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FLEETW RLD internationalfleetworld.com The new

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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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VIEWPOINT

CONTENTS

PSA Peugeot Citroen has been short of good news for the past year or two, but the company’s results for the first half year look more encouraging than the 2012 figures the company reported back in February, when the company reported an annual loss of €5 billion. The company’s latest figures for the first six months of 2013 show the company is still making a loss, but the loss is down to €426million, roughly half the €819m loss the company reported for the first half of 2012. And that figure is on reduced sales, which were down by 3.8% to €27.7bn. PSA says that sales outside Europe rose by 22%, accounting for 41% of total volume, but the car maker is still reliant on the still declining European market, especially in France and southern Europe.

PSA has done well in China with sales in H1 2013 up 33% to 278,000, helped by the launches of the C4-L and 3008.

Group sales rose by 19.7% in Latin America, to 146,000 units. The market in both these regions is likely to soften for the rest of the year, but China is still set to see the biggest growth in cars sales around the world.

PSA will also have been cheered by the news that its €7.5bn restructuring plan, which includes state aid, was given the go-ahead by the European Commission.

The French Government’s guarantee is in the form of a bond issue by PSA’s finance arm and is said to be worth €486m. Another €85.9m will go towards funding greener vehicles, something that PSA Peugeot Citroen has proved to be good at producing.

04 News Analysis 10 EV News Analysis 12 Environment Can alternative fuels work for fleets?

18 Environment Best ways to cut a fleet’s carbon footprint.

20 Environment The green benefits of fleet telematics.

22 Strategy European residual value confidence.

24 Technology Autonomous driving vehicles are closer than you might think.

28 Management How DriveCam can reduce fleet risk.

30 FOCUS ON...

USA.

34 Fleet strategy The fledgling Japanese fleet market.

38 PROFILE IVECO.

44 2013/14 Fleet Calendar 45 Launch Report Audi A3 Limousine / New S-Class / Renault Captur / Golf GTD.

50 Fleet In Figures Analysing the latest ACEA sales charts.

12 24 38 48

John Kendall Editor

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

IFW September 2013

03

news analysis

LeasePlan profits up

Hertz updates rental sites

Fleet management company LeasePlan announced net profits of €171 million for the first six months of 2013, an increase of 38.9% compared with the same period in 2012.

The company also saw its liquidity and capital positions improve and a rise in the number of vehicles managed from 1.35m to 1.36m.

The company’s total assets rose from €19.5bn in financial year 2012 to €20.1bn. LeasePlan attributes the rise in profits to risk mitigation measures and modest improvements in some European second-hand car markets for terminated lease vehicles. The company’s capital and liquidity positions continued to improve with the BiS and Tier 1 ratios increasing to 16.1%.

The company opened its Russian start-up operations in July. It also acquired the Italian fleet and vehicle leasing activities of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) in the first half of this year – adding around 20,000 vehicles to LeasePlan Italy’s portfolio.

During the first half of 2013, retail bank deposits in LeasePlan Bank reached a total of €4bn. The company accessed the debt capital market a number of times during that period. In March, €567m of Bumper France ABS notes were successfully placed in a private transaction. In May the company returned to the 144A capital market in the United States, successfully issuing US$750m of five-year senior unsecured notes. The company has also been active in Private Placement funding to support a granular distribution of debt and meet the natural local currency funding needs of its global subsidiaries. LeasePlan’s diversification strategy results in a liquidity buffer of more than €5bn for the half year-end.

The Hertz Corporation is re-designing and updating its locations worldwide. The locations offer a complete rethinking of what a car rental location and experience should be like, as the company unveils ‘Road Trip by Hertz’ retail stations located on-site that allows customers to access everything they would need for business or leisure travel.

Hertz says it has eliminated the need to wait in line and offers access to an iPad station for researching local area information and to recharge mobile devices. Customers can also make use of printing and FedEx services on-site.

Hertz modernised locations include facilities at San Diego and Shanghai Airports, Marble Arch in central London and its Melbourne, Australia headquarters, with more transformations planned for other locations throughout the year. ”Hertz’s goal is to provide the lifestyle experience traveller’s desire when on the road,” commented Hertz chairman and chief executive officer, Mark P. Frissora. ”We are planning to expand this new customer experience format to all of our global locations by 2015.”

Hertz offers the following to help enhance the travel experience: ▪ Bus Tracking: Working with its leasing company, Donlen, Hertz is piloting new telematics for its buses. Customers will have access to an app that enables them to see how many minutes until a Hertz bus will be at the terminal for pick up.

• On-Site Retail: The ‘Road Trip by Hertz’ retail stations sell food and drink and other supplies from maps and sunscreen to charging cords and beach bags. The updated facilities also carry luggage, clothing and accessories.

▪ On-Site Technology Tools: Customers can recharge their electronic equipment. Additionally, they can use an iPad station set up to access the latest travel apps, entertain kids with games, and book a Hertz reservation, among other things.

Alphabet International website optimised for mobile devices Alphabet International has launched a new website optimised for use on mobile devices in a move to maximise user experience.

Nancy Storp, head of marketing and business development at Alphabet International, said: ”We analysed user behaviour before we started the project. As people are on the go more than ever before, our priority was to optimise the website for tablets and smart phones. Furthermore, with less time on their hands, viewers want relevant information at a glance. Visitors to Alphabet’s new website get where and what they want – quickly and easily.”

The global fleet management and leasing giant has also announced that websites for all its international operations are being revised to provide a uniform global online presence whilst still catering for local market needs.

Alphabet Netherlands has already launched its new website, with Germany and the UK next on the list. The entire website relaunch will be completed by the end of this year.

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ARI closes German acquisition deal with Fleetlevel+ Services ARI has announced the closing of its acquisition of the fleet management segment of Fleetlevel+ Services GmbH’s business holdings.

The deal, announced in July, was cemented at a dinner attended by ARI representatives.

ARI said that the new company, which will be known as ARI Fleet Germany, supports its continuing development of a strategic global footprint and will provide clients with enhanced fleet management solutions in both the German market and in continental Europe.

for the latest news, visit internationalfleetworld.com

Volvo announces first engines from new four-cylinder DRIVE-E family

Volvo has revealed that the first three engines from the 2.0-litre, four-cylinder DRIVE-E powertrain family will be launched in autumn 2013, with other units including plug-in hybrid technology to follow later.

The full DRIVE-E engine range, dubbed Volvo Engine Architecture (VEA) during the development phase, will comprise diesels ranging from 118 to 227hp. Using different levels of turbocharging, petrol versions will start at 138hp and go all

the way up to 300+ hp, replacing eight existing engine families across the Volvo line-up.

All of the new engines are modular, based on a 500cc per cylinder design and sharing key components such as fuel injection systems. Volvo said during development this could reduce unique parts by 60%, as well as making technology such as electrification easier and allowing for three-cylinder units in the future. ”Our four-cylinder engines will offer higher performance than today's six-cylinder units and lower fuel consumption than the current four-cylinder generation,” said Derek Crabb, vice president of powertrain engineering at Volvo Cars.

He added: ”If you take a four-cylinder DRIVE-E engine versus any six-cylinder engine, there's a massive weight and size reduction for the same power. Fuel economy savings are anything from 10 to 30%, depending on which engine you’re comparing it to.”

The initial unit line-up includes the D4 179bhp diesel featuring i-Art technology, which will be offered first on the new S60, V60 and XC60 FWD. In addition, the S60 and V60 will also be joined by a new T6 engine, with 302bhp. Both engines will be available with a new eight-speed automatic gearbox. A 230bhp T5 unit is also being launched.

Thatcham to provide repair expertise to Australian automotive industry Thatcham has signed its first global repair partnership in a deal that will see it provide repair methods and times to vehicle repairers and insurance assessors across Australia and New Zealand.

Under the £2m, five-year deal with Australian insurer Suncorp Group, Thatcham will provide access to its escribe vehicle repair data product, which will provide subscribers with comprehensive estimation information, model-specific repair methods and critical safety data across a range of platforms including PCs, smart phones and tablets.

The partnership will see Suncorp fund the development of local vehicle content in escribe, with Thatcham researching and adding seven new Australian cars in the first year and a further five in each subsequent year up to a total of 27.

The tie-up will be especially wide-ranging as Suncorp will be making escribe available to all repairers, assessors and training organisations across Australia and New Zealand, not just to those who are aligned with the group. ”With increasing vehicle complexity, it’s imperative that

technicians are able to access fully researched methods and times to perform repairs at the highest levels of quality and efficiency,” said Suncorp national industry relations manager, Rob Bartlett.

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news analysis

BMW announces i3 BMW has announced details of the i3 electric car, due for launch later in the year. The car is powered by a 170hp electric motor delivering 250Nm of torque and the lithium-ion battery offers a range of 130-160km. This can be extended by 15% in ECO PRO mode or by a further 15% in ECO PRO+ mode.

The i3 will also be available with a range extender engine. A 650hp two-cylinder four-stroke petrol engine powers a generator which can maintain charge in the battery pack at a constant level. The range extender will extend maximum range to around 290km on a tankful of fuel. The range extender model records CO 2 emissions of 13g/km.

UK models are covered by a three-year unlimited distance warranty, and an eight year 160,000km warranty for the battery. Terms may vary in other countries. The price includes the battery and BMW expects many customers to opt for a leasing package.

BMW launches the i3 electric car this autumn.

GE Capital Fleet Services sells 100,000th vehicle GE Capital Fleet Services has reached a major milestone with the sale of its 100,000th customer vehicle through its Remarketing by GE programme.

Launched in 2007, Remarketing by GE has enabled more than 300 customers nationwide – including credit unions, independent finance companies, banks, and corporations with owned fleets – to outsource the sale of automotive assets to GE Capital Fleet Services’ team of professional automotive remarketers.

The milestone vehicle was sold at Manheim Chicago, a wholesale vehicle auction operation, and the seller was the Chicago-based Turner Acceptance Corporation, a long-time Remarketing by GE customer. ”Remarketing can be a long, complicated process, and in today’s business environment, it’s vital for companies to ensure they obtain the maximum return on vehicles sold at auction,” said Paul Seger, vice president of asset remarketing at GE Capital Fleet Services.

GE Capital Fleet Services also announced the launch of an expanded Remarketing by GE website for customers.

The website content includes auction sale calendars, information on promotional events, customer testimonials, and a direct link to GE Capital Fleet Services’ YouTube channel.

Ebbon-Dacs relocates in UK as part of European expansion plans

EurotaxGlass’s to drive growth under new CTO appointment EurotaxGlass’s has announced the appointment of Anthony Doherty as its new chief technology officer as the company looks to drive growth across mainland Europe.

Mr Doherty will join the company early in 2014 from CAP, where he has spent 18 years as development director, leading the product management and development teams. At EurotaxGlass’s, he will be responsible for leading the Technology and Data teams. Based in Madrid, his role will focus around delivering product and content innovation to the continental European market.

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Online fleet solutions provider Ebbon-Dacs has announced a move to new premises in the UK in line with its plans for further expansion and future development of the business.

The company, which supplies the Leaselink platform for the contract hire and leasing and fleet management industries, has moved to new offices still within the city of Oxford in a move to gain increased space, on-site training facilities and enhanced staff resources.

Robert Pilkington, managing director of Ebbon-Dacs’ Leaselink division, said: ”We wanted new offices that matched our growth and expansion ambitions. As well as further developments to Leaselink, we are also planning to open new offices in Germany later this year, to go with those we already have in the Netherlands. We already have a development team in Eastern Europe. ”Germany is the largest car market and one of the largest fleet markets in Europe, and we will be opening commercial offices to really attack the market, which we believe would benefit from the online purchasing functionality and cost savings that Leaselink brings.”

for the latest news, visit internationalfleetworld.com

Lease accounting proposals come under scrutiny in whitepaper The latest proposals from the IASB and FASB on lease accounting reform have been overviewed in a whitepaper from CHP Consulting.

In May 2013, the boards issued a revised proposal for a new lease accounting standard. Their original proposal, published as an Exposure Draft in August 2010, was widely criticised for being overly burdensome and subjective. Since then the boards’ deliberations have been quite transparent and, overall, the industry – lessors, lessees and the users of financial statements alike – has welcomed many of the subsequent revisions.

Dubbed ‘Lease Accounting Reform: The Systems Impact for Asset Finance Lessors’, the whitepaper has been comprehensively updated and provides an overview of the current accounting standards, summarises the key features of the new Exposure Draft from both a lessor’s and lessee’s perspective, and considers the implications for lessors from a systems perspective.

The whitepaper is available at www.chpconsulting.com

Changes to Australia’s FBT legislation to impact fleets Proposed changes to the Fringe Benefit Tax (FBT) legislation in Australia will substantially impact fleet managers as well as specialist leasing providers, general business and the new vehicle manufacturing sector.

So says the Australasian Fleet Management Association (AfMA), which adds that the changes have been announced without consultation.

AfMA outlines that FBT legislation is applicable to any non-salary benefit (i.e. private use of a company supplied vehicle) an employee may receive from their employer. In the instance of company-supplied vehicles, it is a tax levied on the employer not the employee. The only time that this tax becomes the responsibility of an individual (employee) is where a ‘novated lease’ is concerned and the lease payment is made via ‘salary sacrifice’.

Of all those vehicles that are subject to FBT less than 10% could be classified as being of a salary sacrifice nature. The remaining 90%, which AfMA estimates as approximately one third of fleet vehicles, are company supplied and the company is responsible for the payment of applicable FBT. AfMA says that fleet purchases account for more than 50% of all new vehicle registrations.

Under the proposed legislation, all businesses would be required to abandon the Statutory Method, which will result in a significant rise in the FBT liability.

In comparing the applicable FBT payment for a vehicle, valued at $35,000, evaluated under the statutory formula of 20% against one using the operating cost method, with non-business usage at 80%, we see an increase in the FBT cost of almost 67% (over $4,500).

In these cases, it is likely that companies would be quick to cut fleet sizes, and/or provide a vehicle allowance as an alternative.

AfMA says it sees the changes as so far reaching that it will take some time to fully appreciate the extent and impact they will have on many sectors of the economy.

In response, AfMA is calling on fleets to highlight the issue to colleagues and peers and evaluate the impact of FBT changes to their business.

in brief...

FTA Ireland calls for action on illegal diesel The Freight Transport Association Ireland is calling for action from the Irish government to combat the illegal trade in diesel fuel. FTAI proposes to end the colouring of rebated fuel with dye. Criminals filter the fuel to remove the dye which damages diesel engines. If the dye was not used, the trade in illegal fuel and damage to engines could be stopped.

Ryder opens new Vermont facility CV rental specialist Ryder has opened a new facility at White River Junction in Vermont, USA. The facility includes a rental counter, four service bays and a wash bay, open from Monday to Friday.

UPS Expands in China UPS will expand its presence in China with two new contract logistics distribution sites in Chengdu and Shanghai, offering warehousing and distribution facilities. Chengdu will offer over 4,366m2 and Shanghai 6,503m2. Both are close to international airports.

TomTom acquires Coordina TomTom has acquired the Spanish fleet management software provider Coordina, bringing 27,000 subscriptions and giving the Dutch company better access to the Spanish fleet management software market.

GM appoints new chairman for China GM has appointed Tim Lee as chairman of GM China, after nearly four years leading the company’s international operations. He will continue as executive vice president global manufacturing. Former CEO of Volvo Cars, Stefan Jacoby, joins GM as executive vice president consolidated international operations, covering more than 100 countries in Africa, Asia Pacific, Europe and the Middle East.

IFW September 2013

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EV news analysis

Alphabet puts focus on electromobility Business mobility solutions provider Alphabet has begun an in-house electric vehicle trial as it prepares to roll out an electromobility fleet support package across Europe over the next six months.

AlphaElectric launches in the UK this September and is said to be an industry-first. Headed up by the company’s eMobility team, it will provide customers with personalised consultancy, home and office charging solutions, and support services including driver training and access to conventional vehicles where battery-powered models are unsuitable.

Although Alphabet is part of the BMW Group, AlphaElectric will be open to any electric vehicle, and it is hoped that a support package such as this will help improve uptake in public and private sector fleets.

But a lack of real-world knowledge remains a barrier, the company said, so it has also launched a trial of the BMW ActiveE prototype vehicle. Based on the 1 Series Coupe, and featuring a 168bhp electric drivetrain, this will be deployed on Alpabet’s in-house car sharing fleet in the UK, with the aim of gaining experience which can be passed onto customers. The vehicle will also allow many of Alphabet’s own employees to test drive an electric vehicle.

Kit Wisdom, mobility solutions manager at

Alphabet, said: ”With an increasing emphasis on Corporate Social Responsibility, EVs can help businesses stand out from the crowd by demonstrating their environmental credentials and helping to reduce their fuel costs. ”It’s not enough to just spend a few hours or a day in an EV, you have to live with it. Adopting an EV onto the AlphaCity CarSharing scheme has enabled us to provide access to this innovative vehicle to multiple users, and ensure AlphaCity is adapted to highlight how EVs can be a successful part of customer fleets.”

Tesla Model S arrives in Europe Tesla Motors delivered its first European-market Model S electric luxury cars to customers in Norway, Switzerland and the Netherlands during July, beginning what will be global coverage for the brand.

In its Q2 financial results, the California-based carmaker said it sees Norway as a key market – expecting to sell 800 vehicles there this year, and with plans to roll out its Supercharger network of free fast charge units across 80% of the country’s population, launching imminently.

The company now has its European headquarters in Amsterdam, with final assembly for the region’s customers taking place at a plant in nearby Tilburg. Eight new retail locations opened in the region during the second quarter, and orders for the Model S increased each month.

Production of a right-hand drive Model S will begin this quarter, with the fleet market high on Tesla’s agenda. The manufacturer has begun appointing a fleet sales team based in Amsterdam, with the Netherlands and United Kingdom seen as important

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corporate markets, favoured by tax breaks.

With global orders on the rise, Tesla built a total of 5,150 cars at its factory in California during Q2, a 25% rise on initial forecasts. By the end of 2014, the company expects annual Model S production to exceed 40,000 units.

for the latest news, visit evfleetworld.com

New partnership aims to tackle hydrogen infrastructure in United States BMW i has announced German charging point manufacturer Schneider Electric will provide home and office installations for customers of its first electric vehicle, the i3, which was unveiled in July.

The partnership extends to all global markets for the vehicle, where Schneider will offer a package comprising electrical surveys, supply and installation of the BMW i Wallbox, as well as providing ongoing maintenance and support. This is provided by Schneider, but managed by BMW. The i3 is designed specifically to work with the Wallbox, which is manufactured

by Schneider and can fully charge the 186bhp electric four-seater within four hours, and the partnership is said to be the first where the charging point is manufactured and installed by the same company.

BMW is Schneider’s second manufacturer partnership, alongside a deal with Ford to provide EVLink charging points for the Focus Electric and plug-in hybrid C-Max and Mondeo models in Europe.

EC announces €1.4bn hydrogen fuel cell programme The European Commission has announced a €1.4bn programme aimed at making hydrogen fuel cell electric vehicles widespread by 2020.

Its latest proposal creates the basis for a renewed public-private partnership to expand the use of clean and efficient technologies in transport, industry and energy under its Fuel Cells and Hydrogen Joint Undertaking programme.

The programme’s €1.4bn budget is to be shared equally between the EU and private companies, with a number of objectives planned. These comprise boosting the number of hydrogen fuel cell vehicles, reducing the dependency on imported energy, bringing prices down and creating a thriving industry for the technology in Europe with employment and financial growth as benefits.

Màire Geoghegan-Quinn, European commissioner for research, innovation and science, added: ”Much research and development is still needed to make this application of fuel cells and hydrogen technology widespread and those for clean energy production and storage commercially attractive.”

Frankfurt debut for 2015 Infiniti Q30 EV Infiniti will unveil a premium C-segment concept car at the Frankfurt Motor Show, with the production version likely to be built at the Sunderland factory and to use the Nissan LEAF’s electric drivetrain.

The Q30 appears to be a hatchback version of the LEAF-based LE concept shown at last year’s Paris Motor Show, sharing its distinctive swage line and C-pillar but adapted to feature the Q50’s front end. It suggests Infiniti could offer four and five-door models to suit different markets.

Production will take place at Sunderland from 2015, as announced last December, where Nissan builds European versions of the LEAF and has an on-site battery manufacturing facility.

in brief...

UK's first Chip and PIN charging point launched British charging point manufacturer Rolec EV has launched a pedestal unit which features Chip and PIN access.

The AutoCharge : PAYG unit will offer membership-free access to public charging infrastructure using a credit or debit card, with instant billing at the point of use. A partnership with Ingenico and Barclaycard means further upgrades to contactless payment are also possible in future.

Japanese carmakers partner for public charging Toyota, Nissan, Honda and Mitsubishi are joining forces to boost the network of charging points in Japan. Part-funded by a ¥100bn (€780m) government grant, the carmakers will each invest in a public-access network targeting 12,000 units, including 4,000 quick chargers, as the country works towards 15-20% green car sales by 2020.

EVs more appealing than diesel in the U.S. Only 19% of US motorists would consider an electric vehicle as their next car, according to a study by Harris Interactive has shown. That’s more than diesels (16%), but behind hybrids and plug-in hybrids at 48% and 27% respectively. Two thirds said pricing was the biggest barrier, but nearly half won’t consider an EV even if it cost the same as a petrol car.

60% of Ford plug-in journeys are electric Ford’s U.S. electric and plug-in hybrid vehicle customers are making 60% of journeys on battery power, according to data from the MyFord Mobile smartphone app. The company said most drivers charge at lunchtime, and increase their electric range during the first 30 days of ownership. At the start of the year, 41% of journeys were electric-only, it added.

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environment

Gas-powered Iveco Daily vans are in service with TNT in Italy.

Fuelling the alternatives How well can alternative fuels work for fleets? Steve Banner looks at fleets operating alternative fuel vehicles around the world.

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Blue skies, palm trees waving in a gentle breeze, the shining sea lapping gently against beautiful beaches... the US state of Hawaii can lay claim to being a paradise on earth, at least so far as its tourism authority is concerned, and governor Neil Abercrombie (pictured) is determined to keep it that way.

He is a keen supporter of electric vehicles and was happy to endorse rental fleet Enterprise’s decision to start offering battery-powered cars to customers arriving at Honolulu International Airport and to set up a charging station there. “Such vehicles are an essential part of Hawaii’s transition to a clean energy

economy,” he states. The aim is for 70% of the state’s energy to come from clean sources by 2030.

“We plan to expand the locations that offer electric vehicles to many of our 29 neighbourhood, resort, and airport branch locations in order to meet the growing needs of renters,” said Paul Kopel, vice president and general manager of operations for Enterprise Holdings in Hawaii.

The increased use of electric cars is being supported by the state of Hawaii Electric Vehicle Ready Grant Program and the Enterprise charging locations form part of a network deployed by Better Place Hawaii under the scheme’s auspices. In another initiative, the Hawaii State Energy Office has just released EV Stations Hawaii,

an app that plots the locations of publicly available charging stations.

Government support of electric vehicles – sometimes through grants that bridge the gap between the premium price of a batterypowered car and its petrol or diesel equivalent – is viewed as vital in many countries if their use is to be encouraged. That is particularly the case given that they face an uphill battle in some markets according to KPMG’s Global Automotive Executive Survey 2013.

“Just one in 10 of all survey participants think battery electrified vehicles will be the next big thing,” the survey observes.

Despite the availability of subsidies, buyers remain wary of making the commitment although attitudes vary strongly from one country to another.

While Russian respondents were optimistic about the technology’s potential, Chinese respondents were pessimistic, even though it is strongly supported in the country’s Five Year Plan.

To overcome these reservations vehicle manufacturers need to redouble their efforts to cut the cost of batteries and the drivetrain, so says Oliver Hazimeh, automotive cleantech transportation leader at PwC. “Simply passing high initial development costs on to the customer is not a long-term option and it is not viable to rely on longterm government incentives either,” he observed: what government gives, government can also take away. “Auto companies need to deploy smart vehicle and technology platforms and global partnerships to achieve economies of scale.”

Range limitations between recharges remain a key concern, but one that fleets can address by deploying electric vehicles on short-range urban work rather than attempting to use them on trips that push them to the edge of their capabilities.

Amsterdam, Netherlands based taxi fleet Taxi-E runs 13 zero-emission Nissan LEAF cabs in and around the city and Ruud Zandvliet, one of the executives behind the company, says that they are ideal for this sort of application.

Because they are never too far away from a charging point they can be quick-charged two or three times daily so that they are always available. That addresses another concern that potential users have: the

worry that their vehicle will have to be plugged into a power point for hour after wearisome hour before it can be used again.

“There are some 3,000 taxis in Amsterdam so there is obviously plenty of scope to reduce emissions even further if operators are prepared to switch to electric,” Zandvliet said.

Turning to Switzerland, 10 Nissan LEAF cabs are scheduled to go into service in Zurich later this year. Underlining the fact that the proper provision of infrastructure is vitally important if electric vehicles are to be a success, they are being supported by a network of fast-chargers as part of plans by the city fathers to ensure that 15% of the cabs on Zurich’s streets are electric by 2015.

The chargers are capable of replenishing a battery to 80% of its capacity in just 30 minutes: but with many customers arriving with batteries with a reasonable amount of charge left in them, the average stay is just 15 minutes.

Electric cars do of course have the advantage of low running costs once they have been acquired. In many markets the cost of the power they use is modest, tax concessions can be claimed for them, fewer moving parts means low maintenance bills and they can gain access to city centres without the owners having to face congestion charges.

How long the batteries they employ will last before requiring replacement – and how much those replacements will cost – remains a concern however.

It has prompted several manufacturers to offer batteries under separate lease agreements, which in some cases has resulted in clashes with residual value guides. They contend that they cannot project a residual value for a vehicle whose power source may be under separate ownership and such a stance naturally affects contract hire rates.

The limitations of pure battery vehicles and the continued impact of those limitations on their appeal mean that respondents to the KPMG survey referred to earlier placed more faith in both plug-in and nonplug-in hybrids and in battery electric cars with range extenders.

As if to endorse this faith, last year saw Europcar make 30 range-extended Opel Amperas available for hire from outlets in Amsterdam, Brussels in Belgium, and Frank-

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¡

environment

Fuelling the alternatives ¡

furt in Germany. “Ampera has a range of more than 500 kilometres and combines all of the capabilities our customers expect from a car for everyday all-round use,” said Opel e-mobility launch director, Enno Fuchs.

“Japan has already taken to hybrids in a big way,” observes the KPMG study. “In May 2012 alone a fifth of all vehicles registered were hybrids although that figure excludes minicars.

“Consequently there is little expectation among Japanese auto executives that battery-powered cars will be in high demand, especially given the worries over electricity supplies in the wake of the Fukushima nuclear disaster.”

That underlines a perennial difficulty with battery power. While the streets of a country’s capital may be made cleaner and greener as a consequence of an absence of exhaust emissions, the low-grade brown coal that fuels the power station 200 miles away that produces the power the batteries need, may be causing widespread air pollution and be a contributory cause to periodic downpours of acid rain that destroy trees and rivers.

One of the most interesting aspects of the KPMG study is the faith so many respondents have in the potential of fuel cells. While only 17% of respondents felt that vehicles powered by them would eventually take the lead – a lower percentage than was recorded when a similar study was conducted in 2012 – in China they were viewed as the best bet by 44% of respondents.

“As fuel cell technology is also part of China’s Five Year Plan there is no doubt that both BAIC and SAIC are investing in the production of fuel cell cars,” says the study.

“SAIC even plans to mass-produce its fuel cell model in 2015.”

While cynics often observe that the widespread introduction of fuel cells is 20 years away and was 20 years away 20 years ago – in other words, it is always just over the horizon – General Motors and Honda aim

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to shrink that time scale. They have announced a joint-venture agreement to co-develop next-generation fuel cell systems and hydrogen storage technologies with 2020 the target date. Both companies have plenty of fuel cell experience.

Launched in 2007, GM’s Project Driveway programme has accumulated almost 3m miles of real-world driving with a fleet of 119 hydrogen-powered vehicles. Honda began offering the FCX on a lease basis as long ago as 2002 and has deployed 85 in the USA and Japan, including its successor the FCX Clarity.

GM and Honda point out that fuel cell vehicles can operate on renewable energy from sources such as wind and biomass, the only emission they produce is water vapour and they can offer a range of up to 400 miles.

The appeal of gaseous fuels varies hugely from market to market and is significantly influenced by tax and by availability, with units dispensing compressed natural gas (CNG) or liquefied petroleum gas (LPG) a rare site at publicly accessible fuel stations in some countries.

That need not be a drawback, however, so far as those commercial vehicle operators whose vans and trucks operate locally and always return to the same depot at night are concerned.

One company that has embraced CNG with alacrity is TNT Express Italy. Last year it placed an order for 115 CNG-powered Iveco Daily vans that are being used to deliver packages and parcels in Rome and elsewhere in central Italy.

In Italy switching from diesel to CNG means a cut in fuel costs of around 40% according to Iveco and a reduction in CO2 output of from 5% to 8%: a fall of 370 tonnes annually so far as TNT Express Italy is concerned.

“It is the best short and medium-term solution for the reduction of harmful emissions and an effective alternative so far as the high costs of fuel and transport are concerned,” commented chief executive officer, Uffe Ekstedt:

Lead-carbon batteries will be the ‘next big thing’ so far as electric vehicle technology is concerned if the USA’s Advanced Lead Acid Battery Consortium (ALABC) has its way.

Along with the US Department of Energy it has been involved in a project managed by Ecotality North America to assess the durability of lead-carbon batteries in the highrate partial state-of-charge operation of a hybrid vehicle. It did so by running a Honda Civic HEV retrofitted with lead-carbon UltraBattery modules sourced from East Penn Manufacturing on courier work in and around Phoenix Arizona.

The Honda covered over 160,000kms in just under two years with no significant loss in battery capacity, according to ALABC. In terms of energy usage it achieved a comparable level of performance to that of a hybrid Civic employing nickel-metal-hydride batteries claims the organisation but at significantly lower cost.

The UltraBattery combines a traditional lead-acid battery with a carbon-enhanced supercapacitor in a single component.

www.kia.com

EvEry FlEEt nEEds a Flagship.

» » » »

international Car Of The Year 2013 7-year warranty* fuel consumption from 4.9 l/100 km Up to 177 pS with only 119 g CO2/km**

The Kia OpTima: BOrn TO lead The Kia fleeT. With its bold looks, the Kia Optima has received several design awards. Its convincing high-quality materials and state-ofthe-art technology make the interior of the Kia Optima a real comfort zone for its passengers. Besides diesel and petrol engine options, the Kia Optima offers a hybrid powertrain with surprisingly low CO2 emissions of only 119 g/km, which makes it the first D-segment petrol hybrid launched in Europe. But ultimate peace of mind for fleet customers derives from its 7-year warranty – just like any other Kia fleet member. Simply put, it runs in the family.

Meet a different kind of fleet: www.kia.com/eu/fleet

* The Kia 7-year/150,000 km new car warranty. Valid in all EU member states (plus Norway, Switzerland, Iceland and Gibraltar), subject to local terms and conditions.

Fuel consumption (l/100 km)/CO2 (g/km): urban from 5.7/138 to 10.3/239, extra-urban from 4.4/116 to 6.1/142, combined from 4.9/119 to 7.6/177. ** For Kia Optima Hybrid.

THE ULTIMATE E-DRIVING MACHINE.

BMW i

Sheer Driving Pleasure

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 efficient 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

bmw-i.com

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.

the environment

POOLING RESOURCES What’s the best way to cut a fleet’s carbon footprint, fuel bills and other overheads?

Run fewer, more modern, vehicles, reckons Steve Banner.

That was the conclusion the small city of Loveland in Colorado, USA, came to last year.

It disposed of some 40 ageing, insufficiently utilised, sedans, pick-ups and vans from its fleet and replaced them with 15 shared vehicles leased from Enterprise Fleet Management, saving itself over $300,000 (€228,745) annually. They are all equipped with automated rental technology used in Enterprise Rent-A-Car’s WeCar car sharing programme.

Employees who need transport to get to meetings or tackle jobs can avail themselves of motor pool vehicles stationed near their workplaces at four locations around the city. They can be reserved online for a few hours or a few days and the system automatically charges the individual’s departmental budget for the vehicle's use based on time and/or mileage.

Charges range from $25 to $60 (€19 to €46) daily and go towards the cost of leasing whatever the worker has been driving.

To make use of a vehicle the driver swipes a special membership identification card across the windscreen. A sensor recognises the card, records the date and time, opens the door and allows access to the ignition key in the interior.

When the driver no longer needs the vehicle it is driven back to its parking space, the key is relocated inside and the card is swiped in front of the sensor. The doors are locked and the duration of usage is recorded along with the mileage.

“Our shared motor pool enables us to reduce maintenance and insurance expenditure while providing safe and fuel-efficient transport for city employees,” says Loveland fleet manager, Steve Kibler. “All maintenance and repair work is carried out by Enterprise Fleet Management's local independent contractors so we have not had to recruit additional personnel to perform these tasks.

“The motor pool programme is one of

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our efforts to make city government more efficient and effective both economically and environmentally," he continues.

“In addition to giving us access to purchasing power that allows us to obtain vehicles at the best-possible prices and on the best-possible terms, the leasing agreement with Enterprise offers maintenance management, risk management and vehicle registration and reporting as well as a fuel card programme that automatically monitors fuel purchases and mileage,” Kibler says. Future expansion of the scheme to add hybrid and zero-emission plug-in models is likely.

On the other side of the Atlantic, PwC Luxembourg recognised a while ago that transport accounted for about 70% of its carbon footprint and elected to do something about it. Working with LeasePlan and Avis it decided to introduce a carsharing scheme for its 2,000 employees with the emphasis on low-emission models: Nissan’s LEAF and Renault’s Twizy are among the cars on offer.

“By providing flexible mobility solutions such as electric car sharing and by encouraging alternative means of transport, including city buses and soft mobility (walking or cycling for example) we’re going a step further in our commitment to reduce our carbon emissions,” says Patrice Waltzing, the partner in charge of managing PwC Luxembourg’s fleet.

Hertz is busy providing businesses, utilities, and municipalities in Germany with an electric car sharing service under the auspices of the Hertz on Demand/MoveAbout partnership. Based in Norway, MoveAbout A/S is an electric vehicle-sharing specialist and the two companies have signed a five-year agreement.

“Hertz believes that

electric cars and mobility on-demand services go hand-in-hand as the public and private sectors develop new and sustainable travel solutions,” says president of Hertz International and executive vice president, Hertz Corporation, Michael Taride.

Hertz says that its electric vehicle sharing service offers a zero-emission solution to organisations wishing to reduce the carbon footprint of their fleets and meet sustainability goals without having to worry about the cost of ownership.

So far as the practicalities are concerned, the arrangement is not dissimilar to the one the city of Loveland has with Enterprise.

Drivers are given a smart chip-enabled card that gives them access to any vehicle in the fleet that they have reserved. A hands-free kit connects them to a Hertz representative should they have any questions, require assistance or need to hang on to the car for longer than they originally anticipated and Hertz can locate and unlock vehicles remotely.

Elsewhere in Germany, Hertz has recently embarked on a three-year agreement with Lufthansa to run its car pool. It is supplying and maintaining over 1,000 vehicles equipped with its car-sharing technology and is operating the car pool booking system.

Unlocked using an RFID-enabled token, the vehicles are available from a variety of locations including the airports at Munich, Frankfurt and Hamburg and bookings can be made via the internet, PwC Luxembourg has introduced a car-sharing scheme with Renault’s Twizy on offer.

MINIMISING THE IMPACT a mobile webpage or an iPhone app.

All the major rental fleets appear to be moving more energetically into car-pooling and car sharing with the aim of appealing to both private and corporate customers.

Some of this is by acquisition, with Enterprise Holdings buying the not-forprofit IGO CarSharing service in Chicago, USA, back in May with 200 locations in more than 40 neighbourhoods and over 15,000 members. In July it went further and bought Zimride, the largest ride matching programme in the USA with over 15,000 users.

One reason for their interest is the opportunity it gives them to meet the needs of local authorities that wish to provide an environmentally friendly car sharing service to local residents. That is the route the French city of Lyon has gone down with car2go Europe, a joint venture between car2go Gmbh, which is owned by Daimler, and Europcar.

Under the programme residents have access to a fleet of 200 low-emission

smartfortwo microcars, which can be rented and returned, within an operating area of 44km2 covering the city centre. Programme members can find the vehicles on the streets, via the internet at www.car2go.com and with the aid of several smartphone applications.

The chosen microcar can be unlocked using a personal membership card and drivers do not have to bring it back to wherever the journey started. Instead, they can simply leave the car at their destination, in any public parking space and at all Lyon car-sharing stations within the car2go business area.

Says Lyon mayor, Gerrard Collomb: “Innovative urban mobility solutions like car2go offer a way to help meet the challenges of urban congestion, reducing carbon emissions and improving the quality of life.”

The scheme follows an even-moreenvironmentally-friendly initiative the city introduced in 2005: a bicycle-sharing programme operated in conjunction with Velo’v.

All major fleets are seeking to minimise their impact on the environment and not just by operating electric or hybrid cars.

Last November Hertz announced an agreement with Liberty Tire Recycling to introduce what it says is the first nationwide tyre-recycling programme in the USA. It involves Liberty collecting over 160,000 used tyres annually from locations all over the country.

The recycled rubber feedstock from the tyres is turned into a wide variety of products including mulches for gardens and surfaces for playgrounds and is also used to help produce composite railway sleepers.

In addition it is being used to provide highways with a surface that is said to last longer, offer a quieter ride and use less material than more traditional approaches to road building. Up to 8,000 recycled tyres are used to help construct each mile of road, says Hertz.

IFW September 2013

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environment

Tracking the future...

Vehicle tracking is not new, but a wide range of fleets can benefit from the technology, says Steve Banner.

If you are Canadian and happen to have a problem with your garage door – or need a new one – then who are you going to call? There is an increasing chance that you will be contacting The Garage Door Depot, a franchise that is rapidly spreading across the country and had established almost 30 outlets at the time of writing.

Set up by Port Coquitlam, British Columbia, based Canadian Access and Door Systems, The Garage Door Depot boasts franchisees in Ontario, Alberta, Saskatchewan, Manitoba, the Yukon and Nova Scotia as well as in its native province.

Firm foundations are required to make a success of such a venture however, something president and chief executive officer, Dean Carman, realised sometime ago. That involves keeping tight control of overheads, a policy that can also have a positive impact on the environment.

With 3,800 customers on its books, the Port Coquitlam business initially ran a fleet of 14 light commercial vehicles. Carman realised at an early stage that it made sense to have a tracking system fitted to monitor their whereabouts as they crisscrossed the Greater Vancouver area.

The aim was not solely to provide a better service to clients. It was also to cut fuel usage and thus minimise CO2 emissions.

Carman recalls that prior to having a Fleet Complete tracking package installed

by Complete Innovations, technicians were being despatched to clients and driving some distance to get there when as it turned out one of their colleagues was almost literally just around the corner.

Fuel was being wasted as a consequence.

“It was simply because people didn’t know where everybody was,” he said.

Employees were allowed to take their

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vehicles home at night and Carman wanted to be sure that they were not being surreptitiously used for private purposes, burning the firm’s fuel in the process. “We trust our staff, but we nonetheless felt it made sense to introduce a formal process to track vehicle location, fuel usage and mileage,” he said.

Net result? Fleet Complete’s introduction has cut fuel usage by 21%, in part because the company has been able to employ it as a route planning aid, helping it to work out which are the most direct routes between one location and another.

One thing it has allowed Carman and his colleagues to do is keep a close eye on idling time.

Allowing a vehicle’s engine to tick over unnecessarily wastes fuel and pumps CO2 and harmful emissions into the atmosphere.

That is a fact not lost on Today Delivery, an offshoot of USA-based logistics group SEKO. Opting for a NexTraq Fleet Tracking telematics platform has allowed it to cut engine idling by a hefty 85% reports gen-

eral manager, Danny Cohagen. Using the package’s Fleet Dispatch application plus a Garmin satellite navigation system has reduced overheads too, because delivery drivers do not end up meandering all over the place trying to locate their destination.

“Our employees no longer backtrack to get to job locations,” Cohagen says.

“They know the most efficient way to get somewhere which cuts down, not just on fuel, but on the number of miles being put on vehicles.”

Wasteful and polluting engine idling has also been a concern of Namasco Corporation, now part of Kloeckner Metals: one of the largest metal distribution companies in North America. “For every hour a diesel tractor unit idles it burns approximately one gallon of fuel,” observed director of technical services, Len Stark.

Its solution was to contact Teologis and introduce Teologis Fleet, a GPS-based fleet tracking and management software system. Idling time and speeding fell signifi-

For every hour a diesel tractor unit idles it burns approximately one gallon of fuel.

Len Stark, director of technical services, Namasco Corporation, USA

cantly in the wake of its implementation as did mileage thanks to greater efficiency: changes which reduced the business's fuel costs and shrank its carbon footprint.

“The reduction in idling time alone helped increase profits by approximately $50,000 a year,” said Stark. Being environmentally aware can have a positive impact on your bottom line.

Last year saw Aliso Viejo, California, USA-based Teologis join forces with leading global fuel card provider FleetCor to introduce the Teologis Universal Premium Fuel Card. The aim is to make it easier to integrate the data on fuel usage obtained from a vehicle tracking system with the data generated by a fuel card so that a fleet can obtain a more comprehensive picture of the volume of fuel it is burning and home in on any areas of waste.

One way of reducing a fleet’s CO2 output is to train your drivers to drive more frugally and use any management programmes that have been introduced as a training aid.

That is a policy pursued by SuperValu.

Part of the Musgrave Group, one of Ireland’s biggest food distributors, it delivers goods to 193 independently owned stores.

With an eye to running its fleet more efficiently it teamed up with Galwaybased Blue Tree and introduced its R:COM management system. It records information on excessive idling, harsh acceleration and braking, over-revving, speeding, and driving without using cruise control.

Having analysed this data, trainers then provide feedback to the company’s drivers on techniques they can use that will ensure they drive more frugally.

According to Blue Tree. R:COM can summarise individual driver performance in league tables and produce score cards for

each individual which can be used as the basis for an in-house competition or an incentive scheme. It reports the performance of vehicles as well as employees – high fuel consumption may mean that there is a maintenance problem – and links events such as harsh acceleration with map location data.

Tracking is of course not just about minimising fuel bills and being kinder to the environment. It is also about security, as South Africa’s G4S Cash Solutions (SA) can testify.

After a six-month trial it has recently decided to install a fleet management system from MiX Telematics with the aim of better-protecting the significant quantities of money it moves around the country daily.

It will be installed progressively in 900 cashin-transit vehicles and 330 support vehicles.

“An aspect we’re really excited about is the lowered risk around the delivery of security codes for the vaults and doors on our vans,” said G4S Cash Solutions (SA) managing director, Albert Erasmus. “Using the MiX Telematics solution they will only become available to drivers on arrival at a customer’s site – in real time – meaning the window of risk in this part of our delivery chain will be vastly reduced.”

Also relying on MiX Telematics to help it

GreenRoad’s tracking system features a display that illuminates in red, yellow or green depending on driver behaviour.

combat crime is Thessaloniki, Greece, based international transport fleet Karassulis.

Having suffered a spate of thefts it has had tracking units fitted to its trucks and trailers by Tacho Hellas, MiX’s Greek partner.

The initiative has already paid off with an attempted trailer theft in Italy thwarted.

The MiX package has also allowed route scheduling and fleet utilisation to be optimised, thereby reducing fuel expenditure.

Tracking systems increasingly involve the installation of a unit in the vehicle which tells the driver if he or she is engaging in behaviour that means more petrol or diesel is being used than is necessary and prompts the individual to desist. It acts as a performance coach: something that undoubtedly appealed to IDM Trucking, based at Weyers Cave, Virginia, USA. The system it has sourced from GreenRoad features an LED display that illuminates in red, yellow or green depending on whether the vehicle is being driven sensibly (green), the driving style is starting to deteriorate (yellow) or if risky behaviour is being indulged in (red). Reports are generated on each driver’s performance for managers to review and IDM Trucking has introduced a quarterly bonus scheme that rewards drivers depending on their safety and efficiency.

As well as improvements in safety and reduced insurance costs, GreenRoad 360 has brought IDM Trucking annual fuel cost savings worth $1,500 a vehicle according to safety director, Randy Hill. “It employs a holistic approach that makes it easy and cost-effective for fleets to change driver behaviour fundamentally,” he said.

“Our drivers have adapted well to it and have consistently exhibited green driving since it was installed,” he added. “We couldn’t have asked for better results.”

IFW September 2013

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fleet strategy

Rental rates vary across Europe in Q2 Fortunes were mixed for pan-European fleet operators as rental rates varied between countries, reckons Experteye.

Pan-European leet operators have experienced volatile rental rates across Europe, with monthly prices shifting up and down depending on the country the vehicles are leased in.

In the second quarter, UK leet customers saw prices rise by +6.2% whereas in neighbouring France rentals fell by -4.2%. Portuguese leet operators enjoyed a reduction of -3.6% with smaller price shifts in Germany (-0.7%), Spain (+0.4%) and Italy (+0.8%).

The figures from the Experteye European Leasing index reflect mixed pricing opinions across the European market, with some dramatic differences in forecasted residual values (RV) and servicing, maintenance and repair (SMR) budgets affecting the rates.

During the last 12 months Portugal has downgraded its residual value forecasts by -6.4%, Spain -2.9%, Germany -2.2%, Italy -0.2% and France -0.1% whereas the UK has a much more optimistic outlook with a +6.1% rise.

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.

Annual SMR budgets show some big pricing differences. In Portugal budgets have shot up by +8.6% whereas in Spain they have fallen by -9.5%. French customers have seen the SMR element of their rentals climb by +6.5% and the UK by +1.1%, whereas in Germany they have come down by -1.2% and Italy by -1.7%.

Market summaries – 3 and 12 months to June 2013 FRANCE: SMR budgets rose by +6.5% in France during the 12 months to June, the second highest of all nations surveyed. This settled more recently, with a +0.5% rise in Q2; a period which has seen rental rates drop by -4.2% after a year during which they’d climbed by +2%. Forecasted residual values remained relatively

stable with a -0.1% fall for the year and a +0.4% rise for Q2.

GERMANY: German fleet operators saw little movement in rental prices, with a -0.7% reduction since April 2013 and a -0.9% fall for the year. SMR budgets were static in Q2 (0%) after a -1.2% drop since July 2012. There is slight pessimism in the future used vehicle market with a -2.2% fall in annual forecasted RVs and a -1.3% quarterly downturn.

ITALY: Italian leet customers saw the largest fall in the SMR element of their monthly rental costs, with a -2.7% reduction in Q2. For the year ending in June, SMR fell by -1.7%. Forecasted residual values saw little movement with a -0.2% shift for both the year and Q2, and rental rates rose by +0.8% for both time periods.

PORTUGAL: Portugal continued to show some dramatic shifts in its budgets with a +8.6% increase in annual SMR budgets, although this has calmed to a +1.7% rise since April 2013. Forecasted residual values came down by -6.4% for the year ending June, the largest fall of all nations surveyed, but a more stable -0.3% movement for Q2.

Rental rates reduced by -4.5% since July 2012 and -3.6% for Q2.

SPAIN: Spain saw a significant -9.5% fall in its SMR budgets during the year ending June. Yet with forecasted RVs falling by -2.9% it has left rental rates relatively unchanged (-0.8%). In Q2, the RV forecast fell by -1.4%, SMR was down by -0.9% and rentals were up by +0.4%.

UK: The UK continued to show confidence in the future used vehicle market with forecasted residual values rising by +6.1% for the year ending June, yet they were down by a slight -0.6% for Q2. SMR budgets rose by +1.1% during the 12 months and by +0.5% in Q2. With a +4.2% increase for the year, UK rental rates rose the most of all nations surveyed, compounded by a +6.2% hike for the second quarter.

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 +0.4% -0.1% +0.5% +6.5% -4.2% +2.0% -1.3% -2.2% +0.0% -1.2% -0.7% -0.9% -0.2% -0.2% -2.7% -1.7% +0.8% +0.8% -0.3% -6.4% +1.7% +8.6% -3.6% -4.5% -1.4% -2.9% -0.9% -9.5% +0.4% -0.8% -0.6% +6.1% +0.5% +1.1% +6.2% +4.2% 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 July 2012.

• Three-month comparisons show change April and June 2013.

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• 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.

technology

Autonomously driving vehicles are claimed to be only a few years away, and will bring significant cost and safety benefits to fleets.

Steve Moody and Alex Grant investigate the claims.

The robot fleet ow much time do your employees waste on the road driving? For many businesses this time is signi icant, but vital: after all they have to get to their meetings and jobs. But they also could be doing something more productive in those lost hours on the motorways of Britain.

What if they could be sitting in their car or van, illing out job sheets, meeting reports or catching up on emails instead? There have been many studies on just how much time is lost by business drivers in traf ic jams and congestion alone, with some quoting three to ive working days per driver a

H

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year. But if much of this could be taken out of the working day, then time and motion become one and the same thing, as work and travel meld into one entity.

The advocates of driverless cars claim that this will be possible in the near future, perhaps in the next ive years, when the car or van will take an instruction and set off all of its own accord. They also reckon this will cut the number of accidents – in approximately 90-95% of all road traf ic accidents, human behaviour is partially or fully responsible – and that fuel economy and traf ic will improve too.

However, there are many challenges

around technology, cost, public acceptance, legality, liability and infrastructure.

Foremost is having the necessary technology available to do the job, and to define exactly what that job is. For example, there is full autonomy, where the driver could enter the destination into the sat nav, and take a nap until the car gets there, partial autonomy in a road train, or autonomous systems that can be switched on and off, or intervene automatically to avoid crashes or offer partial machine-only driving.

For the fully autonomous car, the future is further away, because the technology is

more complex and more expensive.

Google’s self-driving car, which has been developed intensively for the past three years, has now clocked up half a million miles of safe driving on US roads. But it requires a staggering amount of processing power, of nearly one gigabyte of data every second, in combination with GPS, laser range inding and mapping to determine its location and route and as a result, even Google admits that a projected cost of market-ready cars would be $150,000, of which nearly half is on the laser range inder. And a number of other technical obstacles remain. For driverless cars to work, every inch of road, every junction, road sign and signal everywhere will have to be mapped in perfect detail. This is being done anyway to support navigation systems for both cars and smartphones, but this takes time and a vast amount of money.

However, there are cheaper alternatives. Researchers at Oxford University claim to have built a system of selfdriving-car cameras for £5,000, which could be eventually cost as little as £500.

Its system is less ambitious than Google’s more pervasive one, by using camera in concert with a database of stored 3D images. When the cameras pick up an environment and road system it has committed to memory, it tells the driver it can take over control. This would clearly be something business users and delivery irms who use speci ic routes or commutes would ind of interest.

The price will be of interest to businesses too, because according to a J.D. Power & Associates survey published earlier this year, 39% of people would be interested in owning an autonomous car, but only 21% said they’d be interested if it cost them an extra £2,000. The Oxford University system, while some way off being market ready, could be retro itted too, its makers claim.

The sensors are the key in these systems, because without good quality information, full autonomy can never be delivered. For example, Bosch’s highperformance long-range radar sensor can detect objects up to 250 metres away. In addition, a stereo video camera can detect objects in 3D, calculating how far objects are away from a vehicle, as well as the direction in which they are moving.

Fully autonomous driving will come

Last year in Spain, a road train comprising a Volvo XC60, V60 and S60 automatically driving in convoy behind a lead vehicle operated on a public motorway among other road users. about one step at a time. At irst, driving on highways with an ever-greater degree of automation and at ever-higher speeds will be possible, until the highway pilot can take over the entire trip.

But two major challenges remain: irst, inner-city driving, since automated vehicle functions have to deal with dense traf ic involving a large number of road users traveling in every direction; and second, developing a concept to ensure that the system’s functions operate reliably in all types of driving situation.

It seems that before 2020, more simple – relatively speaking – automatic operating systems will become more prevalent, such as road trains.

Last year in Spain a road train comprising a Volvo XC60, V60 and S60, plus one truck automatically driving in convoy behind a lead vehicle operated on a public motorway among other road users. The SARTRE Project believes the road train offers the attractive possibility to do other things while driving, promotes safer transport, and reduces environmental impact.

Basically, a professional driver leads the vehicle platoon, for instance in a truck. All the following vehicles are driven autonomously at speeds of up to 60mph – in some cases with no more than a fourmetre gap between them – thanks to a blend of present and new technology.

The cars drive close to each other and reap the bene it of lower air drag, and the reduced speed variations improve traf ic low, creating more ef iciently utilised road capacity. Intervehicle reaction response times are very quick thanks to the co-ordinated technology.

Erik Coelingh, technical specialist at Volvo Car Corporation, who are partners on the project, said: ‘The energy-saving potential is 10-20%.

‘The road train is the best of two worlds.

You can enjoy all the multi-tasking possibil-

ities of public transportation, behind the wheel of your own car.’

A prototype Human-Machine Interface including a touch screen for displaying vital information and carrying out requests, such as joining and leaving the road train, while a prototype vehicle-to-vehicle communication unit that allows all vehicles within the platoon to communicate with each other and vary their speeds accordingly if needed.

An EU report in 2010 into autonomous driving saw the value in the development of these systems to the point of full machine control, but it recognised there were many hurdles before manufacturer, owner and operator all saw the bene its.

The report said: ‘The most challenging issue for the private sector is to ind applications that bring value to all the players involved, from OEM and supplier, to leet owner, insurance company and end user.

‘Then, a quick uptake will happen and signi icant penetration rates of automated driving vehicles will arise. Besides the individual bene it of increased safety and fuel ef icient driving, a signi icant penetration rate of automated driving vehicles will increase the overall bene it of traf ic congestion reduction, reduced emissions and traf ic safety.’

Recently though critics have claimed that the US government is being more proactive in developing legislation to allow them to run on public roads than the European Union. There are signi icant legal hurdles around liability: just who is at fault should an accident occur? The OEM, “driver” or vehicle owner? It really is the philosophical stuff science iction writers have mulled over for decades, when the relationship between robots and humans becomes entangled. Do drivers really want to be subordinate to machines while in the car?

Certainly if you see the erratic way some rain sensing wipers or active cruise control systems work on cars at the moment, the future of fault-free robot cars is rather further off than the experts would claim.

But the National Highway Traf ic Safety Administration is all but admitting that the day is coming when the robot is at the wheel.

‘America is at a historic turning point for automotive travel,’ the agency said in its preliminary statement on autonomous cars.

‘Motor vehicles and drivers’ relationships with them are likely to change signi icantly in the next ten to twenty years, perhaps more than they have changed in the last one hundred years.’

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technology Audi – Piloted Parking

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Driving autonomy in action

What is it?: Fully autonomous driving, using web-based maps.

How it works: Google is manually collecting detailed electronic maps of test routes , including junctions, lane markers and road signs, which are stored online. The car is able to combine this with GPS data, video and information from laser and radar detectors to avoid other traf ic and pedestrians, navigating to addresses and points of interest stored on Google’s database.

When?: Google was the irst to demonstrate an autonomous car, but as yet no manufacturers have adopted it.

Audi – Piloted Parking What is it?: Automatic location of parking spaces, and the ability to manoeuvre into them.

How it works: Using a wireless connection, the car is able to download a map of available parking spaces within a car park, and then use this to navigate to one of them. Once there, it uses ultrasound sensors to park automatically, then turns off the engine, locks the doors and contacts the driver. All the driver has to do is pull up outside and activate the system using a smartphone app.

When?: Audi demonstrated Piloted Parking at the Consumer Electronics Show in Las Vegas this year, but has yet to reveal when it will go on sale.

BMW – ConnectedDrive What is it?: Adaptive cruise control with the ability to change lanes.

How it works: Using data from camera, laser and radar systems, currently employed for accident avoidance and lane-keeping, BMW’s system is able to position the vehicle correctly in its lane and maintain a speed. Detailed GPS data forewarns the car about changing road layouts, while the windscreen-mounted camera means the car can overtake and change lanes to avoid joining traf ic.

When?: Traf ic Jam Assistant and automated parking will debut in the new X5 and i3 electric vehicle later this year.

Mercedes-Benz – Intelligent Drive What is it?: Hands-free driving through slow traf ic jams.

How it works: Stereo cameras at the top of the windscreen can recognise lane markings and groups of vehicles driving ahead together, intelligently deciding whether to follow the road or other road users in heavy traf ic at up to 37mph. This can take control of steering, brakes, throttle and gear changes, allowing drivers to sit back and even let go of the steering wheel in traf ic jams, reducing stress.

When?: On sale this summer in the new S-Class.

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VOLVO – Road Trains What is it?: Groups of cars which autonomously follow a manually driven lead vehicle.

How it works: Volvo is the sole manufacturer partner in the SARTRE project, which allows a “platoon” of vehicles to follow each other automatically along stretches of road. The platoon is led by a vehicle with a professional driver behind the wheel, and following cars download and mimic the way this is driven while radar, camera and laser systems maintain a constant six-metre gap from each other.

When?: Volvo has recently unveiled a self-parking system similar to Audi’s, saying its next generation of modular cars starting with the XC90 next year will feature some autonomous driving features.

Volkswagen – Temporary Auto Pilot (TAP) What is it?: Automatic cruise control which can recognise road signs.

How it works: TAP uses sensors from adaptive cruise control, lanekeeping and accident avoidance systems to monitor surrounding traf ic and road signs at up to 80mph. Cameras at the top of the windscreen monitor road signs and lane markings, allowing it to obey overtaking rules and speed limits, while a radar allows it to maintain a safe distance from the car in front even in start-stop traf ic.

When?: Volkswagen showed a concept vehicle two years ago, but has yet to announce when the system will be commercially available.

UK registered charity no 1072105. Patron HRH The Princess Royal.

management

VIDEO

REDUCES RISK DriveCam records more than just driving footage.

Driver feedback and behaviour analysis are also part of the package, as John Kendall reports.

In vehicle camera recorders are one of the tools that leet managers have at their disposal to help improve driver behaviour and with it, reduce injury and damage, as well as fuel consumption. Many of the systems are passive in that they record video, usually forward facing, from a camera mounted behind the windscreen. Video images are then recorded on a card, which can either be removed for later analysis, or the system may have a modem to permit uploading of the images. The system may over-write data, recording continuously, including normal driving events.

DriveCam is based in San Diego California, in the US and a few months ago, the

company opened an office in London to expand its operations in the UK and Europe. The London office is managed by Paul Jones, vice president and general manager, UK Operations, who joined DriveCam in San Diego in 2005.

The company offers a camera system which only records when the system is triggered. This will occur automatically if the system’s on-board sensors record excessive acceleration, deceleration or cornering forces. Alternatively, the driver can trigger the system manually, for instance to show when access to a location was barred by a locked gate. In an impact, the system will record the impact forces.

The system incorporates a forward facing camera, which records a 131-degree horizontal view and a 152-degree vertical view in front of the vehicle. In addition, the system comes with an in-cab lens which will record events inside the vehicle, including driver behaviour and what may be visible through the rear and side windows. The system will record for 12 seconds after it is triggered, designed to capture the eight seconds before and four seconds after an event. This means that the leet manager does not need to keep hours of video footage, but only the seconds where the system has detected risky behaviour, or evidence from an accident. << CIRCLE OF DRIVECAM LIFE How the technology works in action

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The recorded material is uploaded in a secure, encrypted format, via the Vodafone mobile network in Europe, to DriveCam’s Analysis Centre. The data is then analysed by experts and risky driving events are passed on to fleet managers.

The events can then be discussed with the driver and appropriate driver training can be given if necessary.

In an accident, the fleet manager also has video evidence of what was happening in front of the vehicle and inside it in the seconds before the accident. The system does not permit camera monitoring in real time, so driver’s need not worry that the system is being used to ‘spy’ on them. Other benefits include evidence against fraudulent insurance claims or where drivers were unfairly blamed for causing an accident.

The DriveCam system can be integrated with fleet tracking and fuel management to extend its fleet appeal

The video database has given DriveCam the opportunity to analyse many driving events, using trained analysts. The information is then used to predict driver behaviour and identify drivers most at risk of accidents before they happen.

DriveCam claims it can reduce collisions by up to 75%. All video material is password protected, so can only be viewed by those authorised to view it.

In addition to this, the DriveCam system will give real time feedback to the driver in the vehicle to help them improve their driving.

The system can be integrated with leet tracking and fuel management to extend its leet appeal. Each leet is given a dedicated programme manager and DriveCam gives a quarterly programme review where he or she can give feedback to senior managers.

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fleet focus USA

LOW COST BUT FOR HOW LONG? The US has been a low cost fleet market for some years, but costs look set to rise, reports John Kendall.

BORN IN THE USA Chevroletâ&#x20AC;&#x2122;s Impala took 6% of business car sales in 2012.

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China may be closing the gap on US car sales, but the US is forecast to remain the largest light vehicle market in the world in 2013. Data from the Scotiabank global auto report forecasts that in 2013, light vehicle sales in the US will grow by around 7.6% from 14.4 million in 2012 to 15.5m, compared with some 15.15m in China.

Of the 2012 14.4m total, around 15% are business cars according to Michael Kasuba, vice president of research for North America, JATO Dynamics; with cars accounting for around 2,044,222 sales in the business sector. The total depends on how you define the sector and Bill Robinson, International vice president at Wheels Inc, reckons the commercial fleet sector is only 5-7% of the overall market. Either way, in percentage terms this is considerably less than the leading fleet markets in Europe.

American business car operators tend to be loyal buyers of their home products.

According to JATO’s Kasuba, Chevrolet took 21% of the business car sector in 2012 with 439,508 vehicles and of these, the Impala was responsible for 6% of sales. Ford was close behind with a 20% share, representing some 420,576 vehicles of which the Escape took 3% of sales.

The make-up of the business sector sees sedans as the preferred business vehicle with 49% of the market and SUVs accounting for 23%, according to JATO. Bill Robinson at Wheels Inc, ALD Automotive’s partner in the US, has a slightly different take on which manufacturer dominates the business sector, but as we have said, it depends on how the sector is defined. “One of the things that we have seen in the last year is that Ford in the United States has taken a commanding lead in the commercial fleet market,” he says. “It’s not like Ford is edging out GM and Chrysler, Ford is far and away leading the market.

“It comes down to the fact that in the United States, vehicles are awarded based on business need. It is not a ‘User/Chooser’ market. The way that the vehicles are selected is whoever has responsibility for the fleet at the corpora-

tion determines which vehicles will be acceptable for each class of driver, and then those drivers are allowed to pick – sometimes the only thing they’re allowed to do is pick the colour, or maybe some options. In particular the Ford Fusion (Ford Mondeo in Europe) has become the vehicle of choice in the US market.

“We order about 60,000 vehicles a year at Wheels and we serve primarily the large corporate fleets and Ford’s share of those orders in the current model year is overwhelming. It’s over 40%.”

Bill Robinson has observed another trend too; “When I started in this industry 15 years ago, well over 90% of our vehicle orders were from what we call the ‘Big Three’, the US domestic manufacturers, Ford, GM and Chrysler. In the last five years, since the financial crisis, foreign makes have made significant inroads into the fleet business. The foreign makes are not 25% of the market, but they are 10-15% and they used to be much less than that. The companies that have done well include Subaru, Toyota was doing well until they had some of their quality problems, Nissan is making inroads and Volkswagen has invested in the United States. The company has just put a big plant in Tennessee and they are making the Passat here. Volkswagen – and to a certain extent Audi – are beginning to make some inroads in the US market.”

Cost control has had an effect on the kind of vehicles that are being chosen for business use, as Bill Robinson indicates, “We’re seeing a renewed effort around finding vehicles that are the appropriate fit for the business use. The laser like focus

EST SELLER

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FORD ESCAPE

on reducing cost has finally made US companies begin to look at smaller vehicles.

“I know Europeans did this many, many years ago but we’re seeing vehicles go from eight-cylinder engines down to six and from six-cylinders down to four, all as part of efforts to improve fuel economy and reduce emissions. It has been a win-win because not only do they save on fuel costs, but those vehicles are generally less expensive than the vehicles they were using before.

“I would argue that that will continue as long as our prices stay high relative to what they have been in the past.”

Business vehicle taxation does not really differ from retail sale vehicle taxes in the US. “There is no real difference between taxes purchased by the individual as opposed to a business. There is no federal tax, but local state sales tax differs state to state,” says JATO Dynamics’, Michael Kasuba.

“Part of the reason why our model is so different from the European model is there is very little difference from a tax basis. There is no favourable taxation of vehicles as opposed to compensation.

They are all taxed at the same level,” says Bill Robinson of Wheels.

“If you are awarded a company car, you have to pay tax on the personal use of that vehicle, but that is determined by your income.”

The most popular financing method, at least for larger fleets is through leasing, says Bill Robinson, “Companies almost always use the leasing structure and get the financing from the fleet management company.

“One of the trends that is beginning to happen, or that companies are beginning to consider, is coming from US companies in particular that are sitting on a tremendous amount of cash. They have no place to put it. So some of our customers have begun to work out situations where they are either purchasing the vehicles themselves and utilising their own capital rather than paying a financing rate, or they still lease the vehicles from us but they provide the funding to us to purchase the vehicles. It is not common at all for people to do finance leases. The North American model is for what we call an open end or TRAC lease, where TRAC

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fleet focus USA

Low cost, but for how long... ¡

stands for Terminal Rent Adjustment Clause.” This is a form of operating lease.

Bill Robinson explains; “Both the US and Canada are incredibly transparent. You pay for things as you use them, so when you have a lease, there is no time limit, or mileage limit. You can drive it as long as you want and as far as you want. It’s just like making a mortgage payment on a house. If we buy a vehicle for $20,000, part of their payment is a depreciation reserve payment each month and we apply that to the vehicle and then when they sell the vehicle, if the book value on it is say $5,000 and we take it and sell it for the client and we get $5,000, then everything’s great. If we get $7,000 for the vehicle, the client gets all the benefit, the extra $2,000. On the other side, if we sell it for $4,000 and the book value is $5,000, then our final bill to them is for an additional $1,000.

“Our margins in the open end market are much lower than they are in the European market, but that is appropriate because in Europe, the fleet management companies are taking all of that risk and we have very low risk. We have a maintenance service, but it’s a very small fee that we charge on a monthly basis to manage that maintenance and if a client has a transmission service and it costs $105, we bill them $105, so they pay the actual cost of maintenance, so we’re not taking any risk on maintenance, we don’t take risk on residual value, we don’t even take

risk on financing because most of our clients choose a floating interest rate, so that interest will float month to month depending on market indices.”

Could that model be introduced in other parts of the world? Bill Robinson thinks so, under the right circumstances, “If the sourcing people who are based in the United States end up becoming responsible for global fleet, we think that they will drive that model to other markets. We argue that it’s not a particularly good way to manage fleet in a market where the primary benefit that fleet vehicles provide is compensation.

So we don’t think it’s a particularly good model for the European market, but we see US companies doing that, in particular the pharmaceutical companies.”

Looking ahead, Michael Kasuba at JATO thinks that business sector cars in the US will stay at a similar level. He points out that over the past five years, the sector has taken around 13% of the total car market.

“Prior to the great recession, some OEMs were overly reliant on fleet sales to stimulate revenue and ensure production efficiencies at the expense of profitability. This was particularly true with models that weren’t selling quickly. The result was lower overall profit margins for OEMs, which contributed to overall financial issues.

“Today, fleet sales are an important lever in a carmaker’s overall strategy to sell vehicles. Fleet sales provide a consistent revenue stream and help car compa-

nies achieve steady production levels.

With pent up vehicle demand pushing new vehicle sales higher, fleet orders, particularly with government or business buyers, help strengthen revenue gains without sacrificing profitability as they once did.

“In the next five years, I expect business vehicle sales in the U.S. to grow in line with new vehicle sales as pent up demand stimulates growth both with consumers as well as with commercial buyers who must contend with ageing fleets.”

“We’re seeing evidence that we’re beginning to see our clients grow again,” says Bill Robinson at Wheels. “So we’re seeing some growth in the fleet that way.”

“In the US, frankly, our clients costs for vehicles have not gone up for 10 years,” he says. “Even with the cost of fuel going up as dramatically as it has, funding has come down so much – financing is so inexpensive now and that has made up for the increase in the cost of fuel. Vehicles are better made in the US than they used to be, so the cost of maintenance has actually gone down, even though individual maintenance items have gone up. The frequency for maintenance has gone down pretty dramatically. Customers are keeping their vehicles for longer; they used to turn their vehicles between two and three years, now it’s much closer to four and for some of our clients beyond four years. All those things working together have kept costs stable over the last 10 years.

We now think that costs are going to go up.”

The Ford Fusion has become the big fleet model of choice in the USA.

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remarketing

DICK DENNIS, USA COUNTRY MANAGER FOR AUTOROLA, LOOKS AT THE GROWTH OF UPSTREAM REMARKETING AMONG USA USED VEHICLE CONSIGNORS. he American used light vehicle market is beginning to show signs of recovery after positive GDP growth and a growing source of credit that is relatively cheap and easily available at around 4%. As a result, retail leasing is growing at record levels – 28% in 2012 – and there is potential for further growth in 2013.

In 2012 there were 40.5 million used light vehicles sold retail in the US, which was up +5% from 2011, further reinforcing that the market is getting back to where it was prior to the recession in the late nineties. Out of those 40.5 million vehicle sales, approximately one third are sold privately, one third by independent dealers, and one third by franchised dealers.

Additionally, within the US automotive market, roughly 21 million light vehicles were sold wholesale, essentially unchanged from the prior year.

Within this market, 7.9 million units were sold at NAAA member auctions (up +3.3% from 2011), reflecting the strengthening economy and growing new car market, which resulted in increased dealer consignments to auctions.

From an online perspective, America was a leader in the development of online used vehicle remarketing, beginning in the early nineties. This was due in part to the country’s high level of IT expertise, and because the size of the country meant visiting physical auctions was often a time consuming and costly exercise for buyers.

Twenty years after online used vehicle auctions launched in the US, while physical auctions still comprise about half of all used wholesale transactions in the light vehicle market, online wholesale transactions have grown to just under 20% of used vehicles sold. This includes ‘online only’ and ‘Simulcast/Hybrid’ wholesale auctions, with the ‘online only’ showing the strongest growth, up from 1.4% to 4.4% of wholesale units by 2012 (triple the 2008 level). This trend is expected to continue as asset owners experiment with various forms of online remarketing to improve efficiency and speed while reducing transport costs.

More corporate fleets, including rental agencies, commercial accounts and leasing companies, are currently experimenting with upstream remarketing as they aim to proactively remarket their assets prior to reaching the end of their planned time in service.

A preferred process for commercial fleets and leasing companies is to contact the employee or driver online three months prior to the vehicle’s lease maturity date, based on their specific knowledge of the vehicle’s actual condition. If the employee or driver elects not to purchase this vehicle, it is then offered to other employees within two to three months of the vehicle’s maturity date. If, after this process, no purchaser has bought the vehicle, it is then sent to the nearest physical auction. ”There is a growing trend in the US whereby large institutional consignors (e.g. auto companies, banks, fleets, etc.) are adopting multi-channel remarketing strategies in order to maximize realized sales values while simultaneously reducing their days to sell and overall remarketing costs. Different vehicles get remarketed in different ways, but upstream selling seems to be the way forward,” said Dick Dennis, Autorola USA country manager. ”Not only do vehicles get sold much faster, and the asset owner receives payment earlier in the process, but overall remarketing costs are considerably less when factoring in transportation, inspections, document processing costs, etc.,” said Dennis.

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fleet strategy

WHERE IS JAPAN’S FLEET SECTOR? In contrast to Western Europe, the fleet sector in Japan barely exists.

Peter Nunn explains.

Japan is a land that can be full of surprises. When it comes to cars and driving, for example, you might think that a nation that plays host to such auto giants as Toyota, Nissan and Honda, one that supports such a vast industrial base and massive population, would also have a thriving and lucrative business car sector to its name.

Get ready for one of those surprises, however, because the fleet market as it is known and structured in the UK barely exists in Japan.

Or to put it another way, yes, of course, there are corporate sales but the sector is handled very differently to the UK and, perhaps even more remarkably, not of icially tracked or recognised by JAMA (Japan

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Automobile Manufacturers Association), the local equivalent to the UK’s SMMT. Vive la difference, as our cousins across the Channel would say.

We could start by saying that Japan and the UK actually have two key things in common, in that both are island nations that drive on the left.

Thereafter, Japan goes its own way with the vehicle market over twice the size of that of the UK and dominated, as ever, by the major domestic manufacturers, which is to say Toyota, Nissan, Honda, Mitsubishi, Daihatsu, Subaru, Suzuki and Mazda.

Imports do have a share of course, but it’s traditionally run at some 4% of the market, with the premium German

makers (Volkswagen, BMW and Mercedes-Benz) holding the lion’s share.

While the UK vehicle market is split approximately 50/50 (retail vs fleet), in Japan it is more like 97/3, according to a JAMA spokesman in Tokyo, with the vast majority of sales clearly being to private customers.

Even to seasoned Japan watchers, that still comes as a surprise bearing in mind Japan is a country with a vast vehicle park (some 5.4 million units sold in 2012) and officially has more than 46 million vehicles on the road.

Japan also boasts a powerful corporate sector of course, from blue chip names such as Honda, Sony and Mitsubishi, down to a

There simply isn’t the parking space available to accommodate mass fleets of company cars.

High fuel economy has made the Toyota Prius a huge commercial success in Japan.

vast army of smaller companies and their dealers, manufacturers, and suppliers.

Companies, then, that would surely be very well suited for mass business fleet orders, as would be expected in the UK. But in Japan, the fleet market takes a very different and curious turn.

In the first instance, it’s rare in Japan for a company car to be included in a salary package, even for senior office workers. Typically, the hard working Japanese ‘salaryman’ doesn’t think of asking for a company car, neither does the company think of offering him one. That’s long been the custom.

For office workers in a major metropolis like Tokyo, the norm is to commute to

the office from the suburbs by train. Space is a rare commodity in Japan, especially in the cities, so on a practical level, there simply isn’t the parking space available to accommodate mass fleets of company cars. The costs involved, and congestion on the already crowded roads, would also be big negative factors.

It’s a generalisation but Japanese who do own cars tend to use them only on the weekends. Freed from the grind of the daily commute, cars thus become something of a hobby so are driven relatively short distances.

This is one reason why diesel has historically had such a low penetration. The classical long distance bene it of running diesel (in a mainstream car) doesn’t register with Japanese private buyers and besides, the time old image of diesel being slow, noisy and smelly is still alive and well in Japan.

Instead, ‘hybrid’ is the market buzzword and Toyota has had huge commercial success with the Prius in Japan which absolutely hits the spot. Then comes Honda with its fleet of small hybrid models (Insight, Fit EV and so on).

The Prius, with its clean, green image, exceptional economy and high-tech design, is perfect for the city and short distances and thus exactly the car that Japanese like.

Besides, it is backed by Toyota, the market leader, which has all the marketing power in the world to make it a success if it really comes to a sales battle.

Times are changing, however, and BMW is one that introduced new, cutting edge diesels to the market in Japan. So has Mercedes. Mazda, with the CX-5, is one of the domestics that’s also pushing hard with its new and impressive SKYACTIV diesel – and the market is responding positively.

Yet another difference to the UK market is the emphasis on fuel economy over CO2 emissions. Car makers like Toyota place a big concentration on the car’s official economy figure (3.3l/100km in the case of the Prius in Japan’s JC08 fuel cycle) and it’s this, rather than CO 2, that registers with buyers – and businesses.

Building on this, Toyota has since introduced the 1.5-litre Aqua hybrid, which is distantly related to the UK Yaris hybrid.

Itachieves an even better 2.8l/100km and it’s the Aqua that’s Japan’s current number one best seller (because it is smaller, cheaper and more frugal and the Prius).

Across the industry in Japan, there just isn’t the same concentration and awareness of CO2 that there is in the UK. And car taxation is still based around engine capacity, as it has been for decades.

Back with the fleet sector, this exists in Japan largely in the form of light commercial vehicles, or pool cars for company employees. Honda, Toyota, Nissan, Mitsubishi and Mazda all make light commercial vehicles to fit this sector, while down in Japan’s unique 660cc minivehicle sector, Suzuki, Mitsubishi and

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fleet strategy

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Daihatsu do the same thing (and supply OEM models to other domestic makers at the same time).

And yet, this side of the business is something of a mystery. Companies generally don’t release data on the numbers of ‘fleet’ vehicles sold. Nor does JAMA have any numbers for public consumption.

“Unfortunately, the answer is that in Japan we don’t classify sales numbers by fleet/retail,” explains a JAMA spokesman.

“There is no data in Japan that shows a company bought and gave a car to their worker,” he adds.

However, lifting the veil a bit, he confirms: “In 2012, the Japanese total vehicle market was 46,279,354 units. Of those, 44,960,299 were in private use while 1,319,055 were company use. Therefore, vehicles in company car use had a 2.9% share of Japanese total market.”

“One aspect of leet business that is growing is in car sharing companies,” explains a BMW Japan source. “While still in the few dozens of thousands nationwide, the leet is

Mazda’s SKYACTIV diesel engine is the first to meet Japan’s stringent NOx emissions regulations without after treatment.

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growing and BMW Japan is one of the largest providers of premium import vehicles for this emerging business.

We work with TIMES (known for its parking business) and also did some experimental work with ActiveE electric vehicles.”

Taxis and car rental leets also have a big stake in Japan’s apparently low-key company car business.

Toyota with the Crown and Nissan with the Cedric/Fuga are two stalwarts of this genre (many running on LPG), but on the streets of Tokyo today, you see an increasing number of Prius’ too with drivers/owners looking to take advantage of the Toyota’s high economy and low running costs.

All in all, Japan is a very different and fascinating environment compared to the UK and Japan’s version of Mondeo Man is still a pretty rare sight. Likewise, the

Toyota’s Aqua is Japan’s current best-selling car.

director in Tokyo ticking off the box for his next company Audi or BMW (although expats in senior positions can be entitled to imports as part of their package).

It could be said, then, that the fleet/business car sector in Japan has a very large capacity for expansion, but the time for far reaching change still seems quite some ways off.

fleet profile IVECO

The Italian Job Ian Norwell profiles Italian CV maker Iveco, and finds that itâ&#x20AC;&#x2122;s a key component of a much larger machine.

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he small blue square discretely tucked away in the top corner of Iveco managers’ business cards belies its gravity. The Fiat Industrial Group has three major divisions of which Iveco is one. It manufactures trucks and commercial vehicles, taking essential components in the form of engines, transmissions and axles, from a sibling division, Fiat Power Train. They also supply the third leg of Fiat Industrial’s tripod, CNH or Case New Holland, which specialises in agricultural and heavy construction equipment.

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HISTORY As with many other automotive conglomerates, the inancial muscle lexed by Fiat set it to embark on a series of deliberate and calculated acquisitions that would eventually form an industrial automotive division. The names that have been swallowed up along the way are a roll call of the European truck, bus and construction business, with oriental contributions added in recent years.

Formed as the Industrial Vehicles Corporation (IVeCo) in 1975, the initial core of Iveco drew in some long-established names. Unic (French, but joined the Fiat group in 1966), Magirus Deutz (established German vehicle and fire fighting equipment manufacturer), Lancia Veicoli Speciali (Lancia Special Vehicles, later to become the Iveco defence manufacturing plant in Bolzano), and OM (Officine Meccaniche, an Italian car and truck maker).

Iveco pressed on and acquired the Piacenzabased Astra brand, and formed a 50/50 joint venture with the UK’s Ford Truck division, named Iveco Ford, both in 1986, followed by Seddon Atkinson and the Spanish Pegaso in 1991. Iveco later acquired the remaining UK Ford Truck business. In March 1996, as they inevitably have, heads turned east to China and Naveco was formed, a 50/50 joint venture between the stateowned Nanjing Auto, a subsidiary of SAIC (Shanghai Automotive Industry Corporation), and Fiat.

Moving to another of the so-called BRIC (Brazil, Russia, India, China) hot spots, Iveco Mercosul was created in Brazil in 1997, as a base for manufacturing and distribution operations all over South America. Before the century ebbed away, Iveco’s passenger carrying operations were rationalised and bolstered with the formation of Irisbus. The company was formed from the merger of the bus and coach divisions of Fiat Industrial, Iveco and Renault in January 1999.

Bought in late 1999, Ikarus Bus was sold off in 2006 to Hungary's Műszertechnika group. In 2007 China’s Yuejin truck-making business was merged with the Naveco JV, which continues to sell under the Yuejin brand.

IVECO KEY FIGURES Net revenues Unit sales – vehicles Employees Plant locations (countries) Dealers Dealer locations (countries) Sales & service points R&D investment

€8.9bn 137,028 >25,000 11 684 >160 5,000 €289m

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fleet profile IVECO

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DRIVELINES

THE IVECO BRANDS The interfaces between the separate divisions of Iveco were well demonstrated at the 2013 BAUMA Construction Trade Fair in Munich in April. The Iveco Trakker four-axle construction chassis took care of the on-highway role at Europe’s road legal weights, but handed over to the Astra brand for the heavy-duty end of the offhighway trucks and dumpers. The regular commercial division manufactures mid to heavy vans from 2.8 to 7.0 tonnes GVW under the Iveco Daily brand, and upward from there to 44 tonnes gross combination weight (GCW) with ranges of rigid trucks and tractors under the Cargo, Trakker and Stralis badges.

IVECO BUS Iveco bus products also cover the range of passenger transport with minibuses, urban and extra-urban buses, and tourist coaches. The remaining two divisions make for exceptionally interesting factory tours (an oxymoron to some) and they demonstrate that there is still a place for the skills of a hand-built vehicle.

IVECO MAGIRUS The Iveco Magirus ire truck manufacturing plant in Ulm, Germany, and the defence vehicles site in Bolzano, way up in the northern Italian Tyrol, are in stark contrast to the mass production of Iveco’s daily van plant in Suzzara, near Milan. In the latter, there are 53 robot welders in action, keeping the body shells on the move. At the former plants, there’s a relative calm and not a robot in sight.

Magirus is Iveco’s specialist producer of ire- ighting and rescue appliances including turntable ladders and pump equipment, with an output of over 1,500 highly individual vehicles a year. Iveco Defence has sites in Bolzano, Ulm and Brazil where the company makes tactical and civil protection vehicles.

IVECO DEFENCE Iveco Defence has on-going contracts for the LMV (Light Multirole Vehicle) with 10 European armies, as well as the supply of over 200 heavy Trakker 6x6 and 8x8 chassis to the UK Ministry of Defence, now delivered. The LMV – the armoured workhorse of the military – has been a success, generating a 3,200-strong order book, now 80% delivered, including 400 to the UK, many of which are in service in Afghanistan.

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With the need to service this wide variety of automotive demand, it made sense to establish a dedicated driveline division, and Fiat Power train (FPT) was born. With six research and development centres worldwide, and ten manufacturing plants in three continents, the range of engines, transmissions and axles is more than enough to feed the needs of the haulage, off-road, marine and power generation sectors. So much so, that the list of alliances, strategic cooperation agreements and customers includes big-hitters like Daimler, Fuso, SAIC, CAT, Hyundai, Komatsu, Ford and Tata.

This success multiplies the already powerful economies of scale and spreads risk (from the impact of downturn) in a very effective way. As far as Iveco is concerned, FPT supplies engines for the heavy truck product in the form of the Cursor series.

For the Euro 6 emissions legislation, due to be implemented at the end of 2013, Iveco is ploughing a lone industry furrow in avoiding EGR (Exhaust Gas Recirculation) emissions reduction technology and sticking instead with a high ef iciency version of the SCR (Selective Catalytic Reduction) technology. All other truck makers have gone for a combination of the two technologies, and although Iveco may be steering clear of worries surrounding EGR’s higher operating temperatures, and the impact it may have on engine longevity, the company will pay a penalty in higher AdBlue consumption.

When it comes to gearboxes, ZF is Iveco’s declared global partner and all vehicles and gearboxes are developed in close cooperation with the German company’s Friedrichshafen base. The alliance is suf iciently strong for Iveco to get preferential treatment. The Eurotronic automated gearbox was released to Iveco with a one year lead over competitors like DAF, before ZF went on to sell to them and others.

Iveco says that the next generation AMT (Automated Manual Transmission) from ZF is another joint development tailored to the Italian brand. If it is the TraXon dual clutch gearbox, DAF has already said that the company is not interested until it sheds some weight. Sour grapes, possibly?

GLOBAL FOOTPRINT With the world map laid out on the table, Iveco has production plants (either their own or FPT’s) or sales and service networks in South America, Africa and the Middle East, Asia Paci ic, China, Central and Eastern Europe and Western Europe. The only obvious black hole is the USA. It’s a market of such size that it must be regarded as an ‘open point’ on the boardroom wall map.

Iveco will only say that any moves into the North American market are ‘under evaluation’ and that there is no commitment at present. Industry watchers have speculated that Fiat’s acquisition of Chrysler, which is still not complete, will need to be boxed up and tidied away with both legislators and unions, before any incursion into the North American truck market can be planned. With many of the major US players already in the hands of European commercial vehicle makers, it’s questionable if there is anything left for Iveco to go for. But we’ve been surprised before.

If the company has been slow off the mark in the US, the same cannot be said of Iveco’s business in China. Company history shows that its interest there, both as a market to sell into, and as a partner for joint manufacturing ventures, has been worked on for 17 years and seems to have blossomed in the last seven, since the JV with Nanjing Auto was implemented.

Iveco’s strategy here is not only to service the domestic demand, but export to international markets from within the country.

Working with a state-owned strategic partner, we can assume that planning and legal formalities to trade and export would have been swiftly dealt with. The JV volumes certainly look impressive. With 20,006 units sold in 2006, there has been a steady progression with a slight dip only in 2008 – to 147,747 units in 2012.

The combination of Iveco’s and Nanjing’s ranges allows them to address premium and mainstream segments, across light, medium and heavy ranges. They see themselves as having a ‘ irst-mover’ advantage and even though there’s a ‘slowdown’ in growth reported in China, the term is laughable from a Western perspective, as it is still booming compared with the mature and stagnant European zone.

Iveco also sees South America as a growth market – as do the other main players – and has established an R&D centre in Brazil with FPT running an engine customisation plant in Belo Horizonte for Latin American customers, and a heavy engine plant for off-road applications in Cordoba, Argentina. Taking full advantage of the money spent on development in the Chinese market, Iveco also plans to exploit its Chinese platforms in Latin America where the company has already reached a 12.7% share of the heavy sector.

THE NUMBERS A split of the revenues by business for 2012 would seem to indicate igures in line with market size, and no obvious weak areas. Heavy trucks unsurprisingly accounted for 36% of the business, with volumes of the light CV Daily range not far behind, taking 28%. The medium trucks division tied with the bus products at 13% each, and the specialist niches of defence and ire appliances captured the remaining 10% between them.

The inancial performance graph since 2005 has a familiar shape. The dip in 2009 was suf iciently severe for the recovery to have not yet returned to the previous €11.19bn peak of 2007. Market shares vary.

From a leading 36.6% of the 6.01 – 15.99 tonne GVW sector in Central Europe, and a Western European sector equivalent of 23%, Iveco did not fare as well in the over 16 tonne GVW segment. Here Iveco managed only a 5.2% share in central Europe and 7.5% in the West.

IVECO SALES & SERVICE NETWORK

Western Europe Dealer: 325 Sales point: 808 Service point: 2,601

Central & Eastern Europe Dealer: 135 Sales Point: 224 Service Point: 326

Africa & Middle East Dealer: 114 Sales point: 144 Service point: 223 Latin America Dealer: 71 Sales point: 187 Service point: 212

China Dealer: 657 Sales point: 1,432 Service point:1,396

Asia Pacific Dealer: 39 Sales point: 59 Service point: 174

Total with JVs Total dealers: 1,341 Total sales point: 2,854 Total service point: 4,932

GREENERY As all the major players do, Iveco provides a range of alternatively fuelled vehicles, but they all struggle to establish a foothold with customers. That’s not a comment on the product; it just can’t be brought to market at a competitive price. Vans, light and heavy trucks and buses with compressed natural gas (CNG), bio-methane, battery electric and hybrid drive are all there in the Iveco garage, but with very few takers. It is not an Iveco problem; it’s an industry one. Parallel Diesel-electric hybrid drives get closest to the target, and they do offer good operating economy, low noise levels, exemption from some road charging tariffs, and they are clean. But with chassis typically costing double that of a conventional diesel-powered vehicle, it is legislators who are missing from the party.

IFW September 2013

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fleet profile IVECO

¡

Benefits from Motorsport will trickle down to customers in years hence

A SENSE OF ADVENTURE Most motor manufacturers are keen on sponsorships, and Iveco can get involved closer to home than most. With its Fiat parentage, the links with the Ferrari F1 operation is no surprise. But a stronger commercial vehicle lavour comes through with support of Petronas Team de Rooy Iveco, and the team’s assaults on the Dakar rally.

In recent years, the event has moved to South America to avoid the politically unstable countries of West Africa that were giving the rally organisers security nightmares. It retains the iconic ‘Dakar’ name, but contestants now thrash cars, motorcycles and trucks for two weeks from Lima to Santiago. There’s an undoubted ‘big boys toys’ element to the event, but it’s a Cursor 13 engine from FPT Industrial that powers the De Rooy team’s

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Trakkers and Powerstar and, in the same way that disc brakes for trucks started life on the race track, there is at least some justi ication in the bene it that will eventually trickle down to a Stralis customer in years hence.

Identifying truck drivers as a key audience also leads Iveco to a main sponsorship role in MotoGP motorcycle racing, with a Stralis leet hauling the Yamaha factory team. It all brings a little welcome colour and a sense of fun to what could otherwise be a drab industrial concern. We will be watching Iveco’s progress in China, a notoriously tough market to deal in, and we await with interest what chess pieces move across the Atlantic. Your move there, Iveco.

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NEWS from the global fleet community

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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...

September 4-5 Cenex Low Carbon Vehicle Event, Milbrook Proving Ground, UK (PC, LCV) www.cenex-lcv.co.uk 9-14 Moscow Auto Salon COMTRANS, Russia (LCV, CV) www.oar-info.ru 12-22 Frankfurt International Motor Show, Germany (PC) www.iaa.de 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 KEY: PC – passenger cars // LCV – light commercial vehicles // CV – commercial vehicles

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launch report Audi A3 Limousine p46 Mercedes-Benz S-Class p47 Renault Captur p48 Volkswagen Golf GTD p49

The characteristics of the 1.5-litre engine are well suited to Captur and it is probably the most refined version of the engine when driven. p48

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launch report

Audi A3 Limousine A niche model in Europe, but Audi’s first ever booted A3 is big news, as Alex Grant explains.

SECTOR Lower medium PRICE €24,520 – €41,370 FUEL 4.6 – 8.2l/100km CO2 107 – 152g/km The A3 accounts for a fifth of Audi’s global volume, and despite a conservative styling evolution with the third-generation it’s comfortably the best seller in the premium C-segment. Yet despite a 16-year success story, the lack of a limousine has left a gaping hole in its product offering.

It’s hard to believe in Western Europe, where even the biggest-selling hatchbacks struggle to find buyers when they grow a boot, but globally this is far from a niche model. Audi has opened a new factory in Hungary just to build this model, and as many as half of Chinese and North American customers are expected to opt for the booted version. Once the second factory opens in China – just for domestic customers – 30% of global A3 production will be the limousine. So it’s big news.

Sales expectations are far more modest in Europe, though. In hatchback-dominated markets, the manufacturer sees the A3 Limousine as an option for customers with mainstream D-segment cars, looking to downsize but move up to a more desirable badge.

Trim levels vary depending on the market, but these are based on three basic versions, comprising the entry-level Attraction, sporty Ambition and luxurious Ambiente.

Some markets will be offered the S line and

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Luxe packages on the latter two, others will feature these as models in its own right.

Prices are €420 higher than the Sportback.

But the traditional three-box limousine shape means the A3 feels brighter and roomier in the back than the CLA, despite being shorter. Wider wheelarches and a short boot make the A3 limousine feel stocky rather than stretched, and bode well for the next Cabrio which will be based on this instead of the hatchback.

Rear legroom is identical to the Sportback, while boot space has grown by 60 litres albeit with a narrower opening.

Launch engines include the 150hp 2.0 TDI which has proved popular in the rest of the range, and this smooth, efficient unit is predicted to be the biggest seller.

A 184hp version will follow in December, along with the 1.6 TDI with range-lowest CO2 emissions of 99g/km. Despite the 45hp drop in power, this is more than adequate for most drivers, and easily settles at 4.3l/100km on long journeys.

Petrol versions include 1.4 and 1.8 TFSI units at launch, the smaller of which features Cylinder-on-Demand technology, allowing it to run on two cylinders at low loads. It’s a pleasure to use, light and revvy to drive and switching seamlessly

into its fuel-saving mode, but despite diesel-like 109g/km CO2 emissions it’s also €500 more expensive than the 2.0 TDI which will blunt its appeal.

The 1.2-litre TFSI petrol found in the Sportback isn’t being offered in the Limousine, while quattro four-wheel drive is available on the 2.0 TDI and 1.8 TFSI in selected markets.

The Limousine shares its three no-cost interchangeable suspension setups with the Sportback. Tested on the sport setup, as fitted to the Ambition model, even on heavily potholed roads it felt suppler than the CLA without becoming wallowy through corners. It’s only the largest wheels which give it a tendency to thump uncomfortably over lumpy tarmac.

The limousine may not be a mass-market car for Western Europe as yet, but the A3 has become a well-rounded hatchback and its best qualities translate neatly into a worthy compact alternative to the A4.

verdict The A3 offers the space and comfort which should be available from the CLA, albeit in a less daring design. A great choice for MPG-minded downsizers.

Mercedes-Benz S-Class Can the S-Class still live up to its claims of being the world's best car? Alex Grant finds out.

SECTOR Luxury PRICE €79,790 - €152,618 FUEL 4.4 – 10.3l/100km CO2 115 – 242g/km It takes enormous confidence in your own product to describe it not only as the best in its sector, but the best car on the market. So when Mercedes-Benz call its luxury S-Class the best car in the world, it’s giving the luxury saloon a lot to live up to.

While this isn’t a volume seller, it’s a backbone of the carmaker’s product offering. This is where its latest technology appears first, and it's a figurehead for a brand defined by luxury.

It also enjoys a commanding sales lead in its sector, even after an eight-year lifespan. This means its successor has to build on what is already a benchmark, moving the pinnacle of luxury motoring forward a generation while bringing running costs down for the fleetheavy sales mix. That’s a very tough task.

At the familiar end of the technology spectrum, the S-Class launches with familiar S500 V8 petrol and S350 BlueTEC V6 diesel engines, the latter predicted to remain as the biggest seller. It’s a remarkably quiet engine, too, now consuming 5.5l/100km with CO2 emissions of 146g/km (or 5.6l/100km and 148g/km for the long wheelbase version) while delivering a near-silent 258hp through its smooth if slightly lethargic gearbox.

Less familiar is the choice of hybrid versions available. Using technology deployed

on the E-Class last year, the S-Class will be available with a 147g/km petrol-electric hybrid and the diesel-electric S300 BlueTEC Hybrid. It’s a unique product in this segment, offering an easily class-leading 4.4l/100km and 115g/km. Despite using the only four-cylinder engine in the range, this is quieter than the E-Class can muster, with limited shudder while shifting between diesel and electric power.

For the first time, the S-Class has been designed to cater for the growing Asian markets where buyers tend to be sat in the back. The long wheelbase now offers five rear-bench seating combinations, comprising two or three-seat versions, the former available with two reclining options each of which can be specified with a centre console. Because the seats pivot at the hip, not the shoulder, there’s less of a reduction in legroom when fully reclined.

European buyers – generally found in the driver’s seat – are expected to opt en masse for the short wheelbase model, with either a two or three-seat rear bench. Regardless of wheelbase, the S-Class cabin comes awash with soft and impeccably stitched leather and remains the benchmark for ride quality even on its largest wheels.

But where the S-Class really moves the

sector forward is in its execution of everyday tasks autonomously. Six radars, six cameras and numerous other sensors mean it can analyse its surroundings in 3D, distinguishing between pedestrians, cyclists, vehicles and animals, adjusting suspension settings to soften bumps on motorways, stopping automatically and adapting its headlight beams to avoid other traffic.

This also means it can park itself with the driver only responsible for selecting reverse or forward gears, and eerily it’ll lock onto other vehicles in a traffic jam, intelligently deciding whether to follow their movements or the road markings at up to 60km/h. Above this, it gently corrects steering to keep the car in its lane, while automatic cruise control makes long trips completely effortless.

Whether it’s fair to call a car this aspirational the best in the world is open to debate, but there’s no questioning that the S-Class is a march forward in technology which wows and delights in equal measure.

verdict A benchmark for effortless cruising and first-class comfort, the S-Class's only real fault is the conservative way it does so. But that's done it no harm in the past.

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launch report

Renault Captur John Kendall finds out how Renault’s compact crossover compares to an ever-growing group.

SECTOR Compact SUV PRICE €13,860 – €21,350 FUEL 4.2 – 6.0l/100km CO2 96 – 125g/km It doesn’t take much to work out that the Renault Captur – compact SUV, crossover, or however you want to categorise it – is related to the new Clio. Not that this is in any way a bad thing. The latest Clio is a neat little car and a fair bit of that neatness rubs off on the Captur, which then adds some style of its own. There’s the two-tone colour scheme for instance – you don’t have to have it, but it lends the Captur a cheeky air – with the same colour picked out in the roof, door mirrors and alloy wheels. This can be matched in the seat covers which can also be removed and cleaned in a washing machine – useful if you have small children.

That practicality is continued elsewhere inside. The Captur borrows from its Nissan Note cousin and has adopted a sliding rear seat, offering variable legroom or boot space as needed. With all seats in use, there is up to 455 litres of boot space, which opens up to 1,235 litres with the back seats folded away.

There are a number of other storage spaces around the car, including an 11-litre drawertype glove box on left hand drive versions.

The taller body benefits interior space.

There is reasonable room in the back, helped by that sliding seat and the gently tapering roof line. Three seats, split 60/40 are fitted in the rear, although they would

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be a tight fit for three adults. Renault says that the SUV equipment does not mean extra weight either, stating that the Captur weighs about as much as a Clio III. Safety equipment is comprehensive, with front and side airbags and a driver lateral head-thorax airbag and ESC (electronic stability control), among other items.

Power comes from an all-turbocharged engine line-up starting with Renault’s uncannily smooth 90hp TCe 90 898cc triple cylinder petrol engine. Above that is the four-cylinder version with 120hp from 1,197cc, driving only through a dual clutch automated six-speed gearbox. Alternatively there is the 90hp dCi 90 1.5-litre diesel, used extensively in the Renault and Nissan European ranges. This is available with a fivespeed manual gearbox at present but will soon be followed by a variant coupled to the six-speed automated transmission. Not surprisingly it’s the diesel that offers the lowest CO2 emissions at 96g/km, with 115g/km for the TCe 90 and 125g/km for the TCe 120.

Part of the Captur’s low weight is due to the lack of four-wheel drive. It’s not an option.

Neither is Renault’s Grip Extend system, similar to the Grip Control system available with the Peugeot 2008, which uses the ESC control electronics to optimise traction and could

give the Captur useful off-road capability.

But it is available with Renault’s R-Link, integrating satellite navigation and online connectivity with 50 apps already available.

Don’t write off the tiny 898cc engine on the grounds of size. Turbocharging gives it an unexpected level of performance and it is uncannily smooth for a three-cylinder engine, arguably better than Ford’s 1.0-litre EcoBoost. It is the entry-level engine, but far from being the least desirable.

Fleets will probably be drawn to the 1.5-litre diesel with its lower emissions and good torque. Its characteristics are well suited to the car and it is probably the most refined version of the engine when driven.

The dual clutch transmission will bring even greater versatility when it arrives.

It feels well assembled although the bright upholstery won’t be to everyone’s taste. But beware of the bulky A-pillars, which are quite capable of concealing an individual crossing the road, especially in town driving.

verdict The Captur has stylish appeal but in some ways, the Peugeot 2008 does it better.

Low emission engines mean it’s worth a look if a compact SUV/crossover appeals.

Volkswagen Golf GTD The GTD continues to set benchmarks for user-chooser desirability, reckons Alex Grant.

SECTOR Lower medium PRICE €29,700 – €32,525 FUEL 4.2 – 4.5l/100km CO2 109 – 119g/km Can you think of many more complete company cars than the Golf GTD? Efficient, practical and low on tax, yet packed with kerbside appeal and great fun to drive, it strikes a brilliant compromise between commuter workhorse and desirable private use car.

The diesel hot hatch may have become a more common proposition in recent years, but Volkswagen has had three decades to perfect its offering. Only five years separated the arrival of the GTI and GTD badges in the Mk1 Golf, and it’s since grown from an economy-focussed model with a few of the GTI’s styling add-ons to become a far more convincing performance car.

It’s a surprisingly big seller, too. The GTD accounted for just under 5% of all European Mk6 Golf sales, and in some markets it’s not far behind the entire Jetta range.

At 184hp, the latest GTD is still 36hp behind the newest GTI but, as with the Mk6, what it lacks in power it more than makes up for in torque. Peak output of 380Nm is available between 1,750 and 3,250rpm meaning it picks up with the urgency of a far more powerful car. The all-important sprint to 100km/h takes 7.5 seconds, a second behind the GTI, but with ample in-gear pulling power to make each drive fun.

As one less sacrifice, the newest of Volkswagen’s 2.0-litre TDI engines are barely noisier than the direct injection petrols found in the GTI. There’s a tiny amount of diesel clatter with the window open, but in most situations it’ll leave you checking the inside of the fuel flap to see what nozzle to pick up. Volkswagen has a sound actuator planned for the options list, which pipes a gruff exhaust note into the cabin, if you wish to drown it out completely.

The same is also true outside. As with previous versions, the GTD looks almost identical to the GTI save for a few red pinstripes and stitches, all of which are reduced to monochrome for the diesel. Honeycomb grilles, large part-polished wheels and a twin exhaust separate it from the basic Golfs on the outside, while grey tartan-trimmed sports seats and a flat-bottomed GTDbranded steering wheel lift the interior.

It’s an accessible car, too. Fuel consumption of 4.2l/100km with CO2 emissions of 109g/km for manual versions means it’s 13% more efficient than its predecessor.

Drivers opting up to the DSG gearbox get a resulting drop in fuel efficiency to 4.5l/100km with 119g/km CO2 emissions for the five-door – both of which are comparable figures to the first Golf Bluemotion

launched in 2007. That’s a remarkable advance over just two generations.

Meanwhile, lower insurance groups than its predecessor and high residuals, with the five-door manual at the top of the desirability list, should keep running costs down for the substantial share of GTDs which are expected to sell to fleets.

Natural rivals are few and far between.

The Opel Astra Biturbo is a significantly more aggressive looking car, but it’s slower and less economical, and nobody else has a sports-styled C-segment car which is a model and engine in its own right. It’s only when you get up to premium brands when a similar package of power, economy and styling begins to present itself.

The GTD remains a bit of a benchmark for the hot diesel hatchback, offering almost all of the plus points of the GTI but with much lower running costs than its petrol-powered counterpart. It makes this a company car which satisfies on every front.

verdict Private buyers may baulk at paying almost as much for the GTD as the GTI, but for fleets the diesel is an accessible way to get GTI perks without the associated costs.

IFW September 2013

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fleet in figures

China leads global car sales Signs of economic recovery in Europe have seen the sales decline slow, while sales in China and North America keep building, as John Kendall reports.

Jaguar Land Rover was the only group to record growth, with registrations up +10.9% to 74,130

ACEA, the European Automotive Manufacturers Association gives its number crunchers a break over the summer, so there will be no of icial data on European new vehicle registrations until September. But forecaster LMC Automotive gives an insight into how the market performed in July. According to the company, registrations in Western Europe grew by +4% in July, only the second time this year that the market has shown signs of positive growth. Perhaps the igures support recent press reports that the European economy is showing signs of growth.

LMC Automotive suggests that the seasonally adjusted annual rate of sales for Western Europe stood at 11.5m units in July, and the company forecasts that annual sales will inish the year on 11.41m units. While that still represents a fall of -3.1% compared with 11.77m units in 2012, if the forecast is accurate, the rate of decline will have slowed

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from -8.1% in 2012 to -3.1% in 2013.

Using LMC Automotiveâ&#x20AC;&#x2122;s data for July, it shows that the year-to-date (YTD) sales were down -5.4% compared with the January to July period in 2012 to 7,004,005.

For the month, some countries were showing extensive sales growth.

In Ireland, new car sales grew by +162.7% for the month, with 11,640 sales compared with 4,431 for July 2012, although sales are still down -8.6% for the year to date figures. Among the larger countries, Spain saw July sales of 75,024, +14.8% up on July 2012. Although yearto-date sales are down -2.1% to 461,362, the annual selling rate for Spain at 712,814 units per year is up +1.9% on 2012. As LMC Automotive points out, the Spanish market is supported by a government-backed scrappage scheme, which was extended for a third time in the

summer and despite the good performance, underlying demand remains weak.

France also saw positive sales growth in July, up +0.9% to 150,248. The French market is still declining with YTD sales to the end of July down -9.8% and an annual selling rate down -6.9%, but these figures are an improvement over the large falls in the French new car market of last year.

Germany registered positive growth in July too with sales up +2.1% on July 2012 at 253,146. But the German car market was down -6.7% for the January to July period, to 1,755,776. The UK is continuing its strong sales performance with July sales up +12.7% on July 2012 to 162,228. For the January to July period, sales were up +10.3% to 1,325,851 and annual sales look on course for around 2.2m units.

Other European markets that look set for positive growth through the year

include Belgium, Denmark and Portugal.

Although the Netherlands pulled back in July with sales down -0.8% to 30,666 compared with July 2012, sales are down -33.0% for the January to July period as the country wrestles with its financial issues.

Looking at ACEA igures from the irst six months of 2013 (H1), the Volkswagen Group maintained its market leadership across the EU and EFTA countries. Overall the market was down -6.7% to 6,436,743, with the Volkswagen Group down -3.7% for the same period to 1,598,768. Volkswagen remained the strongest brand with registrations down -7.7% in H1 2013 compared with H1 2012 to 805,745, with SEAT delivering +9.4% growth to 151,836 registrations.

PSA held the second place among the groups, but both Peugeot and Citroën recorded fewer registrations as individual brands than Renault or Vauxhall/Opel.

Among brands recording an increase in H1 were Mercedes-Benz, up +3.5% to 320,359, Honda, up +7.6% to 78,077, Kia, up +1.3% to 175,453 and Mazda, up +5.4% to 74,419. Jaguar Land Rover was the only group to record growth, with registrations up +10.9% to 74,130. Jaguar’s H1 registrations rose +17.7% to 14,824, while Land Rover was up +9.3% to 59,306.

COMMERCIAL VEHICLES If the European economy is growing, it might be reasonable to expect growth in commercial vehicle sales, reflecting increased economic activity. Economic growth in Europe remains fragile and that may explain the continued weakness in the European CV market.

The coming Euro6 emissions legislation for commercial vehicles might have been expected to stimulate demand for Euro5 compliant models that will not carry the cost penalty of the additional emissions control equipment. But even this does not appear to have added stimulus to the European CV market.

Overall, ACEA igures for the irst half of 2013 (H1) show that registrations for all CVs were down -4.8% for June and -6.9% for the January to June H1 period. In June, only Spain and the UK registered growth among the major European markets. Regis-

trations in Spain rose +14.7% compared with June 2012 to 9,661 and in the UK by +3.7% to 27,339. But for the H1 period, the UK was the only major market to show growth in CV sales with a rise of +7.2% compared with H1 2012 to 156,450.

The pattern was similar for light CVs, up to 3,500kg gross vehicle weight (GVW). For June, registrations were -4.2% down compared with June 2012 to 123,720. Among the major European markets it was again Spain and the UK that posted growth for the month. Spain saw light CV registrations rise +21.9% compared with June 2012 to 8,710, while in the UK, light CV registrations rose +3.4% to 23,041. For the H1 period, it was only the UK among the major European markets that registered an increase in light CV registrations, which were up +11.2% to 133,177. Overall, the market was down -5.9% for the H1 period, with France down -9.1% to 186,989, Germany down -9.0% to 99,509 and Italy down an estimated -20.1% to 51,107.

For heavy trucks above 3,500kg GVW, June registrations were down by -6.6% across Western Europe to 23,780. The UK was the only major market to post growth with an increase of +15.5% compared with June 2012 to 3,710. For the H1 period, overall registrations were down by -11.5% to 132,900 and all major markets registered a decrease in registrations. France registered an H1 decrease of -13.5% to 22,014, Germany was down -13.2% to 39,823, Spain was down -18.3% to 5,067 and the UK down -8.8% to 19,759. Poland registered a +4.6% increase to 8,087.

Looking at the global position, Scotiabank’s global auto report indicates that for H1, car sales grew by +4%. The bank points to the gradually improving economy in Western Europe and a renewed focus on job creation across the world as factors. Despite strong growth in the emerging markets of Asia and South America in early 2013, those markets are now moderating, but this has been offset by the global improvements.

Scotiabank shows that despite slower growth earlier in the year, car sales in China are still leading global growth. Chinese light vehicle sales accelerated 20% year on year in the irst half of 2013 says Scotiabank,

more than double the 2012 full-year +8% increase. Scotiabank forecasts a +15% increase in Chinese car sales for 2013, giving a forecast total of 15.15 million.

Strong sales in the North American Free Trade Area (NAFTA) means that Scotiabank forecasts a record car market in Canada in 2013 of 1.72 million, greater than the 2002 peak of 1.70m, while sales in the US and Mexico are on track to reach their highest level since 2007. The bank points to consumer confidence in the US at a six-year high, while economic growth in Mexico is running at around +3%, higher than its NAFTA partners.

Meanwhile, inflation is damping down demand in Brazil. The rate of inflation is approaching 7% year on year and interest rates have risen to 8% to try and counter the inflationary pressures. This is expected to damp down demand for cars and Scotiabank is forecasting a +6% rise in car sales for 2013 to 3.01m.

US EV SALES The Inside EVs website reports on electric vehicle sales in the US and shows that at the end of July the Nissan LEAF is the bestselling plug-in electric car in the US with 11,703 sales to date. The Chevrolet Volt is close behind with a total of 11,643 sales, while the Tesla Model S is in third place with some 10,750 sales. Altogether, electric car sales in the US have reached 47,589 to the end of July and if sales continue at the same rate, the full year 2012 total of 52,581 will have been exceeded by the end of August.

Inside EVs expects to see sales fall as the year progresses, partly because Volt and LEAF sales have softened and partly because Tesla is shifting its sales focus outside the US for most of the remainder of 2013.

New to the US market in July was the Fiat 500e, which matched sales of the Ford Focus EV in its irst month with 150 units.

The Chevrolet Spark EV came to market in June and notched up 103 sales in July. The Toyota Prius Plug-In has been the fourth best seller in 2013 with sales of 5,031 to the end of July. The Ford C-Max Energi took ifth place with 2,915 sales so far this year.

Figures show that US EV sales peaked in June at 7,992, building from 4,577 in January.

IFW September 2013

51

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