrol’s Technology Centre tucked away in the Berkshire countryside, an R&D facility teeming with white coats and tortured engines. So why is lubricant technology becoming more important? Castrol’s white coats provide an assembly of BMW dealers and media with a bit of context. Small is good – as prevailing car tax regimes and government policy would advocate. And putting less under the bonnet to improve ef iciency without compromising performance, is a challenge that both engineers and motor industry marketers have risen to over the past few years. In the

current climate, no manufacturer worth its salt can do without an eco sub-brand. That’s fuelling the trend for ever-decreasing engine size, and aggressive boosting technology – as Castrol’s European Development Manager for passenger car engine oils, Richard Egan explains: “As most of the OEMs move towards downsizing – you’ve got these small powerhouses working much harder to deliver the same power as larger capacity engines – and the engine oil has to work much harder to provide the same protection and durability needed. But smaller engines mean smaller sumps – so the oil not only has to work harder, there’s less of it to go around.” However well-oiled the presentation,

About 25% of fuel consumption is due to friction in the engine, so efforts to improve oil technology are hugely important

lubricant technology can’t be considered exciting in the traditional sense. But with a large chunk of scheduled service costs these days attributable to higher-tech lubricants, it’s useful to know there is some substance behind the premium mystique of ‘top tier’ offerings from Castrol, Shell and ExxonMobil. Should the leet industry be interested in what the oil bof ins say? Well, yes. Thanks to extended service intervals which the likes of the VW Group and BMW have largely tuned for the leet market, many cars will cover up to 40,000km before the on-board computer calls time and recommends an oil change. The wrong lubricant can spell disaster, particularly for diesel

particulate ilter (DPF) – equipped vehicles with exhaust after-treatment systems – which is why BMW developed its Longlife oil speci ication, setting a minimum standard for the lubricants used in its latest engines. If leets want to keep repair costs down, it’s important to know the correct lubricant is used – even more so where cars are maintained outside of the manufacturer’s franchised service network. The current factory- ill choice and BMW’s recommended aftersales lubricant is Castrol Edge Professional, formulations of which were developed to deliver the protection and durability needed by the highly-stressed TwinPower turbocharged engines in BMW’s current model line-up.

It’s not just about durability and engine protection though. The other reason for leets to take notice of oil choice is that it forms a vital piece of the fuel economy jigsaw – with the latest low-viscosity friction reduction technology making evermore impressive economy numbers possible – as BMW’s engine development man, Hubert Fischer explains: “About 25% of fuel consumption is due to friction in the engine, so efforts to improve oil technology are hugely important to BMW.” It’s also hugely important from a leet manager’s perspective; if company cars are to achieve anything like the 68mpg igure claimed for the 320d Ef icientDynamics, the right oil has to go in at service

IFW July/Aug 2012

the environment BMW Global Challenge

Well-oiled efficiency ¡

time. That, according to Fischer, and the trend for more highly stressed engine hardware is pushing the industry towards lower viscosity (thinner) oils. He also reveals Castrol is working with BMW to develop a 0W 20 grade lubricant – one of the thinnest oils seen outside a motorsport application. But ExxonMobil and Shell also produce oils which franchised dealers are free to use, provided the formulation meets BMW specs. As to why many BMW dealers stick with Castrol, there’s clearly value in the premium image, “We buy Castrol because it’s a strong brand in the market and a premium oil for a premium car – and because of the personal relationships with them developed over many years,” said Stephen Potter, MD of London-based franchise, Hexagon BMW. Laboratory tour and presentation over with, it’s a quick hop down the M4 to the private roads of the Transport Research Laboratory in Crowthorne. Awaiting us is a leet of BMW’s latest 320d Ef icientDynamics models – each plastered with Castrol/BP

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livery and the assorted national lags of the various countries represented by the attending delegates. The plan is simple: to coax our union-jacked BMW 320d Ef icientDynamics to a home victory over the assembled international media. Instructors provide a few pointers on how to adopt the most fuel-sipping driving style irst, and it isn’t all about accelerator dodging - the kind of tips handed out would be familiar to anyone who has attended an eco-driving course. Smoother accelerator and brake inputs, fewer gear changes and planning well ahead of junctions will all see that fuel gauge needle move more glacially. Setting the tyre pressures correctly and taking off that roof rack from last summer’s camping trip helps, too. The pre-set route takes in 30mph roads as well as a tantalising high-speed bowl section, but with a benchmark igure of 49.2mpg to beat, that’s off limits. As there’s a time limit attached - we also have to cover the course in less than 18 minutes to avoid penalties. That means deliberate dawdling

to nudge up the economy figure is out. It may be a well-worn BMW driver stereotype, but driving too close to the car in front seriously damages your fuel economy. In the end, being bunched up behind slower cars leads to frustration and too much lirtation with the right pedal, scuppering any chance of getting near the BMW’s claimed 68mpg. With a shamefully inef icient 46mpg, it’s a reminder that leaving plenty of space behind the car in front enables you to dictate your own pace and inesse any brake and accelerator inputs. Thinking about the driving style more takes practice, but it makes a whole world of difference to the economy igures, as a second run and a more respectable 52mpg proves. So the gold medal goes to the French team, who manage a far more frugal 61mpg. Apart from reinvigorating international relations, the surprise of the day is that driver behaviour and car choice are only part of the equation when it comes to achieving manufacturer’s fuel economy claims. The slippery golden stuff matters too.

ENGINEERS AND DESIGNERS FOUGHT ABOUT THIS CAR. BOTH WON.

» 7-year warranty* » From 3.7 l/100 km » From 97 g CO2/km

THE NEW KIA CEE’D. EXCITEMENT. QUALITY. FLEET-ABILITY. There are some occasions when y ou have to choose between beauty and br ains. This isn’t one of them. Inside this attractive, well-engineered packaging you’ll find our new Kia cee’d. The perfect role model for our fleet range: designed, engineered and built in Europe, dynamic but with low consumption and low CO2 emissions, high residual value, with innovative technology backed up by a unique 7-year manufacturer warranty. It seems you can choose to have it all. Time to meet a different kind of fleet: www.kia.eu

www.kia.eu *7-year / 150,000 km Kia warranty for all Kia models with initial registration after 01/01/2010; valid in all EU member states (incl. Norway, Switzerland and Iceland) subject to local terms and conditions. Fuel consumption (l / 100km) / CO2 (g / km): urban from: 4.1 / 109 to 7.2 / 189, extra-urban from: 3.5 / 91 to 4.5 / 118, combined from: 3.7 / 97 to 6.0 / 139.

operator profile Noske Logistics

Chevin Fleet Solutions helps streamline Noske Logistics Australian bulk carrier Noske Logistics has adopted fleet management software to smooth its operations and co-ordinate its administration. ased in Melbourne, Australia, Noske Logistics is a bulk haulage company, which began operations in July 2005. Since then, the company has experienced rapid growth after focusing on compliance, safety, customer service and innovation. Noske now operates more than 200 heavy trucks and associated assets. Customer diversi ication follows from focusing on niche markets. Industry diversi ication has come from a focus on environmentally sustainable market segments with high barriers to entry. With an ethos of driving innovation for an environmentally sustainable future, and with a strong safety and compliance record, Noske Logistics is ixed on setting the benchmark for the haulage sector.

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Identifying the risk Running a leet of over 200 heavy trucks and related assets carries a certain degree of risk, where accident management, compliance adherence and meeting the requirements for chain of responsibility legislation are concerned. This includes both internal obligations and broader responsibilities within the supply chain. As an accredited operator in the voluntary Australian National Heavy Vehicle Accreditation

Scheme (NHVAS) for Mass, Maintenance and Fatigue modules, Noske must demonstrate a high level of organisation and management relevant to a series of corresponding standards, ranging from scheduling and itness for duty to fatigue awareness. This translates into a need to conduct regular driver medicals, schedule frequent external fatigue management training sessions and ensure that the workshops

The ability to export data and obtain statistics for relevant compliance reports has cut the time required by over 90% commit to a regular preventative maintenance schedule and axle weight veri ications. This is in addition to daily maintenance pre-trip checks, weekly inspections and repairs. Continued accreditation enables appropriately trained Noske drivers to operate for longer hours and for vehicles to carry heavier loads. Then the need to uphold its impeccable internal safety record and to avoid ines and penalties means that compliance is the only option for the company. Yet, with a rapidly growing leet, along with growing pressure to reduce overheads, Noske identi ied the need to replace manual administration and reliance upon disjointed systems and spreadsheets, with a more robust method. Also, as employees left the business – their methods of data management tended to leave with them. Finding the right tool for the job After examining the market and inviting a number of providers of asset management software to demonstrate their products, Noske selected the web-based asset management application, FleetWave, from Chevin Fleet Solutions. Linda Cole-Mein, compliance manager, Noske Logistics comments, “Running a leet the size and scale of Noske Logistics’ brings with it a range of legislative obligations. Managing those obligations and remaining compliant is essential not only for the ef iciency of the leet but also the prosperity of the entire business. Therefore, implementing the most effective methods of managing and maintaining compliance is at the top of our agenda. By selecting FleetWave I’m con ident that we’ll continue to meet and exceed our compliance and general ef iciency objectives. “We considered a number of competitor products but ultimately felt that FleetWave offered a superior level of process automation and ease of use and was backed up with over ten years’ of successful use with major blue chip companies around the world.” The contract between Noske and Chevin ensured a dedicated project manager and

support and development team was assigned to Noske. Phase two roll out of the system was achieved on time and within budget. Ashley Sowerby, managing director of Chevin Fleet Solutions adds, “Noske Logistics is a progressive organisation, dedicated to delivering the highest of standards to its clients, whilst prioritising safety and compliance adherence. “The FleetWave application, which has been tailored to exactly match the business processes and day to day demands of Noske Logistics, is built for purpose and designed to enable the leet management department to hit the ground running with no disturbance to business as usual.” Reaping the rewards Noske has been using Chevin’s FleetWave asset management software for 10 months and has already noticed the bene its. From a risk management and compliance perspective, the system enables Noske to hold all applicable data needed to assist with the management of all elements of driver compliance, leet management and maintenance management. As FleetWave is web based, all authorised employees have access to the same, real time data – creating clearer visibility and communication. The application’s “traf ic light” system is also proving a popular feature with Noske Logistics’ leet department, providing an holistic view over tasks categorised as ‘planned’, ‘near due’ and ‘overdue’. Anecdotally, operations staff are better able to manage vehicle service schedules. As for the reporting process, FleetWave is playing a major role in helping the Noske leet to remain compliant and quickly and easily demonstrate compliance through automated reporting. Linda Cole-Mein explains what the implementation has meant for her, “Without FleetWave supporting our business functions, we would definitely be struggling to maintain our impeccable compliance record. I have no doubt that

FleetWave is significantly reducing the risk of failing to comply with the various legislations relevant to our industry. With FleetWave it is impossible to inadvertently miss compliance or legislation requirements and we have experienced zero downtime since our go live. “The ability to export data and obtain statistics for relevant compliance reports which previously, in some key areas such as odometer readings, were estimates, has cut the time required by over 90%.” Beyond compliance, FleetWave is adding value in other operational procedures such as: • Visibility of R&M spend, and enforcement of compliance procedures related to spend control.

• Reduced administration, through provision of training to key suppliers to facilitate third party work requests.

• Streamlined internal processes for R&M spend sign-off and invoice reconciliation.

• Real time reporting of fleet costs, with facility to analyse data - simply not possible with previous spreadsheet based processes.

• Management of insurance claims and related repairs. Future-proofing operational success To ensure continued operational success, Noske will be analysing FleetWave’s impact to calculate the return on investment. Noske and Chevin will also be working together to establish whether there is scope to expand the software’s functionality to drive further improvements. Ric Morrey, general manager of Noske Logistics’ leet department, concludes, “Using FleetWave has undoubtedly enhanced our ability to manage compliance obligations and streamline leet management processes. FleetWave is already playing a pivotal role in our company’s operational success.”

IFW July/Aug 2012

fleet strategy

UK fleet sector sees falling forecasted residual values SMR costs are rising while RVs are falling in the UK contract hire sector, yet rental rates are also down slightly, reports Experteye. The UK contract hire sector is experiencing rising servicing, maintenance and repair costs and falling forecasted residual values, yet fleet operators remain unscathed with an overall reduction in rental rates. According to the Experteye European Leasing Index, the UK has seen a +6% rise in SMR costs since June last year, with forecasted residuals falling by -4.6% over the same period. However, average contract hire rental costs have fallen by -3%; perhaps a sign of an increasingly competitive market. The Experteye survey tracks forecasted residual values (RV), servicing, maintenance and repair (SMR) costs and rental rates in six European countries using data supplied by major leasing companies. Alongside the UK, Portugal is also reporting a -4.6% downturn in forecasted RVs and a +4.6% rise in SMR costs. But elsewhere in Europe the picture is mixed with France seeing improved confidence in the future used vehicle market with a +2.8% rise in forecasted RVs, but a +4.7% hike in SMR budgets, Italy a +1% RV rise and +3.4% SMR, Spain a +1.4% RV increase and +0.4% SMR and Germany showing the most positive outlook of all with a +4.1% RV improvement and -1.1% reduction in SMR. The consequence is that in a mixed European market, French, Italian and Portuguese fleet operators have seen a rise in their annual rental costs, whereas customers in Germany, Spain and the UK have enjoyed a reduction.

budgets (also the second highest of all nations surveyed). GERMANY: Germany shows the greatest confidence in the future used vehicle market with a +4.1% increase in forecasted RVs during the course of the year. That upward trend has settled to a +0.1% rise for the quarter. Germany is the only nation to report a reduction in its annual SMR budgets at -1.1%. This trend continues with a -0.9% drop since March 2012. As a result, German fleet operators have benefited from a -3.4% reduction in annual rental costs, and a -1.4% drop for the quarter. ITALY: SMR budgets have risen by +3.4% in the last twelve months, albeit reducing by -0.3% in the last quarter. Forecasted RVs have moved upwards by +1% for the year, but have shown a small downturn in con idence of -0.7% in the most recent quarter. For Italian leet operators, the market is relatively static with a +1% rise in rental rates since June 2011 and a +0.6% increase for the quarter. PORTUGAL: Portugal sits alongside the UK showing least con idence in the future used vehicle market, with a -4.6% annual fall in forecasted residual values. With no signs of improvement, there has been a -4.8% drop in RVs since March 2012. SMR budgets are up by +4.6% for the year, and +0.6% for the quarter, yet Portuguese leet customers do not appear to have suffered dramatically with only a +0.9% increase in annual rentals and a +1% rise for the quarter. SPAIN: Spain has been relatively stable during the past year with a +1.4% increase in forecasted residual values, a +0.4% shift in SMR budgets and a -0.1% reduction in rental rates. However, for the three months since March 2012 SMR budgets have seen the greatest increase across the nations surveyed at +4.7%, with forecasted RVs seeing a +1% rise and rentals hardly moving at -0.1%. UK: With forecasted residual values falling by -4.6% for the year, and SMR budgets rising by +6% it is surprising to see rental rates coming down by -3%. However, in the last quarter forecasted RVs have remained static (0%), but SMR budgets continue to rise with a +3.9% shift. Rental rates for the quarter are stable with a -0.5% reduction.

MARKET SUMMARIES – 3 and 12 months to May 2012 FRANCE: French customers have suffered the largest rental rate rise since June 2011 with a +2.4% increase. However, in the last quarter there has been a -3.5% reduction; the largest drop of all nations surveyed. During the last three months SMR budgets have reduced by -1% and forecasted RVs are up by +0.6%. This is compared to an annual rise in forecasted residual values of +2.8% (the second highest of all nations surveyed) and a +4.7% hike in SMR

CHANGES IN RV FORECASTS, SMR COST FORECASTS AND LEASE RENTALS Forecast Residual Values

Forecast Service, Maintenance and Repair Costs

Current Rental Rates

3-month change 12-month change 3-month change 12-month change 3-month change 12-month change France

+0.6%

+2.8%

-1.0%

+4.7%

-3.5%

Germany

+0.1%

+4.1%

-0.9%

-1.1%

-1.4%

-3.4%

Italy

-0.7%

+1.0%

-0.3%

+3.4%

+0.6%

+1.0%

Portugal

-4.8%

-4.6%

+0.6%

+4.6%

+1.0%

+0.9%

Spain

+1.0%

+1.4%

+4.7%

+0.4%

-0.1%

+0.0%

-4.6%

+3.9%

+6.0%

-0.5%

-3.0%

Notes: • The comparisons are for vehicles with a contract duration of 36 months/90,000km. • Twelve-month comparisons show change since June 2011. • Three-month comparisons show change since March 2012.

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+2.4%

• Rental rate changes compare the rates in effect at the time of the survey with those in effect three or twelve months ago. • RV and SMR changes show the change in participating leasing companies’ forecasts of residual values and maintenance costs over the period.

fleet strategy the Eurozone

CRISIS WITH PROFITS The Eurozone financial crisis may be making leasing business challenging, but there is still money to be made It would be simple to deduce that since the 17 Eurozone countries continue to experience inancial problems, particularly Greece, Portugal, Spain and Italy, that operational leasing, the acquisition method that has been particularly appealing to vehicle leets, would not be the best of businesses to be involved in at the moment. It’s true to say that there have been a number of changes, with companies and banks deciding to withdraw from the business and mergers and acquisitions among others. But as we have found out, the leasing sector has to a degree not yet recovered from the 2008 inancial crisis and leasing companies have remained cautious. Pascal Serres, Deputy CEO of ALD International says that this is something ALD has observed in the worst affected markets. He outlined the general trends he has seen in the southern European markets for IFW, “What we have been observing is a slowing down in orders, notably from January onwards, which has been accelerating in recent months.” He suggests that the contraction has been between 10% and 30% when compared with 2011. “This has not already affected the volumes because we had huge order books by the end of 2011, so for the irst months of 2012 we continued to deliver a lot of new contracts based on our order books,” comments Pascal, “But at the same time the new orders from the beginning of the year were

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slowing down. So ALD and probably most of the companies in the market continued to grow, but growth is slowing down and this is something that is con irmed by the manufacturers, who are very concerned about the slow-down of orders.” Pascal describes this slowing down as a irst consequence of the inancial crisis and sees the second consequence as liquidity cost in those countries most affected, notably Greece and Portugal and probably Spain too. “Interest rates are going up and at the same time, the used car market is deteriorating or remaining very bad in Greece and Portugal. The countries never recovered from the crisis and used car

prices continued to deteriorate and the market is now worse than it was three years ago. Our portfolios are stable, or decreasing in those countries and we are concentrating only on major accounts, big international companies, just to avoid credit issues.” In Italy for example, the White Clarke Group reports that the automotive leasing sector was lat from 2010 to 2011. The sector was reckoned to be worth €5.7bn or approximately 23% of the leasing market in Italy. White Clarke quotes Gianluca di Candia of Italian Leasing Association ASSILEA, who pointed to a 1.6% rise in passenger car business during 2011, involving €2.5bn in new inancing operations. But

expected to increase from 28.5% in 2011 to 35.2% in 2012. Italy may be facing dif iculties, but the economy has suffered more in Spain, Greece and Portugal. LeasePlan points to data from the Spanish Vehicle Fleet Association AER, which showed that leet size contracted by 3.7% in 2011 compared with 2010. The company has also considered the possible effects if Greece were either forced out of the Eurozone or decided to leave. According to LeasePlan, operating leasing business can expect three effects if that were to happen:

1. Currency and debt redenomination may lead to a rapid devaluation of the replacement currency. 2. Certain businesses in Greece may face potential insolvency. 3. Credit needs may be met by the central bank of Greece, leading to in lation, while credit availability within the Eurozone would be further squeezed.

against this, the average value of new contracts fell by over €800. LeasePlan told IFW that new car registrations are expected to drop significantly in Italy, with a total of 1,500,000 expected for 2012, around 500,000 less than the average of the past 4 to 5 years. The company says that several car related costs have increased in the country in the past few months and further company car tax measures are being considered there, even though Italy has one of the least favourable company car tax systems in Europe. In terms of growth in Italy, LeasePlan sees the private sector being more affected than the company car sector with market share

As a hedge against the problems in the Eurozone, LeasePlan will continue to diversify its funding sources, “The recent outlooks provided by the key rating agencies have re-con irmed the bene its of this strategy and necessity to continue with such actions”, the company says. The company expects to drive sustainable pro it growth through a mix of organic growth and acquisition where the right opportunities exist. Opportunity areas for organic growth are reckoned to be an increased focus in the small leet and light commercial vehicle segments and market entries into new countries and regions. The inancial problems are having an impact on leet renewal and leasing terms. In Italy, LeasePlan says that the trend towards downsizing is continuing and the company can offer contract extensions where appropriate. Employment regulation in Spain in recent years has led to leets reducing the number of vehicles and seeking contract extensions. Even so, LeasePlan reckons that its Spanish customer base has not grown smaller because sectors such as small and medium businesses are turning to leasing and leet management services. Pascal Serres at ALD says that business is good in Spain, “We continue to have good results. It’s not been so much affected by the

crisis because we had a portfolio that is very much concentrated on good signings and we have been cautious with our residuals. But as a consequence we have been lat in terms of volume for the last three years.” In Greece LeasePlan identi ies extended contracts as impacting renewals, with political uncertainty delaying business decisions in some companies. Business in the country carries a greater risk and cash lows have been affected. Pascal Serres says that ALD has responded to the inancial crisis by being selective. “We have worked mainly with big international accounts, or when we are working with SMEs, we are working through our partnership agreements. These are with manufacturers’ banks and we take the best of this particular segment. We are not dealing direct; we are dealing through the manufacturers, or through the banks, which are providing us with customers they already know with a track record on payments. “So we have been able to control our risk. Last year we grew at about 9%, this year our growth will slow down, we will probably grow at around 2% to 4% this year. We are very careful about managing our working capital; we keep our used car stock extremely low. It’s never been so low as it is today. We have 13,000 cars in stock for a global leet of 900,000.” Other factors that Pascal identi ies include the anti-cyclical nature of full service leasing because some medium sized companies will switch to it when inances are restricted. Meanwhile existing leets are reducing their leet size. Cost savings are being realised through choosing smaller cars and some customers are seeking to extend contracts. At the same time, he says that some cash-rich companies are thinking of switching from full-service leasing to leet management.

We have been observing is a slowing down in orders, notably from January onwards IFW July/Aug 2012

fleet focus INDIA

Growth slows, but great potential for fleet business High fuel prices and inflation are slowing growth in India, but the vehicle market has more than doubled in eight years and future prospects look good.

MADE IN INDIA European Micras are built at the Nissan plant in India. 28

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Many global motor manufacturers have set up operations in India to take advantage of the burgeoning domestic market and export opportunities. India is the seventh largest country in the world and, after its neighbour China, has the second largest population at 1.2 million. Growth in the Indian vehicle market has been impressive over the past decade, both in terms of production and sales. According to statistics from the Society of Indian Automobile Manufacturers (SIAM), total vehicle sales in India have grown from 7,897,629 in 2004/5 to 15,513,156 in 2010/11. That said, the most popular vehicles in India are two-wheelers, which accounted for 11,790,305 sales from the 2010/11 total – around 76% of the market. Passenger car sales of 2,520,421 in 2010/11 accounted for the second largest sector with a share of some 16.25%, having grown 137% since 2004/5. Commercial vehicle sales have also enjoyed healthy growth in the period, reaching 676,408 in 2010/11, an increase of 112% since 2004/05. Since India has built up a thriving automotive industry, it is not surprising that vehicle production has followed a similar trend to domestic sales. Total vehicle production reached 17,916,035 in 2010/11 – a 112% increase on the 2004/5 ﬁgure of 8,467,853. Like domestic sales, the bulk of that production is of two wheelers, which accounted for 13,376,451 units in 2010/11. Passenger vehicle production reached 2,987,296 in the same year, up from 1,209,876 in 2004/5 and commercial vehicle production reached 752,735 vehicles in 2010/11, up from 353,703 in 2004/5. Like China, India has not been immune to the economic reverberations, which have affected Europe and North America in particular. Last October, SIAM downgraded

ABL E MOST AFFORD NANO TATA

its growth forecast for the Indian automotive sector. Having forecast growth of 1012% in the fiscal year to March 2012, back in July 2011, by October the organisation had slashed its growth forecast to 2-4% for the year. That followed car sales growth of 30% in 2010/11 and 25% in 2009/10. Other causes behind the cooling of the market are a series of fuel price increases and the high interest rates in the country. Fuel prices have increased by around 11.5% in the past year. The Reserve Bank of India has increased its rate many times over the past two years to tackle high inflation, currently running at around 4.8%. The current bank base rate stands at 10.5% and the bank is facing calls to reduce the rate. Price increases in India are currently the highest among the BRIC countries (Brazil, Russia, India and China) and press reports suggest that the country could lose its Standard and Poor’s investment grade credit rating. Not surprisingly, many global motor manufacturers have set up operations in India to take advantage of the burgeoning domestic market and export opportunities. BMW, Fiat, Ford, General Motors, Honda, Hyundai, Mercedes-Benz, Nissan, Renault, Suzuki, Toyota and the Volkswagen Group all have car assembly operations in India. These operate either as wholly owned subsidiaries or, as in the case of Honda and Toyota for example, as joint ventures with a local partner. Commercial vehicle manufacturers are well represented too. Mercedes-Benz has established Bharat Benz to build trucks and buses in the country, opening a new plant earlier this year. MAN has a joint

venture with Force Motors, Navistar with Mahindra and Mahindra, while Scania and Volvo are represented too. Besides these operations, India also has an established motor industry of its own. Maruti Suzuki is India’s largest car manufacturer, established originally as Maruti Udyog, but now a wholly owned Suzuki subsidiary. The company sold its 10 millionth car in India earlier this year and is the best selling car manufacturer in India with around 40% of the domestic car market. Mahindra and Mahindra began by building the Willys Jeep under licence and currently produces cars, SUVs and CVs. Premier builds a range of vehicles and was probably best known for producing Fiat based cars between the 1950s and 1990s. Tata now owns Jaguar and Land Rover and has built a range of cars and trucks in India for many years. The Tata Nano is the cheapest car built in India, designed as an affordable entry-level model. Altogether, Tata has around 16% of the domestic car market. Hindustan Motors is probably best know for the Ambassador, popular as a taxi in India, based on the 1950s Morris Oxford. Ashok Leyland is one of the largest commercial vehicle manufacturers in India and produces a range of trucks, buses and construction vehicles. Hyundai is the second largest car manufacturer in India and has a domestic market share of around 14%. The i10 supermini is built solely in India for domestic sales and export markets. Other manufacturers also export to Europe and other markets from India. Nissan, for instance, produces the Micra and Pixo in India.

ORMER STRONG PERF YUNDAI i10

UFACTURER LARGEST MAN MARUTI SUZUKI

IFW July/Aug 2012

fleet focus INDIA

Great potential for fleet business... ¡

ALD Automotive reports that Honda and Toyota are strong in the executive segment. The company reckons that the recent market entrant with significant future potential for market share is Volkswagen, which has introduced the Polo and Vento. At the premium end, ALD says the market is still small. Mercedes, BMW and Audi between them account for about 20,000 units per annum, which is around 1% of the total market – a contrast to China where the three brands sell almost 1 million units in total. The rapidly growing market and the strength of the motorcycle and scooter segment are indicators that the fleet sector is far from developed. A number of large fleet companies are active in India, including ALD Automotive, LeasePlan and Arval and expect to be able to take advantage of the growth that the market offers. ALD opened its Indian operation in 2005 and has built a team from scratch, as the company’s general manager in India, Sujit Reddy (left) told IFW: “We started with a strategy to have a presence in the major cities, so we were headquartered in Mumbai, but at the same time we also recruited sales and operations people in Delhi, Bangalore and Hyderabad. We signed our first clients in July/August 2005.” The business has expanded further since with representation in Pune and Chennai. Sujit points out that there are no published figures for the business fleet sector in India, “Manufacturers have approximately 2,000 corporate customers whom they track for corporate sales. Based on these figures, we estimate that annually sales to these corporates are about 80,000 units per year with a total fleet of around 400,000 vehicles. This excludes smaller, SME segment corporates, which may amount to another 70,000 units per annum but this market is not tracked. These cars are largely provided as perks

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for senior managers or used within the business for their activities.” LeasePlan bases its figures on estimates too and reckons that the new car market in India is growing at around 18% and aggregates to about two million per annum, although growth will be much smaller this year. Out of the total new car market, LeasePlan estimates that the company car market constitutes 10%, or around 200,000 cars. The company reckons that the company car market can further be segregated as follows: • Perquisite given to senior executives, representing around 30,000 cars. • ‘Tool for trade’ (vehicles for field staff ) – representing around 30,000 cars. • Business vehicles (such as cash vans and logistic vehicles) – representing around 40,000 cars. • Salary sacrificed cars – representing around 100,000 cars. Sujit Reddy at ALD says that providing cars to employees specifically for business use has still not become a major feature in India. That said, he identifies several industries that have procured vehicle fleets for business use. “This is particularly so in the agricultural business where utility, Jeep type vehicles such as the Mahindra Bolero and

TATA Sumo are given to sales staff as they travel in rural areas to market and distribute their products. Other companies have provided smaller vehicles, mainly hatchbacks, to sales staff to carry out certain specialised duties primarily for sales executives. “This is an area of the market – the ‘tool for trade’ segment, which has a large capacity to develop and it will provide tremendous opportunities for car operating lease business to grow to another level. “We are talking to a number of companies in, for example, the pharmaceutical and fast moving consumer goods (FMCG) sector about considering options for leasing cars for their sales representatives instead of the current method of travel reimbursement or two-wheeler transport.” LeasePlan reports similar demand and also points to the popularity of Toyota and Honda models where cars are provided as perks. Sujit Reddy suggests that the Income (perquisite) tax applied to the employee for company provided vehicles is relatively low. For a car below 1,600 cc, the perquisite value or taxable benefit is equivalent to around €30 per month and for cars above 1,600 cc it rises to €40 per month.

ALD opened its Indian operation in 2005, based in Mumbai

remarketing

THE GERMAN USED MARKET IS IN DANGER OF GRINDING TO A HALT, SAYS AUTOROLA GERMANY’S MD he German used car market is finding the going very tough currently with prices and demand falling and stock piles of unsold vehicles increasing on a weekly basis. Generally the economic conditions in the Eurozone are the primary reasons for a stagnation in new and used car sales. As manufacturers spend more time and money marketing new cars to consumers, the price of nearly new cars that are primarily coming out of the rental market are struggling to find a buyer due to their high price. To put this into perspective, currently a new exrental car is only 1000 euros less expensive to buy than a discounted new car complete with a full warranty and attractive financing. Currently vendors are hanging onto these cars in the hope that the used market will improve in quarter three and four 2012, but Joseph Caruso, Autorola Germany’s managing director, believes this is unlikely. ”With the growing stock of used cars in the German market, unless prices are reduced and some of this stock sold, then the problem will continue to get worse. In quarter three and four there could be thousands of cars that have been sitting in a compound for many months that are still not selling, so our advice would be to reduce prices now by 10-15% or risk selling the cars for even less later in 2012,” he said. An added pressure in the German market is cheap used cars that are being imported from Belgium, Netherlands, Italy and Spain. Some of these are 10-15% cheaper than German used cars so are immediately finding buyers who would previously not have considered replacing their car in these tough economic times. ”This challenge shows that mainland Europe is now a used car market in itself and cross border sales means Germany is up against competition from other countries where used cars are much cheaper. ”There is a cross border market opportunity for German cars to go to Russia but currently this is in its infancy due to tax and customs issues, but this situation may improve over the next 12 months. In the meantime, companies are also extending their replacement cycles – while others are making staff redundant and not actually buying new cars – where the German market would be partly fuelled by demand from corporates even in a recession. ”Where Autorola’s online platform is coming into its own is with leasing companies and big dealer groups who are offering cars for sale online whilst they are still in a compound or dealer forecourt. There are no vehicle movement costs and it opens up stock to hundreds more trade buyers across the whole of Germany. Within a couple of hours of images being taken of the car, it can be live on the Autorola platform being viewed by hundreds of trade buyers. ”Ex-lease cars are often sold by the vendor directly to the consumer, and what we are doing is offering those cars for sale to trade buyers online. Vendors are receiving reasonable bids and are selling stock as they are used to buying 120,000 km ex-fleet cars without a warranty, whereas the consumer is still more cautious at buying directly from the lease supplier,” said Caruso. So the outlook for the German used market into 2013 looks to be pretty tough, and unless vendors are bold and start to react to a rapidly changing market, then supply will continue to exceed demand and the stockpile of used cars will continue to grow.

IFW July/Aug 2012

fleet profile PEUGEOT

PEUGEOT PLANS A BRIGHTER FUTURE Can the alliance with GM halt the Peugeot sales slide? Mark Bursa reports.

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PSA is still heavily reliant on Europe, which accounted for 58% of its total sales of 3.5 million Peugeot and Citroën vehicles in 2011

Alliances have been the name of the game for French automaker PSA Peugeot Citroën, and its recent wide-ranging deal with General Motors is likely to prove crucial to the company’s success in the coming years. The scope of the alliance is still being de ined. From an initial announcement centring on purchasing and platformsharing, there now seem to be many more opportunities for the two companies to make savings. Clearly this is a very different deal to any previous PSA partnerships, for example with Toyota on small cars, with Ford on diesel engines and with Fiat on light commercial vehicles. Indeed, the scope of the PSA-GM alliance could result in a signi icant reduction in some of these partnerships. It has already been announced that part of the LCV partnership, the Sevelnord plant at Valenciennes in northern France, will not be renewed after the current LCV model range completes its lifecycle. And it also appears there will be a scaling back of the PSA-Ford engine JV, with PSA likely to extend the GM alliance to include larger diesels of 2 litres and above. A look at last year’s inancial igures con irms why PSA is looking at the cost savings that an extended alliance would bring, as well as other cuts, including job reductions, the sale of non-core businesses, property sales and even possibly plant closures. The 2011 igures showed a 48% drop in net pro it to €588 million from €1.13 billion in 2010, largely due to losses at its core automotive division in the second half of the year. Peugeot's automotive division made an operating loss of €92m for the full year compared with a pro it of €621m as a second half loss of €497m wiped out €405m irst half pro it. “Deterioration in our business environment from the end of the irst half led to very disappointing results from our automotive division. Other divisions — components division Faurecia, logistics company Gefco and Banque PSA Finance—made a positive contribution to our results,” said chief executive Philippe Varin.

REDUCED DEPENDENCE ON EUROPE PSA is still heavily reliant on Europe, which accounted for 58% of its total sales of 3.5 million Peugeot and Citroën vehicles in 2011. Rivals such as Volkswagen have a much more balanced global spread, with an established presence in North America and a stronger market share in key emerging markets. PSA’s target is to raise the share of deliveries outside Europe to 50% in 2015. Peugeot is the larger of the two PSA brands in terms of sales, accounting for around 60% of the total. In 2011, Peugeot brand achieved 2.114m sales of cars and LCVs, 1.3% lower than the all-time record of 2.142m, set in 2010. PSA’s overall sales decline was largely down to a reduction in European sales of 6.8%. On the other hand, PSA is improving its position in emerging markets, with sales up 11% in Latin America, 7.7% in China and 35% in Russia. In all these markets, Peugeot is driving the increased sales – in Latin America, Peugeot brand sales have grown 19% so far in the irst four months of 2012 against 2011, and in Russia 40% over the same period. A new car, the 301, focused on emerging markets, will be launched to compete with the Dacia/Renault Logan family. Emerging markets sales will again have to balance PSA’s declining European sales in 2012, as analysts expect the European market to contract by 5% this year, and PSA’s home market, France, could fall by as much as 10%. “In general, all countries have been affected, less so in the UK and Germany,” said a spokesman. France and Western European countries remain the biggest markets for Peugeot-brand vehicles, with increasing sales in Belgium (+0.2% market share against 2011) and in the Netherlands (+2% market share on passenger vehicles). Europe will remain the number one market for Peugeot even if the company follows its globalisation strategy. PSA also plans to raise €1.5bn from asset disposals this year, and will reduce in-house employment by 3,500 (with an additional 2,500 job cuts at suppliers), which will save a further €1bn. Non-core disposals have already started. The sale of car rental company CITER has raised €440m, while property sales have netted a further €500m. PSA wants a further €500m for a controlling stake in pro itable logistics arm Gefco – though PSA says it plans to retain strategic stake in the car transporter company.

IFW July/Aug 2012

fleet profile PEUGEOT

MANUFACTURING STRATEGY PSA combined the manufacturing arms of Peugeot and Citroën into a single entity more than a decade ago – previously plants had built exclusively for one brand or another. Now vehicles are built for both brands on the same lines, using shared platforms. All factories carry PSA Peugeot Citroën branding. Further back-of ice savings are envisioned. In the UK, for example, Citroën is abandoning its long-standing home in Slough, to the west of London, to move in to Peugeot’s new corporate head of ice in Coventry. European manufacturing in concentrated in France and Spain. The UK assembly plant at Ryton, Coventry, was closed several years ago, though its capacity was replaced with a new factory in Trnava, Slovakia, which started producing the Peugeot 207 in 2006 and has now switched to the new 208. Citroën C3 Picasso is also built there. Major PSA plants in France include the two former Peugeot factories in Alsace, Sochaux and Mulhouse, which have a combined capacity of more than 700,000 units. Sochaux produces Peugeot 308 saloon, SW and CC, plus 3008 and 5008 MPVs and Citroën DS5. Mulhouse builds Peugeot 308 hatch, as well as Citroën C4 and Citroën DS4. Larger cars – Peugeot 508, RXH, 508 Hybrid4, and Citroën C5 and C6, are made at a former Citroën plant at Rennes in north-west France. Output in 2010 totalled 118,000 vehicles, while the Poissy plant received major investment to tool up for the new Peugeot 208. The other major assembly plant in France is Aulnay, in Paris, which currently builds Citroën C3, though leaked documents suggest this plant is earmarked for closure in 2014. This would make sense, as PSA capacity utilisation across Europe is likely to fall to 75% this year, though is likely to be fought by French unions. C3 could be absorbed by other plants making cars off the same platform – such as Poissy, Trnava or Madrid in Spain. Madrid is the smaller of two PSA plants in Spain, and it could itself be under threat. It builds around 125,000 Peugeot 207s a year, but it appears the new 208 will not be built there. In March, PSA said it had suspended inde initely plans to build a new compact vehicle at Madrid following a meeting with union representatives. Madrid is also a major engine plant, and that could be its long-term future. Vigo, the larger PSA Spain plant, builds MPVs and LCVs, mainly for Citroën (Grand C4 Picasso, C4 Picasso, and Berlingo) as well as Peugeot Partner vans. Combined output at Vigo was 397,000 vehicles in 2010.

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IMPLICATIONS OF GM ALLIANCE Smaller plants such as Madrid and the 60,000-unit Mangualde factory in Portugal are likely to be threatened with closure as PSA and GM look to make savings. The two companies have already con irmed that they will co-operate on B- and D- segment cars as well as a crossover and MPV, and could expand their agreement to cover a small car for emerging markets as well as larger vehicles and transmissions. Other projects postponed include the manufacturing of a dual clutch transmission at Valenciennes, France, while the recent announcement that Ford and PSA would reduce their co-operation on diesel engines means PSA and GM are likely to work together. PSA and Ford will in future independently develop and manufacture diesel engines of 2-litres and above. PSA is traditionally strong in diesel engines, while GM is not, and has relied on Fiat technology. One rumour suggests the next-generation Citroën C5 will be built at an Opel plant, probably Russelsheim, using the next-generation Opel Insignia platform. Other rumours suggest the next-generation Opel Za ira Tourer could be built at a PSA plant, though this would not happen for some time as the Za ira Tourer is new. Likewise, the next-generation Peugeot 208 and Opel Corsa could be built on a common platform – though again, the 208 has only just been launched and the Corsa is about to be renewed. So any major platform or plant-sharing is unlikely until a model completes its cycle. INTERNATIONAL FLEET SALES Fleet sales of the two brands are likely to be better co-ordinated in the future too. At the beginning of 2012, PSA Peugeot Citroën established a new entity, International B2B Sales, responsible for the leet sector. This new umbrella company will bring together four groups: Peugeot Professional International, Citroën Business International, short term rental and TCO, and an LCV team. International leet sales development is being handled by Stéphane Chesnel, who is charged with coordinating the large leet and key account operations of Peugeot and Citroën, while providing back of ice support for the separate sales brand-speci ic teams. There are two business development teams, one for Europe and the other focused on emerging markets. Despite this administrative back-up, Peugeot and Citroën product management is being kept separate. Within the Peugeot leet operation, international leet business is handled by two sales entities: International Lease Sales and International Key Accounts Sales. Customer companies are each assigned a dedicated International Key Account Manager (IKAM) whose job is to address that organisation’s speci ic issues, from co-ordinating with the client’s leasers (at a national and international level) to advising them during leet rationalisation projects. Peugeot works with a total of 200 strategic international key accounts including Siemens, VINCI, Nokia Siemens, Veolia, Bayer, and many others, though the company says a key focus for the future is to work with smaller companies that operate internationally as well. The current trend is to provide mobility offers which can suit leet demands. This goes beyond a total cost of ownership (TCO) approach, covering leet usage and a full service offering. An ‘eco consulting service’ is also offered to customer companies. This service was launched in 2011 and focuses on key areas such as CO2 measurement and reduction and eco driver training. With regards to remarketing, short-term Fleet units are very carefully managed on a country-by-country basis to ensure residual values are protected. This is coordinated by a central International used vehicle operation.

TOYOTA JV It also appears unlikely that small cars will be shared with GM, as PSA’s JV with Toyota, which has produced the Peugeot 107, Citroën C1 and Toyota Aygo at Kolin in the Czech Republic since 2002, looks likely to become closer. PSA and Toyota are reportedly discussing joint production at the Sevelnord plant in northern France, in a move that would see Toyota replace Fiat as PSA’s partner at the plant. Fiat has already announced it will leave the partnership in 2017. The Toyota alliance would make sense – Sevelnord is in Valenciennes, also home to Toyota’s Yaris factory, which means Toyota already has a strong supplier base in the area. The deal could see Toyota and PSA sharing panel vans and large MPVs built at Valenciennes. Toyota has recently discontinued its Hiace van and has not had a large MPV in Europe for several years since the end of Previa sales.

NEW MODEL FOCUS With the recent launch of the 208 (pictured below), Peugeot is aiming to regain leadership in the compact B segment. The Peugeot 208 has been well received, and offers signi icantly low CO2 emissions starting from just 87g/km CO2. Peugeot started making the 208 at its plant in Trnava, Slovakia, in November 2011. Output began at the company’s factory in Poissy, France, in January of this year and the subcompact also will be made at Peugeot's factory in Mulhouse, France, starting in October 2012. Peugeot 208 output should be close to 200,000 units in 2013 from the three plants, and it is expected to be the automaker's top-selling model in Europe once it reaches full production. The ‘green’ image has been further enhanced by the launch in 2012 of three diesel-electric hybrid models using PSA’s HYbrid4 technology: 3008, 508 and 508 RXH. In the HYbrid4 system, the diesel drivetrain and the electric motors are not connected. Instead, the diesel drivetrain powers the front wheels, while the electric motor drives the rear wheels. So the car can run as a front-drive diesel, a rear-drive electric car or a hybrid all-wheel drive vehicle. The big advantage is CO2 reduction. The Peugeot 508 Hybrid4 has a standard 2-litre diesel engine, but thanks to the electric element of the powertrain, its CO2 emissions are just 95g/km. The renewal of the LCV range (restyled Peugeot Partner and Expert vehicles) is also intended to help Peugeot recover market share with small and medium-sized businesses.

IFW July/Aug 2012

fleet profile PEUGEOT

BRIC BUSINESS SALES ¡

Outside Europe, the main B2B markets for Peugeot are China, Russia and Latin America (Brazil and Argentina). Peugeot plans to sell more than 68,000 cars and vans to B2B customers in these countries. Peugeot is not present in India, and plans to build a factory there may be delayed pending talks with GM.

LATIN AMERICA Alongside China, South America is PSA’s most significant market outside Europe, with major production plants in both Brazil and Argentina. Total sales in Latin America in 2011 ammounted to 326,000 vehicles. In Brazil, PSA has a major, modern plant in Port Real, which builds both Peugeot and Citroën models. Peugeot models are based on the 207 platform, including saloon and Hoggar pick-up versions speci ically tailored for Latin America. This plant has a capacity of 160,000 cars a year, and also builds engines for Brazil, Argentina and European plants, with a capacity of 220,000 engines a year. In Argentina PSA has a plant in Buenos Aires, which produces the Peugeot 206, 207, 307, 408 and Partner, as well as Citroën C4, C4 Sedan and Berlingo. The plant builds around 130,000 vehicles a year. The fleet market in Brazil and Argentina is a growing sector, and in Brazil, a new PSA B2B organization for the Key Accounts will be in place from July 1, 2012. PSA estimates the combined Brazil/Argentina B2B market in the first four months of 2012 to be 289,941 units, of which Peugeot delivered 8,102 cars and vans, giving it a B2B market share of 2.2% (3.6% for PSA).

Peugeot Hoggar for Brazil market only

EMERGING MARKETS Peugeot has quietly developed speci ic models for emerging markets, though without the fanfare surrounding the RenaultDacia X90 family. Over the years, booted saloon versions of the 206, 207 and 307 have been made, and more recently, models have been given speci ic names. The Peugeot 408 is essentially a booted 308. It is a global project developed for the brand’s three key markets in Russia, China and Latin America. It is designed to have good interior space, plus a large 526-litre boot. It is built at plants in Kaluga, Russia; Buenos Aires in Argentina and Wuhan, China. This model will be joined before the end of 2012 by the 301, a new emerging markets sedan that will be built in Vigo, Spain, and sold initially in Turkey. It will be priced between the existing 208 and 308 hatchback models, but will stop short of the Dacia low-cost approach. New 301 showcases Peugeot’s new Unlike Renault, Peugeot has no plans to sell its low-cost models in western Europe. badging policy for emerging markets The 301 has been speci ically designed for markets where four-door saloons remain popular. The 301, like the 408, is designed to cope with poor quality road and has a large boot – 506 litres. It also represents a new badging policy for Peugeot, where “emerging markets” vehicles will use “1” (301, 401, and so on) while all future mainstream models will retain “8”. So the replacement for the current 308 will also be called 308, and the next 5008 will be 5008. The replacement for the current 107 will be 108 – and all future generations will also stick with 108. This avoids the problem of Peugeot running out of numbers, and also has strong appeal in Asian markets, where the number 8 is considered lucky.

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INDIA Peugeot is not currently present in India as a manufacturer, though in September 2011 chief executive Philippe Varin announced plans to build a €650m factory in the Indian state of Gujarat. However it now appears these plans have been delayed. PSA Peugeot Citroën said it was "reviewing the investment calendar”, which means the plant is unlikely to begin production in 2014 as originally planned. It is possible the plan could be revised as part of the GM alliance – GM has manufacturing facilities in India.

CHINA

RUSSIA The new Peugeot factory in Kaluga was launched in April 2010. It produces the 308 and 408 models, and has the capacity to manufacture 125,000 cars per year with the possibility to increase production to 300,000 cars. Total investments in production will reach €470m. Of the initial 125,000 capacity, 85,000 are Peugeot, and 40,000 308 and 408 models, and the rest are SUVs for Peugeot, Citroën and Mitsubishi, which is a partner in the venture. Peugeot builds the 4007 SUV at Kaluga alongside the technically similar Citroën CCrosser and Mitsubishi Outlander. Fleet sales are still small in Russia. In a January-April 2012 B2B market of 118,718 units, Peugeot delivered 5,785 cars and vans, giving a share of 3.8% (6.2% for PSA).

PSA has been expanding Dongfeng Peugeot Citroën Automobile (DPCA), its 50:50 JV with Dongfeng Motor in China, and has recently announced it will set up a second joint venture with ChangAn Automobile Group. Peugeot is a relatively recent introduction in China – PDCA had previously focused on Citroën brand vehicles. But in 2012, Peugeot sales have been strong, showing a three-fold increase on 2011. DPCA celebrated its 20th anniversary in May 2012. Based in Wuhan, Hubei province, DPCA currently has three production plants: two assembly plants in Wuhan and a powertrain facility in Xiangyang. DPCA sold 404,000 vehicles in 2011 and currently has a production capacity of 450,000 vehicles. A third assembly plant in Wuhan is under construction, and along with the ChangAn project, PSA is looking to establish a China capacity of 1m units. Citroens have been produced since 1992, with Peugeot production only starting in 2009. Peugeot models produced in China are 408, 308 (hatchback and saloon) and 207 (hatchback and saloon). The new 508 has also been launched in China and at the recent Beijing Motor Show, Peugeot presented an Urban Crossover Concept that could form the basis of a future China market model. A new PSA China B2B organisation was established on May 1, 2012 with Dongfeng. In the irst four months of 2012, Peugeot delivered 11,327 cars to business customers, giving it a 2.6% share of the Chinese B2B market, which totalled 437,773 units in the period. PSA’s combined share was 6.3%.

The new Peugeot factory in Kaluga, Russia, produces 308 and 408 models IFW July/Aug 2012

Transaid Week: 2 – 6 July 2012

Photo © Paul Starkey

In Africa transport is often a challenge. Up to 40% of harvest can be lost due to inefficient transport and impassable roads in rural areas. During Transaid Week you can help improve livelihoods in Africa. Organise a darts tournament and challenge yourself for Transaid! For more ideas visit www.transaid.org Email events@transaid.org or call 020 7387 8136 Transaid – transport for life 137 Euston Road London NW1 2AA UK UK Registered Charity no. 1072105. Patron HRH The Princess Royal

launch report Kia ceeâ&#x20AC;&#x2122;d p40 Peugeot 508 HYbrid4 p41 SEAT Ibiza p42 Emerald Automotive Hybrid van p44 The compact Ibiza has a key role to play in the carmakerâ&#x20AC;&#x2122;s continued growth, so a mid-life refresh is well timed p42

IFW July/Aug 2012

launch report

Kia cee’d Will the Latest Kia cee’d help the onward march of the brand? John Kendall thinks it will. SECTOR Lower Medium PRICE €14,280 – €23,600 approx (ex taxes) FUEL 3.70 – 5.5l/100km CO2 97 – 145g/km Five years on from the launch of the original model and Kia brings us the second-generation cee’d, replacing the first car that it designed and built in Europe. Neither Kia nor sister brand Hyundai have slackened the pace of development in recent years and both have reaped the rewards – booming sales in Europe and North America and rising market share where others are losing it. Can Kia expect to do the same again with the latest Slovakian-built model? In a word, yes. The latest cee’d shares a lot with the latest Hyundai i30 – the same basic platform and powertrains, for instance. And like everything else Kia and Hyundai, the learning process has been a rapid one. Where petrol and diesel engines were off the pace when cee’d 1 was launched, the company is offering latest technology and class competitive engines in the latest model. Most European countries will get the choice of two petrol and three diesel engines. The larger petrol engine, the direct-injection 135hp 1.6-litre unit, is available with Kia’s first ever dual-clutch automated transmission (DCT). The diesel choices are between a 1.4-litre 89hp and 1.6-litre offering either 110hp or 128hp. Curiously, the 109g/km CO2 1.4-litre engine is not the lowest emitter. That is the 1.6-litre EcoDynamics variant

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with 97g/km, which should ensure ﬂeet interest. The second cee’d diesel curiosity is that the 1.6-litre diesel is also the highest emitting engine in the range with 145g/km CO2, when paired with the six-speed automatic gearbox. Standard transmission is a six-speed manual with all engines. The interior looks a little more ordinary than the latest Hyundai i30 with a plainer looking dashboard, albeit with new audio systems including an integrated display for standard models. Curiously the car feels slightly more substantial than it’s Hyundai cousin. The Kia doors shut with a thunk not a clang. Equipment will vary according to market, but our UK spec models offered ESC as standard and active head restraints, while other standard items include electric heated door mirrors, a reach and rake adjustable steering wheel, air conditioning, steering wheel remote controls, an iPod compatible audio system, with Bluetooth connectivity and USB socket. A host of new options includes a heated steering wheel and dual zone climate control. The 1.6-litre petrol engine is very smooth, but the brand new, low-mileage examples did not feel particularly powerful. Maximum power is produced at 6,300rpm, so the engine needs to be worked to extract that. The engine

was generally reﬁned although it sounded coarser at high revs. The DCT transmission makes the best of the engine – well-adapted to its characteristics, but the trade oﬀ is no automatic stop/start, available with both 1.6-litre diesel and petrol manual models. The 1.6-litre diesel was more appealing with superior low speed torque. It is a little noisy when cold but becomes far quieter as the engine warms up. Cruising at motorway speeds in Switzerland was refined – the most noticeable source of noise was wind, with some road noise but little from the engine. Long gearing means the engine was turning over at around 2,500rpm at an indicated 75mph. The stiffer bodyshell contributes to the cee’d’s impressive ride and handling. It may not be up to Focus and Golf standards, but it has a supple ride and predictable handling. Most versions have flex steer, allowing the driver to dial in extra assistance when parking.

verdict Each new Kia brings a tangible improvement and the second-generation cee’d is no exception. It’s comfortable, refined and has low emissions, giving plenty of fleet appeal.

Peugeot 508 HYbrid4 Alex Grant finds out if Peugeot’s most efficient 508 lives up to its claims. SECTOR Upper Medium PRICE €39,200 – €42,200 FUEL 3.6l/100km CO2 95g/km While Citroën has launched its Hybrid4 diesel-electric drivetrain as a high-performance four-wheel-drive option in the executive-class DS5, Peugeot’s approach has been to highlight its off-road credentials in the 3008 crossover and Audi Allroad-alike 508 RXH, until now. The 508 HYbrid4 saloon breaks that trend. It uses the same 163hp diesel engine and 37hp electric rear axle as the RXH, but sheds the rugged cladding and raised ride height. Instead of marketing its ability to cross rough terrain, this new model becomes the most efficient 508 and one of the most powerful too. For most European markets, it’s the model which makes more sense for fleets, because at 95g/km it qualifies for a number of tax benefits to offset a price increase of over €5,000. The drivetrain is well packaged. Peugeot has fitted the motor and battery under the boot floor, and the only visual clues come from a HYbrid4 badge on the grille. The downside is a noticeable drop in luggage capacity, and drivers regularly carrying bulky loads may find the remaining boot space a little shallow. Interior differences are as easily missed, confined to a hybrid display in the instrument binnacle, mirrored on the satellite navigation screen, and a power gauge

which replaces the tachometer. HYbrid4 is available in two trim levels. For most markets, it is based on the 508 Allure, and includes 18-inch alloy wheels, electrically adjustable half leather heated front seats, keyless entry and start and Peugeot’s intuitive infotainment system with satellite navigation and Bluetooth. A higher spec, based on the Feline trim, is also available in some countries. On paper, at least, it’s an impressive allrounder. There’s a combined 200hp power output, the option to drive short distances using electricity and 3.6l/100km fuel consumption, resulting in a tempting balance of efficiency and performance that’s difficult to match in the D-segment. HYbrid4 starts in economy-prioritising Auto mode, one of four which can be selected by the driver. This makes the most efficient use of diesel and electric power, and feels like a stop/start system, which shuts off the engine more frequently. Efficiency can be boosted further by selecting ZEV pure electric mode at low speed, depending on battery charge. The remaining 4WD and Power modes combine the two power sources for an electric ‘boost’ function or extra grip as required, and the electric motor also cuts in to smooth

gaps in power between gear changes from the sluggish electronically-controlled gearbox. But, with an additional 140kg, it’s not a fast car. Performance is brisk, but the hybrid is outpaced by the equivalent conventional diesel, and this isn’t its biggest problem. Early road tests of the 3008 HYbrid4 criticised its poor economy, and the 508 suffers a similar issue. Drivers expecting close to the claimed 3.6l/100km will find its real-world economy of between 5.1 and 5.6l/100km disappointing, as other non-hybrid 508s easily return similar figures. There’s a skill to extracting the best economy from the system, helped by forcing the electric motor to assist the diesel engine at high speeds. Ultimately, its downfall appears to be a lack of ability to ‘sail’ on electric power at motorway speeds and disconnect the diesel engine like some other large hybrids. This omission means the saloon makes the most sense as a low-pollution urban car with many tax benefits as its most obvious attraction.

verdict The 508 HYbrid4 offers a tax-conscious high performance option no competitors can match. It’s a shame the high speed efficiency struggles to meet Peugeot’s claimed figures.

IFW July/Aug 2012

launch report

SEAT Ibiza Concept car styling contributes to an effective update of SEAT’s biggest seller, reckons Alex Grant. SECTOR Supermini PRICE €10,990 – €20,465 FUEL 3.4 – 5.9l/100km CO2 89 – 139g/km With its mix of Audi-esque chiselled sportiness and Skoda-like affordability, SEAT has become a brand on the move. Profit jumped 41.3% last year, largely due to growing export sales, and it’s about to take its first steps into the potentially lucrative Chinese market. As the brand’s biggest-selling model, the compact Ibiza has a key role to play in the carmaker’s continued growth, so a mid-life refresh is well timed and just as vital to sustaining its momentum in Europe. SEAT’s performance in the region’s biggest markets is strong, and in addition to knocking Ford off the top sales slot in its home market – where the Ibiza is the bestselling car – it’s also grown its presence in Germany, France, the UK and Italy. Followers of SEAT’s recent concept cars will find the most obvious update no surprise. Few of the panels have been changed, but it’s a far more modern looking car thanks to the new chevron-clad headlamps, optionally lined with LEDs, almost identical to those seen on the 2007 IBZ concept car. Now designed by Spaniard Alejandro Mesonero-Romanos, the revisions bring it in line with the Mii, forthcoming Toledo and, more than likely, the next generation Leon due later this year.

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But the IBZ concept was best known for previewing the Ibiza ST, and the biggest updates are found on the most practical model. Trim and engine choices now fall in line with those of the hatchback, meaning buyers can equip the Germaniclooking estate in FR form for the first time, and with almost the same engine line-up as the hatchback. The range is identical across most markets, comprising of the entry-level Reference, mid-spec Style and sporty FR, while the low-carbon Ecomotive is found at the mid-range. A Cupra version – likely to use the same 1.4-litre 180hp petrol engine as its predecessor – will follow before the end of the year, but will probably only be oﬀered in the three-door Sport Coupe body style. What’s so pleasing about the Ibiza, even compared to the Fabia, is that the most stripped-down versions don’t feel cheap. SEAT uses high quality materials throughout the cabin, and even entry-level models have a solid, upmarket feel. Move further up the range and the FR feels thoroughly grown up, featuring body-hugging redstitched sports seats, large alloy wheels and an optional dashboard-mounted TomTom satellite navigation unit. Under the bonnet, the engine range is

almost the same as the outgoing car. Petrol units start with the gruff but surprisingly willing 70hp 1.2 12V and work up to the potent 150hp 1.4 TSI with a DSG gearbox, the most powerful on offer. A comprehensive range of diesels is offered across all body styles, with the 140hp 2.0-litre TDI CR optional for hatchback versions and the most efficient 89g/km 1.2-litre TDI CR Ecomotive carried forward from the outgoing model. But the fit for most buyers is found in the mid-range. The 1.2-litre TSI and 1.6-litre TDI CR both offer an ample 105hp and respectable on-road performance, but with CO2 emissions of 119g/km and 112g/km respectively. The diesel sacrifices little in terms of refinement over its petrol counterpart, but the small TSI is the pick of the bunch. It’s a lively turbocharged engine that fits the sporty Ibiza’s character perfectly, and the only oversight is the lack of a sixth gear to give extra motorway efficiency.

verdict Updates to SEAT’s biggest seller are subtle, but add up to an effective refresh for such an important model. Price, residuals and quality all shine.

Transaid Week: 2 – 6 July 2012

Photo © Paul Starkey

Road crashes kill an estimated 1.3 million people each year. 90% occur within the developing world. (WHO) During Transaid Week you can help improve road safety in Africa. Organise a quiz night and challenge yourself for Transaid! For more ideas visit www.transaid.org Email events@transaid.org or call 020 7387 8136 Transaid – transport for life 137 Euston Road London NW1 2AA UK UK Registered Charity no. 1072105. Patron HRH The Princess Royal

launch report

Emerald Automotive to launch dedicated fleet hybrid van A low emission hybrid van, sold direct to fleets, designed to slice millions off fuel bills could be just two years away, as John Kendall reports. A low-emission hybrid delivery van designed specifically for fleets? That is part of the business plan from Intelligent Energy and Revolve Technologies, two UK-based companies that have led a consortium of development partners, with financial backing from the Technology Strategy Board, a UK Government agency. The project has produced two prototype vehicles, which have been undergoing tests at the Millbrook Proving Ground in the UK. One of the vehicles was displayed at the NAFA conference in St Louis, Missouri, USA in April. The vehicle will be brought to market by a new company, Emerald Automotive, headed by former Lotus finance director and chief operating officer Andy Tempest. The idea for the vehicle came about after the Royal Mail, which operates mail services in the UK, planned to reduce carbon dioxide emissions by 50% but was unable to find a vehicle manufacturer that could supply vehicles capable of meeting these needs. The vehicle draws on Ford Transit components and Emerald describes it as a Range Extended Electric Vehicle (REEV). A 50kW Ford/PSA 1.4-litre common-rail diesel is mounted transversely under the bonnet and the engine flywheel is replaced with a 54kW (72hp) generator that supplies power to a 25.1kWh lithium-ion battery pack mounted under the cab floor. This powers a 75kW (101hp) electric motor, which drives the rear wheels and also supplies regenerative charging to the battery pack during braking and downhill running. Both motor and generator are supplied by EVO Electric. This provides an electric range of around 60 miles (96km), which can then be extended to around 250 miles (400km) by the diesel engine. Emerald would use petrol engines for models sold in the United States. The company says it has been in discussions with a number of suppliers, believed to include General Motors, Hyundai and VW that all produce small highly efficient petrol engines.

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The engine will start automatically once the batteries have 20% of charge left, producing power to recharge the batteries and also supply power directly to the drive motor. The target overall fuel consumption was to improve on 2.8l/100km (100mpg imperial) but early results suggest that around 2.4l/100km (120mpg) is possible. The best result achieved to date is 1.2l/100km (232mpg). Similarly, a target for carbon dioxide emissions was set at less than 70g/km. Early results show that emissions as low as 25.4g/km could be possible, with a demonstrator averaging around 31.4g/km. Although the range-extender technology is fairly similar to that used in the Opel/Vauxhall Ampera/Chevrolet Volt, the ability to both charge the batteries on the move and power the drive motor is a notable difference. The vehicle also uses some smart technology to extend range and battery life. A GPS module is built into the vehicle and information is used by the driveline. This will help to avoid unnecessary charging of the batteries towards the end of a route, ensure there’s enough charge for hill climbing and avoid using the engine in low emissions zones. Reducing vehicle weight was essential to achieve the low emissions and fuel consumption. This meant that a conventional steel body would have to be abandoned in favour of lighter materials. Since a number of consortium members have experience with Lotus Cars, construction methods reflect that experience. The target was to produce a vehicle offering an alternative to traditional 3,500kg gross vehicle weight vans such as the Ford Transit, MercedesBenz Sprinter, Renault Master/Opel/Vauxhall Movano and Fiat/PSA Sevel models. The vehicle is based on an aluminium chassis, with space frame cab structure, equipped with lightweight composite body panels. The target kerb weight for the low roof, short wheelbase prototype models was 1,550kg, although the two demonstra-

tors built to date weigh around 1,665kg. With a gross weight of 3,050kg, this gives a payload of 1,385kg. The construction is designed to be modular, giving the option of different body lengths and roof heights. The next phase is to bring the vehicle into production and Emerald plans to achieve this by 2014. The plan is to build the vehicle on a ‘Hub and Spoke’ basis and Emerald is still looking at possible build sites. The ultimate plan is global multi-site construction, possibly using a central “hub” to build up the major components, then shipping to different places in kit form for final assembly. Although global build is the ultimate plan, initial production is likely to start either in the UK or United States. Emerald is planning on building 5,000 units in the first year and the base business plan has been calculated on 10,000 per year. The company reckons it can break even with 4,000 units per year, so high volume production is not necessary for profitability. Up to 100,000 units per year could be built using the hub and spoke system. From an operating perspective, Emerald is expecting a retail price of around €39,500, with no allowance for tax concessions, but expects the high price compared with a conventional light CV to be offset by reduced fuelling costs. The company reckons that for a vehicle covering 160km per day, the fuel saving would equate to €37,000 over four years, giving a payback in 24 months, based on current European fuel prices. Spread across a large fleet, the fuel savings could be significant. Emerald is working with fleets such as the Royal Mail in the UK, La Poste in France and Fed Ex in the US to establish duty cycles. The company plans to sell direct to fleet operators who would maintain the vehicles either in their own workshops or through their existing repair and maintenance arrangements. IFW expects to bring you a test drive of one of the prototype vehicles in the next few months.

Reducing vehicle weight was essential to achieve the low emissions

IFW July/Aug 2012

S.W.O.T.

In association with

Volkswagen CC

Volkswagen CC More than a stylish Passat? VW should seize the opportunity while the CC has few competitors, reckons Stephen Dilley at Fleet Influence.

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Passat is passé, so the new car becomes the ‘CC’ and stands apart. The broad frontal design with a bolder grill and daytime running lights has a muted aggression. Side on, the low roof line and rising flank trim emphasise the length of the car but also highlight the slightly heavy bonnet line. From the rear, the CC shows a stylish interpretation of what, on the Passat, is so bland. As you would expect with Volkswagen, the interior is generally top quality. The plastics, leather and ergonomics all meld to produce a feel good ambience. A couple of minor gripes: the dashboard on the car we drove had a small rattle around the driver side air vent and the brushed metal trim which runs across the dashboard width scratches easily. Ample legroom fore and aft make this a good, long distance cabin for all passengers. The front seats are well contoured and hold you firmly, reducing the car’s low sensation of roll even further. By use of acoustic glass and extra sound deadening materials, this car is quiet, very quiet. Once inside, the car does not feel as low as it looks from the outside. But the A-pillar swoops back at low altitude, so remember to duck when you are getting out – the roof really is that low! The boot offers plenty of storage, and although on the shallow side, it certainly has ample width and depth. The engine offerings range from the 1.8 TSI petrol, offering 160hp, the 2.0 TSI petrol at 210hp, through to the 2.0 TDI diesels in

140hp and 170hp guise. The diesels are far in advance on consumption and equal on re inement versus petrol, so you just need to work out the sums on fuel and tax cost to make your choice. France gets the 3.6-litre V6 300hp 4WD version in manual form, whilst Germany gets the same with the DSG box. Standard transmission is the 6-speed manual, although opting for the 6 speed DSG box will get you identical 0-62mph (0-100kph) times. Disappointingly, it will also get you a decrease in fuel consumption (5.2 from 4.8l/100km), and an increase in CO2 emissions (137g/km from 125 g/km). It also suffers from poor pickup during upshifts at certain speeds. Go for the manual. Our test GT was equipped with ADC – Automatic Distance Control linked with the cruise control system. An interesting sensation – if it thinks you are getting too close to traffic in front, the car will decelerate. However, it always seemed to do this earlier than I would have (does that mean I tailgate? Of course not..). This CC handles well, the long wheelbase provides a fluid ride, yet it possesses a sharp cornering ability. Our car was fitted with adaptive damping, although we are unsure whether this is a benefit. The standard ‘comfort’ mode seemed fine for all needs. In fact, sport mode is too harsh, jarring heavily, especially when the wheels are shod with 35 profile tyres. So, a new name to distinguish it from the Passat and deserving to stand alone?

Certainly, the CC is a very impressive car which doesn’t disappoint.

STRENGTHS It is rare for the VW brand to fall short and the CC is no exception. Almost everything works together well and the fine diesel engines are central to this. WEAKNESSES The ride. If ever there was a standard failing on German cars, it must be the lack of compliance. Surely it is not beyond the wit of these clever engineers to design a suspension and tyre combination that delivers cracking roadholding with a perfect ride. Come on – try harder. The DSG transmission – clever, but not that clever. It has flaws which should not appear in a modern transmission and, nowadays, should go head to head with a manual on fuel consumption and emissions. OPPORTUNITIES Not so much opportunities, as lack of competition. There is little else around in this large ‘coupe/saloon’ market. VW need to make hay while this bit of sun shines. THREATS Other than the lower roof line, from the inside it is hard not to remember this is a Passat in most areas. Not necessarily a drawback, although it can make it hard to think of it as the VW executive express.

CROSS BORDER COMPARISONS List Price

Portugal

Spain

Italy

Germany

France

Euro – Low end

28,365

39,364

33,890

31,500

31,880

31,990

Top end

35,210

45,788

40,630

40,650

43,275

49,490

£S – Low end

24,395

Top end

30,280

CC GT

CC Carat

Spec & Trim

CC Carat Edition Engines Petrol

1.8 TSI 160hp

2.0 TSI 210hp

V6 4MOTION 300hp

2.0 TDI 140hp

2.0 TDI 170hp

Diesel

IFW July/Aug 2012

fleet in figures

Mixed sales for Europe Crisis-hit Eurozone countries to struggle, but a number of EU countries are looking more positive.

Kia sales in the EU27 were up 24.7% in January to May compared with 2011.

There are no surprises where the sales data for the 27 European Union countries is concerned. For May and the first five months of the year, the pattern, already established in the past few months remains much the same. That is to say that the markets in the worst affected Eurozone countries – namely Greece, Italy, Portugal and Spain – are still well below the level or registrations seen in the buoyant economy years. Data from the European Automobile Manufacturers’ Association (ACEA) for the January to May period shows that new car sales in The EU 27 countries were down 7.7% on the same period in 2011 at 5,442,326, and down 8.7% for the month of May at 1,106,845. Registrations for the January to May period in Greece were running 40.9%

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lower than for the same period in 2011, with a total of 26,902 (45,535 in 2011). Italian new car sales are down 18.9% to 684,962. In Portugal, the decline is 43% to 42,601. Despite the renewed focus on the Spanish economy, the decline in the new car market was the least affected of the four countries with registrations running 7.3% down on 2011 with 332,811. Regarding these two markets, LMC Automotive suggests, “Of the major five markets in Europe, Spain and Italy are the real concerns. As worries mount over the health of the Spanish economy, its car market remains decidedly weak. The selling rate for May came in at 720,000 units/year, and while this is marginally better than the previous month’s result, it is very poor by historical standards. The Italian car market is also well off the pace

of last decade pre-recession, and ongoing economic contraction is only set to ensure the going remains tough.” There are brighter prospects though. Following the pattern of earlier months, the eastern European and Baltic EU member states continue to perform well. Year to date figures for Hungary show registrations up 20.4% to 22,829 and up 18.0% in Estonia to 6,170. The pattern in most of these countries shows signs that the growth is beginning to cool. Registrations in May in Estonia were up 7.9% compared with the YTD 18.0%. In the larger markets, only Germany and the UK posted sales growth, with German sales January to May up 0.3% to 1,337,679, but sales for May were down 4.8%. In the UK, sales rose 2.6% January to May to 868,166, with May sales up

7.9% to 162,288. Elsewhere, the pattern in France remains the same as that seen in earlier months, with sales January to May down 17.2% to 840,073. LMC Automotive comments, “France saw its selling rate dip to 1.86 million units/year, the lowest level since December 2008 – this is a disappointing sign from a market now down 17% for the year. Germany joined other markets in suffering a drop in sales volumes versus a year ago. Adjusting for the fewer selling days suggests that the market was still relatively buoyant, with the selling rate remaining above 3.3million units/year. However, it has been reported that private sales are tailing off, with concerns regarding the Eurozone no doubt applying downward pressure to the private share of the market. The UK market picked up well in May, growing 7.9% thanks largely to the improvement in private sales. This was the third consecutive monthly improvement putting the market up 2.6% year-to-date.” There are no surprises where the manufacturers are concerned either. Year to date the VW group remains the best selling group in the EU 27 with 1,304,501 sales, down 2.4% on the same period in 2011. Audi and Skoda have continued to grow with Audi up 3.8% January to May with 292,246 sales and Skoda up 1.4%. In growth terms, Kia and Hyundai continue to return the most impressive figures with sales up 24.7% January to May to 136,573 for Kia and up 9.3% for Hyundai to 179,936. Jaguar and Land Rover continue to outperform the market in a number of ways with joint sales up 32.8% January to May – Land Rover showing a 39.4% increase at 43,839. Jeep’s 43.0% rise shows an impressive return for the US brand, albeit with January to May sales of 11,327. If Toyota sales in Europe are down, but better than many rivals with January to May sales down 5.9% to 218,452, then it’s a different story in North America. Car sales were up 17% January to May in the United States, according to the Wall Street Journal, to 3,162,353. Toyota US car and light truck sales in May alone were 181,510, up 89% on May 2011. Overall Toyota sales January to May were up 23.7% in the US to 868,301, putting the company in third place behind GM and Ford.

Commenting on Toyota’s US performance, Tom Libby of Polk said, “Hidden behind the headlines about May's modest new vehicle sales results is the fact that Toyota Motor Sales had an extraordinary month. With replenished inventories of core models, both the Toyota and Lexus makes had ‘break-out’ months. Together the two brands captured 15.2% of the U.S. market in May, up five percentage points from May 2011. To put that in perspective, Toyota's gain in May was equal to the entire U.S. volume of the Hyundai make in the same month. “Toyota dealers delivered 181,510 new cars and light trucks in May, up 89% from a year ago and more than any make in the industry except Ford. Camry sales more than doubled to almost 40,000 units, and it out-sold its nearest competitor, the Accord, by almost 10,000 units. Sales of the Prius family of cars, including the ‘original,’ the plug-in, the value-oriented ‘C’ and the spacious ‘V’ version, more than doubled to 21,477 units. In May, the Prius was the fourteenth most popular vehicle in the country, ahead of the Hyundai Sonata and

Chevrolet Cruze, among others.” Looking at the Wall Street Journal figures, Prius sales January to May in the US are 72.9% up on the same period in 2011 at 107,504 and a staggering 210.2% up in May compared with May 2011.

CHINA Growth may have slowed in the Chinese car market but statistics from the China Association of Automobile Manufacturers (CAAM) show that automobile sales in China were up 16% to 1,607,200 in May, compared with May 2011. Of these, car sales were responsible for 1,281,900 units, up 22.6% compared with May 2011. Taking the January to May period, passenger car sales were up 5.5% compared with 2011 to some 6,330,000 units, and total automobile sales were 8,023,500 units for the period, up 1.7% on 2011. Commercial vehicle sales in China for May were down 4.3% to 325,300 compared with May 2011. Taking the January to May figures, commercial vehicle sales were running at over 1,693,500 units, down 10.3% on 2011.

West European Car Sales Country

May 2012

Austria

30,894

34,393

Belgium

40,780

Denmark

May 2011 % Change

YtD 2012

YtD 2011

% Change

-10.2%

153,605

155,575

-1.3%

54,888

-25.7%

237,469

278,092

-14.6%

12,831

17,127

-25.1%

65,031

70,218

-7.4%

Finland

7,312

13,026

-43.9%

59,181

60,075

-1.5%

France

165,776

197,588

-16.1%

840,038

1,014,340

-17.2%

Germany

289,977

304,543

-4.8%

1,337,813

1,334,315

0.3%

Greece

5,314

10,076

-47.3%

26,902

45,534

-40.9%

Ireland

7,714

9,446

-18.3%

60,387

66,117

-8.7%

147,102

172,231

-14.6%

683,672

847,806

-19.4%

Luxembourg

4,380

5,696

-23.1%

24,506

24,340

0.7%

Netherlands

47,628

49,800

-4.4%

255,677

277,803

-8.0%

Norway

12,612

13,005

-3.0%

58,302

58,151

0.3%

Portugal

10,668

14,711

-27.5%

42,579

74,758

-43.0%

Spain

72,442

78,870

-8.2%

332,812

358,826

-7.2%

Sweden

25,759

30,853

-16.5%

117,071

129,557

-9.6%

Italy

Switzerland

29,025

29,454

-1.5%

124,273

130,217

-4.6%

162,288

150,431

7.9%

868,166

846,513

2.6%

Western Europe 1,072,502

1,186,138

-9.6%

5,287,483

5,772,237

-8.4%

Source - LMC Automotive

IFW July/Aug 2012

2012/13 fleet calendar International Fleet World’s guide to what’s happening in the fleet industry in the next 12 months – when, where and how to find out more info... August 31-9 September Moscow Auto Salon (PC) www.oar-info.ru September 20-27 Hanover 64th International Motor Show (CV) www.iaa.de 22-30 Jakarta, 20th Indonesian International Motor Show (PC, LCV) www.dyandra.com 25-26 National Association of Police Fleet Managers Conference and Exhibition, Peterborough, UK www.napfmevent.org.uk 29-14 October Paris Mondiale de l’Automobile (PC, LCV) www.mondial-automobile.com October 10-12 Kiev International Motor Show, TIR’2012 (CV) www.autoexpo.ua 11-12 Annual Conference of European Leasing and Automotive Rental Industry, Cannes, France www.annual-convention.eu 20-28 Sydney International Motor Show (PC, LCV) www.motorshow.com.au 24-4 November São Paulo, 27th International Automobile Trade Show (PC, LCV) www.salaodoautomovel.com.br 26-28 Oslo Motor Show (PC) www.messe.no November 2-11 Istanbul International Auto Show (PC) www.odd.org.tr 23-2 December Guangzhou International Automobile Exhibition, China (PC, CV) www.autoshow-gz.com 30-9 December Los Angeles Auto Show (PC) www.laautoshow.com December 2-6 Riyadh International Motor Show, Saudi Arabia (PC) www.recexpo.com 7-16 Bologna Motor Show, International Automobile Exhibition (PC, LCV) www.gl-events.it January 2013 18-20 Tokyo Auto Salon 2013 www.tokyoautosalon.jp 19-27 North American International Auto Show, Detroit (Industry Preview, 16-17) (PC) www.naias.com February 8-17 Chicago Auto Show (PC) www.chicagoautoshow.com 15-24 Canadian International Auto Show, Toronto, Canada (PC) www.autoshow.ca March 7-17 Geneva 83rd International Motor Show (PC) www.salon-auto.ch April 9-11 The Commercial Vehicle Show, Birmingham UK (CV) www.cvshow.com 23-26 NAFA Institute and Expo, Atlantic City Convention Center, NJ, USA www.nafa.org/conference KEY: PC – passenger cars // LCV – light commercial vehicles // CV – commercial vehicles 50

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lower fleet emissions

Reaping the o said dividW enhds effic

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How Ford’s fleet strategy has allowed it to create truly global vehicl es

The new

MOKKA

THINK BIG. RIDE CLEVER. World premiere at the Geneva Motor

www.opel.com

The A ll New

Fuel consumption combined 7.0–4.9 l/100 km; CO2 emissions combined 159–129 g/km (according

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to R (EC) No. 715/2007).

Suzuki SX4

On show

LA & Tokyo review s

Off balance

Lease accou

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SIMPLY CLEVER

Cutting edge technology that helps cut costs.

ŠKODA Superb Combi. When it comes to a business, your company is only as reliable as its partners. Adding a ŠKODA vehicle to your fleet gives you the much needed quality and reliability, especially in today’s economic storm. Our state-of-the-art technology and attention to detail finds its way into every aspect of our cars – design, development, production, safety, running costs and also after sales service. Your fleet choice of ŠKODA Superb Combi will fully match your company‘s high standards. Consequently the car has earned the ‘Best in Class’ Running Cost in Spain, France, Italy and UK, besides also being nominated as the ‘Best in Class’ Residual Value forecast in Germany according to Eurotax-Glass’s.

www.skoda-auto.com/fleet

Combined fuel consumption and CO2 emissions for the Superb Combi model: 4.4–10.2 l/100 km, 114–237 g/km