International Fleet World October 2013

OCTOBER 2013

internationalfleetworld.com

INTERNATIONAL

FLEETW RLD Essential Business Information for International Fleet Decision Makers SE AT.COM

THE NEW SEAT LEON ST MORE SPACE FOR YOUR BUSINESS

SEAT FOR BUSINESS Average consumption: 3.8-5.9 l/100 km. Average CO2 mass emissions: 99-137 g/km.

ENJOYNEERING

BMW i

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GOOD COMPANY. THE ALL-ELECTRIC BMW i3.

At BMW i, we know the corporate world is all about efficiency, so we’ll keep this short and simple. Why should fleet managers consider the all-new, all-electric BMW i3? First, with its highly dynamic and effi cient BMW eDrive technology, it’s a perfect fit for innovation-minded companies. Second, with its intelligent handling of resources throughout the value chain, it makes a strong sustainability statement. Third, with its connectivity features, it’s a functional workplace when required. Fourth, it can bring down the cost of ownership. And finally, as a genuine BMW, it’s going to put a smile on the faces of all of your colleagues. And on yours. More: bmw-i.com/i3 BMW i. BORN ELECTRIC.

BMW i3

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0 g CO2 / km* 125 kW (170 hp)

* Zero-carbon operation, encompassing everything from power generation to use on the road, requires energy sourced entirely from renewable resources.

OCTOBER 2013

internationalfleetworld.com

INTERNATIONAL

FLEETW RLD Essential Business Information for International Fleet Decision Makers SE AT.COM

MORE SPACE FOR YOUR BUSINESS

ENJOYNEERING

Average consumption: 3.8-5.9 l/100 km. Average CO2 mass emissions: 99-137 g/km.

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

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 fleetworld.co.uk

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THE NEW SEAT LEON ST

SEAT FOR BUSINESS

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VIEWPOINT

CONTENTS

Europe's biggest motor show, the biennial Frankfurt Show is in full swing as I write this (ironically on a plane to Frankfurt for the second time in a week, this time for the launch of the revised Opel Insignia).

The show was not as busy as usual, sending journalists scuttling from one side to the other of the enormous IAA show ground. That's probably because this show’s goodies were all under development in the depths of the European financial crisis, when other projects were delayed, cancelled or scaled back. Business as usual will probably return in 2015. So with fewer new models and concepts to feast the eye, what was the talk of the show? I don't mean what car or concept kept people talking, but what were the themes. The words I kept hearing were about the onward march of the electric car and ‘mobility’. For that read car sharing and similar schemes where the car may not be the sole means of transport in a single journey.

Not surprisingly the two are related, with e-mobility a key element in the overall mobility discussion. And forget the cynicism and range anxiety. The latest crop of electric launches such as the BMW i3 and VW e-up are very credible. They will work for more people than not, partly because there is a will to make them succeed, even though there are still problems to overcome.

And car sharing? Many schemes have been dreamed up over the years and many of them will not succeed, but those with a workable business plan will. As Miel Horsten of ALD in Belgium told me in our profile on page 30, people are fed up with sitting in traffic jams for hours each day. Car sharing could help in many ways.

04 News Analysis 10 EV News Analysis 12 Strategy How software can streamline a fleet.

16 Strategy The advent of cross-border penalties.

18 Remarketing Used Car Report 2012.

22 Strategy European residual value confidence.

24 Management How reliable are fleets in reality...?

28 Interview Giuseppe Tommaso of SEAT.

30 FOCUS ON...

BELGIUM.

33 Remarketing 34 Operator profile How Kwik Fit plans to expand into Europe.

37 2013/14 Fleet Calendar 38 PROFILE Jaguar Land Rover.

45 Launch Report Opel Zafira Tourer / SEAT Leon ST / Peugeot 308 / Chevrolet Trax.

50 Fleet In Figures Analysing the latest ACEA sales charts.

18 28 38 46

®

To subscribe to Fleet World visit: fleetworldsubscriptions.co.uk

John Kendall Editor

IFW October 2013

03

news analysis

Fleets warned of new crossborder action on driving offences Fleets are being warned of new pan-European legislation that means drivers breaking traffic laws outside their home country will soon be able to be dealt with.

The European Union Directive 2011/82/EU will come into effect by 7th November, from which date EU Member States will be able to exchange information on road safety related traffic offences. However, the UK, Republic of Ireland and Denmark have opted out of the EU directive.

There are eight offences included in the text of the EU directive: • Speeding • Not using a seatbelt • Not stopping at a red traffic light/mandatory stop signal • Drink driving • Driving under the influence of drugs • Not wearing a helmet (for motorcyclists) • Using a forbidden lane (such as the forbidden use of an emergency lane, a lane reserved for public transport, or a lane closed down for road works) • Illegally using a mobile phone, or any other communications device, while driving The European Traffic Police Network (TISPOL) is urging motorists to comply with the directive, with president Koen Ricour stating: ”Those who abide by the law will have nothing to fear from the new legislation. Those who choose to flout the laws when away from their home country can now be dealt with, and will no longer be able to drive away from justice.”

The organisation has added a guide to driving in each European country on its website (www.tispol.org). Each guide contains up-to-date details of speed limits, specific rules on drink-driving enforcement and other important information.

EC runs consultation on professional driver training Firms active in the field of driver training are being asked to help with a European Commission consultation on the training of professional drivers, including the certificate of professional competence (CPC).

Open until 25th October, the consultation is part of a process of assessing the implementation of Directive 2003/59/EC on the compulsory initial qualification and periodic training for professional drivers.

The EC’s online questionnaire asks whether the directive has met its objectives and what specific action and measures may need to be adopted to improve its effectiveness.

In particular, the consultation addresses the issue of mutual recognition of professional drivers’ training, notably the CPC. The aim is also to identify new common requirements by analysing the different existing structures.

The consultation is available on the European Commission website under the ‘Consultations’ section.

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Optimistic outlook for European leasing industry for rest of 2013 Prospects for the European leasing industry remain positive, with the sector expecting a stable outlook for the coming six months.

That’s the finding of the Leaseurope/Invigors European Business Confidence Survey, which was conducted in June 2013.

The findings suggest that respondents are expecting a stable outlook over the next six months, with many of the survey’s measures showing little change from the previous survey conducted in December 2012.

The outlook for new business volumes over the coming six months remains positive, with 54% of those surveyed expecting new business volumes to increase, while just 20% anticipate a decline. Expectations on the level of bad debt show little change on the previous survey, with the majority of participants (57%) forecasting that bad debt will remain unchanged over the coming six months.

Similarly, 59% expect no change in margins, though only 19% now predict that margins will increase in their organisations, down from 39% in the previous survey. The results also show that nearly 55% of survey respondents forecast that net profits for their business will increase over the same period, a decrease from the 63% recorded last December.

Industry expectations on a number of key indicators covering service levels, expenditure and staffing indicate few major changes for the remainder of 2013, though just under half of respondents (48%) said that their organisations are targeting expansion. Growth was focused on asset classes such as agricultural equipment and green assets as well as geographic expansion within and outside Europe.

The results come as Leaseurope publishes the results of its Q2 Index, which tracks key performance indicators of a sample of 17 European lessors.

The latest Index shows that the weighted average ratios for Q2 2013 have improved compared to the same quarter in the previous year, with the exception of cost of risk.

Total new leasing volumes reported by the sample of firms reached almost €18bn, a big improvement on the weak volumes reported in Q1 2013. This upturn suggests that customers are slowly beginning to return to investment spending. The portfolio of outstanding contracts decreased slightly (-1.6%), as did risk-weighted assets (-0.8%).

Total pre-tax profit for the companies in the sample experienced a substantial recovery in Q2 2013, increasing by 14.6% compared with Q2 2012. Similarly, the average profitability ratio grew from 25% in Q2 2012 to 27% in Q2 2013.

for the latest news, visit internationalfleetworld.com

SageQuest opens UK-based European customer service centre SageQuest has announced the opening of new offices and a UK-based customer service centre in Reading, Berkshire, to support its GPS tracking product.

The company, part of fleet management solutions provider Fleetmatics Group PLC, has opened the new centre to provide its growing list of European customers with a dedicated and reliable support service.

SageQuest’s European operations manager, Tanya Arnold, who is responsible for running the new customer service centre, said: ”In addition to providing our customers with a tried-and-tested solution that meets the challenges of running large enterprise-sized fleets, a high-level of customer service has always been the cornerstone of SageQuest’s offering. Our customer service team has been trained extensively on the SageQuest system and we strive to give the best customer service possible to our customers. This ethos is important to SageQuest and is something that we feel sets our company apart from other vendors.”

The UK customer service support centre is open weekdays from 8am to 6pm.

Ford Transit Connect wins ‘International Van of the Year 2014’ Ford’s new Transit Connect has been named as the ‘International Van of the Year 2014’ at the COMTRANS commercial vehicle exhibition in Moscow.

The van scored a total of 130 points from a maximum 163, putting it ahead of the Mercedes-Benz Sprinter and Renault Kangoo.

The 24-strong jury of journalists praised the model for its fuel economy, design, driveability, load-carrying and safety.

The latest win means that Ford is now the first single manufacturer to win the award for two consecutive years, after gaining the title for its Transit Custom last year. Other previous Ford winners are: the Transit (2001), Transit Connect (2003) and Transit (2007).

Volvo Car Group strengthens commitment to China with CATARC partnership Volvo Car Group and the China Automotive Technology and Research Centre (CATARC) have announced a new strategic partnership that will see the two parties work together on safety, environment and cabin air quality solutions.

Under the partnership, Volvo Cars will share its knowledge with CATARC while both parties will co-host seminars to discuss common goals and a technology roadmap with regards to new solutions, standards, regulations and policy development in the industry.

The agreement was signed in the city of Tianjin, China

by Lars Danielson, senior vice president, Volvo Car China Operations and Zhang Jianwei, vice director at CATARC. Lars Danielson said: ”This new strategic partnership will help Volvo Cars to further cement its leading role in improving safety in the automotive industry, and further strengthens our long-term commitment to China as our second home market.”

Renault reorganises management structure Renault has announced plans to revise its management structure following the announcement that chief operating officer, Carlos Tavares, is stepping down.

The carmaker is to split the COO role into two new functions. This would include a chief competitive officer, who will cover the areas of Product and Programmes, Design, Engineering, Quality, IS/IT, Purchasing, Manufacturing and Supply Chain.

In addition, a new chief performance officer would be appointed covering all the group’s regions as well as Sales and Marketing.

The carmaker added its plan was to ”reinforce Renault’s industrial, commercial and financial performance while continuing to empower the regions.”

At the time of going to press, Renault had not announced who would fill either role.

IFW October 2013

05

news analysis

Fully autonomous robotic vehicles to arrive in 2023 The first driverless vehicles will appear in the US in the next decade, rising to more than 10 million robotic vehicles shipping in 2032, according to a new report by ABI Research.

The company, whose research on robotic vehicles includes technology, players and solutions, impact and benefits, says the disruptive effects of autonomous driving are only just being discovered and its transformative impact on the auto industry and society as a whole will be huge, with car sharing and declining vehicle ownership being two of its main exponents. ”While the technological feasibility of autonomous vehicles is being demonstrated by Google, Audi, Volvo, Bosch and Continental, obstacles such as high costs and lack of legislation remain. On the other hand, the benefits of autonomous vehicles in terms of safety, cost savings, efficiency, and positive impact on the economy, are driving research and development efforts globally. With ADAS-type assistance features already being implemented on a wide scale, the next phase of autonomous Co-Pilot type vehicles will materialise in this decade,” said VP and practice director, Dominique Bonte.

The company added that the current focus on passive safety functionality will become less relevant as the gradual move towards active safety and automation renders driver-centric features at least partially redundant. This will require changing attitudes from governments favouring V2X mandates and autonomous driving legislation and subsidisation over eCall mandates, HMI guidelines, and banning portable devices.

NAFA session to cover variances in European and global fleet practices The many differences in fleet management practices within Europe and across the globe are to come under the spotlight at a specialist session being held by North America’s NAFA Fleet Management Association.

NAFA’s 3rd Annual International Fleet Academy is a three-day conference designed specifically to meet the unique needs of those who manage fleets of vehicles outside the United States and Canada.

The conference will take place 21-23 October 2013 at Loews Ventana Canyon in Tucson, Arizona and will include a session on ‘Differences Among the World: Europe, China, Mexico, Brazil, Australia’. In addition, the conference contains over 15 additional sessions, including topics such as tax issues around the globe, aligning suppliers in multiple countries, the international RFI-RFQ process, and understanding and managing a fleet’s Total Cost of Operation.

For more information visit www.nafa.org/international.

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Fall in Western European car sales in August reinforces industry’s uphill struggle A drop of 5.3% in car sales in Western Europe last month showed the continued tough conditions faced by the car industry in Europe, according to LMC Automotive in its latest market analysis, but there are still signs of optimism.

The fall follows a run of four better months in terms of Seasonally Adjusted Annualised Rates (SAAR) of sales, with the August result slipping back to 11.1 million units/year.

However, LMC cautions against putting too much emphasis on the latest figures, with August being the weakest month of the year and adds that the September result is much more critical, not least because of the registration plate change in the UK. It also says that there are good reasons to continue to believe the market will begin to pick up. The Eurozone economy is expected to return to growth in the second half of the year, albeit slowly, which will provide support to the car market. Consumer confidence has also been edging up in recent months. However, the West European car market (at 11.4 million units) is likely to finish 2013 nearly 3.5 million units lower than 2007, with only a modest improvement likely in 2014.

Mazda trials tram–vehicle communication system Mazda has embarked on trials of a new tram–vehicle communications system that could prevent accidents.

Being tested on an ASV-5 (Advanced Safety Vehicle) Sedan – based on the Mazda6/Atenza – on public roads in Hiroshima, the system uses 700MHz radio waves to allow cars and trams to communicate on a range of data including the type and location of a vehicle, the direction they're heading, and braking and turn signal information.

The technology has been developed by a consortium made up of Mazda, the University of Tokyo, Hiroshima Electric Railway Co and Japan's National Traffic Safety and Environment Laboratory.

for the latest news, visit internationalfleetworld.com

Ryder secures MOD ‘White Fleet’ contract in Germany Ryder has won a new four-year contract by the Ministry of Defence (MOD) for the provision of its ‘White Fleet’ in Germany worth approximately €30m over four years.

The contact follows a competitive tender process using the Government Procurement Service (GPS) frameworks and was awarded under Project Roc, which is managed by DE&S Land Equipment Operating Centre and specifically Operational Support Vehicle Programme (OSVP) within the Operation Support Programme (OSP) area.

Under the deal Ryder will supply a wide range of vehicles, including HGVs, minibuses, cars and modified vehicles and will reflect the MOD’s planned troop reduction in Germany during the period of the contract.

The contract provides for full fleet management and services to include provision of vehicles, maintenance, breakdown and incident management, and short-term hire.

In addition, Ryder will be supplying an ‘intelligent vehicle booking system’ as part of its Fleet Care On-Line programme to assist the MOD in ensuring that the fleet utilisation is as efficient as possible.

in brief...

ARI reintroduces Life Cycle Analysis Tool ARI has reintroduced its Life Cycle Analysis tool within its ARI insights web-based and mobile fleet management system to provide clients with key data when selecting fleet vehicles.

The new tool allows for a side-byside view of up to four vehicles along with the ability to choose and compare among a multitude of different variables to help determine TCO and vehicle cost per mile.

Opel/Vauxhall ADAM only gets four-star Euro NCAP rating Euro NCAP has published its latest safety results, which include a four-star rating for the Opel/Vauxhall ADAM. The supermini – the brand's rival to the Fiat 500 – scored 87% for adult protection, with figures of 72% for child occupant, 65% for pedestrian and 81% for safety assist.

Automatic braking technologies could make multi-car crashes history, says Thatcham Multiple vehicle accidents could be mitigated or avoided altogether with the widespread use of new automatic braking technologies, according to the UK's Thatcham Research.

The comments come from the experts at the motor insurers’ automotive research facility, which has been researching and testing Autonomous Emergency Braking (AEB) systems on behalf of insurers for the last three years and has already undertaken an in-depth study of crashes and their causation factors.

International safety body Euro NCAP is to incorporate the test as part of its overall vehicle safety standard in 2014.

Peter Shaw, chief executive of Thatcham Research, said: ”The evidence from our testing is undeniable and combined with a growing body of real-world research and evidence we firmly believe that AEB and other ADAS (Advanced Driver Assist Systems) have a critical role to play in avoiding both common low-speed shunts that can cause injuries such as whiplash, and mitigating some of the horrendous injuries and fatalities that we see as result of higher-speed pile-ups.”

André Konsbruck assumes brand director role at Audi UK Audi UK has announced the appointment of André Konsbruck as its new brand director from 1st October.

He succeeds Martin Sander, who steps up to the role of senior director of sales Americas based at the company's headquarters in Ingolstadt, Germany.

IFW October 2013

07

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EV news analysis

Electric car grants jeopardise RVs, says CAP Consulting Governments are being advised to prioritise ‘in-life’ incentives to increase electric vehicle uptake, following a panEuropean study led by CAP Consulting which found financial subsidies at the point of purchase are harming residual values and threatening economic viability for the sector.

The report analysed the used market performance of the Nissan LEAF in the United Kingdom, Germany, France and Italy to compare values in countries with and without a purchase incentive subsidy. It found residual values were stronger in Germany and Italy, where there are no grants, and weaker in the United Kingdom and France where EV purchases are incentivised. French market residuals were the lowest, marking a correlation with the largest subsidies.

CAP warned that the eventual and inevitable removal of these grants will cost new electric vehicle owners thousands in additional depreciation, as the used value will already have been established in each market and the additional cost of a new vehicle will never be retained by a higher residual value.

Report author Mark Norman said: ”As it stands, 12-month depreciation levels in the UK already amount to almost half the subsidised new price for a Nissan LEAF. Without the original £5,000 subsidy, total 12 months depreciation over the first year would amount to over £17,000. With average depreciation for a comparable specification diesel Volkswagen Golf or Ford Focus currently standing at around £7,000, this would make the economic argument for buying

the LEAF all but impossible to make even with the potential fuel cost savings.”

The report argues that government investment to encourage take-up of ultra-low emission vehicles would be better directed in future toward supporting provision of ‘in life benefits’, such as ‘green badge’ parking schemes, permission to use bus and multi-occupancy lanes and exemption from many city centre driving restrictions, as already successfully deployed in Norway, where EV ownership per capita is higher than anywhere else in the world.

Volkswagen Group aims for e-mobility leadership by 2018 Volkswagen Group has shown the next models in its electrified model range, as its chief executive told the world it aims to be the market leader in electromobility by 2018.

Speaking on the eve of the 65th International Motor Show in Frankfurt, Prof. Dr. Martin Winterkorn, chief executive officer of Volkswagen Aktiengesellschaft, said: ”We are starting at exactly the right time. We are electrifying all vehicle classes, and therefore have everything we need to make the Volkswagen Group the top automaker in all respects, including electric mobility, by 2018.”

By the end of 2014, the group will have 14 electrified models available across its brands, including the battery electric Volkswagen e-up! and e-Golf, the Audi A3 e-tron plug-in hybrid, and Porsche Panamera S E-Hybrid and 918 Spyder shown at the Frankfurt show.

Investment is substantial. Volkswagen invests €7bn in electromobility R&D each year, helping to bring knowledge of motors and batteries in house. It has also recruited 400 experts and trained 70,000 development, production and service employees to deal with the new technology.

Modular drivetrains, meanwhile, mean production can be varied quickly to meet

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demand. If this is sufficient, the group is aiming to have 40 vehicles with alternative drivetrains by 2018.

Winterkorn added: ”From the zero-emission city car, through the plug-in hybrid all-rounder to the three-litre sports saloon: It is our customers who decide for themselves just how much e-mobility they want.”

for the latest news, visit evfleetworld.com

Hydrogen fuel cell is long-term mobility solution, says Daimler Daimler sees hydrogen fuel cell vehicles as the long-term solution to clean mobility, head of R&D, Thomas Weber, has told news agency Headlineauto at the Frankfurt Motor Show.

Weber believes electrified drivetrains will gradually replace petrol and diesel engines over the next few decades, with pure electric for city cars, hybrid and dual-fuel drivetrains earmarked for mid-size models and plug-in hybrids expected to make its largest cars more efficient. Daimler’s first fuel cell vehicle, a B-Class, has been postponed until 2016 or 2017 as the carmaker begins a collaborative project with Ford and Nissan. ”This gives us time to develop a common drivetrain, which makes a lot of sense because the volumes will be higher and the costs lower, and push on the infrastructure situation,” he said. ”Toyota will step in and now Volkswagen has said it is no longer against the fuel cell. In the long run it is the best solution because range is no longer a topic.”

Fleet bias expected for Tesla Model S in Europe Tesla Motors is predicting a heavy fleet bias for its Model S electric luxury car, with the United Kingdom set to be one of its top three European markets, according to EU sales director, Bryan Batista.

The California-based company has already delivered the first left-hand drive cars to European customers, and is rolling out free-to-use fast chargers across the region.

Corporate sales will be run from its new headquarters in Amsterdam, where a European fleet sales manager is now in place. Regional specialists will now be appointed for each of Europe’s key markets, and conversations are underway with leasing companies and residual value guides. ”The big thing now is not only educating them about the Model S, but also about Tesla and how we design and produce our cars,” Batista explained. ”It’s really a process of getting to know each other, of education. It’s critically important that those people who set or guide residual values are well informed and know what Tesla is about.”

Ford drops hybrid efficiency in line with real-world figures Following press and owner criticism, Ford has lowered the published fuel economy figures for the C-MAX Hybrid in the United States, bringing them closer to what drivers should expect on the road. It will also offer goodwill payments of up to $550 (€410) to existing customers to cover the difference.

Ford will now voluntarily test hybrids separately to EPA guidelines, adding that variations in fuel economy were greater than in conventional models because driver behaviour could cause the engine to run more frequently. As a result, the C-MAX’s official economy has dropped from 47mpg (5.0l/100km) to 43mpg (5.5l/100km).

in brief...

Norway considers banning EVs from bus lanes The Public Roads Administration in Norway is considering removing bus lane access for electric vehicles, as sales have grown so much that they are now affecting the flow of public transport. Speaking to Norwegian news channel NRK, director Ivar Christiansen said the incentives would have to stay in place until 2017, but that the situation is being closely watched.

GM drops Ampera/Volt pricing as production streamlines Said to be the result of a streamlined production process and economies of scale on components, General Motors has heavily reduced the price of the Opel/Vauxhall Ampera and Chevrolet Volt around the world. European buyers are being offered up to a €7,600 cut, while in North America the Volt hasshed $5,000 (€3,800) from its list price.

Trade association launched at LCV2013 to support UK e-mobility Cenex, the UK’s centre of excellence for low-carbon vehicle technology, has launched a trade association for electric vehicle equipment suppliers. The UK Electric Vehicle Supply Equipment Association (UK EVSE) will offer strategic guidance and support to industry stakeholders, including developing standards and best practice.

Nissan & Barcelona tie up on e-NV200 electric taxi Nissan has partnered with Barcelona City Hall to promote the use of the electric Nissan e-NV200 as a taxi by improving the quick charging network and range of privileges for zeroemission operators in the city. The deal is expected to pre-empt the vehicle’s roll out as a taxi in other major cities around the world.

IFW October 2013

11

fleet strategy

Data driven MAINTENANCE, TAXES, TRACKING, ROUTING AND SCHEDULING: All in a day’s work for fleet management software, reckons Steve Banner.

Simply installing a package that tracks your vehicles and leaving it at that does not mean that you have a comprehensive fleet management system in place. The reality is that you have only done half a job, and the gaps that have not been filled could lead to serious long-term difficulties.

That is the view of John Bell, chief executive officer at South African fleet management software specialist, FleetPro. He is becoming increasingly worried that an alleged change of emphasis among operators in his own country away from the proactive management of maintenance and in favour of tracking – understandable perhaps given the high crime rate – is already creating problems.

“The tracking systems that companies install provide information as to where an accident took place and the actions of drivers but have not brought about a reduction in accident levels,” he contends.

What businesses should also be doing, he says, is ensuring that any faults – bald tyres, defective brakes and so on – are dealt with before vehicles leave their premises. In many cases they are not doing so, Bell claims.

“Too many bus accidents in South Africa are caused by vehicle failure and that is because the buses concerned are not managed by a system that flags up problems at the right time,” he alleges.

“A good fleet management system will handle maintenance and repair, replacement costs, budgeting and cash flow requirements and cope with them all equally well,” he continues. “It will ensure that vehicles are safe and roadworthy and will give owners a full history of what work has been done and by whom.”

FleetPro’s own software package can

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address all these areas says Bell, not to mention the management of fuel, accidents and fines. Nor is it sold solely in South Africa: FleetPro is represented in the UK, Tanzania and Mauritius, and Bell has recently signed a deal to supply its software to Diamondlease, the largest independent vehicle rental and leasing company in the United Arab Emirates.

In Zimbabwe its fleet management package is being implemented by Pioneer Unifreight Group’s Swift and Pioneer businesses. They run 900 vehicles including cars, vans, trucks, buses, motorcycles and trailers.

Companies such as South Africa’s own MiX Telematics would doubtless argue that tracking can certainly bring down accident levels if combined with a unit that monitors the behaviour of drivers at the wheel and provides them with instant feedback that will hopefully improve their conduct.

However, Bell is not saying that tracking is pointless but should simply be viewed as a single tool: not an entire toolbox.

Fleet management software certainly

If you are given a company car in Australia then it is assumed that 20% of its usage is private and you are taxed

needs to be able to help companies with their tax returns, especially in countries where the provision of a car or van is treated as a taxable benefit for the individuals concerned. The amount of tax levied can be a bone of contention, nowhere more so than in Australia, where recent FBT – Fringe Benefit Tax – changes proposed by the government have enraged fleet industry bosses.

As things stand, if you are given a company car in Australia then it is assumed that 20% of its usage is private and you are taxed on that. However, the government proposes to abandon this stance in favour of drivers completing log books that will show precisely how much of their driving is work-related and how much is personal, and they will be taxed accordingly.

As a consequence some may face higher income tax bills and their employers will end up facing a lot more paperwork.

The impact will be especially severe on small and medium-size businesses, argues Fleetcare, Australia’s largest independent fleet management company. It recently surveyed 200 of them in the wake of the FBT announcement and says that 56% state that the impact of the proposals on them will be significant.

36% intend to cut back on the size of their fleets according to the survey while 24% are moving towards cash allowances for drivers instead of supplying cars. 45% say that they do not have the resources to manage logbooks given how time-intensive the compliance process is likely to be.

“I don’t know what sums the government has based its FBT revenue forecasts on, but with such a dramatic change in behaviour the end-result will be only a fraction of the tax revenues they may be

expecting,” observes Fleetcare chief executive officer, Nigel Malcolm.

Fleetmanager, Fleetcare’s fleet management software system, is already set up to gather FBT data from fleets and enables a return to be prepared for the Australian Taxation Office although the proposed changes are unlikely to make this task any easier. It generates a yearend FBT report for fleets too.

That is in addition to reports on and analyses of fuel card activity, kilometres travelled, fleet composition and a variety of other factors. An on-screen dashboard allows users to retrieve the information they need and drivers can be alerted using SMS messages if, say, their vehicle needs servicing or an odometer reading is missing.

Australia was in the run-up to a general election at the time of writing which could lead to a change of government and another re-think of FBT policy.

But whatever stance eventually emerges, data will still have to be recorded, and

suitable software will be required to do it.

Finding that vital bit of information a fleet management package contains when you need it quickly can be frustratingly difficult on occasions. That is why PHH Arval has tried to improve the service it provides to fleet operators in the USA and Canada by enhancing the search function of its PHH InterActive online fleet management portal.

The new approach condenses all vehicle and person searches down to a single search box that allows the user to find what he or she is looking for by inputting virtually any identifying information.

Last year saw PHH Arval launch PHH InterActive for Drivers Mobile, an app that allows drivers to complete fleet-related tasks without having to make special trips to the office. In North America it is also continuing to launch enhancements for PHH FleetSelect, a vehicle ordering system said to enable customers to have an experience akin to being in a virtual dealer showroom when ordering cars.

Dimensions of scores of vehicles can be checked and the vehicles concerned can be viewed through 360 degrees.

PHH InterActive users include Rodger Klarer, fleet manager, employee services, at McDonald’s Canada. It offers leased vehicles to corporate staff and restaurant managers from a fleet almost 600 strong and Klarer makes regular use of PHH InterActive Dashboard, a summary reporting tool.

It allows him to, for example, examine the performance of a particular make and model of vehicle over time and if necessary alter his purchasing decisions in the light of the information he has seen. “With Dashboard I can keep a better finger on the fleet and act quickly if anything comes up,” he observes.

Not all company cars are allocated to individual members of staff of course.

Some are pool cars and they can present fleet managers with a major challenge, especially when it comes to assessing levels of utilisation.

¡

Will car fleet drivers in Australia hand in their keys thanks to proposed FBT changes?

IFW October 2013

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fleet strategy

Data driven ¡

Are some cars ever actually used or do they just sit there, representing a constant, barely noticed, but nonetheless expensive overhead? They still have to be taxed and insured even if they hardly turn a wheel.

New Zealand software development house Fleet Works believes it can provide at least some of the answers with iJourney, its pool car booking system.

It enables up to four staff members to book into a car for a single trip, lessening the risk that they will all take a pool car each even though they are heading for the same destination. Staff can see who is in which car and where they are going and change their plans if possible so that their departure and return times match.

It also allows fleet managers to see how intensively pool cars are utilised and may enable them to shrink the pool's size and save cash.

Fleet management systems are increasingly likely to be delivered as cloud-based solutions. S & T Europe, the Houten, Netherlands, based European offshoot of Taiwan’s Systems & Technology Corporation has come up with one called MyFMS which can handle everything from the recording of CO2 emissions to keeping track of business mileage for tax purposes.

“It is available for companies with thousands of vehicles as well as delivering high value to firms with only a few,” says product manager, Frank Leemkuil.

Currently available in Dutch, German and English it will gradually be released in more languages as it is rolled out across Europe.

Tracking’s role in fleet management should not of course be diminished, a view that is certainly taken by Republic of Ireland commercial and domestic waste collection and recycling specialist, The City Bin Co. With sites in Dublin and

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Ford Fusion in production at Ford's Flat Rock, Michigan, USA, plant. PHH InterActive Dashboard will allow fleet managers to keep tabs on its performance in service.

Oranmore, County Galway, it is using a GPS monitoring package sourced from Irish fleet management software specialist Fleetmatics to keep tabs on its 28 refuse collection vehicles.

It also uses it as an aid to route planning and scheduling.

“I can look at a certain area, see where all my customers are, and plan accordingly,” says operations director, Niamh Bray. “If I need to add another customer then I can see which truck would be the best one to use to service them and add that customer’s stop to its route.”

The system tells Bray when a truck’s power take-off is in use, which means a bin is being lifted. “If a customer says we didn’t empty his bin then I can pull up a report which shows when the power take-off was activated,” she says.

If it was activated outside the client’s premises then that is an indication that the bin was indeed emptied and that the client is mistaken.

Also useful to The City Bin Co is the package’s idling report, which shows when a truck is stationary and the engine is ticking over, potentially wasting fuel – and increasing the fleet’s CO2 output – and causing unnecessary wear and tear to components.

“Because of the nature of the operation we run then some idling time is necessary,” says Bray. “But if a truck is idling more than is normal then that is something that will be highlighted and that I will have to look into.”

She is especially pleased with the mobile app that Fleetmatics has developed, which provides real-time access to vehicle locations as well as to alerts and reports.

“Rather than having to log on to my PC I can see where all my trucks are when I’m at home just by using the app on my iPhone,” she adds. “It allows me to keep track of my vehicles: and know if someone is running late.”

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fleet strategy

Cross-border penalties EU cross-border penalties are coming, and this could be just the beginning, writes Chris Wright.

New legislation comes into force in November 2013 which will mean that drivers across the European Union will face penalties for breaking traffic laws when driving outside their home country.

The new laws mean that traf ic offenders will be pursued back to their own country – unless they live in the UK, Ireland or Denmark; the three EU countries that have opted out.

The developments come into force on 7 November, the deadline date for EU member states to implement the new directive facilitating cross border exchange of information on road safety related traffic offences.

There are eight offences included in the text of the EU Directive: • Speeding • Not using a seatbelt • Not stopping at a red traffic light or other mandatory stop signal • Drink driving • Driving under the influence of drugs • Not wearing a helmet (for motorcyclists) • Using a forbidden lane (such as the forbidden use of an emergency lane, a lane reserved for public transport, or a lane closed down for road works) • Illegally using a mobile phone, or any other communications device, while driving Koen Ricour, president of TISPOL, the organisation established by European police forces to improve road safety and law enforcement across the continent, said: “We want motorists to comply with the rules of the road, wherever in Europe they may be driving. Those who do will have nothing to fear from the new legislation. Those who choose to flout the laws when away from their home country can

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and the use of automated devices such as speed cameras. To be most effective, police enforcement should be publicised, and involve a mix of highly visible and low profile activities.

The EU recommends consistent enforcement of laws against speeding, drinking and driving, and driving without a seat belt. It says that research has shown that better enforcement of these rules could prevent 5,000 deaths per year in the EU. The new legislation is aimed at easing cross-border enforcement of fines for major traffic offences.

TISPOL says its main priority is to reduce the number of people being killed and seriously injured on Europe's roads.

Ricour added: “We believe the enforcement of traffic law and education, where appropriate, will make a significant contribution to reducing the carnage on our roads. This is evident in a number of TISPOL member countries."

now be dealt with, and will no longer be able to drive away from justice.

“We support the EU Directive as it provides police of icers with an effective and much-needed tool. It also improves co-operation between police forces across the EU.” The EU has adopted an ambitious road safety programme, which aims to cut road deaths in Europe between 2011 and 2020.

It sets out a mix of initiatives, at European and national level, focusing on improving vehicle safety, the safety of infrastructure and road users' behaviour.

The Commission says road safety is a major issue. In 2011, more than 30,000 people died on the roads of the European Union – the equivalent of a medium-size town. For every death on Europe's roads there are an estimated four permanently disabling injuries such as damage to the brain or spinal cord, eight serious injuries and 50 minor injuries.

Traditional methods of police enforcement include on-the-spot roadside checks

ROAD FATALITIES IN THE EU SINCE 2001 60,000 54,000

50,000

40,000

31,000 30,500 28,000

30,000

20,000

Target 2020 EU fatalities

10,000 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

While speeding is one of the most common causes of accidents among drivers of lorries, coaches and company cars, tiredness is almost as common, said TISPOL, which added that road accidents are the leading cause of work-related death in industrialised countries.

Tiredness is a signi icant factor in some 20% of crashes involving heavy commercial vehicles and EU laws cap time at the wheel for professional drivers where part or all of the journey is in more than one EU country.

Driving time should not exceed 9 hours a day or 56 hours a week and drivers must take a break of at least 45 minutes after every 4½ hours at the wheel.

The UK has opted out of the new legislation although people taking rental or leasing company vehicles to other EU member states will still be liable for on-the-spot ines if they break driving rules, but foreign authorities will not be able to pursue the registered keepers via the licencing authority in Britain.

However, a spokesman for the British Vehicle Rental and Leasing Association said: “We work very hard to ensure that anyone taking vehicles abroad is aware of the requirements. For example, they will need a VE103 document (the only acceptable substitute for the UK V5 registration document that must be carried in all cars on the continent). We also offer advice about local driving laws and requirements, for example the need to carry a warning triangle, re lective jacket and breathalyser, etc.”

While the new legislation is aimed at making it tougher to evade the law, there is still no sign of any pan-European unification of traffic laws.

For instance, Germany has just recently made it law to display an official CO2 Emission vignette on cars, even those from outside the country. This isn’t a motorway tax like Switzerland, but it is a legal requirement and anyone not displaying the appropriate sticker faces a penalty.

Motorists with cars registered abroad who wish to operate their vehicles everywhere in Germany, also in city centres where environmental zones have been established, will need low-emission cars

and emissions stickers in the future.

The German authorities argue that road traf ic accounts for roughly one-third of particulate pollution. In cities, conurbations and near busy roads, particulate emissions often account for over 50% of air pollution.

The EU has passed a European Directive, which allows municipalities to establish environmental zones in city centres and conurbations. Whether such zones are established and when they will become effective depends on the local conditions.

In Germany that are four emission classes; the lower the particulate emission, the higher the emission class.

Motor vehicles in Class 1 are not eligible for emissions stickers. This class includes passenger cars without catalytic converters, pre-EURO-I and EURO-I diesel cars and trucks. All other motor vehicles are eligible for emissions stickers.

Vehicles registered abroad are classified on the basis of the European emissions standard according to which they have been registered, provided this standard is identified in their vehicle registration documentation or can otherwise be proved. If this is not the case, a simplified approach based on the first year of registration is used to issue emissions stickers to foreign cars.

Emissions stickers are available either

at one of the 300-plus TÜV Service Centres or on the Internet.

To obtain a €15 emissions sticker, you will need part I of a vehicle registration certi icate (and/or the vehicle registration document).

As the EU clamps down harder on traf ic offences there are fears of even more draconian measures including an idea to install speed limiters to ensure vehicles stay within the law.

Under such a scheme, cameras that read speed limit signs would be installed in all new cars and these would slow the vehicle when drivers exceed the limit. There are even thoughts as to retro itting the technology to existing vehicles.

The Intelligent Speed Adaptation plan was proposed by the European Commission’s Mobility and Transport Department. Its purpose is to decrease the number of traf ic deaths. The system would use satellites communicating with vehicles on the road.

Such technology is already in place in some buses in EU countries. More likely, however, is a system to warn drivers whenever they speed.

An informative guide to driving in each European country is included on the TISPOL website (www.tispol.org). Each guide contains up-to-date details of speed limits, speci ic rules on drink-driving enforcement and other important information.

EMISSION STICKERS TO BE ISSUED TO FOREIGN CARS Euro Level

Emissions Class

First registration passenger cars

First registration trucks

Sticker

Diesel cars Euro I or Pre-Euro I

1

Before 1 Jan. 1997

Before 1 Oct. 1996

None

Euro II

2

From 1 Jan. 1997 to 31 Dec. 2000

From 1 Oct. 1996 to 30 Sept. 2001

Red

Euro III

3

From 1 Jan. 2001 to 31 Dec. 2005

From 1 Oct. 2001 to 30 Sept. 2006

Yellow

Euro III

4

From 1 Jan. 2006

From 1 Jan. 2006

Green

Petrol cars Pre-Euro-I (without catalytic converter)

1

Before 1 Jan. 1993

None

Euro I and higher

4

From 1 Jan. 1993

Green

IFW October 2013

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remarketing Used car report

EUROPEAN USED CAR MARKET STILL UNDER PRESSURE Used car sales are big business in Europe. The BCA European Used Car Report highlights the major trends.

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The latest European used car data, published in the 2013 BCA Used Car Market Report, prepared by Professor Peter Cooke at the University of Buckingham Business School in the UK, shows that any recovery in car sales remains patchy in the major European markets.

The report highlights that new car sales remain depressed, with volumes across Europe dropping to 12.5 million last year (EU27 + EFTA), compared to the peak of 16 million reached in 2008. Apart from the UK, Denmark and Luxembourg (where new car markets were lat last year), new car sales in all other Western European countries dropped in 2012. Countries recording the biggest falls included Greece (-40.1%), Portugal (-37.9%), Belgium (-14.9%) and Ireland (-11.5%). In the UK, new car volume growth outpaced the European market by some distance in 2012, rising 103,000 to 2.04 million units, returning the UK to second place in Europe's new car sales table.

By contrast, used car volumes increased by an average of 2.1% across Europe in 2012, although not across all markets. Both the UK and Germany – Europe’s two biggest used car markets – experienced substantial used car sales growth in 2012. At the same time, volumes declined in France by around 2%. Used car sales remained lat in Spain while volumes continued to fall in Italy.

Taking the ive major markets as a benchmark, used car sales rose from 23 million in 2011, to 23.5 million in 2012.

In the UK 7.1 million used cars were sold in 2012, with Germany close behind at 6.9m, an increase of 0.4 and 0.5m units respectively. Both markets have recovered strongly from the onset of recession when used car volumes fell across Europe, with 2009 being the lowest volume point recorded in the last decade.

Used car volumes in France have remained remarkably stable over the past 10 years. Despite falling to 5.4 million as France entered recession in the second half of 2012, a decrease of 100,000 units/-2.1%, volumes kept ahead of the 2009 low point of 5.2 million.

Italy’s car market suffered a ‘double whammy’ in 2012. Both new car and used car sales tumbled – new cars by 350,000 to a lowly 1.75 million and used cars by 300,000 to 2.5 million units. Used car volumes have fallen consistently since 2008.

Spain’s new car market remains under

pressure and new car volumes fell by 108,000 to a low of 700,000 in 2012. Used car sales remained stable at 1.57 million units.

Report author Professor Peter Cooke of Buckingham University commented: “While the used car markets experienced some moderate – if patchy – growth across Europe last year, it is vital that the European new vehicle markets start to show some consistent signs of recovery as economic conditions improve. The new vehicle market is integral to the economic health of Europe, with two million people directly involved in automotive manufacturing and a further 4.6 million jobs in related parts manufacturing and services sectors.”

2012 USED CAR VOLUMES Country

Volume (m)

UK

7.1

Germany

6.9

France

5.4

Italy

2.5

Netherlands

1.8

Spain

1.6

Sweden

1.0

Austria

0.8

Belgium

0.7

Denmark

0.5

Portugal

0.4

Source: National Trade Bodies

According to the report, the six largest Western European car markets covered by the report accounted for over 25 million used car sales in 2012. The UK is identified as the largest market for used cars in Western Europe, accounting for 7.1m sales in 2012. BCA’s research shows that used car volumes in the UK dropped from 7.4m to 6.3m in 2009 – a consequence of the economic downturn, but the market recovered over the following three years.

Germany’s used car sales also continued to recover, rising 500,000 units to 6.9m in 2012. For France and Spain, used car sales volumes have been constant for several years, the report suggests. Used car sales in Italy declined by 300,000 units in 2012 to 2.5m, even though these sales had held up well during the worst of the recession.

IFW October 2013

19

¡

remarketing Used car report

¡

EUROPEAN CAR PARC 2012 Country

Cars in Use (m)

Germany

42.9

Italy

36.5

France

31.4

UK

30.5

Spain

22.0

Netherlands

7.6

Belgium

5.2

Portugal

4.5

Austria

4.4

Sweden

4.3

Denmark

2.1

Source: Eurosat

There are some 239m cars on the roads of Europe, having grown steadily from just under 222m in 2005. Overall there were around 279m motor vehicles on European roads in 2010. The BCA report shows that 70% of the cars are to be found in ive countries: France, Germany, Italy, Spain and the UK. Of these, Germany has the highest concentration of cars at 517 per 1,000 inhabitants, followed by France with 502 and the UK with 470 per 1,000. On average, Europe has 477 cars per 1,000 inhabitants, compared with 461/1,000 in the USA, 456/1,000 in Japan and a comparatively low 32/1,000 in China.

PARC TURN % 2012 Country

Parc Turn %

Denmark

33.8

UK

30.1

Netherlands

29.9

Sweden

29.6

Austria

26.2

Belgium

23.4

Germany

23.2

France

23.1

Portugal

12.1

Italy

10.7

Spain

10.3

Source: ACEA/National Trade Bodies

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Perhaps it is not much of a surprise that the average age of cars in Europe has increased through the recession years.

The average currently stands at 8.3 years.

Cars in the UK are the youngest on average in the EU’s major markets at 7.6 years, compared with 8.3 years in Germany and 8.2 years in France. According to EU data, the ageing effect actually pre-dates the recession. In the EU15 countries, the average age of cars rose from 6.9 years in 1995 to 7.5 years in 2004. In general, where a nation’s economy is thriving, the average age of its cars tends to be lower. Data from ACEA for 2010 showed that in the EU 35.6% of cars were over 10 years old, 32.1% were between five and 10 years old and 32.2% were five years old or less.

The BCA report suggests that the dynamism of any car market can be measured by how many vehicles are bought and sold there each year, relative to the car parc – the term used for the total number of cars on the road in that country. This measure of vehicle turnover compared with the car parc is also known as the ‘parc turn’. The report notes that countries with a well-developed wholesale infrastructure for used cars and taxfriendly treatment of used car sales generally have a higher parc turn.

The UK has the highest car parc turn with combined new and used car sales of 9.1m units in 2012. This represents a parc turn of 30.1%. As the report highlights, this also underlines the UK’s developed used car infrastructure. Although Denmark has a higher parc turn percentage figure, the market is far smaller with a total car parc in 2011 of 2.1m units. As the report points out, the UK’s parc turn stood at 34% in 2003 and settled at around 28-29% during the country’s longest economic crisis from 2008. The revival of the new and used car markets contributed to the rise in 2012.

Italy experienced a fall in its parc turn from 12.5% in 2011 to 10.7% in 2012 – resulting from a fall of almost 500,000 in new and used car sales volumes. Spain experienced a further fall in its parc turn, down 0.6% in 2012 to 10.3%, driven by a 174,000 drop in new car sales.

Data shows that Germany’s parc turn has remained relatively flat over the past 10 years at around 22%, dipping to 20% in 2007 and peaking at 24% in 2009, as a

result of scrappage scheme incentives.

Parc turn stood at 23.2% in 2012. The rate of turn was also steady in France, at around 25-26% until 2008. Having slipped to 24% in 2008, the rate recovered slightly but has declined again since 2010 from 25% to 23% in 2012, as the French new car market has declined.

The report shows that the parc turns in both Italy and Spain have followed a fairly similar 10-year cycle. Italy remained steady with a turn of around 15% until 2007 when it rose to 16% and has been in steady decline since, reaching 11% in 2012. For Spain there has been more variation with turn climbing from 14% in 2003 to 16% in 2005. It then fell to 11% in 2009, rose briefly again before declining further to 10% in 2012.

USED/NEW VOLUME RATIOS, 2012 Country

Used/New ratio

Portugal

4.6

Sweden

3.5

Netherlands

3.5

UK

3.5

Denmark

3.2

France

2.8

Austria

2.4

Spain

2.2

Germany

2.2

Italy

1.8

Belgium

1.5

Source: ACEA/National Trade Bodies

Almost inevitably, used car sales will exceed new car sales in any market since a car can only be sold once new, but several times as a used car. Given the strength of the car market in the UK it is not particularly surprising that the country’s used/new volume ratio is the greatest among the major European car markets. It rose a further decimal point to 3.5:1 in 2012. In France the ratio rose from 2.4:1 to 2.8:1 year on year, which the BCA Report says reflects the marked drop in new car sales, rather than an increase in used car volumes. A similar explanation is given for the rising ratios for Italy and Spain, up to

1.8:1 and 2.2:1 respectively as new car volumes fell sharply. Portugal’s 4.6:1 ratio is attributed to the large falls in the country’s new car market.

A strong new car market inevitably gives rise to a strong used car market, so the UK’s position at the top of the European used car sales/1,000 population is not unexpected.

The ratio for the UK rose four points in 2012 to 113, some way ahead of the other large European markets. The ratio for Germany rose from 79 to 84 while France’s ratio dropped from 85 to 82. The state of the Spanish economy ensured that the country’s ratio remained low at 34, while the ratio for Italy declined from 47 to 41.

It is equally unsurprising that the UK is the largest used car market among the European car markets. It remains one of the few markets in Europe where new car sales have been rising recently and the same is true of the used car market. Sales dropped from 6.7m in 2008 to 6.3m in 2009, before rising steadily to 7.1m in 2012. Germany, the second largest European used car market, followed a similar pattern, although the fall in used sales was less pronounced in the economic crisis, dropping from 6.1m in 2008 to 6.0m in 2009. The market has risen in stages since, to 6.9m in 2012.

For Italy, France and Spain, the state of the recent used car market reflects the difficult economic position in all three

USED CAR SALES PER 1,000 POPULATION 2012 Country

Used car sales/1,000 population

UK

113

Netherlands

106

Sweden

105

Denmark

98

Austria

96

Germany

84

France

82

Belgium

66

Portugal

42

Italy

41

Spain

34

Source: ACEA/National Trade Bodies

countries. In Italy, used car sales have declined from 3.0m in 2006 to 2.5m in 2012. The position in France has been more stable, with used car sales falling from 5.4m in 2008 to 5.2m in 2009, reaching 5.4m in 2012, after peaking at 5.5m in 2010 and 2011.

The Spanish used car market is much smaller than in either Italy or France, declining from 1.5m in 2008 to 1.4m in 2009 rising to 1.6m in 2012.

IFW October 2013

21

fleet strategy

UK forecasted RVs remain strong in improving economy Portugal rides the waves of RV forecasts and rising SMR costs.

The UK may be doing well, but rental rates are on the way up, says Experteye.

The UK leasing sector continues to lead the way in its con idence in the future used vehicle market. With a +4.4% annual increase in forecasted residual values, British contract hire companies are showing greatest optimism, re lecting an economy reportedly on the up.

Across mainland Europe, France has upgraded its residual value forecasts by a marginal +0.5% in the last three months and Portugal +0.2%, whereas German residual value forecasts have dropped by a very slight -0.3%, with Spain showing a -0.4% fall and Italy -1%.

The igures from the Experteye European Leasing index also show UK leet operators suffering the largest rental price rises, with a +3.7% increase in the last quarter after being up +3.8% for the year.

Portugal remains the most volatile in its pricing movements. In the last 12 months the residual value element of Portuguese rentals has dropped by -7.3%, with maintenance costs rising by +8.8% (both the largest shifts of all nations surveyed). That leaves rental rates down by -5.4% for the year, albeit settling in the last quarter with only a -0.7% fall in rentals.

The Experteye survey tracks forecasted residual values (RV), servicing, maintenance and repair (SMR) costs and rental rates in six European countries using data supplied by major leasing companies.

For SMR budgets, the picture of late is quite stable. Only Italy stands out with a -4.2% reduction in its costs in the last quarter.

Otherwise, in the 3 months from June 2013, Portugal only showed a +0.4% increase, the UK +0.1%, with no change in France (0%), a -0.8% fall in Spain and a -1.4% reduction in Germany.

Market summaries – 3 and 12 months to August 2013 FRANCE: Following a year that saw residual value forecasts fall by -0.7%, there is renewed optimism in the future French used vehicle market with a +0.5% rise in forecasted residual values. Albeit small, this is the largest quarterly rise of all nations surveyed. SMR budgets have steadied with no change during the last 3 months (0%) after a +6.2% hike since September 2012, and monthly rentals have come down by -4.2% for the quarter after increasing by +2.3% for the year.

GERMANY: German fleet operators have enjoyed pricing stability with very little movement for the year or quarter. In the last 3 months forecasted residual values have moved by -0.3%, SMR by -1.4% and rentals by -0.2%. This follows a year when forecasted residual values came down by -0.3%, SMR budgets shifted by +0.1% and rentals were down by -2.1%.

ITALY: Italian SMR budgets have seen some of the most dramatic reductions of the nations surveyed by Experteye. In the recent quarter they fell by -4.2% after a -5.4% reduction for the year. Yet with little movement in residual values (-1% for the quarter, and -0.7% for the year) rental rates have remained stable. A +0.3% rise for the year has been tempered with a slight -0.4% drop since June 2013.

PORTUGAL: Portugal has seen some signi icant movement in its budgets and forecasts for the year, with RVs moving by -7.3% and SMR by +8.8% (both the largest changes of all nations surveyed).

This has resulted in a -5.4% reduction in rental rates during the last 12 months. Rentals have, however, stabilised more recently with only a -0.7% fall since June 2013, after quarterly forecasted residual values only moved by +0.2% and SMR budgets by +0.4%.

SPAIN: SMR budgets in Spain have experienced a -6.4% fall in the last 12 months. In the last quarter this has calmed to a -0.8% reduction. Annual forecasted residual values have moved down by -1.4% with a quarterly shift of -0.4%. Rental rates have remained reasonably unchanged at -0.5% for the year and +1.1% for the quarter.

UK: Over the last year the UK has been one of the most optimistic nations, reporting a +4.4% improvement in RVs. The last quarter has shown a dip in RVs of -3.9%, however leasing companies often adjust their RV forecasts in line with the new registration plates making August a fluctuating month. SMR budgets have remained stable, with a +0.8% increase for the year and a +0.1% rise for the quarter, yet UK fleet operators have seen the largest increases to their monthly rentals with a +3.7% price rise since June 2013 after a year that saw rates go up by +3.8%.

CHANGES IN RV FORECASTS, SMR COST FORECASTS AND LEASE RENTALS Forecast Service, Maintenance Current Rental Rates and Repair Costs 3-month change 12-month change 3-month change 12-month change 3-month change 12-month change +0.5% -0.7% +0.0% +6.2% -4.2% +2.3% -0.3% -0.3% -1.4% +0.1% -0.2% -2.1% -1.0% -0.7% -4.2% -5.4% -0.4% +0.3% +0.2% -7.3% +0.4% +8.8% -0.7% -5.4% -0.4% -1.4% -0.8% -6.4% +1.1% -0.5% -3.9% +4.4% +0.1% +0.8% +3.7% +3.8% Forecast Residual Values

France Germany Italy Portugal Spain UK

Notes: • The comparisons are for vehicles with a contract duration of 36 months/90,000km.

• Twelve-month comparisons show change since August 2012.

• Three-month comparisons show change May and July 2013.

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internationalfleetworld.com

• 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.

management

Behind the warranties With manufacturer warranties extending further than before, Alex Grant asks leasing companies whether vehicles are proving to be as reliable as the paperwork implies. he modern fleet vehicle has never been more complicated. Downward pressure on fuel consumption and CO2 means the latest models are achieving ever-higher efficiency from ever-lower cubic capacity, while consumers expect high durability with increasingly wide service intervals and long warranties.

Evidence suggests cars are making fewer visits to a workshop than ever before. New figures from Trend Tracker showed a 20% drop in routine servicing and repair jobs during the last decade – great news for fleets looking to minimise downtime.

But this reduced exposure can be a double-edged sword.

T

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internationalfleetworld.com

Less frequent visits can mean problems go unnoticed, and while leasing companies are reporting constant improvements in reliability across the board, new technology has created a few new headaches for fleets.

The engine warning light appears to be one such perennial problem. This can be triggered when any one of what could be more than 100 sensors under the bonnet gives an anomalous reading to the engine management system, and can be accompanied by the car switching to a performance-reducing ‘limp home mode’.

But while not all problems are serious, Mark Connor, operations director at Zenith, says it can be unnerving for drivers:

‘There are many reasons why a warning light might trigger, but from a driver’s perspective – who typically has less technical experience – the impact is the same,’ he explained.

“The driver might experience the vehicle going into ‘limp home’ mode, and it might lead him to think that a dealer has mis-diagnosed a problem if he experiences this similar output on more than one occasion.”

Problems aren’t always electrical. Increasingly stringent emissions standards, not only in Europe but globally, mean manufacturers are adding new filters and recirculation systems to control harmful exhaust output. Of these, it’s the diesel particulate filter (DPF) which is the most regular cause of concern for drivers.

DPFs have been mandatory since Euro 5 emissions regulations were introduced at the start of 2011. It’s a filter in the exhaust designed to trap soot, usually burning this off (known as regenerating) while the engine is hot.

But – as with the early catalytic converters – their proliferation means they’re not always fitted to cars which suit the technology. Shorter journeys mean the DPF doesn’t always reach the temperature needed to regenerate, and can be prone to clogging, eventually causing running problems. Malcolm Roberts, fleet services manager at Hitachi Capital, says this results in an average three-day downtime to repair.

The regeneration process is also widely misunderstood.

If the car detects reduced airflow through the DPF it can actively raise the exhaust temperature by injecting extra fuel, but the associated rise in fuel consumption and smell of diesel has been known to be mistaken for engine faults if the driver is unaware of the technology.

Phil Turle, operations manager at ALD Automotive, explains: “DPFs cause a lot of downtime. If it’s a business car you can usually speak to leet people who are switched on, but with smaller leets you’re usually dealing with end users,

and nobody likes to be told they are doing something wrong.

“We’re looking at putting it into contracts this year. It will advise that the vehicle may have a DPF and that it could create problems if the driver is not aware of the regeneration cycle process. It’s all about making the customer aware of potential issues and the technology in today’s vehicles.”

Ironically, it’s the systems most drivers won’t notice which are the ones having the most impact. Leasing companies reported no issues with stop/start systems, while the latest downsized petrol and diesel engines and hybrids are proving as reliable, if not more so, than their predecessors. Electric and hybrid vehicles are also tending to come in under their predicted SMR costs.

Connor says: “Hybrid and electric vehicles have such a gentle power delivery, and we are seeing that they use less tyres. Also, with the electric generators helping slow the vehicle down we are finding they need less brake replacements.”

But it’s never been more important for drivers to understand the latest additions to their vehicles, to avoid what can be needless downtime. This also applies to independent repairers, who as a result of Block Exemption are able to service and repair vehicles without affecting warranties. Turle adds that they’re not always aware of minor software updates, which can avoid the need for expensive mechanical repairs.

Turle says: “It makes more sense to us to have a vehicle serviced within the Franchise network, with many manufacturers offering fixed priced servicing and the backing of the manufacturer regarding goodwill, we shouldn’t always assume independent route is the cheaper option all the time.”

However, feedback from the leasing industry suggests cars have never been more reliable, and manufacturers have never been keener to work with customers to iron out the problems which do persist. Provided drivers understand the systems they’re presented with, the latest additions to company vehicles should present relatively few headaches.

THE online resource for fleet decision-makers... internationalfleetworld.com

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IFW October 2013

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management

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On the horizon – Euro 6 6 of the best Mazda’s SKYACTIV-D technology meets Euro 6 standards, without the need for fuel additives

The latest Euro 6 emissions standards come into force next September, setting tough new limits on toxic NOx and Hydrocarbon content in diesel engine exhaust output.

While some manufacturers – such as Mazda with its SKYACTIV-D diesel engine – have managed to come under the threshold using an optimised combustion process, this next stage in emissions control will usually require extra ilters or a urea solution similar to AdBlue used in heavy goods vehicles. This will require regular re illing to avoid warning lights or the car stopping altogether.

“It’s touching the surface now,” says Phil Turle of ALD Automotive. “People don’t like the process of re illing. We’ve had a couple of drivers who have had problems with contamination, because they think it’s washer additive.

Drivers are not happy as they’re charged €2535 for an AdBlue top up – they do query it.”

Top 5 vehicle faults

1

2

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BATTERIES Still a leading cause of breakdown calls, but dif icult to diagnose whether the vehicle or driver is at fault.

This usually results in the vehicle being jump-started at the roadside and taken to the nearest garage, but rarely results in a new battery being itted due to wear and tear.

ENGINE WARNING LIGHTS Caused by an unexpected reading from any of the engine’s sensors, engine warning lights are a frequent cause of concern for drivers. The problem is often a faulty sensor and can be repaired quickly, but as it can suggest other faults it should be reported to a garage as soon as possible.

internationalfleetworld.com

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DPFs Increasing in frequency as diesel particulate ilters are found on a larger share of the vehicle parc, DPFs can block if they aren’t able to come up to temperature.

The result is an unnerving warning light, reduced performance and economy and a diesel smell as the car injects additional fuel to clear the blockage.

4

EGR VALVE COOLER Another emission control system, exhaust gas recirculation systems divert some of the exhaust gases back into the engine to combust harmful gas output. But these are temperature controlled with coolant, and faults can cause this to leak into the exhaust system resulting in smoking and starting issues.

5

FUEL FILTERS Used to remove contaminants such as rust, sand and water before they reach delicate fuel injectors, diesel ilters can clog if summer formula fuel is used during the winter, causing waxy deposits to form. The result is reduced performance and usually a replacement is required.

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SEAT’S

FLEET CHALLENGE IFW caught up with SEAT’s fleet and remarketing director, Giuseppe Tommaso, at the recent Leon ST launch, as John Kendall reports.

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iuseppe Tommaso joined SEAT in 2012 to take up the role of fleet and remarketing director, a job that carries a global responsibility for the Spanish brand member of the Volkswagen Group. His appointment was seen as giving SEAT’s fleet business strategic importance to sustain its ambitious long term growth.

Since then SEAT has launched the Mii, the Toledo and the new Leon, the latest model to join the range being the ST (Sport Tourer), the first time that SEAT has offered an estate car in the Leon range.

SEAT is a Spanish brand and Spain has been badly affected by the European economic crisis. Even so there are some signs of recovery in the European economy and Spain is one of the countries where the economy finally appears to be becoming more stable. How those European improvements are affecting SEAT’s international fleet business was the first question we asked Mr Tommaso.

“We see signs of recovery – but not in all European markets. The improvements are

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mainly in the UK, Denmark and Poland,” he told IFW. “Even though in the first eight months of the year the European fleet market is still nearly 8% down and even declining stronger than the total market.

“However, in this difficult environment SEAT was able to grow. Including fleet and retail sales, we are 11% above last year.

Talking just about fleet, not including car rentals, SEAT has grown 53% in the five largest European markets, which we call the ‘Euro 5’ – Germany, Spain, the UK, France and Italy. In Germany, we have grown 75%, in Spain by 59% and in the UK by 45%. This success is thanks to our new models, the new Toledo and new Leon. It’s also due to other action that we have taken, such as sales to small and medium companies and also a new brand communication that we have called, ‘SEAT FOR BUSINESS’, which we started at the beginning of 2013.

“Last year we gave priority to the sales to small and medium companies, launching a programme to improve the professionalism of the dealer network in this channel. So far this year we have 57 deal-

ers participating across Europe and the intention is to end the year with 70. The most important thing is to bring SEAT out of the showroom and present it to the final customer. Our plan is to make 10,000 visits to small and medium companies across the ‘Euro 5’ markets in 2013.”

“You know fleet can be a very frustrating job,” says Mr Tommaso. “You can go to visit new customers for three consecutive months and you sell nothing. SEAT has helped each of the dealers in the programme to recruit a fleet expert because it’s a long-term investment, not with immediate sales, but once they start, you can have daily revenue. It is important to close big deals, maybe with a Blue Chip company, but it doesn’t happen every day, so the imperative is to build a basis for the on-going business, boosted by a strong growth in true fleet sales.”

Mr Tommaso says that fleet customers are looking at the total cost of ownership, not just a discount for the car in the first place. Maintenance, fuel and taxation all contribute to this. “In the end, the

In this difficult environment SEAT was able to grow.

Including fleet and retail sales, we are 11% above last year.

Giuseppe Tommaso, fleet and remarketing director, SEAT

customer is paying for the gap between the list price, minus the discount and the future residual value. This is the biggest part, so it’s important to protect the residual value to make the gap smaller.”

Mr Tommaso thinks that one of the most significant opportunities to grow SEAT’s international fleet business is the model range. “We are now offering models that are designed with an international appeal that are being well received,” he says. “Then we are a member of the Volkswagen Group, so the quality of our products and the Latin design that we have means that we can offer Spanish style with German technology. On top, there is the opportunity for our customers to get an offer from VW Group Fleet International (GFI), a division in Germany that is responsible for fleet sales to international customers of all the VW Group brands and this gives us a lot of support.” SEAT has also recently appointed an international key account manager, Reinhold Luiz, to offer SEAT to inter-

national customers and to work with GFI. The Leon ST – the first ever Leon estate car, gives SEAT an additional fleet product; “38% of the segment is fleet sales and our aim is to be in the top five in the ‘Euro 5’ markets,” says Mr Tommaso. “We have a lot of assets with this car, a lot of technology, a lot of space. We are the only one in the segment offering 85g/km of CO2 from the 1.6 diesel DSG, we have the largest luggage capacity of 587 litres, rising to 1,470 litres with the rear seat backrests folded and the Leon ST is the lightest estate in its class.”

Mr Tommaso also points to the latest study showing best in basket residual value in the EU5 market plus Portugal and features such as the optional full-LED headlamps and LED rear lights.

The European financial crisis has shaped the way many companies have approached fleet business and this has affected SEAT too.

“We saw many deals where the company decided to extend their leasing contracts

from three to four years. We saw companies that have decided to downsize the car from big to small and also companies changing brand from premium to generalist brands,” says Mr Tommaso. “We can offer the same technology as luxury, premium brands, the same space, the same shape, similar boot capacity, but at a much lower TCO. “For me the new trend is to support the fleet customer in being completely satisfied about its choice through a professional sales approach. The final customer is looking for cars to operate his business. He’s not only buying cars, he’s buying computers, printers, telephones, so he does not really have enough time to make the right decision, but he can be helped and supported in making that choice. The SEAT target is to have the customer saying; ‘I made the right choice because I found a partner that is supporting me and understanding my needs, who is helping me make a direct choice and if I have a problem, I can really count on him.’”

IFW October 2013

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fleet focus BELGIUM

Tax changes stir up the market Revised BiK taxation slowed the Belgian business car market dramatically in 2012, but economic stability is helping to fuel steady growth, writes John Kendall.

MISSED OPPORTUNITY Changes to the Belgian Benefitin-Kind tax penalise cars like Opel Ampera, despite its extremely low CO2 emissions.

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Business cars account for between 42% and 50% of the total new car market.

Miel Horsten, General Manager ALD Automotive Belgium

he Belgian car market is in a curious position at the moment. The European financial crisis may be starting to ease, although across the border France is still struggling. In Germany, the market is still declining slightly, but may be showing signs of levelling out. Flemish neighbour, the Netherlands, having appeared to be weathering the financial storms well, has been sunk into financial turmoil as the country’s overheated property market has collapsed, with a consequential sharp fall in new car business. Amidst all this, Belgium appears to be making some financial headway. The car market reached 572,211 new sales in 2011 but fell back 14.9% to 486,737 in 2012, according to data from the European Automobile Manufacturers Association (ACEA). For the first six months of 2013, registrations have risen slightly to 289,873, up +1.7% on the first six months of 2012.

Besides cars, light CV sales accounted for around 400,000 sales in 2012 and heavy commercial vehicles around 55,000 units.

The explanation for the 2012 reduction in the new car market has been partly the effects of the recession and partly the effect of a change in Benefit-in-Kind taxation policy for business car users from the new Belgian Government. A benefit-in-kind tax is applied to cars provided by employers, based on factors including CO2 emissions and the price of the car, with options. That situation is not unusual in the region, but this tax scheme was introduced in 2012, replacing a previous scheme where the tax liability was calculated based on private mileage, CO2 emissions and fuel type. As a result the BIK tax liability for many company car users was increased notably, bringing a reduction in new car sales. For this year, the market has increased by 0.43% according to ALD Automotive General Manager for Belgium Miel Horsten, and forecasters are suggesting no significant increase for the remainder of 2013.

Belgium itself is the home of the European Commission, based in the Belgian capital Brussels. The country also hosts the Council of the European Union and the North Atlantic Treaty Organisation (NATO).

Belgium has no single language, but is divided roughly north/south between the mainly Dutch-speaking north (approxi-

T

mately 60% of the population) and Frenchspeaking south (approximately 40% of the population), with a small German-speaking region when Belgium annexed a small part of Germany in the 1920s.

Brussels is located in a small Frenchspeaking region in the North in the heart of the Dutch-speaking region. The presence of the major international organisations in Belgium, combined with the country’s fairly central location in Northern Europe is good for business in the country and multi-national companies are well represented in Belgium.

The country used to have a thriving motor industry. Ford had manufacturing plants at Genk along with Audi, General Motors, Volvo Cars, Volvo Trucks and Daf Trucks. Coach producers Van Hool and VDL Group were also represented. Now Ford is closing its Genk plant and GM withdrew a few years ago. The closure of the Ford Genk plant could reduce jobs by around 10,000 in direct and indirect employment.

As far as the business vehicle sector is concerned, finance and leasing companies are well represented, including LeasePlan, ALD Automotive, ING Car Lease, Arval and Alphabet. The business car market operates in a similar way to the developed business car markets of Northern Europe.

Business cars account for between 42% and 50% of the total new car market. Premium brands are favoured by business car users, with the German premium brands being well represented.

The BMW 3 Series and 1 Series are popular, along with Audi and Mercedes-Benz.

Volvo is also popular as a premium brand alternative. Considering the car market as a whole, Volkswagen is the most popular brand, followed by Opel and Peugeot, according to LeasePlan. JATO Dynamics also puts VW in top place, both for total market sales and business sales. JATO places Renault in second place for both retail and business sales, Peugeot in third place, Citroen in fourth place and Opel in fifth place for total sales.

For business sales JATO ranks BMW first followed by VW, Audi, Mercedes-Benz and Renault joint third and Opel in fifth place.

As we have said, growth in the new car sector has been small this year, which has had a parallel impact in the business car

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IFW October 2013

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fleet focus BELGIUM

Tax changes stir up the market ¡

sector. “Overall growth for the sector is not that big,” says Miel Horsten of ALD, “It is partly influenced by a couple of very large salary sacrifice programmes.

“If you look at it in 2012, the new way of calculating the Benefit-in -Kind-tax of a company car created uproar in the market.

Everybody was very upset and all lease companies and car manufacturers were saying that this is the end of the company car in Belgium. The overall impact was that income taxes for people with a company car went up.

Overall, it was not very well balanced. I think

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BEST IN BUSIN BMW

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pure electric cars were still OK, but hybrid vehicles such as the Opel Ampera, which still have tailpipe CO2 emissions, but a high investment value were completely penalised.

So it was a bit of a missed opportunity. In Belgium we call it the ‘Jealousy Tax’. Who cares if someone drives in a €30,000 car or a €40,000 car as long as it is clean?

“At the same time, the tax goes down with the age of the car, which you might say is a good thing to do. But the problem is that this actually slows down new vehicle purchases because people just say, ‘I’m going to keep my car an extra year’.

“The funny thing about that is that like in every country, we think that we’re the worst country when it comes to income tax, which in Belgium is probably the truth. But if you look at it, a company car is still the most tax efficient way of compensating people.”

Even so, the effect on business cars users has been predictable. According to JATO Dynamics, users have been opting for smaller cars with smaller engines. LeasePlan also reports that buyers are opting for more petrol cars under the new system, perhaps because they tend to have a lower selling price than diesel cars. LeasePlan estimates that the percentage of new petrol cars has increased slightly from 23.5% in 2011 to 29.9% in 2012. The company also suggests that the new fiscal rules have encouraged a switch from company to private ownership for small to medium sized companies (SMEs).

Financing methods vary, generally according to the size of the company, reckons LeasePlan, “There is a difference between small and large companies: while large companies prefer operational leasing (more than 50%), 43% of the SMEs choose private funding above financial lease (20%) or operational lease (9%). Financial leasing accounts for approx. 20% in both segments.”

Miel Horsten at ALD sees growth in salary sacrifice schemes. Why? “Typically, we have automatic indexation of our salaries in Belgium,” he says, “Which means that if the consumer index goes over a certain level, all salaries are adjusted, which for remaining a competitive economy is a disaster, compared with countries like Germany. Because

of the indexation on the employers’ side and the BiK taxation on the employees’ side, people try to get a company car because it is so tax efficient, so the salary sacrifice programmes we’ve had are mainly responsible for the growth in the company car sector.”

THE TRENDS So what trends appear to be emerging for the Belgian business car sector? LeasePlan believes that the growth of the total market is aligned with economic growth. The company has also seen that the lifetime and budget duration of a vehicle are getting longer. LeasePlan says that today, the mobility alternatives in Belgium are limited:

• Only 10% of employees use public transport for commuter traffic.

• Traffic congestion in the major cities is becoming dense.

• Governmental actions to improve mobility include enforcing large companies to implement a mobility plan in the capital cities.

As a result of these factors, LeasePlan believes that leasing companies will focus more on fleet and mobility management rather than operational leasing, together with an increased flexibility and service demand.

“I do think there is still room for growth,” says Miel Horsten at ALD, “Especially in the SME sector. We’ve got a lot of small familyowned businesses. Typically still a lot use outright purchase; so there is still some room for growth there. I expect that we have a few years of 2-3% market growth ahead of us. And I think besides that there’s going to be a push towards add-on services.

“There’s going to be a lot of to-do about mobility,” says Mr Horsten, “People just don’t want to sit in a car for three hours a day. The traffic density of our roads is so high and people just don’t want to lose their time in traffic any more. There’s a large quantity of small start-ups coming up with things like car sharing.”

remarketing

Dutch buyers are downsizing to small cars to reduce fuel costs, CO2 emissions and lower taxes.

NETHERLANDS

Dutch auction The Dutch market is exporting and importing cars to make up for the used car shortage, says Maarten Bekkers, Autorola’s country manager. here is a continued shortage of used cars in Holland as the major dip in new car sales and a move to extended contracts by large corporates in 2009 and 2010 continues to bite the remarketing sector hard.

Up until two years ago the Dutch used market was very parochial with cars being de-fleeted and staying within the home market. 99% of used cars were sold locally, but over the past two years the dynamics of the market have completely changed.

As many as 60% of the Dutch cars Autorola sold through its online platform are being bought from buyers outside the Netherlands.

Cars are being exported by asset owners in search of higher prices. As much of Europe is also suffering from a fall in used car volumes these cars are often making 10-15% more than if they were being sold in the home market enough of a premium to justify the extra administration involved in exporting a car.

This is a classic case of how remarketing works on a Europe wide basis now and that asset owners aren’t afraid to look at cross border transactions to satisfy their search for higher prices. Buyers are prepared to source stock wherever they can to meet their local demand. ”The growth in online remarketing has helped make this possible with Autorola giving buyers access to vehicle descriptions in their own language, supported by photography,” explained Autorola country manager, Maarten Bekkers. ”Autorola has pioneered this transparent approach to online remarketing as we know the more provenance that is available, the more likely an online buyer is to purchase a vehicle, even when it has been damaged,” he added.

To make up for this used car shortfall, Dutch dealers and used car operators have turned to importing cars from other European countries, in some cases just to keep their used car business. Cars are being sourced from Poland, Hungary and Germany; particularly late low mileage models that often struggle to sell in the local market.

The younger cars are in good condition and so are ideal to sell in the Dutch market, which remains heavily biased towards petrol cars that are lower mileage and in good condition. Like most European countries, users are downsizing to small cars to reduce fuel costs, CO2 emissions and lower taxes.

The challenge will be for Dutch buyers to continue sourcing the right kind of stock abroad at the right prices, but this is now a challenge that all the western European countries face. With the eastern European countries experiencing an ever increasing demand for used vehicles as levels of pay increase, so the used car stocks levels will continue to fall which will only push up prices. That has got to be good news for asset owners.

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operator profile

THE FUTURE Kwik Fit plan to expand into other European markets

K w i k F i t set for European expansion Franchising is how Kwik Fit plans to expand in Europe. Steve Banner reports.

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Kwik Fit’s experience has not put it off tackling larger and more challenging new markets

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est-known for its presence in the UK and the Netherlands, fast-fit specialist Kwik Fit is planning to use the franchise route to expand into other European markets with the aim of having over 500 additional outlets in place by 2019.

Both its British and Dutch operations are wholly owned, with over 600 and some 200 branches respectively.

Its ambition is to establish a master franchisee for part or all of each target country, which will in turn appoint sub-franchisees to run local centres.

Countries being targeted include Poland, the Czech Republic, Slovakia, Austria, Norway, Sweden, Finland and Slovenia, with Denmark, Belgium, Luxembourg, Romania and Croatia in the pipeline.

All these countries are relatively small markets and at least have the virtue that they are manageable. What about bigger ones such as France and Germany?

Kwik Fit has already been in both, admits UK fleet director, Peter Lambert; and the experience was not a happy one.

“We sold our Pitstop operation in Germany back in 2009 because we found that customers went to franchised dealers for their tyres,” he says. Its

Speedy operation in France was not a success either, because of the fragmented nature of the aftermarket and the strong loyalty shown by customers to small local garages, he adds.

“Every village in France still has a Renault dealer,” Lambert remarks.

Kwik Fit’s experience has not put it off tackling larger and more challenging new markets however, he says. “We are looking at appointing a Master franchisee for Russia but it’s early days,” he comments.

In the meantime Kwik Fit’s branches in the Netherlands are benefiting from the established Dutch practice of switching to winter tyres before winter sets in then back to summer tyres in the spring ready for the holiday months. In the UK it is rolling out 25 centres upgraded to the new ‘Plus’ standard, all of which should be trading by the end of the year.

“We’re hoping to have 150 Kwik Fit Plus sites in place nationwide by the end of 2015,” says Lambert.

‘Plus’ branches are geared up to handle quite complex mechanical and electrical repairs, using what Kwik-Fit refers to as slow-fit technicians, as well as the more usual activities of fitting tyres and replacing batteries.

The company also has an operation in Hungary under the Speedy banner with a dozen outlets which were being switched to the Kwik Fit brand at the time of writing.

Despite tough economic conditions, Speedy Hungary has seen turnover and pre-tax profits increase every year for the past five years, says Kwik Fit. Kwik Fit’s acquisition by Japan’s Itochu Corporation in July 2011 for €740 million meant that it became part of a vast, multi-faceted, trading conglomerate with other automotive interests. They include working closely with Suzuki on a variety of projects in Hungary.

Over half the Isuzu commercial vehicles sold worldwide are handled by Itochu and it has stakes in Isuzu distributors in the USA, Vietnam and Turkey. It holds a 25% share in Isuzu Motors Sales in Japan, which has just set up an auto leasing operation under the Isuzu Leasing Services banner.

Itochu has also invested in Century Tokyo Leasing Corporation in Japan as well as in brake manufacturer Akebono and in Yanase: a specialist importer of luxury cars.

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industry analysis

If new car sales rise, the flow of cars into the used market increases and prices have to drop to compensate

The car value ‘Holy Grail’ Is there a reliable used car price indicator?

Tim Lewis of BF Forecasts goes in search of the Holy Grail.

Throughout the period when I was setting-up and running Contract Hire companies, both in the UK and Europe, the Holy Grail I was always searching for was an indicator, ideally completely outside the motor industry, which would somehow predict a movement in used car prices. So, if this mythical indicator moved there would be an equivalent movement in used car prices three years later. Nirvana – no more RV risk!

I have read a couple of articles recently warning of the potential for used car prices in the UK to dip, as a result of the strength of the new car market. In a similar vein, my CEO several years ago was a very experienced Contract Hire and Leasing man, who reckoned the tipping point was 2.5 million total industry volume (TIV) in the UK. This idea that there is TIV ‘trigger’, which acts as a method of predicting movements in used car prices, is just a way of looking for an easily identifiable statistic that foretells an oversupply and none the worse for that. Having a reliable way of predicting oversupply, or under demand, helps to avoid too much misery, so ringing the alarm bells is essential. Every country will have its

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equilibrium TIV level, above which the storm clouds begin to gather.

Having this high level ‘rule of thumb’ is a sensible business precaution but it may be interesting to investigate the dynamics behind it a bit more thoroughly.

Statisticians have a wonderful expression – ceteris paribus. In English, we describe it as ‘if everything else remains the same,’ i.e. in a set of variables you may analyse one, assuming that all the others stay unchanged. So, if new car sales rise, the flow of cars into the used market increases and prices have to drop to compensate. This is an idealised situation, which rarely happens in reality. In practice another wonderful phenomenon occurs – elasticity of demand. Therefore, under normal circumstances, the market can fluctuate a bit to accommodate fairly modest changes, prices remain acceptably stable and we’re all happy. For a moment, though, let’s think about the reasons why the TIV may rise. There are two obvious causes: 1. The ‘feel good’ factor. The economy improves; people feel more confident and decide to buy a new car

earlier than they normally would.

2. Manufacturers introduce incentives, which induce buyers into the market earlier than normal (this applies to market segments as to the whole market).

The difference is that in the first case the bath is getting bigger, so, although there’s more water in it, the level doesn’t rise and, for as long as the bath continues to get bigger, it won’t overflow. In the second case, by contrast, the bath isn’t getting bigger, so, as soon as the water level rises, it will overflow. In other words, if the market grows naturally then, within reason, used car prices will remain stable; whereas, if the market is forced it causes an artificial bubble, which will burst, and used car prices will fall.

This is a very simple analogy; in reality it’s far more complex with the interplay of several factors, each affecting the others.

In conclusion then, TIV trigger volumes are a very useful ‘finger in the air’ but, regrettably, they’re not my Holy Grail. There’s still nothing to beat hard graft, experience and detailed analysis. Call in the professionals.

2013/14 fleet calendar International Fleet World’s guide to what’s happening in the fleet industry in the coming months – when, where and how to find out more info...

October 3-13 Bucharest International Motor Show, Romania (PC, LCV) CANCELLED 9-10 MPG Marathon, Sheffield UK (PC, LCV, CV) www.thempgmarathon.co.uk 18-27 Johannesburg International Motor Show, South Africa (PC, LCV, CV) www.johannesburgmotorshow.co.za 29 Van Excellence Conference 2013, Dunblane, Scotland (LCV,CV) www.fta.co.uk/events November 2-10 Athens International Motor Show, Greece (PC, LCV) www.seaa.gr 5-9 Dubai International Motor Show, Dubai World Trade Centre, Dubai, UAE (PC) www.dubaimotorshow.com 14-17 COMVEX Istanbul Commercial Vehicles, Buses and Components Expo, Turkey (LCV, CV) www.comvexistanbul.com 22-1 December Los Angeles Auto Show, USA (PC) www.laautoshow.com 22-1 December 43rd Tokyo Motor Show, Japan (PC, LCV, CV) www.tokyo-motorshow.com 27-2 December Riyadh International Motor Show, Riyadh Exhibition Center, Murooj Area, Olaya St, Riyadh Saudi Arabia (PC), www.riyadh-motorshow.com January 2014 13-26 North American International Auto Show (NAIAS), Detroit USA (PC) www.naias.com 16-26 Brussels Auto Salon, Brussels Expo, Belgium (PC) www.salonauto.be 17-19 Memphis International Motor Show, Memphis Cook Convention Center, Tennessee, USA (PC, LCV, CV) www.motortrendautoshows.com/memphis February 8-17 Chicago Auto Show (provisional), Chicago, USA (PC, LCV) www.chicagoautoshow.com 14-TBA Canadian International Auto Show, Toronto, Canada, (PC) www.autoshow.ca March 6-16 Geneva International Motor Show, Switzerland (PC) www.salon-auto.com April 8-11 NAFA Institute and Expo, Minneapolis Convention Center, Minneapolis, USA (PC, LCV, CV) www.nafa.org/conference 18-27 New York International Auto Show, New York, USA (PC) www.autoshowny.com 21-29 Beijing Auto Show, Beijing China International Exhibition Center Exhibition Hall, Beijing, China (PC, CV) www.chinaexhibition.com 29-1 May CV Show, National Exhibition Centre, Birmingham, UK (LCV, CV) www.cvshow.com September 25-2 October IAA Commercial Vehicle Show, Hanover, Germany (LCV, CV) www.iaa.de KEY: PC – passenger cars // LCV – light commercial vehicles // CV – commercial vehicles

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fleet profile JAGUAR LAND ROVER

JLR’s eastern promise Jaguar Land Rover looks set for a range of new models under Tata ownership, as Mark Bursa discovers. here were raised eyebrows across the auto industry when Tata bought Jaguar Land Rover from the Ford Prestige Auto Group ire sale in 2008. What did this Indian upstart, with its cheap, emerging markets hatchbacks, know of the luxury car market?

Five years on and Tata has proved to be a very good owner of JLR. The company may not have had much expertise in the sector beyond assembling some Mercedes-Benz Eclasses from CKD kits, but the Tata way is to manage the brand sensibly, and let the management get on with things.

A feature of Tata’s global business expan-

T

sion has been its careful husbandry of the brands it has acquired. Tata takes a good look at a brand and its management before making sweeping changes. Its takeovers of Anglo-Dutch steelmaker Corus, and British tea brand Tetley, are seen as exemplary, with high workforce approval.

And industry observers, at irst fearful of an Indian company taking stewardship of classic British luxury brands, now realise that the Tata takeover was a good one. The brands simply passed from an American company in inancial dif iculties to an Indian one with a strong balance sheet. They’re no

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more or less ‘British’ than they were under Ford – but under Tata, JLR has been able to implement new product launches and manufacturing expansions rapidly, without the need for board approval from Detroit.

And Ford left Tata with a good ‘dowry’ – the Jaguar XF and XJ models had not yet been launched, but were fully engineered and came with the sale – as did the Range Rover Evoque. So the uncompetitive S-Type and X-Type models were swiftly dropped, and JLR now has a very young range.

Under Ford, the plan was for Jaguar to be like BMW, competing for volume luxury car

GLOBAL SALES BUCKING THE TREND

sales – the X-Type was intended to compete with the BMW 3-series and Audi A4. Tata reined in those ambitions, focusing instead on Porsche as a business model in terms of volume and unit pro itability.

But now, it seems Tata has changed its mind, and JLR, sur ing a wave of popularity in Europe, The Middle East and, especially, China, is about to chase volume once again.

New, volume models are under development as JLR looks to capitalise on a strong sales performance in 2012, where it was one of only two major automakers to post a sales rise in Europe.

In 2012, global Jaguar Land Rover sales of 357,773 vehicles were up in every major market due to new model introductions and update programmes. China is now JLR’s largest market delivering its best ever sales performance in 2012 (71,940, up 71%). It is followed by the UK (68,333, up 19%), the US (55,675, up 11%), Russia (20,549, up 43%) and Germany (16,722 up 41%).

Land Rover brand was the main growth driver, with 2012 sales up 36%. The brand's top five markets were China, UK, US, Russia and Italy – these five accounted for 65% of sales. Notable product performances were delivered by the Range Rover Evoque with 108,598 vehicles sold in its first full year of sales - more than any other previous Land Rover model. Land Rover Discovery 4/LR4 sales were up 3%, and despite being in run-out mode, Range Rover Sport sales rose 4%.

Jaguar sales rose more modestly – up 6% compared to 2011, driven by the XF 2.2 Diesel and XF Sportbrake – global XF sales rose 13%. The brand's top five markets were UK, US, China, Germany and Russia, which combined equated to 71% of sales for the year.

These increases have continued into 2013, with group sales of 210,190 vehicles worldwide in the first six months of 2013, a year-onyear increase of 14%. JLR said sales were up in every major region, including Asia Pacific (26%), UK (16%), China (16%), North America (13%) and Europe (6%). Sales have been bolstered by the new Range Rover, with 22,000 sold in H1, while the new Jaguar F-Type, which went on sale toward the end of the period, sold 3,000 units.

Land Rover’s half-year sales were up 11% at 172,554 with Asia Pacific leading the way posting growth of 28%, the UK 15% and North America 10%. June sales grew more modestly by 2% to 27,165 due to the run out of the old Range Rover Sport. Jaguar’s half-year sales were bright, reaching 37,636, up 29%.

NEW RANGE

¡

ROVER

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fleet profile JAGUAR LAND ROVER

¡ RANGE RENEWAL 2014 XF

SP RANGE ROVER

ORT

RANGE ROVER

NEW F-TYPE

HYBRID

JLR has added new models across the range in the past 12 months – and if a model hasn’t been replaced, it’s had a facelift.

New Range-Rover was unveiled in late 2012, and all-new RangeRover Sport has subsequently been launched. Hybrid versions of both models have recently been revealed.

Both Freelander and Discovery will receive facelifts in the near future – a revised Discovery was shown at the Frankfurt Show last month – along with a host of other JLR announcements.

The launch of the XF 2.2 Diesel, XF and XJ 3.0 litre powertrains and the introduction of various new derivatives including the XF

Sportbrake have widened the Jaguar portfolio and geographic reach.

New XJ and XF All Wheel Drive models have also been launched in ‘snowbelt’ markets and have been well received internationally, particularly in the US. These are not available in right-hand-drive, however, as AWD accounts for fewer than 5% of UK luxury sales.

On top of this, the new F-Type sports model has created a considerable ‘halo’ effect for the Jaguar range. In particular, JLR reports that around 85% of sales enquiries for the car in the US were new to the brand, and the age demographic was 10 years younger than current customers.

INVESTMENT IN NEW FACILITIES JLR was hugely profitable last year – in the financial year to March 31, 2012, the company generated pre-tax profits of €1.76 billion on a turnover of €15.8bn.

Those profits are being ploughed back in to the business. JLR has stated it planned to invest €3.16bn (US$4.2bn) each year for the next four years on new products and production facilities. Much of this is concentrated on new facilities in the UK – a major shift from 2009, when tough market conditions led Tata to announce that it planned to close one of the UK plants. This plan was abandoned in October 2010, when unions and management agreed that all facilities in Britain would stay open until at least 2020.

Since then new investments have been announced – and upwards of 8,000 extra workers have been hired. The most significant project is a state of the art advanced engine facility at i54 South Staffordshire Business Park near Wolverhampton, which is being built at an initial investment of €415.5m and taking employment at the site up to 1,500 new jobs. Construction commenced in June 2012.

In March 2013, with construction under way, JLR announced it would double the size of the new i54 engine plant at a cost of an extra €585m, creating a further 700 jobs. JLR claimed global demand has continued to rise since the plans were first announced. The plant will include an engine-testing centre alongside the manufacturing and assembly halls.

The factory will build four-cylinder petrol and diesel engines, codenamed ‘Hotfire’, for Jaguars and Land Rovers and is expected to start engine production in 2014. The Hotfire engines will not just be for the new smaller Jaguars – they will also be fitted to the next-generation XF range, expected in 2015, and are likely to feature in Evoque too. A further €433m is being invested in a new aluminium body shop at the Solihull plant south of Birmingham for the new Range Rover as well as upgrades to paint-applications technologies, trim assembly, warehousing and a new customer handover centre.

Jaguar has continued to invest in its existing plants: Castle Bromwich and Solihull in Birmingham, and Halewood near Liverpool. In 2012 it hired extra workers at the Jaguar Castle Bromwich plant to cope with as the XF Sportbrake, re-engined XF and XJ models and the new F-Type sports car. JLR also took on 1,000 workers in 2012 at its Halewood plant near Liverpool, which makes Land Rover Freelander and Evoque models.

Halewood moved to 24-hour production on three shifts, including a new night shift, last year. This is the first time Halewood, built as a Ford plant in 1964 and refurbished by Ford to build the Jaguar X-Type in 2001, has ever run a night shift.

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GROWTH DRIVER – NEW SMALL JAGUARS So with a full-year sales total of 400,000 units in sight, JLR is at a crossroads.

Company sources now say JLR is planning to increase the number of vehicles made annually to 600,000 by 2020 – which will necessitate a return to building smaller Jaguar vehicles.

The new cars will include a compact Jaguar saloon and estate, plus a crossover SUV, expected to be produced from 2015 – when new four-cylinder engines will also be available.

The new vehicles will be based on an all-new platform architecture, the irst fully designed by JLR under the ownership of Tata Motors. They will be made from aluminium and will be built on production lines under construction at JLR’s UK Solihull plant, previously used solely to manufacture Land Rover models, creating around 1,500 new jobs, according to company sources.

The luxury compact and SUV segments are among the fastest-growing in the world, and will give JLR more irepower in the key Chinese market, where its best sellers are the smaller Land Rover models, the Evoque and Freelander. The new Jaguar saloon and estate will compete with Mercedes-Benz C-Class, BMW 3 Series and Audi A4, while the compact crossover, which is rumoured to be badged XQ, will be up against the likes of Audi Q3 and BMW X3, with prices starting just above €34,000.

Perhaps the clearest sign that Jaguar is being focused was the news last December that JLR had suspended plans for production of the Jaguar C-X75 hybrid supercar. The decision was described as a result of “thorough re-assessment of near-term market conditions”, claiming the economic landscape did not “currently” support the introduction of a supercar such as the C-X75. But launching such a vehicle would send out a mixed message at a time when appeal of the Jaguar brand is being broadened.

The C-X75 concept featured hybrid technologies, carbon composite materials developed in association with Williams Advanced Engineering. Five prototypes were built and these are being used for an R&D programme – elements of the project will be used in other future products, said JLR. “Project C-X75 has already broken many new barriers in terms of innovation and advanced technologies,” said Jaguar brand director Adrian Hallmark. “We have achieved an incredible amount and will continue to test and develop these technologies, which are highly relevant to JLR's sustainable future.” ¡

New vehicles will be built on production lines under construction at JLR’s UK Solihull plant.

CROSSING OVER C-X17 Sports Crossover concept is designed to open new doors for JLR...

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fleet profile POPULAR Evoque is selling well in china

JAGUAR LAND ROVER

¡

CHINA With China becoming JLR’s number one market in terms of sales, building cars there is a logical next step. Last October, the Chinese Government of icially approved a plan to build a new China factory as a €1.52bn joint venture with ambitious Chinese automaker Chery Automobile. The 50:50 Chery-JLR venture will be based in Changshu city, near Shanghai, with an annual capacity of 130,000 cars. The factory is scheduled to open in July 2014. The partners will make Land Rover Freelander SUVs initially, with about a third of the installed production capacity (approximately 43,000 units) allocated to the compact SUV. This would be followed by Evoque (34,000 a year), along with some 30,000 Jaguars and 23,000 local-brand units.

According to the plan, the joint venture would comprise a vehicle plant, an engine plant and an R&D centre. The engine plant would make 125,000 TGDI and 5,000 V6 engines a year. Smaller 1.6-litre diesels may be added later as capacity rises. The joint venture’s long-term intention is to increase annual vehicle sales and production to 250,000 units.

The JV would also be able to tap into Chery’s large sales channels in China’s small and medium cities. JLR CEO Ralf Speth said the joint venture would create “a thrilling outlook for both Chery and JLR”. JLR already has 125 dealers in China.

INDIA JLR already assembles the Freelander at a Tata plant in Pune, and last year launched a feasibility study into manufacturing more vehicles in India. The Economic Times of India reported that the company was considering a plan to build the next-generation Defender in India, either at Pune or Sanand. The factory is also likely to house an engine plant.

The newspaper said the feasibility study is expected to be completed in the second half of this year and if the plan goes ahead, the new plant is likely to be ready by the middle of 2015. Capacity is likely to be around 30,000 to 40,000 units a year, and JLR is keen to use this as an export hub with up to 80% of output shipped to overseas markets.

India could become the global production hub for Defender – which would free up more capacity at Solihull in the UK for Range-Rover and other Land Rover models such as Discovery.

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SAUDI ARABIA The Middle East is a traditionally strong market for JLR, and the company has announced it is looking to build vehicles in Saudi Arabia using locally sourced aluminium components. Middle East and North Africa JLR sales rose 9% last year to more than 12,000 units.

JLR last year signed a letter of intent with the kingdom's National Industrial Clusters Development Programme (NICDP) and a feasibility study is now under way to decide if full vehicle manufacture there is viable. This is likely to start with CKD assembly using kits shipped from the UK, with more complex manufacture to follow.

Speth said: “We are committed to further international partnerships to meet record demand for our highly sought after vehicles. Saudi Arabia is an attractive potential development option, complementing our existing advanced facilities in Britain and recent manufacturing plans to expand in other countries including India and China.”

He added: “This is an exciting project that could enable Jaguar Land Rover to establish a JV partnership in a part of the world where luxury vehicle sales are expected to rise. If we proceed, it will complement our existing expansion in the UK and elsewhere.”

The world’s largest integrated aluminium complex, a joint venture between Saudi Arabian Mining Company and Alcoa, is due to begin production in 2014 in Ras Al Khair creating potential opportunities for the automotive sector. Jaguar is planning to source aluminium from this facility for its other worldwide plants as well.

JLR has also opened a new engineering test centre in Dubai, UAE, to conduct extreme hot-weather vehicle research, development and testing. The new facility in the Al Barsha area of Dubai will offer a comprehensive range of tests including durability, calibration and hot weather testing for heat and humidity. The facility will also test powertrains, chassis and heat and ventilation systems, as well as off-road and sand driving capability.

China is becoming JLR’s number one market in terms of sales

SMALL ISSUES Tata Nano has been problematic

MALAYSIA Land Rover (Malaysia) is considering building some models from CKD kits for sale both domestically and for export to neighbouring countries as demand across the ASEAN region continues to grow. Malaysia’s Sime Darby Group – a big regional player in importing, assembly and distribution could assemble some models for sale across ASEAN. The company said it sold 650 Land Rovers in Malaysia last year and expects sales to reach 1,000 units in 2013, most of which will be Range Rover Evoque models.

BRAZIL JLR had been planning to set up a CKD assembly plant in Brazil to assemble Land Rover Freelander SUVs from in order to avoid high import taxes. But late last year, JLR announced it had shelved these plans following a change in local tax rules for foreign companies.

Ralf Speth said the investment no longer made sense after a court decision that regional governments in the South American country could not use tax breaks to attract foreign investors, which meant the cost difference between importing vehicles and producing them locally had disappeared. Speth added he hoped Brazilian authorities might introduce a new scheme in the future, in which case he would look at potential investment there again.

PROBLEMS AT TATA The only black spot on Tata’s automotive business is, somewhat surprisingly, its own brand in India.

Tata’s share of India’s car market has tumbled to 8.9% in the first four months of the Indian fiscal year (April-July 2013), down from 11.8% in the year ended March 31. Factory utilisation has plummeted to just 36.2% in the first quarter of the new financial year, the FT reported. In particular, Tata’s tiny Nano city budget car has been beset with problems – a dispute over a plant location, plus unexplained instances of the cars bursting into flames.

Without a €175m dividend from JLR, Tata’s Indian business would have made a €48m loss in the first quarter of the 2013-14 fiscal year.

Tata has launched no new cars since 2010 and has lost market share to importers such as Ford and Renault, largely due to SUV sales – Tata lacks an SUV model. A revised Nano has just gone on sale, but the model has never reached anything like its targets.

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INTERNATIONAL

FLEETW RLD

ONLINE NOW! For all your fleet needs, visit internationalfleetworld.com

NEWS from the global fleet community

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launch report Opel/Vauxhall Zafira 1.6 CDTi p46 SEAT Leon ST p47 Peugeot 308 p48 Chevrolet Trax p49 While Peugeot has kept the 308 nameplate, it’s the only surviving part of the old car. Its successor has the all the right attributes to become a thoroughly successful part of the C-segment. p48

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launch report

Opel Zafira Tourer 1.6CDTi Opel/Vauxhall’s new diesel is the first of its new engines. It’s impressive, reckons John Kendall.

SECTOR MPV PRICE From €27,000 (approx) FUEL 4.1l/100km CO2 109g/km GM’s European operation revealed a variety of new products at the recent Frankfurt Show, from the Opel/Vauxhall Monza concept, to the eagerly awaited 1.0-litre three-cylinder petrol engine developed with SAIC of China, that will make it's first appearance in the ADAM. This advanced petrol engine is the first in a series of related engines and the same is true of the new 1.6-litre common-rail Diesel engine that first appeared in the Zafira Tourer in May and is gradually being rolled out in the same car across all GM's European markets. It will follow in other Opel/Vauxhall products in due course, likely to include Astra, Insignia and Meriva.

We gave details of the engine in the May issue – it is only offered in Euro6 form and will trigger a rationalisation of the Euro6, 2.0litre CDTi range, currently available with 110hp, 130hp, 165hp and 195hp, overlapping with the 136hp/320Nm 1.6-litre engine.

GM has not discussed other power output options, but it seems likely that it will be offered with at least one other lower rating to take over from the 110hp 2.0-litre engine.

The Euro6 rating means it is the first diesel from Opel to need the AdBlue fluid additive to help reduce emissions of oxides of Nitrogen (NOx). GM reckons that depending on

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driving style, the Zafira Tourer 1.6CDTi will cover between 4,000km–8,000km before the AdBlue tank needs topping up. Vauxhall and Opel dealers will sell 5-litre top-up packs designed to provide spill-free fill ups. The filler is located next to the fuel filler under the filler flap with a smaller diameter neck and blue filler cap. Not all Vauxhall and Opel models fitted with the engine will need AdBlue, but expect all the heavier and more powerful models to need it. When the remaining AdBlue range is around 1,500 miles, a warning light will show on the instrument panel.

If the tank has not been refilled with around 800km range remaining, top speed will be limited to around 100km/h, then 50km/h with about 400km range remaining. If the AdBlue tank is run dry, the engine will not restart after about the 4th attempt, to comply with the Euro6 legislation. So drivers should get used to topping up when the warning light first appears. Fuel stations across the EU will almost certainly be stocking AdBlue too, as many truck fuel stations do now.

GM claims some fairly impressive fuel consumption figures for the Zafira Tourer with the engine – 4.1l/100km combined – thanks to reduced friction in the engine as well as the thoroughly modern design. On the road, it is notably more refined than models

with either of the current 1.7-litre (which it will replace) or 2.0-litre diesels. At cruising speeds in sixth gear, it is exceptionally smooth and free from the low frequency rumble associated with so many diesels. Brisk acceleration with higher revs gives a more diesel like sound, but it is muted and not the harsh sound of a revving diesel from a few years ago. The reduced friction is also noticeable on the road. After a downhill section, the road continued uphill and it took far longer for the speed to drop running uphill without power than expected. Driving on the overrun like this also triggers the brake energy recuperation system, reducing alternator use when under power and helping to save fuel.

In ‘Eco’ mode, our test Zafira Tourer’s default setting, power is limited to cut fuel consumption, but prod the Eco button on the centre console and the torquey engine shows its impressive capabilities. Stop/Start is standard on all Zafira Tourers fitted with the engine, not just the ecoFLEX models.

verdict Without doubt, this is one of the best 1.6litre diesels available and the best fourcylinder GM diesel so far. It will improve the fleet appeal of the company’s cars.

SEAT Leon ST SEAT’s impressive Leon gains a station wagon variant for the first time. John Kendall drives it.

SECTOR C-sector PRICE TBA FUEL 3.2 – 5.9l/100km CO2 87 – 137g/km SEAT has never before offered a station wagon variant of the C-segment Leon hatchback. Customers who previously wanted a C-segment estate car from within the Volkswagen Group had to change their allegiance to Skoda or Volkswagen. But that is about to change. SEAT took the wraps off the Leon ST (Sport Tourer) just before the Frankfurt Show, revealing a stylish station wagon interpretation that is as pleasing to look at as the current Leon on which it is based. In fact it looks like a subtly extended version of the Leon five-door.

It may not look that much bigger at first glance, but the ST offers 587 litres of luggage space with the rear seats in place, while a movable floor section can offer up to a useful 100 litres of concealed storage space just by re-positioning the movable floor. This helps to overcome the longstanding problem of how to keep valuable items out of sight in an estate car – the roller cover usually suggesting that there is something that might be of value in the boot. Wherever the boot floor is positioned, there is space beneath it to store the roller cover so it does not have to be removed when it is not needed. The additional boot capacity is produced by extending the rear overhang by 23cm – the wheelbase

stays the same as the Leon five-door.

Fold the 60/40 split rear seats down and the Leon ST will offer up to 1,470 litres of space. If that is still not enough, the front passenger seat can also be folded down as an option to give a flat floor section from the back to the front of the car.

The ST also gets a 12-volt power point in the boot and storage nets there too. Rear seat reading lights are also part of the package. Other options include a panoramic sunroof and a variety of option packs including folding seat back tables on the front seats.

The ST gets the same wide range of petrol and diesel engines as the five door models and will also get the new 1.6TDi Ecomotive diesel with emissions of 87g/km, designed to conform to the new tax system in the Netherlands from next year. The entry-level petrol engine is the 86hp 1.2TSI offering 119g/km of CO2 and 5.2l/100km combined fuel consumption.

1.4 and 1.8TSI engines give a total of five petrol engine ratings up to 180hp, with CO2 emissions between 119g/km and 137g/km while the diesels span 90hp to 184hp with 87g/km to 119g/km. Each engine is available with Start/Stop technology and the DSG automated transmission is available with all engines apart from the 1.4TSI.

There will be an AWD version too, or more correctly four AWD versions, probably sold under SEAT’s up and coming ‘Experience’ sub-brand likely to appear at the end of 2014.

The ST brings the same accomplished driving experience as the Leon five-door, with the same impressive build quality. It may have a 23cm longer rear overhang, but, certainly when lightly laden it makes no difference to either the pleasant driving experience or the polished handling. It’s a stylish estate car with a high degree of practicality and fun. In other words, just what SEAT needs to help expand its fleet business.

SEAT has developed a European used car strategy, in line with the Volkswagen Group’s 2018 target, involving extensive investment in the used car network. This is designed to bolster residual values and the Leon ST is part of that programme. There are quarterly and bi-annual residual value committee meetings in all markets, involving distributors and VW Group Financial Services.

verdict The Leon ST is a welcome addition to the new Leon range, extending the company’s fleet appeal and helping to bolster its retail presence. Well worth a look.

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launch report

Peugeot 308 The stylish new 308 is a welcome return to form for Peugeot’s C-segment offering, says Alex Grant.

SECTOR Lower medium PRICE €17,800 – €28,350 FUEL 3.7 – 5.8l/100km CO2 95 – 134g/km It’s ironic that Peugeot’s new 308 is the first car to enter a second generation with an ’08’ suffix, because this radically different new hatchback is so much of an improvement over its predecessor that the carmaker could comfortably have ditched convention and named it the 310.

This is Peugeot’s best-resolved lowermedium design since the still stylish 306 ended production in 2002. It’s wider, lower and shorter bumper to bumper than the car it replaces, and with arches stretched over optional large wheels it has on-road presence the Mk1 308 never quite managed.

Under the skin is PSA Peugeot Citroën’s all-new modular platform, named EMP2, as found in the latest C4 Picasso. Not only does this allow forward compatibility with the group’s diesel-electric Hybrid4 and hydro-pneumatic Hybrid Air drivetrains, but it’s incredibly lightweight, contributing half of the 140kg weight saving over the previous car. It means the 308 is lighter than the equivalent 207 was, with benefits for agility and efficiency as a result.

Launch engines comprise three petrol engines and two diesels, with the familiar 1.6-litre e-HDI 115 the most popular.

While it’s a great fit here, and now a little more fuel efficient, the lighter body helps

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the e-HDI 92 feel almost as capable on the road, while CO2 emissions of 95g/km will further reduce costs. It’s slower, but not significantly so.

New three-cylinder turbocharged petrol engines and a trio of Euro6 compliant BlueHDI diesels will arrive in Q2 2014, after which the launch engines will be phased out. Diesels will comprise 1.6 and 2.0-litre units between 120 and 150bhp, taking the 308 to a currently class-leading 3.1l/100km and 82g/km with considerably fewer harmful exhaust emissions thanks to a new filtration system. The preproduction BlueHDI 150 available to test at the launch drove well, but felt heavier and sounded coarser than either of the launch diesels.

The latest models to join the range have all enjoyed strongest demand for the highest trim levels, and Peugeot expects this to be true for the 308. The two range-topping trims feature slimmer and more attractive all-LED headlamps and reshaped front bumper, which make it look more of a premium product than entry-level models.

Equipment is generous across the range, though. Most feature Peugeot’s minimalist new dashboard, which puts most controls into an intuitive touch

screen in the centre of the dashboard, bundled with standard-fit satellite navigation. Important functions are accessed using shortcuts on the map display, and while it lags occasionally it’s an easy system to use and a unique selling point too.

Otherwise, the dashboard is similar to the 208 and 2008, adopting the small lowmounted steering wheel with instruments perched just under the driver’s line of sight.

It suits shorter drivers best, but the steering wheel adds a direct feel to the driving experience, and the anti-clockwise rev counter is an attractive novelty. Boot space has grown by 40 litres, but rear legroom isn’t as generous as rivals and the shallow rear window could make passenger rides claustrophobic for tall passengers.

So while Peugeot has kept the 308 nameplate, it’s the only surviving part of the old car. Its successor has the all the right attributes to become a thoroughly successful part of the C-segment.

verdict Great to look at, better to drive and with segment-best economy coming next year, the 308 feels like it has skipped a generation and should be a very popular fleet model.

Chevrolet Trax Promising high value, Alex Grant asks whether the Trax can tempt buyers out of its Mokka sibling.

SECTOR Crossover PRICE €16,990 – €25,990 FUEL 4.5 – 6.5l/100km CO2 120 – 153g/km Chevrolet’s B-segment crossover has arrived in Europe over a year behind sister brand Opel but, in a rapidly expanding market sector where C-segment running costs and muscular styling are attractive, it has some solid foundations laid out.

The Trax shares its platform with the Opel Mokka and Buick Encore, and until production of the European market Opel and Vauxhall models is moved to Spain, all three cars are built on the same production line in South Korea. With the Mokka predicted to become a backbone of its range, and the smallest crossover segment growing rapidly with new products, Chevrolet’s newcomer is an important addition.

While its siblings share bodywork, the Chevrolet is visually a very different car.

The bulky wheel arches and large glasshouse belie its small size – it’s 250mm shorter than a Cruze hatchback – and the end result looks more closely related to a shrunken Orlando than the cars with which it shares a production line.

This is also true inside, where the Trax features a similar dashboard to the Aveo.

It’s noticeably less tactile than the Mokka’s, but with its blue-backlit digital instrument panel and air vents styled like

jet thrusters, the interior manages to avoid feeling overly cheap.

Most markets will get two trim levels, and with diesels only available on the higher level, the majority of fleet customers will also get Chevrolet’s new MyLink infotainment system. It’s a derivative of Opel’s IntelliLink setup also found in the ADAM and new Insignia, and capable of streaming apps and music from smartphones onto its high-resolution display.

Also unique is the Trax’s chassis setup.

The platform itself derived from an extended version of the Aveo, and European versions feature bespoke suspension and steering settings, different even to the Mokka. The result is a convincing compromise between superminilike agility and ride quality close to a C-segment car.

There’s also plenty of space for four adults inside, though road and wind noise at higher speeds give away its small car DNA. Customers downsizing from a Cruze hatchback will notice a drop in boot space, but the load area extends from 356 to 785 litres with the seats folded flat.

Powertrains are similar to the Cruze, and the familiar 128hp 1.7-litre diesel engine is likely to be the biggest seller in

Europe. This offers plentiful power for the compact Trax, but it’s also exceptionally noisy especially under load. Given the choice, the 1.4 Turbo petrol is a nicer drive, and far quieter, but 139g/km CO 2 emissions compared to the diesel’s 120g/km will limit its corporate appeal.

The line-up also includes a 1.6-litre petrol, but it’s primarily a retail option and unlike the more powerful engines it isn’t available with four-wheel drive or an automatic gearbox.

Chevrolet’s big problem could be value for money against its sibling. Vauxhall already offers a highly equipped Mokka Tech Line, designed for fleets, in the UK and as Chevrolet has no direct alternative this makes an equivalent Trax more expensive at the front end. Opel is already rolling out Business Edition models in some markets, and from a corporate standpoint it does make the Chevrolet harder to justify.

verdict A well-rounded proposition, but this is a competitive segment with abundant high value, which is likely to keep the Trax a retailfocused model compared to the Mokka.

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fleet in figures

China booms, Europe recovery in sight?

The European car market may be showing signs of recovery, but it will be slow.

Meanwhile the US and China continue to boom, reports John Kendall.

The buoyant market in the US has encouraged Ford to hire 1,400 new employees to build the Fusion sedan.

Car buyers’ thoughts rarely turn to buying cars in August and that is re lected in the new European registration igures for that month. In fact, the European Automobile Manufacturers Association (ACEA) does not publish igures for the summer – we shall have to wait a while longer yet for ACEA statistics, so we are relying on alternative sources for our data this month.

Data from LMC Automotive shows that car sales in Western Europe continued to

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decline overall with August sales down – 5.3% compared with August 2012 to 631,237. This percentage decline also matches the year-on-year fall for the January to August period, which is also down -5.3% to 7,638,579.

So the pattern remains similar to the last few months with the UK the only major European market to be growing. UK data shows sales rose by +10.9% in August compared with August 2012 to 65,937. This

increase exceeds the January to August growth of +10.4% (1,391,788 units), compared with 2012, which seems to show the underlying strength of the market. August is usually a quiet sales month in the UK because the country has the second twiceyearly registration plate change in September and sales are usually suppressed in August as buyers hold back for a new registration plate in September. LMC’s data forecasts overall sales growth of +6.5% for the

UK in 2013, which could result in around 2.1m sales by the end of the year.

Among the other large European markets, sales in Germany have continued to fall with the January to August total reaching 1,969,820, down -6.6% compared with the same period in 2012. LMC’s annualised selling rate data shows that to date this is down some -4.0% for Germany, which may suggest that the rate of decline in Germany could be slowing.

The pattern of decline in the French market is continuing with sales down 9.9% to 1,165,987 and LMC points to a falling back in the selling rate there too after a slight improvement. Sales in Italy showed signs of improvement in August although the market remains weak with sales down -9.2% YTD to 891,715.

The rate of decline in Spain has slowed, with the market down -3.6% YTD to 501,234 but as LMC points out, the market is still being supported by a scrappage scheme. Belgium, Denmark, Norway and Portugal are among the countries where new car sales have been rising, which gives support to increasing confidence in the European economy as LMC notes; “There are good reasons to continue to believe the market will begin to pick up. The Eurozone economy is expected to return to growth in the second half of the year, albeit slowly, which will provide support to the car market. Consumer confidence has also been edging up in recent months. However, the West European car market (at 11.4m units) is likely to finish 2013 nearly 3.5m units lower than 2007 with only a modest improvement likely in 2014.”

UNITED STATES Meanwhile, the market in the US continues to grow. Scotiabank reports that annualised sales volumes exceeded 16 million units in August for the first time since late 2007, a sizeable increase from the average selling rate in July of 15.4 million. Scotiabank attributes this to; “Robust replacement demand alongside high consumer confidence, on-going improvement in the labour and housing markets, and rising household wealth – both house prices and equity markets have posted double-digit increases over the past year.”

Volkswagen Lavida is China’s second best selling car The buoyant market has encouraged Ford to hire 1,400 new employees at its Flat Rock, Michigan, plant to build the Fusion sedan. Scotiabank reports that Fusion inventories are down to 13-days supply in California, less than a quarter of the industry norm.

The popularity of the Fusion has not been such good news for European customers.

The car was originally due for European launch, as the next generation Ford Mondeo, last year but demand in North America had delayed that launch. The continuing demand for the car may not be a factor in the latest postponement of the launch though, as labour disputes are blamed for the latest delay, which has pushed the European launch back until late 2014.

CHINA The Chinese car market continues to grow. Despite forecasts earlier in the year that the market would grow at single digit rates this year, growth has exceeded that.

China Auto Web reports that August car sales reached 1,353,200 in August, up +11% on August 2012. For the year to date, sales have reached 11,256,000, an increase of 13.1% on the same period in 2012. Truck and bus sales in China have increased less, but are up +6.8% for the year to date to 2,691,600.

Shanghai-Volkswagen led the August market with 133,100 sales, ahead of FAWVolkswagen with 131,700. Shanghai-GM was the third best seller with 123,700 sales.

China Auto Web reports that the best selling car in China during August was the

Ford Focus, with no less than four Volkswagen models taking the remaining top five places, with the Volkswagen Lavida, Volkswagen Sagitar, Volkswagen Passat and Volkswagen Jetta. Mid-size SUVs proved popular too with the Great Wall Haval H6 leading the sector, followed by the Volkswagen Tiguan, Honda CR-V, Hyundai ix35 and Audi Q5.

The Chinese Association of Automobile Manufacturers says that car sales in the January to August period were around 11,255,989 units, up +13.1% on the same period in 2012.

INDIA LMC Automotive reports that the light vehicle market in India is in a prolonged slump with sales from January to July falling -14% to 1.73m vehicles. Passenger car demand is reckoned to be -9%, down to 1.41m units.

“In this time of economic gloom, higher costs of financing, and depleting discretionary income, India’s vast middle class are holding back the purchase of vehicles – still considered more a luxury than a necessity by the majority,” said Ammar Master, senior market analyst for India at LMC Automotive. “This is most evident in the continued slide of mini and sub-compact cars. In addition, many buyers of larger vehicles and luxury cars are also now deferring purchases.”

LMC expects to further downgrade its car sales forecast for India from 3.0m, already reduced from 3.56m at the beginning of the year.

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