THE NEW SEAT LEON X-PERIENCE WITH 4DRIVE DISCOVER NEW ROUTES FOR YOUR BUSINESS
SEAT FOR BUSINESS Average consumption: 4.8 - 6.8 l/100 km. Average CO2 mass emissions: 125 - 152 g/km.
TECHNOLOGY TO ENJOY
The New Generation Hyundai i20
A boost for your fleet. A brake on your costs. Our New Generation i20 combines a wealth of virtues that are rare in this class of car. Within its surprisingly spacious interior, drivers will appreciate the availability of large car features like the wide-opening sunroof, Lane Departure Warning System, heated steering wheel - even cornering lights. And you will welcome the comfortably low cost of ownership together with our reassuring 5-year unlimited mileage warranty. The Hyundai i20. Inspiration. Engineered.
Combined Fuel Consumption: 3.2 - 6.7 l/100 km, Combined CO2 Emissions 109 - 155 g/km. The 5-year unlimited mileage warranty is valid in all EU member states + EFTA. Warranty is subject to local terms and conditions. For taxi or rental usage model specific restrictions apply. For more information, visit www.hyundai.com/eu
contents THE NEW SEAT LEON X-PERIENCE WITH 4DRIVE DISCOVER NEW ROUTES FOR YOUR BUSINESS
SEAT FOR BUSINESS Average consumption: 4.8 - 6.8 l/100 km. Average CO2 mass emissions: 125 - 152 g/km.
TECHNOLOGY TO ENJOY
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1
Publisher Jerry Ramsdale jerry@fleetworldgroup.co.uk
16 What’s the future for diesel on fleets?
27 Star fleet cars for 2015 and beyond.
32 Interview: Michael Cole, COO of Kia.
44 New Honda CR-V tested on the road.
Editor John Kendall john@fleetworldgroup.co.uk Deputy Editor Alex Grant alex@fleetworldgroup.co.uk Business Editor Natalie Middleton natalie@fleetworldgroup.co.uk Features Editor Katie Beck katie@fleetworldgroup.co.uk Fleet Consultant Katie Beck katie@fleetworldgroup.co.uk Sales Director Anne Dopson anne@fleetworldgroup.co.uk
04 Fleet Review John Kendall assesses the way CO2 emissions are measured.
Sales Executives Darren Brett darren@fleetworldgroup.co.uk
06 Inside Knowledge ALD’s Stephane Renie on declining oil prices and EVs.
Claire Warman claire@fleetworldgroup.co.uk
08 News The biggest stories from a month in the international fleet world.
Circulation Tracy Howell tracy@fleetworldgroup.co.uk
16 Feature Will changing test cycles affect the popularity of diesel with fleets?
Dawn Mitchell dawn@fleetworldgroup.co.uk
18 Feature The importance of the correct drivetrain and controlling fuel spend.
Head of Production Luke Wikner luke@fleetworldgroup.co.uk
22 Feature The business case for hydrogen, and what’s preventing adoption.
Designers Tina Ries tina@fleetworldgroup.co.uk
24 RVs Why SMRs and RVs are showing a mixed picture across Europe.
Samantha Hargreaves sam@fleetworldgroup.co.uk
27 Feature Some of the key fleet cars to watch out for over the next year. 30 Strategy Smaller Japanese manufacturers compete for European fleet share. 32 Interview Kia’s COO, Michael Cole, on the firm’s growth strategy for Europe. 34 Fleet Focus Canada’s record light vehicle sales and opportunities for growth.
Published by Stag Publications Ltd, 18 Alban Park, Hatfield Road, St Albans, Herts, AL4 0JJ tel +44 (0)1727 739160 fax +44 (0)1727 739169 email ifw@fleetworldgroup.co.uk web internationalfleetworld.com
38 International Fleet Academy Vehicle replacement and remarketing strategies. 40 Profile Renault’s plans for international expansion and launch of new Kadjar. 44 Launch Report Kia Sorento / Honda CR-V / Suzuki Celerio / Iveco Daily. 50 Fleet in Figures Breaking down the latest global vehicle sales by region.
global STAG Publications
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fleet review
This month, editor John Kendall looks at the way CO2 emissions are measured, SUVs and whether Tesla’s Elon Musk has a point...
Fuel figures Contributor Tony Lewis puts fuel economy figures under the spotlight in this issue, in particular the New European Driving Cycle, which doesn’t seem to be doing what it should – giving consumers good information about the fuel consumption they can expect from their car. It may give them an idea about how one car should perform against another, but the driving cycle doesn’t accurately represent how most of us drive. Consequently the gap between what is claimed and what we achieve has been growing. If it’s not working, fix it and that’s what is proposed for 2017, which still leaves us a couple of years of the current system. As I said, it gives us a good impression of how one car is likely to perform against another and that’s probably true of average CO2 emissions too. PSA Peugeot Citroen has been keen to point out that it regained its first place in low average CO2 emissions in 2014, with a fleet average of 110.3g/km compared with a European market average of 123.7g/km. These figures look good on paper, but the new test cycles due in 2017 may not be so flattering. It will be interesting to see how manufacturers handle the change over the next couple of years.
The SUV sensation I’ve marvelled over the success of SUVs before, but writing about Canada this month helps to make some sense of it. Some 60% of Canada’s roads, and Canada is the second largest country in the world, are unpaved. In the US, it’s just over 50%. There’s a limit to how many surfaced roads you can lay and maintain in such
04 / internationalfleetworld.com
vast countries. So the SUV makes a lot of sense in such places where there are many dirt roads and where the weather can be severe in winter. We just don’t have that scenario in most European countries. Roads are surfaced and most of us spend our driving lives on smooth, black asphalt. Long travel suspension, four-wheel drive, with its added weight and heavily damped steering are not what we need. Nor is the fuel consumption penalty that goes with vehicles with such comparatively high frontal areas. Drivers like the high driving position, but that’s not much use when so many more cars are taller than they used to be. It could go two ways in Europe. Either we decide that we can’t maintain the paved road networks we have and we will go the same way as North America, or something will break the SUV spell…
Battery flattery Tesla boss Elon Musk was not complimentary about hydrogen fuel cell power recently, pointing out that we need electricity to produce hydrogen, which in a fuel cell is then used to produce electricity, so why not just produce electricity, he argued? He has a point and developing battery technology may render the fuel cell unnecessary, but if we’re going to talk inefficiency, the motor car is not a shining example, with petrol engines around 30% efficient or less and diesels at around 45% efficient. Battery electric hybrid systems don’t do well either, typically leaving around 30% of the energy they regenerate available for use. Take your pick.
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I L A E T S
N O I T N E T T A G N
The new ŠKODA Fabia. For your economical and stylish fleet. The new ŠKODA Fabia will become the highlight of your fleet. And not only thanks to its dynamic design. Its new generation of economical engines will bring you low running costs as well as the great feeling of environmental friendliness. The car’s exceptional spaciousness will ensure comfort for all aboard. Its advanced systems, such as the ESC (Electronic Stability Control) with the multi-collision brake will take care of your maximum safety. In addition, you can choose from an endless variety of exterior and interior colour combinations for complete car customisation. In convenient: contact us, we will prepare a special offer fi t to your needs. At the same time we will most gladly introduce you to other ŠKODA car models. skoda-auto.com/fleet
facebook.com/skoda
Combined fuel consumption and CO2 emissions for the Fabia model: 3.4–4.8 l/100 km, 88–110 g/km
inside knowledge
The fuel picture... Declining oil prices are unlikely to reduce the demand for electric or plug-in hybrid vehicles, says ALD International sales and marketing director, Stephane Renie. Fuel and driver taxes I don’t think we will see any drastic change. Remember that while the cost of a barrel of oil may be falling, a high percentage of the retail price of petrol and diesel is made up of tax. As a consequence the full impact of falling oil prices is not always passed on to the consumer. Remember too that some countries have fiscal arrangements in place designed to smooth out the cyclical rise and fall in oil prices. Such arrangements help insulate motorists from rising prices but also mean they do not benefit fully when prices drop. The way in which company car drivers are taxed is continuing to propel them towards low or zero-emission vehicles. Benefit-in-Kind taxation may be linked to a vehicle’s CO2 emissions for example. Such an approach favours cars powered by batteries.
and city authorities are increasingly discriminating against diesels on environmental grounds.
Diesel – still a fleet contender I doubt this will discourage fleets from running diesels any time soon, however. In France, for example, we still have a tax environment that favours diesels. Admittedly the government will probably start taxing diesel more than petrol soon but the difference will be no more than a couple of cents a litre. It won’t eliminate one of the big advantages of diesel from a fleet operator’s viewpoint. You can reclaim 80% of the VAT you pay on diesel in France but you cannot reclaim any of the VAT on petrol. Tougher future urban bans on diesel cars will probably only affect pre-Euro 6 models. Fleets tend to run relatively new vehicles so the impact on them will be limited. Electric advantage So where does this leave cars powered by the newer Even with low oil prices, the cost of the energy electric and more-efficient crop of petrol engines that are vehicles consume per kilometre remains a fraction of becoming available? the per-kilometre cost of the fuel consumed by a petrol The case in their favour is very strong, especially in or diesel engine. markets where taxation policy Low energy consumption is isn’t quite as important in deter“You can reclaim not the only advantage that mining peoples’ choices. I think electric vehicles enjoy. The cost demand will grow - but the speed 80% of the VAT you of maintaining them is low of growth will vary immensely pay on diesel compared with petrol and from country to country. diesel models. Fleet operators – and busiin France.” Aside from being supported nesses such as ALD – think longby government incentives in term. The long cycles we operate many countries, electric vehicles and hybrids are on means there is no immediate yo-yo effect on the usually exempt from urban congestion charges. Diesel type of vehicles we supply. And who knows where the and petrol vehicles are not, and some governments price of a barrel oil will be in 2018/19?
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manufacturer news
BMW reveals seven-seat MPV
B
MW has taken the wraps off its new 2 Series Gran Tourer, the carmaker's first seven‐seat MPV and the only premium‐brand model in its sector. The sister model to the 2 Series Active Tourer, the new Gran Tourer shares its engines and MINI‐derived front‐wheel drive platform with the five‐seat MPV, but is 214mm longer and 53mm higher with a longer wheelbase of 2,780mm to provide more space. It also comes with seven seats as standard. Practical features include a sliding second row of seats with adjustable backrests, a third row of seats that fold into the floor, and provision for up to five universal child seats. Engines comprise five turbocharged petrol and diesel engines with either three or four cylinders. Combined fuel consumption ranges from 6.4 to 3.9l/100km with CO2 emissions from 104 to 149g/km.
BMW Group announces corporate appointment
Kia Sportspace previews first Optima wagon nveiled at the Geneva Motor Show, the Kia U Sportspace concept is likely to preview the next generation Optima, notably including a sports tourer version for the first time. To date, Kia has only offered the Optima as a four‐door saloon. A second bodystyle would enable the brand to broaden its appeal in Europe, where wagons traditionally account for a large share of sales, if not the majority in some markets. Expect a much broader range of engines, includ‐ ing petrol, diesel and petrol‐hybrid drivetrains as in the current Optima and possibly a plug‐in hybrid utilising technology derived from the Hyundai Sonata which launched recently in the United States. It could also debut Kia’s T‐Hybrid system, shown on an Optima last year, which combines a diesel engine with an electric supercharger, increasing power and fuel economy.
New engines for Opel Astra, Mokka and Insignia
MW Group has appointed Marco B Lessacher as vice‐president, interna‐ tional corporate, direct and special sales.
s part of a range‐wide engine refresh, Opel has A improved the fuel economy for the Astra, while adding new Euro 6 diesel units in the Mokka and Insignia.
Mr Lessacher takes over from Bernd Döpke, who moved at the beginning of September to a senior management role in the quality management department. Mr Lessacher previously spent five years as CEO of Alpha‐ bet Germany where he expanded the fleet management and leasing services company significantly, introducing AlphaC‐ ity corporate car‐sharing and AlphaElectric. He joined the BMW Group in 2007, where he joined the team at BMW Financial Services in Munich. Prior to that, he held various management positions at UniCredit Group and Sixt Group. BMW Group international corporate, direct and special sales handles worldwide sales of and global frame contracts for corporate clients, governments, international organisa‐ tions and diplomatic corps. Special and security vehicles also come under Mr Lessacher’s remit.
Reductions in rolling resistance, optimisation of the engine and improvements to aerodynamics mean the 110hp 1.6 CDTi now consumes 3.7l/100km and emits 94g/km – instead of 97g/km to date. Refinements to the 136hp version have brought CO2 emissions down to 99g/km. In the Mokka, the 1.6 CDTi replaces the 130hp 1.7 CDTi and will be offered with 136hp. This cuts fuel consumption from 4.5l/100km to 4.1l/100km, result‐ ing in a drop in CO2 emissions from 120g/km CO2 to 109g/km CO2, despite an increase in power and torque. The Insignia, meanwhile, gains a 170hp 2.0‐litre CDTi engine in place of the outgoing 163hp unit. Faster and more powerful than its predecessor, it achieves the same fuel consumption and CO2 emissions, at 4.3l/100km and 114g/km, with a manual transmission.
08 / internationalfleetworld.com
For the latest news, visit internationalfleetworld.com
DS 5 steps away from Citroën
fleetweet
n sale this summer, the refreshed DS 5 will become the first car O in the newly independent DS range not to feature the Citroën double‐chevron badge, mirroring the brand’s identity in China.
a few soundbites from a month in fleet
The facelifted flagship model incorporates the new DS grille, as featured on the DS 5LS luxury saloon and DS 6WR SUV sold in China, with LED and Xenon headlights. Updates also include a touchscreen infotainment system, as used across most of PSA Peugeot‐Citroën’s new cars, which has enabled the 12 buttons to be removed from the dashboard, and adds Mirror Screen smart‐ phone app streaming for the first time. Engine options include three diesels with 120hp, 150hp and 180hp, a 1.6 turbocharged petrol with 165hp and the diesel‐elec‐ tric Hybrid 4x4 system as used in the outgoing car.
@bdkjones Bryan Jones, Californian Mac developer
Dear Apple: work on self-driving cars AFTER my Bluetooth mouse works reliably with Yosemite. *reboots OS X again*
@renew_economy Official Twitter account for RenewEconomy, Australian independent climate change group
France offering up to €10,000 to switch from old diesel cars to #electricvehicles.
@Lebeaucarnews Phil LeBeau, Japan and Europe correspondent for CNBC news channel
Volkswagen debuts new Caddy
Stat of the day: 8% of drivers on weekend nights had alcohol in system in ‘14 @NHTSAgov study. Down from 80% in same survey in ‘73.
ringing a reduced entry‐level price and lower emissions and B reduced fuel consumption, the new fourth‐generation Volk‐ swagen Caddy has been unveiled.
@Masternaut
The latest Caddy brings a redesigned front and rear end along with new‐look front and rear lights and an upgraded interior. Engine line‐up is also upgraded and brings a range of four Euro 6‐compliant TDI diesel engines with performance ranging from 75hp to 150hp and including a BlueMotion model, specially developed for urban deliveries and offering fuel consumption starting from less than four litres per 100 kilometres. In addition there’s a new 1.4‐litre TGI, successor to the Caddy EcoFuel, which consumes 4.1kg of natural gas per 100km – down by 28% – whilst also offering more power. Three petrol engines are also offered, ranging from an 84hp 1.2‐litre four‐cylinder TSI and a 102hp 1.0‐litre three‐cylinder TSI, up to the large 1.4‐litre TSI four‐cylinder with 125hp.
Official Twitter account for Masternaut, European leader in vehicle and asset tracking software
Company drivers racked up £9.42m in motor-related fines & penalties in 2014, says @LexAutolease.
@Saltwatertattoo Tim Hendricks, Californian tattoo artist & car enthusiast
Blade Runner was set in 2019. That means we’re only 4yrs away from flying cars and human replication. Can’t wait.
@ChevroletCanada Official Twitter account for Chevrolet’s Canadian operation
Since 2010 #Volt has been Canada’s best-selling plug-in. We’re not slowing down. Next Gen Volt debuts @autoshowcanada!
internationalfleetworld.com / 09
E: like economically. The automobile future runs on electricity. The Mercedes-Benz B-Class Electric Drive.
A Daimler Brand
Less emission is the most called term when people talk about the future of automobiles. The most called term when Mercedes-Benz is talking about the automobile future is: zero emission. The new B-Class Electric Drive. www.mercedes-benz.com/fleet
Provider: Daimler AG, MercedesstraĂ&#x;e 137, 70327 Stuttgart
environmental news
Ghosn: EV demand to continue, despite drop in oil prices
U
npredictable oil prices and ever‐stricter emissions regulations mean electric vehicles will continue to grow, according to Renault‐Nissan Alliance CEO and Chairman Carlos Ghosn, despite the recent slump. Speaking after the World Economic Forum in Davos, Switzerland, Ghosn explained that electric vehicle sales aren't only driven by cost reduction, and that the technology is also being driven by global pressure on manufacturers to reduce emissions. “The price of oil is unpredictable – nobody predicted last year that we’d be at this level of oil price today, and nobody knows where the oil price will be next year or two years down the road,” he said. “What is predictable is that the regulation on emissions is going to get tougher in the different markets where we are present. “I can bet you that more and more carmakers are coming to EVs even with the price of oil going down.
Not only because nobody thinks the price of oil is going to remain where it is in the long‐term, but at the same time because without EV and zero emission vehicles it’s going to be very difficult to meet the regulations on emissions – particularly in China and the United States.” Ghosn’s bullishness about the future of the market was reflected in a recent media round table, held at the Detroit Motor Show, where he said EV technology was best compared to mobile phones. As such, the next LEAF is likely to be able to match the 200‐mile range of the Chevrolet Volt concept car shown at the event. “Autonomy is going to go up, the batteries are going to get lighter, smaller and cheaper, and that’s totally normal. With the amount of investment we’re doing with our suppliers to make EV more affordable, much more convenient, much less heavy to charge etcetera, we will be competing with the 200‐mile car,” he said.
French diesel scrappage scheme to launch in April
T
he French government is to introduce a ‘super bonus’ of up to €10,000 against the purchase of a plug‐in hybrid or electric vehicle this April, aimed at improving air quality in the most polluted areas by incentivising drivers to replace their old diesel cars. Speaking with Le Parisien, Ségolène Royal, France’s Minis‐ ter for Ecology, Sustainable Development and Energy, said the country had joined the fight against air pollution too late, and that 60% of its inhabitants are now living in areas of poor air quality. The ‘super bonus’ builds on existing incentives against green vehicles, and will only be offered to drivers living in the
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country’s most polluted areas – which Royal said includes around 48% of the population. It will provide an additional €3,700 discount against an electric vehicle (on top of the existing €6,300 eco bonus) and €2,500 off a plug‐in hybrid (on top of an existing €4,000 eco bonus) for those who trade in a diesel‐powered vehicle which is more than 13 years old. By the summer, France will introduce a certification system to easily identify vehicles which are bad for air quality, and ongoing plans will roll out a clearly sign‐ posted, standardised network of seven million charging points nationwide. Installation will be mandatory in large car parks and transport hubs, according to the proposal.
For the latest EV news, visit evfleetworld.com
United States funds $80m for vehicle R&D T
he United States Department of Energy (DoE) has announced a $55m (€48.5m) funding package to develop and deploy envi‐ ronmentally‐friendly vehicles across the country, with an additional $35m (€30.9m) to support the hydrogen fuel cell industry. The investment will support research and development into batteries and electric drivetrains, but will also fund projects related to improving conventional engine technology, lightweight materials and dual‐fuel and natural gas drivetrains. Hydrogen fuel cell technology will be supported by $35m of fund‐ ing, available from early February and aimed at driving early adop‐ tion in light‐duty vehicles, the DoE said in its announcement. Energy secretary, Ernest Moniz, said: “Energy Department invest‐ ments in advanced vehicle technologies have had a major impact on the industry, driving down costs for consumers and reducing carbon emissions. These projects will continue America’s leadership in building safe, reliable, and efficient vehicles to support a strong, 21st Century transportation system.”
BMW and VW back US rapid charge corridors
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MW and Volkswagen have part‐ nered with the ChargePoint network to install 100 rapid chargers along major routes on the east and west coasts of the United States of America. Set to be located in and between large cities, the new chargers will be spaced 50 miles apart and connect Boston to Washington and Portland with San Diego. Ongoing plans will extend the network further inland. Each site will offer an 80% charge in half an hour or less via the Combined Charging System connector, used by both the Volkswagen e‐Golf and BMW i3, and join ChargePoint’s existing network of 20,000 stations across the United States. Robert Healey, head of EV infrastructure at BMW of North America, said: “The express charging corridors are another important step in the develop‐ ment of the U.S. e‐mobility infrastructure that makes longer distance travel a real option for consumers.”
EV 50 in numbers
in brief Mirai production to triple in 2016 Toyota is to triple production of the Mirai hydrogen fuel cell car in 2016, having sold 1,350 in Japan in its first month on sale – almost four times its pre‐launch prediction of 400. The carmaker will build 2,000 in 2016 and 3,000 in 2017, serving the European and North Ameri‐ can markets based on the interest recorded so far in Japan.
Beijing-Shanghai charging corridor opens Chinese utility company State Grid has installed one of the world’s longest rapid charging corridors for electric vehicles, spanning the 800 miles between Beijing and Shanghai. All of the units meet Chinese charging standards, and are compatible with all EVs sold in China.
Tesla links UK and Continental charge networks Tesla has strategically added a Super‐ charger charging point cluster near Maidstone, en route to the Eurotunnel, linking British drivers to a pan‐European network spanning from the Arctic Circle to the Mediterranean Sea. The company expects to have full UK coverage by the end of this year.
EVtweet of the month @raywert Both @NissanUSA and @Chevrolet sold more electric cars in the U.S. than @TeslaMotors did last year.
DHL Express Nissan e-NV200 electric delivery vans due to be deployed in Rome and Milan.
37%
Increase in plug-in registrations in Europe last year – 75,331 units. SOURCE: DHL Express
Source: ACEA
internationalfleetworld.com / 13
business news
ALD expands into South Africa with Absa partnership
A
LD Automotive and its North American partner Wheels Inc have signed a partnership with South African‐based company Absa Vehicle Management Solutions (Pty) Ltd (AVMS) that will allow them to assist clients in 46 countries. AVMS is a leading fleet management service provider in South Africa and is part of Absa Bank Limited (Absa Bank), a wholly owned subsidiary of the Barclays Africa Group Limited. The agreement with ALD Automotive and Wheels will provide extended support to international clients with operations in South Africa. The latest partnership joins ALD and Wheels’ existing agreements in Australia and New Zealand (Fleet Partners) and in Ireland (J&P), providing coverage of 46 countries across the globe, representing over 1.5 million vehicles worldwide.
LeasePlan posts 14% rise in net profits
easePlan Corporation NV has published its annual results for L 2014, which show both a rise in net profit and an increase in the number of vehicles in fleet to above the pre‐crisis level. The figures show that the leasing giant reported a net profit increase of 14%: €372m in 2014 compared to €326m in 2013. Meanwhile the total number of vehicles under management increased from 1.37 million in 2013 to 1.42 million, putting it above pre‐crisis (2008) level of 1.39 million vehicles. 2014 also saw the opening of LeasePlan Canada and the announce‐ ment of plans to acquire full ownership over LeasePlan Turkey. Vahid Daemi, CEO of LeasePlan, said: “Given the ongoing challenges in the operating environment, it is testament to the commitment and ingenuity of LeasePlan employees worldwide that the group is in a position to post these excellent results.”
Iberdrola launches Spain’s first corporate EV sharing service panish utility company Iberdrola has partnered with BMW Group S to launch the first corporate electric vehicle sharing service in Spain, using a fleet of i3s. Mobility solutions provider Alphabet – part of the BMW Group – will supply the fleet and manage the service, offering 350 Iberdrola staff at its centres in Madrid, Bilbao, Barcelona and Valencia access to an electric car for business trips. Iberdrola says the scheme will reduce its carbon emissions by 4.68 tonnes during the four‐year lifespan agreed so far. It builds on a partner‐ ship formed with BMW in late 2013 to collaborate on electric vehicles. Since 2010, Iberdrola has offered a charging solution product for public and private sector fleets which has installed 224 charging points across Spain, including 19 at BMW’s headquarters, dealerships and corporate centres.
14 / internationalfleetworld.com
in brief EU approves cross border traffic penalties The European Parliament has approved latest rules enabling police to enforce penalties on foreign motorists who break traffic rules. The new rules cover offences including speeding, drink driving, using a mobile phone at the wheel and ignoring red lights. These rules, which aim to ensure equal treatment of drivers and improve road safety, will be extended to the UK, Ireland and Denmark within two years.
Driverless car trials underway The UK Government has given the green light to tests of driverless cars in four UK cities following a review of regulations. The projects are being funded in four UK cities and, according to busi‐ ness secretary Vince Cable, “will help to ensure we are world‐leaders in this field and able to benefit from what is expected to be a £900bn (€12.2bn) industry by 2025.” In total, £19m (€25.7m) from the government will be used to fund the four projects.
Russian car & LCV sales down 24.4% in January Sales of new passenger cars and LCVs in Russia decreased by 24.4% in January 2015, according to newly released figures from the Association of European Businesses (AEB). Janu‐ ary registrations were 115,390 cars, down by 37,272 units.
EU-5 fleet market up 12.2% in 2014 True Fleet sales in the EU‐5 put in a strong end to 2014, with figures up 12.3% in December – almost equal to the year‐to‐date growth rate (+ 12.2%) – according to latest figures from Dataforce. Fleet business represented 25% of new passenger car registations all over the EU‐5 markets.
FEATURE Fuel Management
The great diesel debate Tony Lewis assesses how a change in test cycles could affect diesel models and their popularity with fleets. NEDC: Fit for purpose? Will fleets across Europe need a major rethink of their buying policy if the EU adopts the proposed Worldwide Light Vehicle Test Procedure (WLTP) in 2017? The WLTP test would replace the New European Driving Cycle (NEDC), which is rapidly losing credibility following a series of reports highlighting the discrepancy between the test results and real‐world driving. The discrepancy is so great that Italian consumer organisation Altroconsumo plans to take Fiat and Volkswagen to court alleging the companies overinflated claims for fuel consumption of the Panda and Golf models. The claim could apply to nearly every major manufacturer using NEDC tests and it’s hardly surprising that the indus‐ try is resisting change since there are severe financial penalties for manufac‐ turers who fail to meet the EU’s average carbon‐dioxide emissions figure. Consumption gap widens Research by the International Council on Clean Transportation (ICCT) suggests the gap between claimed and real‐world fuel economy – and therefore emissions – has jumped in 10 years from 10% to 30%. The ICCT claims that this discrepancy is costing the average European motorist around €450 a year in extra fuel. Manufacturers deny they manipulate the tests but acknowledge that there is plenty of scope for interpretation, which is something that both ICCT and T&E believe the worldwide test proce‐ dures would eradicate. Carmakers also point out that different driving styles
16 / internationalfleetworld.com
can easily produce a 30% difference in fuel consumption. The WLTP involves more vigorous acceleration, higher speeds and a differ‐ ent mix of city and constant speed driv‐ ing which advocates suggest is far more realistic than the gentle acceleration, low speeds and short cycles of the NEDC tests. Diesel in the spotlight But the biggest concern for fleet buyers are the numerous tests indicating that pollution from diesel cars is up to 25 times greater than the legal limit with the average car producing seven times more nitrogen oxides (NOx) than the Euro 6 standard. All new cars registered after January 1, 2015 must meet Euro 6. This is seen as crucial in the argument against diesel since NOx is the fourth largest contributor to the ‘greenhouse gas’ effect of global warming – a far greater cause for concern than carbon dioxide. Carmakers always knew that meeting Euro 6 would be a challenge, calling for a 50% reduction in NOx from Euro 5. Only one of the 15 cars tested by ICCT met the new limit of 80mg of NOx per kilometre (down from 500mg/km under Euro 3 in 2000) while the worst car produced more than 2,000mg/km. This contrasts with petrol‐only vehi‐ cles, which generally meet the regulated NOx standards, even in real world driv‐ ing, according to Emissions Analytics. Lost tax revenues There is no doubt a discrepancy between official and real figures, whichever data you choose, but it’s not just motorists
who are losing out. European govern‐ ments who have adjusted tax rates to encourage people and companies to buy more efficient, less polluting cars are losing billions in tax revenue. It is esti‐ mated the Netherlands alone is losing €3.4bn every year because of the gap between test and real emission figures. The debate was thrown into sharp focus in November when Hyundai and Kia were hit by record $300m fines in the USA for misstating fuel economy figures for 1.2m vehicles. The fines were a record $100m penalty under the US Clean Air Act and an estimated $200m forfeit of greenhouse gas emission credits. These are credits the companies build up by selling more fuel‐efficient cars that can be offset against bigger, less fuel efficient – and more profitable – large cars. Other companies could now find them‐ selves in the firing line. Ford has already admitted that it had overstated the fuel efficiency of some models and has paid compensation to buyers. But it won’t necessarily mean a whole‐ sale switch to hybrid or electric vehicles. Recent research (November 2014) by Emissions Analytics showed that the advantage of hybrid vehicles over frugal diesels could often be an illusion, if judged solely on fuel economy. The company tested two hybrids against eight diesel models (see panel) and found that non‐hybrid diesels can be more fuel‐efficient than hybrids by a factor of 28.2l/100km. Diesel ‘not automatic fleet choice’ Companies like GE Capital Fleet Services are predicting that diesel will not be the
“Carmakers always knew that meeting Euro 6 would be a challenge, calling for a 50% reduction in NOx from Euro 5.”
Hybrids only part of the solution automatic choice of fleet buyers in 10 years’ time. Part of that change is driven by what the company described as “growing unease” over the effects of diesel on air quality. GE also points to the potential cost to manufacturers of meeting Euro 7 emission standards, expected to come into force from 2020. And it’s the debate over air quality rather than fuel consumption that is really driving the issue at the moment. It’s worth pointing out that the European car industry is the world leader in fuel efficiency precisely because of the EU’s efforts to reduce carbon emissions and the level playing field that the industry has operated in. ICCT carried out its test by measur‐ ing emissions over 97 trips and a total of 6,400km and claims it was “the first systematic analysis of the real‐world performance of modern diesel passen‐ ger cars, and the most comprehensive profile available of the on‐road behav‐ iour of the latest generation of diesel passenger cars.”
Should fleets consider a wholesale switch to hybrid power? Probably not, unless most of the driving is in congested cities, according to data from Emission Analytics who tested more than 30 hybrids in the UK and US. The company compared two standard hybrids vs eight diesels with engines rang‐ ing from 1.5 to 2.2‐litres, generating up to 150bhp, employing two‐wheel drive, with a hatchback, saloon or estate body style. The results (see fig. 1) show that while hybrids can deliver good fuel economy in real world driving, they can be eclipsed by up to 10mpg by some non‐hybrid diesels. This is after taking into account any net changes in battery charge levels to make sure the hybrids are not penalised over the test cycle. For certain driving patterns, however, hybrids still prove the better option. They suffer much less than their inter‐ nal combustion equivalents in congested urban driving – on average a 3% penalty compared to 7%. In contrast, by doubling the average rate of accelera‐ tion, fuel consumption falls more for
hybrids – especially diesel hybrids. Comparing motorway driving to town driving, all types of vehicle show better fuel consumption on faster routes. However, the difference between hybrids and ICE vehicles is dramatic – typically because the downsized engines found in the hybrids are less suited to motorway cruising. “For diesel cars, we have previously found that low speed, stop‐start driving dramatically increases levels of NOx emissions,” says Nick Molden, CEO of Emissions Analytics. Carbon monoxide emissions are generally higher for petrol‐only vehicles, but still within the regulated values. As a result, petrol hybrids have the benefit over ICE diesels in their effect on air quality, enhanced by the fact that a proportion of urban driving will be on battery with zero emissions. “Hybrids may deliver good but not best‐in‐class fuel economy, but they are typically the cleanest, and if you are a light‐footed, congested‐town driver, they are ideal,” says Molden.
Fig. 1 – Hybrids versus diesels, ranked by fuel economy: Make Honda Skoda Peugeot Mazda Toyota Citroen Toyota Peugeot VW Honda
Model Engine Civic 1.6 Octavia 1.6 308 1.6 3 2.2 Auris 1.8 C4 Cactus 1.6 Yaris 1.5 2008 1.5 Golf 1.6 CR-V 1.6
Derivative i-DTEC ES Greenline III TDi CR Allure BlueHDi SE-L Nav Skyactiv-D Touring Sports VVT-I Flair e-HDI Excel VVT-I Feline e-HDi Bluemotion TDi i-DTEC SR
Fuel Diesel Diesel Diesel Diesel Hybrid Diesel Hybrid Diesel Diesel Diesel
Transmission Manual Manual Manual Manual Auto Auto Auto Manual Manual Manual
True MPG 67.2 61.9 60.8 59.4 58.7 57.8 57.8 57.7 56.8 56.5
Fig. 2 – The effect of congestion and aggressive or fast driving on fuel economy Urban Urban congestion aggression penalty penalty Diesel -6.0% -8.4% Diesel hybrid -2.5% -12.9% Petrol -8.3% -6.5% Petrol hybrid -3.3% -7.5%
Extra urban benefit 18.4% 1.1% 27.4% 8.5%
Source: Emissions Analytics
internationalfleetworld.com / 17
FEATURE Fuel Management
Playing the fuel Plunging fuel prices are starting to dent the fleet appeal of vehicles propelled by anything other than a straightforward diesel or petrol engine in certain markets.
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“We’ve observed petrol prices falling more rapidly than diesel prices over the past several months, reducing the fuel economy advantages inherent in many diesel vehicles.” David Wurster, president, Vincentric
V
incentric recently carried out an exercise in Canada which involved reviewing the economics of running 29 different hybrid models of car compared with their closest petrol‐powered equivalents. The Bingham Farms, Michigan, USA‐based vehicle ownership cost analyst found that only seven of the hybrids cost less to operate than their petrol rivals. When the costs to own and operate all 29 were taken into account, the average five‐year bill for ownership was €2,269 (US$2,976) more than that of their all‐ petrol‐powered counterparts. Hybrids are more expensive to acquire than petrol cars but the fuel savings they offer can help offset the price premium. “With fuel prices decreasing by approx‐ imately 33% over the past six months however increased fuel efficiency alone is not always enough to keep them competitive with petrol models,” says Vincentric president, David Wurster.
Future for hybrids?
Hybrids like Lexus CT200h can offer significant savings...
So is the shrinking price of a barrel of oil sounding the death‐knell for hybrid technology? Not necessarily says Wurster; after all, the exercise revealed that the Lexus CT200h and the Lincoln MKZ hybrid offered savings of over €8,769 (US$11,500) and €3,050 (US$4,000) respectively. What it does mean, however, is that operators will have to look at the cost of running individual hybrid models a lot more closely in future if they are not to lose out financially. The tumbling price of fuel is also having an impact on the appeal of diesel, at least in the USA.
Diesel cost comparison Vincentric has taken a close look at the cost of running 35 different models of diesel vehicles compared with that of their closest petrol rivals. Just 31% of them – 11 – were identified as having a lower cost of ownership compared with 46% when a similar survey was conducted in November 2013. “We’ve observed gasoline prices falling more rapidly than diesel prices over the past several months, reducing the fuel economy advantages inherent in many diesel vehicles,” says Wurster. When the costs to own and operate all 35 were taken into account, the average cost of ownership was €2,100 (US$2,754) more for a diesel compared with its purely‐petrol running mate, up €1,324 (US$1,737) from the previous study. This is not to say that all diesels should be avoided; far from it. As with hybrids however, the economics of running individual models will have to be scrutinised a lot more closely. In this context it is worth noting that 10 of the 11 vehicles that cost less to run than their petrol stable‐ mates were luxury models. Four wore Mercedes‐Benz badges; three were BMWs with Audis making up the balance. Chrysler’s Ram ProMaster diesel was the only non‐luxury vehi‐ cle to have lower ownership costs than its nearest petrol equivalent.
Big engines: RVs to rise? UK‐used vehicle price guide Glass’s suggests that the residual value of cars powered by what are for Europe big‐capacity petrol and diesel engines – i.e. 3.0‐litres or thereabouts – could begin to rise as oil prices shrink. “In recent years a 3.0‐litre medium‐sized petrol or diesel saloon has lagged some way behind its 1.8‐ or 2.0‐litre equivalents when it comes to retaining its value in the used market,” says head of valua‐ tions, Rupert Pontin. “Buyers have viewed them with suspicion. “But while no‐one could call petrol and diesel prices exactly cheap (at least not in Western Europe) they are certainly falling to a level where some consumers won’t place fuel economy as high on their list of priorities as they have done in recent years,” he believes. “Bigger‐engined cars are suddenly more viable.”
internationalfleetworld.com / 19
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FEATURE Fuel Management
Playing the fuel... →
Cautious approach If that is the case, then sooner or later it will be reflected in contract hire rates. Operators should be careful about throwing caution to the winds and changing their existing policies overnight however, warns Ashley Sowerby, managing director of fleet management software specialist Chevin. “While we may be going through a period when prices have unexpectedly fallen this will almost certainly be temporary and they will increase again over time,” he warns. As a consequence fleets still need to keep a tight grip on fuel expenditure, he says. That involves every‐ thing from making outstanding fuel consumption a prerequisite of adding a vehicle to a choice list to analysing data recorded through software reporting to see which drivers or vehicles are falling outside fuel consumption targets. It also involves continuing to encourage drivers to fill up at the cheapest outlets; still a worthwhile exer‐ cise in many countries given that falling prices have sparked off competition between retailers over who can offer the cheapest deal in town. Fuel price awareness
A Canadian Automobile Association (CAA) survey conducted at the start of this year revealed that lower prices were making 43% of drivers more attentive to exactly how much they were paying for fuel compared to just a few months previously. Almost one in four said they were more willing to go out of their way to find cheap fuel. “Canadians are smart to keep an eye on prices given that we are regularly finding differences of as much as five cents a litre,” says CAA vice president, public affairs, Jeff Walker.
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“Fleet managers should ensure they benefit from the price competition that we are seeing,” says Sowerby. Chevin’s software is used in over 100 countries worldwide, including Haiti. The Haitian National Police recently selected FleetWave, the company’s web‐based fleet management information system, to help it handle the operation and maintenance of its 4,500‐strong fleet and over 40,000 pieces of related equipment. Sowerby’s warning that fleets should not drop their guard when it comes to keeping a tight grip on fuel costs is reinforced by The Fuel Card Group, which is owned by Republic of Ireland based inter‐ national sales, marketing, distribution and business support services conglomerate DCC. “Even in the current climate I doubt if any fleets are relaxed about fuel expenditure, or any other item of expen‐ diture for that matter,” says a spokesman. Even if some fleets are tempted to take advantage of what may turn out to be a temporary decline in fuel prices and turn away from hybrids, battery power and other alternative forms of propulsion, politicians determined to improve air quality, espe‐ cially in urban areas, intend to keep them on the straight and narrow. Legal moves French Prime Minister, Manuel Vals, aims to remove diesel cars from the roads – a shock for a country that is so closely wedded to the fuel and potentially bad news for diesel residuals – with zero‐emission electric vehicles favoured wherever possible. This year will see France alter its taxation policy so that diesel no longer has an advantage over petrol and introduction a system of stickers that will highlight the most‐polluting vehicles. Red stickers will denote diesel cars that are more than 13 years old. “In France the diesel engine has long been favoured,” he says. “It was a mistake.” Mayor of Paris, Anne Hidalgo, wants to ban most diesel cars from the boulevards of the French capi‐ tal by 2020 and introduce electric light commercials to the city’s car sharing scheme.
“In France the diesel engine has long been favoured. It was a mistake.” Manuel Vals, French Prime Minister
On the other side of the Channel, Boris Johnson, her opposite number in London, wants to introduce an Ultra Low Emission Zone by 2020. The Zone’s boundaries will mirror those of the Congestion Charge Zone, with diesel cars that do not meet Euro 6 and petrol cars that do not meet the lower Euro 4 standard penalised. The stances adopted by Vals, Hidalgo and John‐ son will be music to the ears of Nissan executives who have bet the farm (almost) on the success of electric models. EV registrations rise Nissan LEAF sales saw a 32% increase in 2014...
Last year saw European registrations of the all‐elec‐ tric Nissan LEAF rise by a hefty 32% to almost 15,000, giving it just over a quarter of the electric car market and handing it the number one slot for the fourth year running. Renault’s ZOE was number two, with a 20% share and over 11,000 registrations. While that is encouraging news for both manufac‐ turers – and for Tesla, BMW and Volkswagen, who enjoyed some success with their battery‐powered products – there is no denying that sales of electric cars remain way behind those of conventionally‐ powered vehicles. The attitude of pollution‐conscious legislators could go some way to redressing the balance however; no matter what happens to the price of a barrel of oil. Electric vehicles and plug‐in hybrids are among the alternatives that will continue to be encouraged in Europe, contends Alphabet. It points out that electricity is still five times cheaper than petrol or diesel on average and that the cost of energy is only one of the factors that impacts on buying decisions. Electric cars and light commercials and hybrids generally benefit from government subsidies along with free charging and free parking in places, not to mention exemption from congestion charges.
Climate compensation Oil is a finite resource and Alphabet believes that the fall in prices currently being experi‐ enced is an anomaly. In its opinion eMobility is the right response now and for the foreseeable future. Last September saw Alphabet introduce a carbon compensation plan in conjunction with First Climate, which gives fleet customers the option of offsetting their emissions through carbon reduction certificates. Money raised through their sale is used to fund carbon reduction projects throughout the world at a cost of approximately 1% of fuel outgoings. First Climate takes care of all the administration. “Our clients take a long‐term view and the effect of a (temporary) drop in fuel prices on fleet compo‐ sition as seen from a cost perspective will be limited,” says LeasePlan Corporation chief commer‐ cial officer, Nick Salkeld. “Alphabet contracts normally run for 36 to 48 months,” says a company spokesman. Would anybody care to place a bet on where oil prices are likely to be in 2018? Hybrid and electric models still have a good story to tell, Salkeld believes, from both the viewpoints of cost control and corporate social responsibility. “Many of our customers see corporate social responsibility, including running an environmen‐ tally‐friendly fleet, as an intrinsic value and one that is here to stay as part of their overall business policy,” he observes. Like Alphabet, he points to the mixture of local taxes and incentives that are continuing to propel fleets towards zero and low‐emission products. “EU and US regulations that aim to lower CO2 emissions are another important driver,” he says. So far as the new‐found hostility of certain politi‐ cians towards diesel is concerned, while their stance may bring some benefits to hybrid and battery power, Salkeld is not convinced that it is as yet prompting fleets to switch instead to the new gener‐ ation of fuel‐efficient petrol models. “At the moment we do not see a significant change,” he remarks. The oil price drop is certainly not prompting Toyota to pull the plug on its Mirai fuel cell car; far from it. After an enthusiastic reception when it was initially launched in Japan last December production is to be ramped up from 700 this year to approxi‐ mately 2,000 in 2016 and around 3,000 in 2017. Expect it to break cover in the USA and selected European markets in the coming months.
internationalfleetworld.com / 21
FEATURE Fuel Cell Future
Can fuel cell vehicles succeed? Cost and fuelling infrastructure are holding hydrogen fuel cell vehicles back, reckons Chris Wright. ollowing decades of research, hydrogen‐fuelled cars are taking to the roads across the globe this year as F major carmakers start small‐scale volume production for the first time. Toyota, Honda, Daimler, Hyundai and Kia are leading the way and others will follow closely behind as fuel cell electric vehicles (FCEVs) make their case as the future for the car industry. Hydrogen has a lot going for it, cheap and easy to produce while its only emission is H2O – water you can actually drink straight from the tailpipe if so inclined. The downside? Cost – fuel cell stacks are still expensive to produce – and the lack of infrastructure across the planet. Hydrogen fuel filling stations are few and far between. However, like conventional petrol or diesel, a full tank of hydrogen can carry you many hundreds of miles. FLEET USERS TARGETED For the reasons mentioned above, the first few thousand FCEVs taking to the roads this year are targeted at fleet users, and in many cases, these are hydrogen fuel tech‐ nology and infrastructure partners. Bus and commercial fleets will also become major targets as will company car users and rental fleets. With zero emissions, hydrogen fuel for FECVs is high on the agenda in a number of countries with significant government projects enabling the rollout of hydrogen mobility programmes. It is the cleanest fuel available. It can be generated using surplus renewable energy supply and water using an electrolyser. It can even be made on‐ site at the point of use, eliminating the need for trans‐ ported fuel deliveries. FUELLING INFRASTRUCTURE – NEEDED NOW? The EU and individual governments are making funds available although in infrastructure terms – providing hydrogen filling stations – the plans are still not really joined up. The cars coming first, followed by somewhere to refuel, sounds the wrong way round and, largely, it is. However, this is not so much a ‘chicken and egg’ situa‐ tion, more like “an omelette which needs to be served
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properly,” said Robin Hayles, sustainable fuel develop‐ ment manager at Hyundai UK. “The hydrogen car is only a tiny part of the story,” he added. “Hydrogen is a renewable energy that can be used in housing and business in the future. The key is the development of an infrastructure.” Like many countries, the UK currently has just a handful of hydrogen fuel filling stations and two of these, at Honda’s factory in Swindon and the Millbrook Proving Ground in Bedfordshire, are not easily accessi‐ ble to the public. Current petrol and diesel filling stations could provide an instant network but the installation of hydrogen tanks, which have to be kept under pressure, is a very expen‐ sive business. While the petro‐chemical industry might also baulk at installing a competitive fuel at their outlets, it would be unfair to say it is standing in the way. The big oil compa‐ nies are taking an active interest – contrary to popular belief, there are no huge profits in selling petrol or diesel off the forecourt. SUPERMARKETS INVEST IN HYDROGEN However, supermarkets, which are increasingly becom‐ ing major fuel retailers across Europe, are not being slow to spot an opportunity. Major UK supermarket chain Sainsbury’s has invested in a new ‘SmartFuel’ station at its Hendon store in North London. The 700‐bar SmartFuel station is actually owned and operated by hydrogen infrastructure expert Air Products, and delivered as part of the London Hydrogen Network Expansion (LHNE) project, backed by UK Government. Sainsbury’s head of fuel, Richard Crampton, said: “We are always looking for solutions that reduce our impact on the environment. We currently have 280 filling stations serving customers throughout the UK and believe that exploring greener fuels today is fundamental to the long‐ term sustainability of our business.” Air Products’ hydrogen energy business manager Diana Raine said: “Making hydrogen technology available at a supermarket for the first time is another big step
in encouraging the use of cleaner, greener fuels to reduce air pollution.” It’s a move being closely observed by other supermarket chains across Europe. Carmakers have been researching hydrogen fuel since the early 1990s and the vehicles taking to the road now are already in their fourth generation. “There is still so much out of our control and we need a greater commitment from governments because the technology, although cost is coming down all the time, is still very expensive,” said Hyundai UK’s Robin Hayles. EU INFRASTRUCTURE FUNDING The EU is making some €20bn available for invest‐ ment in future fuel technologies while a number of initiatives are gathering pace. HyFive is a pioneering €41 million project involving leading motor manu‐ facturers, hydrogen fuel suppliers, the Mayor of London’s office and energy consultancies to make hydrogen vehicles viable. Partners in the project also include Air Products, BMW, Daimler, Honda, Hyundai, Toyota, Copenhagen Hydrogen Network, ITM Power, Linde, OMV, Element Energy, PE International, the Institute for Innovative Technology and the European Fuel Cell and Hydrogen Joint Undertaking. With clean transportation gaining traction in Europe, the EU’s TEN‐T Programme is investing nearly €3.4 million in studying the region’s current hydrogen fuel infrastructure to determine what can be done to expand the framework for fuel cell vehicles. The research project has already launched initiatives that aid in the development of hydrogen stations in Belgium, Finland, Poland, and several other countries. The EU also suggests that hydrogen fuel could establish more energy security, making countries less
reliant on imported fossil‐fuels. As such it is urging member states to accelerate incentives to promote the adoption of fuel cell vehicles. With billions of Euros, Dollars or Yen having been piled into the research and development, the car indus‐ try is determined to see hydrogen succeed. Most recently, Toyota has announced that it is making avail‐ able thousands of hydrogen fuel cell patents royalty free. The company said at January’s Consumer Electron‐ ics Show in Las Vegas that it hoped the initiative will spur development and introduction of innovative fuel cell technologies around the world. Toyota will allow royalty‐free use of approximately 5,680 fuel cell related patents held globally. The list includes approximately 1,970 patents related to fuel cell stacks, 290 associated with high‐pressure hydro‐ gen tanks, 3,350 related to fuel cell system software control and 70 patents related to hydrogen produc‐ tion and supply. This Toyota initiative builds on previous commit‐ ments, including substantial financial support for the development of a hydrogen fuelling infrastructure in California and the north eastern US. Toyota has made loans available to FirstElement Fuels to support the operations and maintenance of 19 hydrogen fuelling stations across California and has a collaboration with Air Liquide to develop and supply a phased network of 12 hydrogen stations for New York, New Jersey, Massachusetts, Connecticut and Rhode Island. The great unknown is whether consumers will ulti‐ mately take to hydrogen cars. However, if the cost is right and the infrastructure is in place, FCEVs take fewer than five minutes to fill up, have the range of a conventional petrol or diesel car, make no noise as they power an electric motor and have zero emis‐ sions. What’s not to like?
internationalfleetworld.com / 23
RVs
Analysing leasing and residual value confidence in the Eurozone and beyond...
Portuguese rental rates fall SMRs and RVs show a mixed picture across Europe as Experteye shows from its latest survey.
F
leet operators in Portugal are enjoying a steady reduction in their lease rates, with rentals coming down by ‐2.5% in the last quarter, after a year in which they fell by ‐7.7%. Contributing to the reduction is an upbeat mood. Forecasted residual values (RV) improved by +5% in the last twelve months with annual servicing, mainte‐ nance and repair (SMR) budgets falling by ‐5.1%. The figures come from the Experteye European Leasing index survey, which 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. In the latest quarter, the UK leads the way in terms of optimism in the future economy and used vehicle market. Fore‐ casted residual values rose by +2.7%, the highest quarterly rise of all nations sur‐ veyed. This is at a time when all other nations surveyed remain relatively flat in their forecasts. In Italy forecasted RVs rose by just +0.4%, in Spain they didn’t shift at all (0%), France and Portugal both saw a ‐0.1% fall and Germany ‐0.3%.
Market summaries – 3 and 12 months to January 2015
FRANCE: French SMR budgets fell by ‐1.5% in the last quarter after a year in which they went up by +1.3%. Forecasted residual values have seen little shift, with a ‐0.1% fall since November 2014 and a ‐1% drop for the year. As a result, rental rates have also seen very little movement with a +0.3% rise in the last quarter after a ‐1.0% fall since last February. GERMANY: In Germany, SMR budgets are up, with a +4% increase over the last 12 months and a +3.2% rise for the quarter. Forecasted residual values have seen little change, with a ‐0.3% fall in the last three months and +0.3% increase for the year. Rental rates had been steady since February 2014 with a marginal +0.4% increase, however they are down by ‐2.0% in the most recent quarter. ITALY: In the last 12 months, there has been a significant drop in SMR budgets in Italy. They fell by ‐11.7%, but have steadied in the last quarter with a ‐0.3% fall. Residual value forecasts went up by +0.4% since November 2014, following a +2.7% rise for the year. Rental rates have climbed by +2.9% in the last three months after a ‐ 0.3% reduction for the year. PORTUGAL: Since February 2014, Portugal saw the most dramatic movements in its prices and budgets. Residual values went up by +5%, SMR budgets fell by ‐5.1% and rentals dropped by ‐7.7%. The latest quarter has, however, offered a more settled outlook, with RVs moving by only ‐0.1%, SMR budgets by +0.7% and rentals coming down by ‐2.5%. SPAIN: Spanish forecasted RVs were up by +2.7% in the last 12 months, but remained static (0%) in the latest quarter. SMR budgets have gone up by +2.7% since November 2014 after a year during which they rose by +4.9%. Rental rates were down by a small ‐0.6% in the last year but saw a rise of +2.2% for the quarter. UK: UK forecasted residual values went up by +2.7% in the last quarter, the highest quarterly increase of all nations surveyed. This follows a year when they went up by +2.9%. SMR budgets rose by +1.6% for the year and +1.4% for the quarter, and rental rates rose by +0.1% since November 2014 after a small climb of +0.3% since last February.
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 Germany Italy Portugal Spain UK
-0.1% -0.3% +0.4% -0.1% +0.0% +2.7%
-1.0% +0.3% +2.7% +5.0% +2.7% +2.9%
Notes: • The comparisons are for vehicles with a contract duration of 36 months/90,000km. • Twelve-month comparisons show change since February 2014. • Three-month comparisons show change since November 2014.
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-1.5% +3.2% -0.3% +0.7% +2.7% +1.4%
+1.3% +4.0% -11.7% -5.1% +4.9% +1.6%
+0.3% -2.0% +2.9% -2.5% +2.2% +0.1%
-1.0% +0.4% -0.3% -7.7% -0.6% +0.3%
• 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.
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FEATURE Cars to watch
fleet cars
to look out for this year Regardless of your fleet size or the end user, 2015’s new models show the industry has never been more diverse. Here are the 12 newcomers which will change the corporate landscape over the next year.
1
Land Rover Discovery Sport
2
Renault Kadjar Renault strengthens its presence in the C-segment SUV market with the Kadjar, sharing many components with the Nissan Qashqai and built on the shared CMF platform. 4x2 and 4x4 versions will be available. Sales for the Spanish-built car will start in Europe and Kadjar will be the first Renault to be built in China.
Replacing the Freelander, the Discovery Sport will spearhead Land Rover’s fleet push in 2015. It’s a seven seater available with two and fourwheel drive, and gets the familiar 2.2-litre diesel from launch. JLR’s new 2.0-litre diesel with 119g/km CO2 emissions will follow later in 2015.
When? Available now
3
When? Autumn 2015
Volvo XC90
4
Volvo has pulled out all the stops for its flagship, which gets the all-new modular platform, engines and on-board technology including smartphone integration and active safety systems. The 152g/km, 48.7mpg D5 will be the big seller, but the 59g/km plug-in hybrid is an interesting proposition too.
When? Spring 2015
Jaguar XE Finally putting Jaguar back into the high-volume compact executive segment, the XE is set to become the brand’s biggest-selling car. CO2 emissions from 99g/km, thanks to the brand’s new 2.0-litre diesel engine, and an array of personalisation options should give it a good footprint on choice lists.
When? May 2015
internationalfleetworld.com / 27
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FEATURE Cars to watch...
→ When? Available now
6
Hyundai Tucson / ix35 If the current Hyundai ix35 lost out on design to its sibling the Kia Sportage, Hyundai will be hoping the new ix35/Tucson, designed under the direction of the Sportage designer Peter Schreyer, will breathe new life into the C-segment SUV when the new model is unveiled at the Geneva Show this month.
5
Volkswagen Passat Lighter, more efficient and more sophisticated than ever, the Passat’s fleet focus is reflected by its alldiesel launch range and SE Business trim level. The range will get a 95g/km Bluemotion version from June and plug-in hybrid GTE in October, with a 31mile electric range and 45g/km CO2 emissions. When? Autumn 2015
7
Skoda Superb Skoda is targeting conquest customers with its new flaghip, which takes many of its styling cues from the VisionC concept shown in 2014. It’ll share its platform with the latest Passat, and Skoda says it’ll set new standards for interior and luggage space – much like its two predecessors.
8
Opel Astra Little is known about the next Astra, other than its planned production debut at Ellesmere Port in the UK towards the end of the year. Expect some inspiration from the Monza concept car (pictured), and engines including a sub-90g/km “whisper” diesel, plus the new 1.0 and 1.4-litre turbocharged petrols.
When? Summer 2015
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When? Autumn 2015
When? Spring 2015
When? Available now
10
Mercedes-Benz B-Class ED With a 180hp Tesla drivetrain, the B-Class will be the only premium electric MPV in Europe. The battery is packaged into its partial double floor, so doesn’t affect interior or luggage space, and pricing for the single trim level is close to a conventional automatic diesel.
9
Audi A3 e-tron Clever, tax-efficient and yet entirely conventional to look at and drive, Audi’s first plug-in hybrid is packed full of end-user appeal. The combination of 1.4-litre TSI petrol engine and electric motor produces 218bhp and emits 37g/km, and is almost identical to the Volkswagen Golf GTE’s setup.
When? Autumn 2015 12
Toyota Mirai Volumes are likely to be small for the Mirai at first, as the refuelling network is developing, but the UK will be an important market for the brand’s first production fuel cell car. A 300-mile range, water vapour as the only exhaust pipe emission and subfive-minute refuelling will be attractive.
11
BMW 3 Series eDrive Having recently announced it would launch plug-in hybrids of all its core models, the 3 Series looks likely to become the first to get the technology. It’s based on a four-cylinder petrol engine and should come in under 50g/km CO2 emissions, rivalling the Mercedes-Benz C350e. When? Sept 2015
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STRATEGY Smaller and Better?
Minnows in Europe Can the smaller Japanese manufacturers compete in the European fleet sector? Tony Lewis finds out.
f you’re not making at least six million vehicles a year, you can’t compete on the world stage. That’s been the industry theory championed by the likes of Carlos Ghosn at RenaultNissan and Sergio Marchionne at FiatChrysler, for several years. So how come the Japanese second division – Mazda, Mitsubishi, Suzuki and Subaru selling between 1m and 2m vehicles a year each – has been doing so well? In theory they should have either been taken over by a larger company or fallen by the wayside. Yet, in 2014, three of them did remarkably well in Europe. Mitsubishi sales were up 35%, Mazda by 22% and Suzuki by 10% while Subaru, 16.5% owned by Toyota, scored a record year in the US with sales growing 20% year-on-year to top 500,000. Subaru sells more cars a month in the US than in a full year in Europe. While Mazda, Mitsubishi and Suzuki are predominately retail brands, each has seen its fleet business, mostly user-chooser and small businesses, grow during 2014 with plans in place to increase their presence in fleet markets during 2015.
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Weaker Yen, new product A number of factors have come together to help these companies. A weaker Yen, trading at around 150 to the Euro against 113 two years ago, has certainly helped with pricing and improving specification levels. It has also allowed for more flexibility during negotiations on fleet deals. More importantly, the extra cash they have has allowed them to advertise more widely, launching television adverts for the first time in some years in the case of Mitsubishi which, after being starved of new product for years, launched the Outlander PHEV described with some justification as a ‘game changer’ during 2014. Product was also key in Suzuki’s success, with the launch of S-Cross in October 2013 proving to be the catalyst for a profitable entry into the fleet business, with volumes in the UK – Suzuki’s largest market in Europe – doubling. Since S-Cross is built in Hungary, it wasn’t a question of the Euro, Pound or Yen exchange rates helping. The UK importer was reinvesting profit for long-term benefit and television advertising was seen as a key part of that.
Since launching its SKYACTIV range of models, Mazda has returned to profit, opening a new plant in Mexico to provide vehicles for North America and Continental Europe.
Suzuki: Stronger fleet operations
Plug-in hybrid incentives
But for a brand that was predominately retail it meant becoming much more fleet savvy by recruiting experienced fleet staff from bigger rivals and work‐ ing closely with those who influence fleet decisions. The company used S‐Cross for its first ever fleet launch and realised it had to be more open about its used car business if it wanted residuals to improve, taking “the guess‐ work out of our used values,” as Dale Wyatt, Suzuki GB’s director of sales and marketing, put it rather candidly. It also meant establishing a fleet‐ specific model, which included sat nav and reversing aids as standard. The hard work has paid off with residual values for the new Celerio, on sale across Europe from January, predicted to be 9% higher than the outgoing Alto. Suzuki will be hoping to repeat the S‐Cross experience with the new Vitara SUV crossover, on sale from March, which, the company says, will be the first Suzuki people can buy with their hearts rather than their heads. This new Vitara is already winning plaudits. It is based on the S‐Cross and rivals in size the Peugeot 2008, Nissan Juke and Skoda Yeti. Suzuki in the UK is expecting to grow its fleet business from 3,500 units to around 5,000 in 2015. The big challenge both it and Mitsubishi face is teaching a dealer network accustomed to years of ignoring business customers to turn on the charm when a potential user‐ chooser walks into the showroom. Suzuki has solved that dilemma by handling all the fleet administration centrally and supplying the vehicle through a local dealer who gets paid a small commission. Mitsubishi has done it by establishing 12 specialist fleet dealers while each of the company’s 120 dealers has a company car specialist.
Mitsubishi is supported by cash from Mitsubishi Corporation but the relative weakness of the Yen has freed enough money to allow TV advertising in countries like the UK and Norway where there are cash incentives for buyers of plug‐in hybrids. In Germany, where there are no incentives, perhaps because domestic manufacturers are yet to launch their PHEVs, Outlander PHEV sales are non‐existent. “Outlander PHEV has completely changed the franchise,” said Mitsubishi Motors UK managing director, Lance Bradley. “It’s a game‐changer that we can price at an acceptable level because
of the exchange rate.” Across Europe, more than half of the 36,000 or so Outlander sales in 2014 were PHEV versions. The Outlander PHEVs success in fleet markets – two‐ thirds of sales in the UK, for example, are to business customers because of its Benefit‐in‐Kind tax (BiK) of £660 – is opening the door to fleet deals on other models, said Bradley. While TV advertising focussed on the Outlander PHEV, the increase it generated in showroom traffic led to increased sales across the range with even the ageing Shogun seeing sales grow 60% in the UK and almost 30% across Europe at some 6,000 units.
Mazda: Significant product launches in 2015 Mazda, part owned by Ford until 2008, is proof that all a struggling car company needs is product, product and more product. Since launching its SKYACTIV range of models with the 6 and CX‐5 some three years ago, it has returned to profit and opened a new plant in Mexico to provide vehicles for North America and Conti‐ nental Europe. This year will be its busiest in Europe with five significant prod‐ uct launches including new Mazda2 and the CX‐3, a crossover using the 2’s architecture; both are expected to attract strong interest from fleet buyers. Last year, Mazda returned to TV advertising when it launched the 3, which has overtaken the 2 to become the brand’s best seller in several European markets. While still predominantly a retail brand selling about twice as many cars to private buyers as it does to business customers, the return to prof‐ itability has helped it to be choosier about its fleet deals, avoiding “high cost, short cycle fleet in any big numbers,” as one Mazda executive put it. Mazda had a record year in Europe in 2014 with sales up some 21%. It also had its best year for 20 years in the US where sales grew 7.7% year‐on‐year to some 306,000 units. It should do just as well this year with key fleet models being launched or refreshed. Suzuki is helped hugely by its 30‐year joint venture with Maruti in India, which contributes some 40% of Suzuki’s profits. Suzuki owns 55% of Maruti and it was able to shrug off overtures by Volkswagen, which at one point held a 20% stake in the Japanese company. With two new models in 2015 it should be able to sustain its growth. Of the three, Mitsubishi, heavily reliant on domestic sales of the small K‐cars which face large tax rises, would seem the most vulnerable in the long‐term but it has just recorded a 74% sales increase in the UK and is doing well across the rest of Europe. While similar growth is unlikely in 2015, it could still provide a few surprises.
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INTERVIEW Michael Cole, Kia Motors Europe
The rise and rise.. Having recorded a 40% increase in its European sales over the last five years, Kia Motors Europe is feeling equally ambitious about the rest of the decade and fleet will play a vital role in its plans, as chief operating officer, Michael Cole, told Alex Grant.
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elped by an increasingly desir‐ able range, Kia has enjoyed what can only be described as a sales march in recent years, and it’s showing no sign of stopping. The brand finished 2014 with 353,719 units sold across Europe, a healthy 4.2% increase over 2013’s figures, and taking a 2.7% share of the region’s total market. Michael Cole, Kia Motors Europe’s chief operating officer, points out that, while that’s a relatively small increase against 2013, it’s on the back of signifi‐ cant growth since 2009 and against the backdrop of weak economies and declining markets across the region. At the end of 2014, ACEA data shows Kia had grown its sales by 101,316 units compared to 2009 – that’s a 40.1% increase in five years, in a market which declined 10.2% in the same time. That’s also been driven by strong popularity Western Europe. Kia now enjoys a 2.6% share of that region’s sales, up from 1.6% in 2009, with a 47.3% increase to 296,768 units in 2014. With the three biggest‐selling models – Sportage, Cee’d and Venga respectively – all built in the region, the brand is perfectly positioned to tailor its range to local tastes. “A big mix of our European volume is European built,” says Cole. “In fact, our European built products have grown by 77% in the last five years versus 22% in KMC‐built product. So this big growth of sales in Europe has been driven by products out of our European plant.” Compared to an almost 50% market average, Kia has a relatively retail‐ weighted sales mix of around 60%. But the advantage, with desirable products on board and rising residual values, is
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that the last five years have brought a step change in the customers the brand is appealing to. The Sportage, particu‐ larly, is a strong performer in the user‐ chooser segment and much closer to segment norms. “We’re also really pleased with the quality of that sales growth; we’ve focused on growing through the right type of business. We’re not finding ourselves in a position where we having to go to the market to buy market share. Our business is natural, it’s controlled, and we’re managing it in such a way that we can achieve this growth without doing business we don’t want to do,” says Cole. “We are growing our fleet business but growing through the right, good quality fleet business. We’re strength‐ ening relationships with the major leas‐ ing companies in Europe, and we’re appealing more to user‐choosers. It doesn’t mean we don’t look at business opportunities with international fleets, we do some business in the daily rental market at an appropriate level as well, but we’re trying to keep the quality in the right way.” That has led to structural changes at Kia Motors Europe, which are ongoing. Mark Howlett, formerly the national contract hire relationship manager for the UK, was redeployed to Frankfurt in 2013 and now runs regular meetings with leasing companies to build rela‐ tionships, position the brand and share opportunities. This will increasingly be backed up by improvements to infrastructure and, as with Howlett’s appointment, KME is looking to utilise what it has learned through its UK presence – which records the largest fleet volumes in the
region – to benefit other European markets. Germany, in particular, is seen as a big opportunity for growth. “We’re talking about having a fleet selling power plan, which will establish appropriate business centre type struc‐ tures in each of the markets. We also want to create fleet servicing programmes – experience tells us having predetermined pricing for the leasing companies and major fleet companies is always a good opportu‐ nity,” he says. “In the UK every dealer can sell fleet but in terms of an infrastructure, and having a business centre manager or fleet manager, having a fleet policy, we’re using that as the benchmark. The UK is our leading market for fleet, and it’s a big market, but Germany is an even bigger fleet market. So we have to look at how to create the same sort of infra‐ structure in the German network too. “Everywhere has got fleet, it may not be as well structured as it is in a mature market like the UK but clearly we see this as an opportunity for us to create the right infrastructure to be able to talk professionally to fleets so that we can realise that opportunity in the market,” continues Cole. But products will continue to be vital for changing brand perceptions. Kia is starting 2015 having performed mid‐ life upgrades to the Sportage, Optima, Venga and Rio during the previous 12 months, as well as launching a new Soul into a small but growing B‐SUV sector. There’s a new Picanto on the way and, building on a previous generation which had recorded high demand in its top trim levels, the new Sorento is expected to perform well this year too.
“Everywhere has got fleet, it may not be as well structured as it is in a mature market like the UK but clearly we see this as an opportunity for us.”
“[The Sorento] takes us to the next step in terms of sophistication,” Cole says. “If we want to cater for a segment which is becoming more premium we have to offer not only a great looking car but one with improved refinement and a better interior. It’ll appeal to retail, and we see a good opportunity in fleet. So from 10,000 units in 2014, we’ll be planning 14,000 to 15,000 in 2015.
That’s a 40‐50% growth in sales, from private and corporate purchase.” So with factories running at almost 100% capacity and sales continuing to grow, Kia is beginning the latter half of the decade with a positive outlook, and Cole has high hopes for ongoing success in Europe. It’s a process which will, to some extent, be underpinned by the investment in
infrastructure to support its fleet sales. “In the next five years we don’t think it’s impossible that we could grow [our European sales] another 50%, but we have to be realistic. We will also in that period have to have a stronger position in the fleet market. I think holding a 60/40 split might be harder ‐ we have to recognise that fleet offers us a strong opportunity for future growth.”
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FLEET FOCUS Canada
Big country Big opportunities Record light vehicle sales in Canada last year signal more to come in 2015. John Kendall reports.
C
anada is a remarkable country in many respects. It is the largest country in the world that borders one coun‐ try, the United States of America, and it is slightly larger than its southern neighbour. In fact it is the second largest country in the world after Russia and has between two and three million lakes, more than all other countries in the world combined, according to the US Central Intelligence Agency. Large parts of the country in the north are in the arctic regions and it is not surprising that the majority of the pop‐ ulation, numbering almost 35 million are located in the south of the country. The inhospitable regions in the north also help to explain the large land mass yet relatively small population. That population is relatively young too with 41% between the ages of 25 and 54, forming by far the largest age group. Canada is an energy‐rich nation. According to the CIA, the country has the third largest oil reserves in the world, after Saudi Arabia and Venezuela. Crude oil, natural gas and elec‐ tricity are among the country’s leading exports. Considering electricity production, just 31.7% of it is produced from fossil fuel sources, according to CIA data. This shows that 54.7% is produced from hydroelectric sources, 9.2% from nuclear fuels and 4.2% from other renewable sources. In theory at least, Canada ought to be a good place to drive an electric car.
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UNPAVED ROADS DOMINATE Canada is a vast country and according to the CIA data, 60% of roads in Canada are unpaved. In addition, heavy snowfall is experienced in the northern parts of the country and in some parts there is permafrost. This explains the popularity of the pickup truck and SUV sectors. 2014 was a record year for vehicle sales in Canada, with approximately 1,851,000 new light vehicle sales during the year. This total breaks down into around 761,000 new cars and 1,090,000 light trucks. Canada is home to a large motor manufacturing sector, with 14 man‐ ufacturing plants, all based in the province of Ontario. Fiat Chrysler, Ford, General Motors, Honda and Toyota all produce vehicles here. Given the strong presence of the Detroit ‘Big Three’ and Canada’s strong light truck market, it is hardly surprising that it is those companies that dominate the motor vehicle sector. Canada is the ninth largest vehicle producer in the world, and according to the Canadian Vehicle Manufacturer’s Associ‐ ation, the sector is Canada’s biggest contributor to manufac‐ turing GDP and the country’s largest manufacturing employer. Scotiabank expects that the record sales in 2014 will increase again in 2015, “We expect sales to edge up to 1.86 million units in 2015, buoyed by ongoing job gains, low inter‐
est rates, as well as near‐record vehicle affordability. How‐ ever, in contrast to last year when purchases advanced in all regions, the outlook is diverging across provinces. Central Canada will become the growth engine that will drive pur‐ chases to record highs.” ONTARIO AND QUEBEC – FOCUS FOR GROWTH Scotiabank offers a breakdown of sales by province. Given the industrial concentration in Ontario and with it a large proportion of the population, it is not surprising that the province is the largest light vehicle market in Canada. In 2014, sales rose by 11%, exceeding 700,000 for the first time on record. The bank expects this figure to climb to 726,000 in 2015 with both retail and fleet sales increasing. “In partic‐ ular, fleet activity was buoyed by a double‐digit gain in cor‐ porate profits in Ontario last year, and will be supported in 2015 by accelerating export growth,” says Carlos Gomes in the Scotiabank February 2015 Global Auto Report. The report expects to see sales gains in Quebec with marginal gains in British Columbia. In other provinces, the report suggests that sales will either remain flat or decline slightly. Looking at the breakdown in car and truck sales, Scotia‐
bank expects a similar pattern to 2014. In the car sector, Japanese manufacturers dominate with an expected 43.7% of sales in 2015. Toyota is forecast to take the largest slice with a 14.3% market share, up from 12.5% in 2014, followed by Honda with 11.5%, down from 12.5% in 2014. Hyundai is expected to take a 13.2% slice of the market, up from 11.9% last year, with gains also expected for Volkswagen, up from 7.9% last year to 9.4% in 2015. Both Ford and Chrysler are expected to lose market share in 2015, down from 7.6% to 5.7% and from 7.3% to 5.0% respectively. LIGHT TRUCKS LEAD SALES The Big Three dominate the light truck market in Canada, taking around 57% of the market. Shares for the individual manufac‐ turers are expected to stay around the same levels with Chrysler taking around 24.5% of the 2015 market, Ford 18.9% and General Motors 13.2%. Toyota takes the largest share among Japanese manufacturers with an expected 9.8% of the truck market in 2014. Hyundai’s share is expected to slip back from 3.9% in 2014 to around 3.4% in 2015, while Kia is expected to make a marginal gain from 2.1% in 2014 to 2.5% in 2015.
internationalfleetworld.com / 35
→
FLEET FOCUS Canada
→
SLOW EV GROWTH Canada presents a mixed picture for electric vehicles and hybrids. On the one hand, the abundance of renewable elec‐ tricity is a real encouragement to EV and plug‐in hybrid take‐ up. Set against that are the large distances that are involved and the sub‐zero weather conditions in the north of the coun‐ try. Neither favours EV use. Just the same, there are a number of EVs and plug‐in hybrids that are either arriving now or will be arriving in the country this year. Models with fleet appeal include the Kia Soul EV, which is currently offering a range of around 160km, so per‐ haps attractive to some Canadian users. The revised Chevrolet Volt was launched at the Detroit Show in January and is due in Canada by the end of the year. Nissan has boosted supply of the LEAF in Canada, which should raise sales of the car. The latest Smart ForTwo ED should arrive in Canada this year with a $26,990 (Canada) starting price making it the cheapest elec‐ tric car on the Canadian market. Tesla has installed three Supercharger stations in Canada at Squamish, British Colum‐ bia, Toronto and Cornwall, Ontario and more are expected. Tesla’s new Model X SUV is due to start production too. Last but not least, the Cadillac ELR uses the Volt powertrain, but in a two‐door coupe body. US EPA range is rated at 59km under electric power. There are purchase incentives for EVs and plug‐in hybrids in Canada, such as the $8,500 (Canada) offer in Ontario or $8,000 (Canada) in Quebec. As we have seen, Scotiabank expects the fleet sector to do well this year. Scott Singsank is senior global account man‐ ager at Wheels Inc, one of the leading North American fleet service providers, active in Canada. Data for 2014 was not yet available as we went to press but the total commercial fleet market in Canada was around 316,000 vehicles in 2013. “That includes commercial fleets, rental and governmental fleets,” explains Singsank, representing around 18.5% of the light vehicle market. Of the 316,000, around 195,000 vehicles were light trucks, which includes pickup trucks, SUVs and minivans, or MPVs. “There are a lot more SUVs than you would find else‐ where,” comments Singsank, “With our client base we do see a lot of what we would consider to be small SUVs, such as the Ford Escape, the Chevy Equinox and Jeep Cherokee. These are probably the top vehicles at this point.” EVs are not really a factor in the Canadian fleet sector at the moment, partly for reasons already discussed, as well as com‐ paratively low oil prices in Canada. As Singsank suggests, “The use of electrics in our client base is non‐existent and hybrid is relatively non‐existent. We have had some clients that have
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put hybrids on their selector and they just don’t get chosen as much by the drivers as everything else. Then electrics, it’s just like in the US, there’s so much more geography to cover, it’s difficult to implement. I’m not saying it’s not happening. I know there are charging points across Canada, but it’s really not proliferating to fleet use at this point.” Singsank estimates that there are approximately 195,000 light commercial vehicles on the road. “51% of that is what we would consider to be commercial fleet, a good portion of that is commercial fleet.” Popular vehicles include the Ford F‐ 150 pickup and Econoline van, which is being replaced with the Ford Transit. There are smaller vehicles too such as the Ford Transit Connect. CAR SHARING? NOT YET “As far as we know, car‐sharing is non‐existent,” says Singsank, “It’s just like in the US, it’s the geography issue, it’s less developed public transport than there is in Europe. The places you are going to see it is in larger cities, outside those, it’s more difficult to do.” Business car taxes can vary from province to province, “For instance there’s a provincial tax in Quebec and in Ontario and in a few other provinces there’s a tax on the lease of the vehi‐ cle and on some of the services as well. Some of these are reimbursable, but that depends on the various tax rules that the provinces have.” Financing follows the US model, an open‐ended lease, and that tends to be the only choice offered. That finance tends to come from independent fleet management companies, not banks or captives. That is largely because fleet management companies began as dealer based operations and grew their businesses from that start point. Looking ahead, the prospects for fleets look good in Canada. “We’re expecting growth,” says Singsank, “Interest rates are still low. The used vehicle market in Canada is still very strong.” With low fuel costs compared with Europe the impact of falling fuel prices may be less than in Europe, or is it? “Cer‐ tainly, fleets are enjoying paying less for fuel,” says Singsank, “It’s still the second highest cost of running a fleet and they are still very much managing fuel on a day to day basis, because it is such a large spend. We don’t expect to see clients change their selectors because fuel has gone down so much. They’re not going to suddenly put more gas‐guzzling vehicles on the road just because they can. They’re thinking ahead as opposed to thinking short‐term.”
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End of life CHAPTER 10
Vehicle replacement and remarketing This chapter covers the various remarketing options, what factors can impact resale values and issues to consider when remarketing fleet vehicles.
Reproduced with the kind permission of NAFA Fleet Management Association, this is the latest in a series of extracts from the International Fleet Academy Global Fleet Guide.
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Delayed replacement The proper timing of vehicle replacement has an impact not only on hard costs such as fixed and operating expenses, but also on softer, or more difficult to quantify costs, such as driver productivity. There are some definite benefits to keeping vehicles in service longer. Because depreciation is higher in the first couple of years of a vehicle’s life, spreading that peak cost out over more years reduces the cost of depreciation per month and per year. Since depreciation is the largest category of vehicle expense in most countries, this becomes impor‐ tant in the analysis. Delaying replacement also means that you can temporarily avoid vehicle price increases. Keeping older vehicles reduces the amount of money an organisation has tied up in vehicles, which can be important in fiscal matters such as tax rates, stock valuation, and even bond ratings for public entities. Optimal timing Measured against these benefits are the drawbacks of extended replacement. While fixed costs are reduced over time, operating costs increase. The maintenance and fuel costs of operating vehicles increase with age. In addition, organisations have to suffer the impact of greater down‐ time, as well as delays in implementing the latest tech‐ nology and safety improvements. This can result in lower morale and a poor image. The challenge for fleet managers is to maximise the benefits of delayed replacement while minimising the drawbacks. This can be accomplished by identifying the optimal replacement time. The graph below shows that the fixed cost of capital (depreciation) is declining and operating costs are increasing. This means that total costs will fall to an opti‐ mum point, after which they will start to rise again. This optimum point is when vehicle replacement should occur.
Economic theory of vehicle replacement
Remarketing options The remarketing of used vehicles impacts net vehicle depreciation and will be a determining factor in the total lifecycle cost of a vehicle. Fleet managers have many outlets from which to choose when decid‐ ing where to sell their used vehicles and how to get the best price. Each remarketing method has its own advantages and disadvan‐ tages, which are highlighted here: • Employee Sales – This is considered a preferred method as it involves a good return with minimal investment of time or other resources. In global fleets, sales to employees may be regarded as a very desirable benefit and fleet managers should be aware of this. • Auctions – May be on‐site, off‐site, virtual, outsourced, or public. It is important to measure proceeds against fair market value to eval‐ uate the efficiency. • Trade-Ins – May be used when you need the trade value to offset costs of new vehicles. • Direct Sales – Involves marketing directly to individuals, groups or organisations. • Retail Sales – Can get good proceeds. Takes time, expertise, space and personnel. Key considerations Regardless of the remarketing outlet used, these factors are key in terms of their potential to impact resale prices and should be consid‐ ered in all cases: • Accumulated mileage • Maintenance • Vehicle age • Downtime • Options insurance/funding • Geographic location • Market trends in the area where they have fleet operations The maximisation of net proceeds is the obvious goal. However, days to sale can also be important. You want to be in the best market so delays can cost you money. You do not want your vehicles depreci‐ ating for 30 days, sitting on a back lot waiting to be sold. Having all your documentation perfect can save on costly delays, so start early when preparing for vehicle remarketing.
TOTAL
COST
Conclusion OPERATING
CAPITAL
*
Remarketing decisions should not be left to the end of a vehicle’s life. They should be part of the vehicle acquisition and lifecycle management process and take into account the local conditions where the vehicle will be operated.
TIME/USAGE
Readers can review the full article – and much more – by purchasing the Global Guide through the NAFA website: www.nafa.org/
Next month... Identifying and managing road risk for a global fleet operation.
internationalfleetworld.com / 39
PROFILE Renault
Driving change Using the now firmly-established Drive the Change growth strategy as a foundation, the Renault Group plans to strengthen its global operation. Due later this year, Kadjar represents a renewal of its presence in the highly lucrative C-segment crossover sector, and could provide the perfect figurehead for an international sales push…
Captur Soon to be joined by All-New Kadjar in the crossover sector
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Manufacturer Renault Total sales 2013 2,712,432 Headquarters Boulogne-Billancourt, France Global market share 3.3% No. of models 14
view from the top
Europe provides stability... he Renault Group recorded a +13% increase in European new car registrations in 2014, with the most substantial growth being recorded in the United Kingdom (+41%), Portugal (+42%), Spain (+30%) and Italy (+29%). The brand retained its position as the market leader in France, with strong homemarket loyalty helping to make up almost a third of Renault’s total European sales. With over 105,000 registrations, Clio was the best-selling car on the French market, while Captur claimed the title of the most popular crossover. Renault maintained its position as the best-selling light CV manufacturer in Europe in 2014, thanks largely to the enduring success of the Master and recently refreshed Trafic ranges. Trafic and all-new Twingo (launched in September 2014) are expected to provide an additional boost to 2015 sales, with Twingo claiming first place in the city car segment in France just a month after launch. Thanks to the strong performance of the Renault and Dacia brands in Europe, the Group maintained a total sales increase, despite a slowdown of its international operation. New car registrations dropped -6% outside Europe to 1,247,821 units, equating to 46% of the Group’s total registrations, against 50% in 2013. Registrations in Argentina fell by -40% compared with 2013 sales. This resulted in an -11% downturn in total registration in the Americas, despite Brazil continuing to be the Group’s second largest market, and other Latin countries, such as Colombia, performing well. The brand also recorded a drop in total sales in Africa, the Middle East and India in 2014, with some of the Group’s key markets, such as North Africa (-13%), posting significant downturns. Algerian buyers remained loyal to the Renault Group, providing a 27% share of a market that dipped by -20% overall. This performance placed the Renault and Dacia brands in first and third position. The new Renault plant in Oran will reinforce the Group’s commitment to the Algerian automotive market. Renault also achieved sales success in Morocco, retaining its position as the market leader with a 37% market share. Once again, Dacia and Renault topped sales with 45,174 vehicles sold. In Korea, Renault Samsung Motors recorded a sharp increase in volumes (+33%), notably due to the success of the QM3, which sold nearly 20,000 units since launch in late 2013. The Group also performed well in China, recording 34,067 new registrations a year after the creation of Dongfeng Renault Automotive Company (DRAC). Internationally, the small SUV Duster was the Group’s best-selling car, recording 395,350 sales (234,883 Renault branded, 160,467 Dacia branded), with the Clio taking second place with 378,526 total sales. The Renault-Nissan Alliance sold its 200,000th electric vehicle in November 2014, representing a 58% market share for zero-emission cars.
T
RENAULT Global sales, by territory Territory Europe (Of which France)
Eurasia Americas Africa, Middle East & India
Asia Pacific Total
2013 1,301,896 547,694 411,870 466,891 339,289 108,237 2,628,183
2014 1,464,611 577,601 389,703 416,934 308,012 133,142 2,712,432
% change +13% +6% -5% -11% -9% +23% +3%
Jean-Pierre Mesic, global fleet sales director, on Renault’s ongoing commitment to fleet and forthcoming model launches. With drivers increasingly favouring crossovers, is there an ongoing role for traditional models in Renault’s fleet line-up? Mid-2015, Renault will reveal a Dsegment sedan with a very good CO2 positioning and attractive design: this new model has a high fleet potential, and will effectively complete our range – which includes All-New Espace and best sellers like Captur and Clio. Has Renault seen broader acceptance of electric vehicles among fleet buyers? One EV in two is already sold to fleet customers, and the EV trend will follow the provision of charging equipment and tax incentives in each market. Plans to broaden the Z.E. range to include plug-in hybrids are under study – the Renault-Nissan Alliance already owns this technology. Does Renault see a larger role for the Espace across Europe? New Renault Espace is a major model for fleets: more than one vehicle in two will be sold to fleet customers, thanks to its design and equipment. There are no plans to launch All-New Espace in right hand drive. How does Renault plan to continue to grow its fleet share in 2015? As far as the fleet market is concerned, we expect a moderate growth in Europe and will pursue growth in the other regions, except Russia and Argentina where figures are impacted by political and economic instability. In addition to our current range, we will launch new vehicles in several segments that are highly suited for international fleet markets: in Europe, we renew our Csegment model and outside Europe, in a few specific markets, we will make new conquests with a new pick-up and entry level vehicle.
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PROFILE Renault
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Manufacturing plant locations France Batilly – Master Renault Alpine, Dieppe – Clio R.S Douai – Scenic, Grand Scenic, Megane Aubergenville – Clio, ZOE Maubeuge – Kangoo, Kangoo Z.E Le Havre – Laguna, Espace, Trafic Europe 7 Nova Mesto, Slovenia – Twingo, Clio 8 Palencia, Spain – Megane 9 Valladolid, Spain – Captur, Twizy Americas 10 Argentina – Clio, Symbol, Logan, Fluence, Kangoo 11 Parana, Brazil – Megane, Logan, Master 12 Antioquia, Colombia – Logan, Clio Africa 13 Casablanca, Morocco – Logan, Kangoo 14 Oran, Algeria – Symbol Eurasia 15 Moscow, Russia – Logan, Fluence, Megane 16 Arges, Romania – Symbol, Logan 17 Bursa, Turkey – Clio, Symbol, Fluence, Fluence Z.E., Megane Asia-Pacific 18 Busan, S. Korea – SM3 (Fluence), SM7 (Talisman), QM5 (Koleos) 19 Wuhana, China (2016)
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FIN fleet in numbers
4 billion The number of zero-emission kms driven by Renault-Nissan Alliance EVs as of November 2014.
80% The percentage of Renault’s future vehicles that will be built on the modular CMF platform.
17
The number of successive years Renault has been the top-selling light CV manufacturer in Europe.
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8
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Kadjar leads sales assault... n sale from autumn 2015, Kadjar will renew Renault's C-segment crossover offering. The bigger brother to the Captur model, it aims to rival models such as the Nissan Qashqai and Ford Kuga and is said to bring excellent economy and emissions with both 4x2 and 4x4 versions available. The name is drawn from ‘Kad’ for quad to represent a go-anywhere four-wheeled vehicle, and ‘jar’ in line with the French word ‘jaillir’ representing agility. Built on the new Renault-Nissan Alliance CMF (Common Module Family) platform, Kadjar will be manufactured in Palencia, Spain for Europe. It will also be the first Renault vehicle to be manufactured in China following the signing of an agreement between Renault and Dongfeng in December 2013. Debuted at the 2015 Geneva Motor Show, the model is to play a major role in the brand’s plans for global growth and will go on sale initially in Europe and in many African and Mediterranean Basin countries, followed by China. Renault is already claiming fuel economy among the best in the segment. Expect engine options to be similar to the Nissan Qashqai, including a 1.5-litre dCi 110 diesel two-wheel drive model offering CO2 emissions of less than 100g/km. Renault has also revealed a number of new engine innovations, some set to go into production in the next year, that offer improved efficiency through electric and conventional power. The developments include a new lightweight two-cylinder diesel engine, which is being developed under the carmaker’s ‘POWERFUL’ (POWERtrain for Future Light-duty vehicles) project. Another research prototype is the ‘HYDIVU’ (Hybrid Diesel for LCVs) technology, a high-power mild-hybrid system which uses a motor-generator to recuperate energy and provide extra power to the engine, reducing fuel consumption. There is also a new turbocharged petrol engine adapted for use with LPG (liquified petroleum gas). The new dual-fuel petrol/LPG engine promises 25% lower fuel bills and 10% lower CO2 emissions than a comparable petrol-only power unit. As part of the Drive the Change strategy, the Group will continue the product-line expansion it began with the launch of all-new Twingo and Trafic van in late 2014. These will be followed by successors of Espace, Megane, Scenic and a new Dsegment sedan which will all share the new Renault-Nissan Alliance CMF platform. Simultaneously, the Group plans to extend its global market coverage with a complete line-up of cross-over vehicles, an A-entry vehicle designed for India and South America as well as new pick-up trucks for emerging markets.
O
RENAULT fleet model range
Twizy
Twingo
Clio/Lutecia
Variants: Quadricycle Markets: Europe, Asia, Africa Fuel: N/A (EV) CO2: 0g/km (tailpipe)
Variants: 5dr hatchback Markets: Europe Fuel: 4.2-4.5l/100km CO2: 95-105g/km
Variants: 5dr hatchback/wagon Markets: Europe, Asia, Africa, South America, Oceania Fuel: 3.1-6.3l/100km CO2: 82-144g/km
ZOE
Captur
Megane
Variants: 5dr hatchback Markets: Europe, Africa Fuel: N/A (EV) CO2: 0g/km (tailpipe)
Variants: : Crossover Markets: Europe, Asia, Africa, South America, Oceania Fuel: 3.6-5.4l/100km CO2: 95-125g/km
Variants: 5dr hatchback/Wagon/Coupe/Cabriolet Markets: Europe, Asia, Africa, South America, Oceania Fuel: 3.5-8.0l/100km CO2: 90-188g/km
Fluence
Scenic
Variants: 4dr saloon Markets: Global Fuel: 4.4-8.0l/100km (excluding Z.E.) CO2: 114-188g/km (excluding Z.E.)
Variants: : 5 & 7 seat MPV, Crossover Markets: Europe, Asia, Africa Fuel: 4.1-7.9l/100km CO2: 105-184g/km
Kadjar (coming soon)
Koleos
Laguna
Variants: Crossover Markets: Europe Fuel: TBC CO2: TBC
Variants: Crossover Markets: Global Fuel: 5.7-9.9l/100km CO2: 147-237g/km
Variants: 5dr hatchback/Wagon/Coupe Markets: Europe, Africa Fuel: 4.2-5.7l/100km CO2: 109-150g/km
Latitude/Safrane
Talisman
Espace
Variants: 4dr saloon Markets: Global Fuel: 4.8-10.5l/100km CO2: 126-250g/km
Variants: 4dr saloon Markets: China Fuel: 9.8-10.4l/100km CO2: 237-250g/km
Variants: 7-seat MPV Markets: Europe Fuel: 4.5-6.2l/100km CO2: 119-140g/km
internationaleetworld.com / 43
Kia Sorento Better ride, better refinement, in fact better all round, reckons John Kendall. SECTOR SUV PRICE TBA FUEL 5.7–9.4l/100km CO2 149–219g/km
i
being longer, wider and lower than its predecessors. The t may look similar to the outgoing Sorento, but the lat‐ underpinnings are all shared with the Hyundai Santa Fe. est incarnation of Kia’s large SUV comes with a new Overall it is 95mm longer at 4,780mm, 15mm lower at body shell, designed to improve ride, handling and 1,685mm and 5mm wider at 1,890mm. Wheelbase has crash safety. Kia describes the car as smoother in appear‐ been increased by 80mm to 2,780mm, helping to give ance, but the description would fit the car altogether. more interior space. Both five and seven seat versions are Mechanically, there are few surprises, with the same basic available and Kia says that boot space has been increased engine range as before, but all revised to meet the Euro 6 from 515 to 605 litres with the third row seats folded emissions requirements. There will be two diesels and 1 away. Although the roofline is lower, Kia claims additional petrol engine for European customers. The 2.4‐litre GDI headroom by repositioning the seat cushions, with greater 188hp petrol engine is the least likely to be seen – few mar‐ legroom all round too. kets in Europe are expected to take the engine. Of the two The rippled grille was first seen on the diesels, the smaller 2.0‐litre CRDi 185hp 2013 Cross GT concept and there’s also a diesel is not expected to make much of a new face for the dashboard and interior, showing either, except in markets such as aimed at moving it more upmarket. Poland where taxation is based on engine There are a host of driver assistance displacement. That leaves the 2.2‐litre systems available too. CRDi 200hp diesel to mop up most of the On the road, the car feels more luxuri‐ sales. The latest 2.2‐litre diesel is rated at ous thanks to the improved interior and 200hp at 3,800rpm and offers 441Nm of lower noise levels. Kia is really getting torque between 1,750rpm and 2,750rpm. into its stride as a mainstream contender This engine is simultaneously the most to European mass‐market rivals. The 2.2‐ powerful in the range and also the most litre engine offers brisk performance, efficient. Fuel consumption for manual while the automatic transmission com‐ 4x4 models has been reduced marginally plements the engine very well and the to 6.7l/100km and CO2 emissions to manual box is user‐friendly too. The 149g/km. Lower noise levels and claims about improved ride comfort All engines are available with two or improved ride make four‐wheel drive except the 2.0‐litre seem to be borne out on the road. The the Sorento a better Sorento is not the sharpest handling SUV diesel, which is only available with four‐ available, but Kia has not set out to rival wheel drive. Similarly all engines are long-distance tourer, Audi, BMW or Land Rover. Anyone look‐ offered with either a six‐speed manual while occupants ing for a large, comfortable SUV for long or six‐speed automatic gearbox, except will appreciate the distance travel, with good towing capac‐ for the 2.0CRDi diesel, which is only refined interior. ity and occasional off‐road use is not available with automatic transmission. Sorento follows the usual pattern of likely to be disappointed.
what we think
44 / internationalfleetworld.com
Honda CR-V CR-V tweaks help to improve Honda’s game, finds John Kendall. SECTOR Medium SUV PRICE TBA FUEL 4.4–7.7l/100km CO2 115–179g/km
O
driver assist options based around camera and radar ver 750,000 Honda CR‐Vs have been sold in sensing systems, offering an improved collision mitiga‐ Europe since the original model was launched in tion braking system that can now recognise pedestrians 1997, reckons Honda. The current model has and oncoming cars. There is also an intelligent adaptive been with us since 2011 and the last major upgrade saw cruise control designed to anticipate cars ahead cutting the introduction of the 120hp 1.6‐litre i‐DTEC diesel across during motorway lane changing manoeuvres. engine to power two‐wheel‐drive models in late 2013. Honda claims a ‘world first’ for the system. Now Honda has taken the engine a stage further, intro‐ Petrol power will not be the choice for many fleet driv‐ ducing a bi‐turbo version producing 160hp, which will ers, but Honda’s 155hp i‐VTEC 2.0‐litre petrol engine replace the 150hp 2.2‐litre diesel. Not surprisingly, stays in the range. The big advantage of the new 1.6‐litre given that the CR‐V will be four years old this year, Honda i‐DTEC motor is that while it offers more power than has also introduced a facelift with a range of enhance‐ the outgoing 2.2‐litre diesel, torque ments to go with it. remains the same and combined fuel The 160hp diesel is only available consumption is reduced, down from with four‐wheel‐drive, the two‐wheel‐ 5.6l/100km for manual models to drive 120hp option remains. In addi‐ 4.9l/100km for the 1.6‐litre 160hp tion to the standard six‐speed manual engine with the car on 17‐inch wheels. transmission, Honda has introduced a For CO2 emissions, this means a drop nine‐speed torque converter auto‐ from 144g/km to 129g/km, which will matic, co‐developed with ZF. This intro‐ be good news for markets with CO2 duces a wider spread of ratios, so the based tax systems. Even the new nine‐ CR‐V can offer lower gears at the bot‐ speed automatic is rated at 134g/km tom of the gearbox, useful for those with 17‐inch wheels. who tow, as well as higher top ratios, Honda has also worked on noise sup‐ helping to reduce fuel consumption at pression and the new engine not only motorway speeds. delivers brisk performance, but also Other equipment includes the Honda Honda has done a good does so with little mechanical fuss. Connect infotainment system, which job of making the diesel Because the car is 65kg lighter compared will be standard with all trim grades CR-V more desirable and with its predecessor it also feels more above entry level. It includes a seven‐ nimble, particularly for a four‐wheel‐ inch display screen, connectivity for a better to drive. The new drive SUV. Lots of gears means lots of range of smartphones, with MirrorLink engine impresses and gear changing for the nine‐speed auto, to replicate the phone screen on the gives a competitor for but it’s done smoothly, while the lower dashboard display. DAB digital radio is the Q5 and the X3. fuel consumption and emissions will part of the package too. make it an attractive choice for some. Honda has also added a range of
what we think
internationalfleetworld.com / 45
Suzuki Celerio An impressive city car that’s well worth a look, reckons John Kendall. SECTOR City car PRICE TBA FUEL 3.6–4.3l/100km CO2 84–99g/km
F
leading luggage capacity at 254 litres with all seats upright. irst seen in Europe at the Geneva Show 2014, the The car feels surprisingly spacious for a city car. European Suzuki Celerio replaces both the current Indian‐built requirements will ensure that ESC stability control is fitted as Alto and the Splash, built in a joint venture with GM standard to European models. Other equipment includes Europe. European Celerios are sourced from Thailand, driver, passenger, side and curtain airbags, air conditioning, although the car is also built in India where Suzuki enjoys a alloy wheels, DAB radio, CD tuner, USB and Bluetooth connec‐ 40% market share. tivity, electric windows and electric door mirrors. Standard The car is an A‐segment model and like the outgoing equipment varies according to market and trim specification. Splash, is available only as a five‐door hatchback and is 68hp is almost the standard power output for A‐segment designed as a five‐seater. Diesel models are available in models, but the Celerio feels surprisingly lively and free some markets but petrol engines will probably be the choice revving, probably because of the long‐stroke engine, which for most European markets. develops torque lower in the rev range. The standard engine is a three‐cylinder The Celerio can be hustled along with naturally aspirated engine of 998cc surprising ease. At the same time, the producing 68hp at 6,000rpm and 90Nm engine is smooth, even by three‐cylinder of torque from 3,500rpm. This engine engine standards while the ride quality offers combined fuel consumption of is very impressive. 4.3l/100km and CO2 emissions of 99g/km. Most of us would probably not choose a There is an option of a second engine with small car like this for motorway travel, but exactly the same but using Suzuki’s Dualjet the Celerio was a capable performer at technology, first seen on the Swift. This motorway speeds, while the ride quality engine produces the same power as the and refinement add to the cruising ability. standard engine but slightly more torque All this was from our experience of at 93Nm. Using this engine, fuel consump‐ driving the standard engine. Unfortunately tion is reduced to 3.6l/100km on the com‐ the Dualjet engine was not available to bined cycle with CO2 emissions of 84g/km. drive. We also sampled the automated Suzuki fits this engine with automatic stop The Celerio has a lot manual transmission, which did not offer and start as standard, whereas the stan‐ going for it as a city car, the smoothest of gear changes around dard engine comes without it and this is with lively performance, town, but strangely seemed smoother likely to be responsible for a proportion of when used on the open road. the reduction in fuel consumption. good economy, good The Celerio is not likely to feature A five‐speed manual transmission is accommodation, strongly as a fleet model, but there is lit‐ standard but an automated option is also impressive refinement tle doubt that Suzuki has produced a available and may be appreciated by and ride comfort. small car that is far more capable than those who use the Celerio for commuting. you might expect of a city car. Suzuki claims that the Celerio has class‐
what we think
46 / internationalfleetworld.com
Iveco Daily Iveco’s third generation Daily lives up to its International Van of the Year billing, says Dan Gilkes. SECTOR Large van GROSS WEIGHT 3.3–7.2 tonnes LOAD VOLUME 7.3–19.6m3 POWER 106–205hp
I
springs mounted transversely across the van, also con‐ n a rapidly changing marketplace it is perhaps tributes to improved ride comfort. Updated rear suspen‐ surprising that Iveco’s Daily van range is only now sion, on single rear wheel vans at least, has geometry that is in its third generation. Daily is a firm favourite with a recalibrated to reduce the possibility of oversteer. More number of fleets, its truck‐like ladder frame giving it importantly, the new set‐up at the rear saves 8kg and con‐ a robust strength for body mounting, particularly at heav‐ tributes to a welcome 55mm drop in load floor height. ier weights. As before, there are plenty of engines to choose from, Daily can certainly carry a load too, with the van range based on the firm’s 2.3‐litre and 3.0‐litre diesel and CNG now going right up to 7.2 tonnes GVW and regular van motor families. At 3.5 tonnes, the most popular are likely to bodies up to an incredible 19.6m3. Iveco offers three be the base 106hp version of the 2.3‐litre or the more pow‐ wheelbases with five body lengths and three roof heights, erful 126hp engine. In 126hp trim the 2.3‐litre delivers a not to mention six wheelbases for the chassis cab models, healthy 320Nm of torque, enough to pull four of which can be had with single a half laden van along with ease. rear wheels. Of perhaps more interest is what hap‐ Despite this variety, the firm admits pens after the motor, with Iveco drop‐ that 38% of 3.5‐tonne GVW vans sold ping its AGile automated manual in in Europe have a load volume of favour of a full auto eight‐speed ZF trans‐ 9‐11m3, while a further 35% are in the mission. The Hi‐Matic transmission will 11‐14m3 class. With that in mind, new carry the same €2,025 premium as AGile, body volumes of 10.8m3 and 12m3 are though Iveco claims that it offers a 4.1% seen as pivotal models in the revised fuel consumption improvement and a Daily line‐up. 4kg weight saving over the previous box. These van sizes have been created Iveco is claiming fuel savings of up to in response to customer feedback, 5.5% compared to the previous van, achieved by lengthening the wheelbases thanks to improved aerodynamics, an but not the bodies, to reduce rear over‐ Eco switch in the cab, low viscosity oils, a hangs. This has also helped to optimise The changes to Daily smart alternator that recovers kinetic the balance between overall length, are certainly significant, energy and low rolling resistance tyres. wheelbase and interior load length. offering increased As well as lower noise levels, drivers Iveco says that the 10.8m3 van in partic‐ will welcome a revised dashboard, seat ular will deliver the best load efficiency carrying capacity and and steering wheel. The seat is mounted in its class, offering 3,130mm of internal lower running costs, lower in the new van, while the top of load space on a 3,520mm wheelbase. with welcome upgrades the windscreen has been raised, making The longer distance between axles, in for the driver too. it easier for taller drivers to view the combination with the van’s new Quad‐ road ahead. leaf front suspension that has leaf
what we think
internationalfleetworld.com / 47
WHY YOU NEED TO BE THERE! SEMINAR PROGRAMME INDOOR EXHIBITION With over 60 exhibitors already signed up, the indoor exhibition area at Fleet Show 2015 promises to provide visitors with plenty of opportunities to discover new products, services and suppliers. Covering everything from accident management to telematics, exhibitors in the indoor exhibition area will be primed to provide fleet buyers with information on how to make their fleet safer, more environmentally friendly, more costeffective and more effective as a means of recruiting and retaining staff.
Fleet Show 2014 pioneered a new kind of seminar programme in which all the content was collated and presented by a team of experienced fleet managers. Audience feedback was unequivocally positive and as a result the same format will be adopted in 2015. Under the chairmanship of Dennis Dugen - Fleet & Employee Benefits Manager for WSP Group - our team of professional fleet managers will present the latest thinking on: • Fundamentals of Fleet Management • Environmental Management • Risk Management • Procurement and supplier agreements Further seminars and training sessions will be available throughout the day.
OFF-ROAD COURSE The off-road course will be in operation throughout the day. Visitors who have experience of driving 4x4s will be able to test a wide range of vehicles over the challenging course, while those who haven’t driven offroad before can pick up some of the key skills from our team of instructors.
TRACK DRIVING With so many different areas to choose from, Silverstone Circuit provides the perfect location for test driving new cars and vans. At Fleet Show 2015 visitors can experience: > NATIONAL
> INTERNATIONAL
> STOWE
VILLAGE CORNER THE LOOP
ABBEY COPSE CORNER WOODCOTE CORNER
NATIONAL PITS STRAIGHT
FARM CURVE INTERNATIONAL PITS STRAIGHT
CHAPEL CURVE
BROOKLANDS CORNER
WELLINGTON STRAIGHT
HANGAR STRAIGHT
LUFFIELD CORNER MAGGOTTS CORNER
SPONSORED BY
CLUB CORNER VALE
AINTREE CORNER
STOWE CORNER
All drives will be accompanied by either a professional racing driver or a representative of the motor manufacturer. Drivers on the National circuit will be able to experience the full excitement of the iconic Silverstone Circuit.
SILVERSTONE CIRCUIT
12TH MAY 2015
NETWORKING LOUNGE Fleet Show 2015 will provide visitors with a full day of informative experiences, but there’s always time to sit down for a chat with colleagues old and new. The networking lounge in Hall 3 proved to be something of a magnet for visitors to last year’s show and with so many of the industry’s major players in attendance, the networking lounge will once again be the place WHERE THE FLEET INDUSTRY MEETS.
www.thefleetshow.co.uk
REGISTER TODAY and be part of the action at the Fleet Show 2015, visit www.thefleetshow.co.uk
fleet in figures
Exceeding expectations Light CVs and buses helped bolster European CV registration figures last year, reckons John Kendall.
Renault Renault took a 14.2% share of the LCV market in 2014, maintaining their position as the best-selling LCV manufacturer.
European registrations It would have been a complete surprise if 2014 CV registrations in Europe had come anywhere near matching the total market in 2013. This is because the Euro 6 emissions regulations for vehicles over 3,500kg gross vehicle weight (GVW) came into force in January 2014, bringing a sig‐ nificant on‐cost for buyers. Consequently demand for cheaper Euro 5 compliant models in the latter part of 2013 pushed registrations to unsustainable levels. The fact that total commercial vehicle
50 / internationalfleetworld.com
registrations rose in 2014 compared with 2013 can be explained because the increase in the light CV sector and a small increase in the bus and coach sec‐ tor offset the declines in the medium and heavy CV sectors. In 2014, total EU CV registrations rose 7.6% compared with 2013 to 1,849,077, according to data from ACEA. With the exception of France, the major European markets all recorded increases during the year. Total registrations in France fell marginally by ‐0.4% to 415,042.
Light CVs In the light CV sector, where the bulk of all CV registrations were recorded, EU regis‐ trations rose by 11.3% to 1,535,125. ACEA does not provide data by manufacturer, but Renault maintained its position as the best selling light CV manufacturer in Europe in 2014, a position it has held for 17 successive years. Renault took a 14.2% share of the light CV market, which according to Renault’s own data gave the company 307,501 LCV registrations in total. France was the largest light CV mar‐
ket in the EU, recording 370,362 light CV registrations in the course of the year, 1.5% more than in 2013. The UK was the second largest market with 321,686 reg‐ istrations, an increase of 18.7% compared with 2013. Germany took third place with 228,323 registrations, an increase of 7.3% compared with 2013. Croatia and Belgium were the only EU nations to record decreases during the year, but in both cases, these were small, ‐0.1% in the case of Belgium and ‐1.0% for Croatia.
Medium and heavy trucks In the medium and heavy truck sector for vehicles over 3,500kg GVW, it is per‐ haps surprising that the market was not down further. Overall registrations fell by ‐8.1% in 2014 to 280,391. This was partly because the market proved more buoyant in Germany, Italy and Spain amongst the ‘Big Five’, offsetting the greater falls in France and the UK. The market in France fell by ‐13.7% in 2014 to 38,784, While the decline in Germany was much smaller, ‐0.9% to 85,971. In Italy the market remained flat, gaining just two more registrations in 2014 to reach a total of 12,665. Spain was by far the most buoyant of the Big Five with registrations reaching 16,214 in 2014 an increase of 23.2% over 2013. The UK decline was expected because of the way companies chose to operate the Euro 5 derogation in 2013. The market dropped ‐27.8% to 38,240.
European light vehicle fleet sector Dataforce has analysed the car fleet sec‐ tor in the Big Five European markets in 2014, paying particular attention to the True Fleet sector, which excludes car rental fleets. Overall, the True Fleet sec‐ tor across the five countries grew by 12.2% during the year. Dataforce points out that fleet business is becoming more important to vehicle manufacturers as it represented 24.7% of all new passenger car registrations in the Big Five (France, Germany, Italy, Spain and the UK), com‐ pared with 23.2% in 2013. France experienced the lowest rate of
growth of the five countries at 6.1% for the year. But the company says this must be viewed in the context of a total car market that rose 0.3% during the year and an overall decline in private registra‐ tions which decreased by ‐2.4% during the year. Successful models included the market leading Renault Clio and second placed Peugeot 308. The True Fleet sector in Germany grew by 9.3% during 2014, exceeding 715,000 registrations, a figure only beaten in 2011 when fleet car registrations reached 719,450. The 2014 True Fleet total represented 23.6% of new car reg‐ istrations, a new market share record. Volkswagen was the best selling manu‐ facturer, followed by Audi and BMW. SEAT and Skoda recorded the highest increase in market share with increases of 27.1% and 25.5% respectively. For Italy, the True Fleet market grew by 17.2% in 2014. Perhaps it is no surprise that Fiat dominated the sector taking the top four best selling places. Volume growth for Fiat reached 22.6%, with Peu‐ geot and Citroën logging high sector growth of 45.7% and 61.9% respectively. Models fuelling the PSA expansion included the 308, 3008 and C4 Picasso. The Spanish car market experienced a year of strong growth in 2014 and this was also true of the fleet sector, where registrations grew by 24.3%. Volkswagen and Renault were the best selling brands, seeing fleet volumes rise by 32.4% and 33.2% respectively, leaving Peugeot in third place. Strong performances were recorded by Ford with growth of 39.2% and Mercedes‐Benz with 40.5%. For Ford, Fiesta volumes grew by an impressive 94.3%, while for Mercedes, C‐Class regis‐ trations grew by 105%. The UK may not have recorded the largest growth in True Fleet volume in 2014 with 14.2%, but it is the largest True Fleet market in Europe. 850,000 new cars were registered by fleets dur‐ ing the year. GM’s Vauxhall brand held its top selling place in the sector with Ford close behind. Between them, the two companies took 27% of the fleet sector,
with Volkswagen, Nissan and Audi in the following places. SUVs were strong per‐ formers with Qashqai and Juke leading the sector, the Vauxhall Mokka taking third place, rising to the top slot in December.
Oil price impact IHS Automotive has been assessing the impact of falling oil prices on the car market, particularly in North America. “Fuelled by reduced prices at the gas pump, U.S. consumer confidence is expected to continue to rise, resulting in a potential shift to larger vehicles in the U.S. and Canada as these vehicles will be more affordable to own and the value of fuel economy becomes less important to consumers,” reckons IHS. Assessing the global impact on light vehicle sales, the report suggests that between 5 million and 7 million more cars could be sold between 2014 and 2021 because of lower fuel prices. IHS reckons that the biggest beneficiaries will be the US market, based on improved consumer confidence. Developing markets in India and the Asia region could benefit too, where lower costs will tempt new buyers. The company’s research suggests that US vehicle manufacturers are planning for greater production of larger light trucks, including SUVs and pickups at the expense of smaller B and C segment models. Countering these expected trends, reg‐ ulatory moves will bring pressure for more efficient, lower emitting models and developing the technologies to do so may need to be accelerated. “Regardless of the outcome, the timing of the current price decline injects an additional level of uncertainty into the auto industry’s planning cycle,” Phil Gott, senior director, long‐range planning at IHS Automotive said. “As we start this year, we are just 10 years or one plat‐ form cycle away from the most stringent fuel efficiency standards. To plan for profitable manufacturing of vehicles and components in this era is perhaps one of the greatest business challenges the industry has seen in a long time.”
internationalfleetworld.com / 51
! H O ST U J S IT’
S A T R A M S S A
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The new Corsa. With smartphone connectivity. The new Corsa is one with your smartphone. Stay connected and listen to your favourite tracks, send e-mails, make calls or navigate via app1. And all with a tap of the IntelliLink1 7˝ colour touch screen. For more about the new Corsa and how it makes driving smarter, visit opel.com 1
Available as an option at extra cost. Fuel consumption combined 6,0–3,1 l/100 km; CO2 emissions combined 140–82 g/km (according to R (EC) No. 715/2007).