International Fleet World September 2014

New CORSA

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contents NEW CORSA

MUST BE LOVE. opel.com

Managing Editor Ross Durkin ross@fleetworldgroup.co.uk

16 Meet Volkswagen’s New Passat.

20 Jose Luis Criado of LeasePlan.

40 Suzuki’s truly global fleet brand.

44 Fully-electric e-Golf on the road.

Publisher Jerry Ramsdale jerry@fleetworldgroup.co.uk Editor John Kendall john@fleetworldgroup.co.uk Deputy Editor Alex Grant alex@fleetworldgroup.co.uk Business Editor Natalie Middleton natalie@fleetworldgroup.co.uk Features Editor Katie Beck katie@fleetworldgroup.co.uk Sales Director Anne Dopson anne@fleetworldgroup.co.uk

04 Fleet Review Editor John Kendall on the instability in the Eurozone.

Sales Executives Darren Brett darren@fleetworldgroup.co.uk

06 Inside Knowledge Ed Pierce explores the changing role of the US fleet manager.

Claire Warman claire@fleetworldgroup.co.uk

08 News The biggest stories from a month in the international fleet world.

Circulation Manager Tracy Howell tracy@fleetworldgroup.co.uk

16 Spotlight IFW gets a first look at Volkswagen’s eighth-generation Passat.

Head of Production Luke Wikner luke@fleetworldgroup.co.uk

18 RVs The benefits of strong residuals for the contract hire and leasing sectors.

20 Interview Jose Luis Criado on how LeasePlan plans to grow its global share.

Designers Tina Ries tina@fleetworldgroup.co.uk

22 Technology How improved connectivity will influence the cars of the future.

Samantha Hargreaves sam@fleetworldgroup.co.uk

26 Management Advice for reducing environmental impact.

30 MPG Marathon 2014 Sign up for the year’s premier economy event.

32 Fleet Focus Norway’s affinity with EV and alternative drivetrain technology.

36 Interview Derrick Bishop offers an alternative telematics solution.

Published by Stag Publications Ltd, 18 Alban Park, Hatfield Road, St Albans, Herts, AL4 0JJ tel +44 (0)1727 739160 fax +44 (0)1727 739169 email ifw@fleetworldgroup.co.uk web internationalfleetworld.com

38 International Fleet Academy The importance of people power in a global fleet.

40 Profile Suzuki’s popular Kei car range and fleet-friendly new models.

44 Launch Report e-Golf / GLA-Class / Citroën C1 / VW Transporter BlueMotion.

48 Global Fleet Forum A round-up of activity on the popular fleet forum.

50 Fleet in figures Breaking down the global vehicle sales by region.

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fleet review

This month, editor John Kendall looks at the Eurozone, the changing role of the fleet manager and connected cars.

Eurozone recovery under threat?

Fleet manager to corporate buyer

It seems that we have hardly stopped making references to Western European economic problems in the past two years and it was something of a relief to report that the fragile recovery appeared to be taking hold earlier this year and that car registrations were growing across the region again. Now news that Eurozone economy has ground to a halt as growth in France has slowed to a stop and that Italy is back in recession looks as though it could threaten that recovery. Sanctions against Russia may not be helping either, particularly for the French motor industry given the big involvement of Renault/Nissan with AvtoVAZ. If France can’t control its debt, what impact could it have on the Eurozone?

Columnist Ed Pierce has extensive fleet experience, having worked for ARI for over 20 years in the US. Ed has now set up his own business but his observations on the way the US fleet sector has evolved make interesting reading (pg.6). His observation that the transition for US fleet managers to corporate buyers is now complete seems a logical development, given that the trend in European fleets has been to outsource fleet management to service providers. The in-house manager has moved into becoming a deal maker in many cases. It’s not a case of “Could it happen here?”, more a matter of it’s the way the business has already developed.

Leasing needs better infrastructure Those thoughts are underlined by Steve Banner’s interview with LeasePlan’s boss Jose Luis Criado (pg.20).

With a total car leasing market of 810m cars in Europe, it’s still the place for leasing companies to do business, followed by the US with some 4-5 million. There’s plenty of room for growth in emerging markets, but economic stability in Europe is probably top of many leasing company wish lists at the moment. Criado points to the lack of infrastructure in China for vehicle leasing to make serious inroads yet and makes some pointed comments about electric vehicles.

04 / internationalfleetworld.com

Connected cars...

Do you care what technologies will be in your car in 2020?

As we outline in our connected car feature (pg.22), current connectivity – Bluetooth phones and mobile Wi-Fi hotspots are likely to be just the beginning. Wireless connection to other systems, GPS and radar will all be helping to ensure that cars can drive themselves. I know some observers are cynical about autonomous cars, but the worldwide demand for fewer road accidents will drive it forward. Human error is responsible for too many accidents, caused by inattention, fatigue or distraction. The basics of autonomous driving are already available to us with systems such as adaptive cruise control. We trust aircraft to be flown vast distances by computer, so what’s wrong with computers controlling cars when it’s convenient? The biggest obstacle is not technological but legal and we can’t wait 45 years again for a ratified Vienna Convention, which is how long it took last time.

visit internationalfleetworld.com

inside knowledge

North American fleet market looks for value With corporate buyer transition complete, savings are new fleet goal, says Ed Pierce of ItsTheArtsFleetMarketing.com.

I

n a recent article in North America’s Automotive the mid-2000s, corporate procurement took hold of Fleet magazine, ‘Procurement Ascendency’ fleet management as ‘strategic sourcing’ became a busitopped the list of global fleet mega-trends. The ness best practice. This migration became a powerful once-feared, but ultimately beneficial, transition from change agent for traditional fleet managers. fleet managers to corporate buyers can now be The strategic sourcing fleet group, led by a procuredeclared over. Even if the fleet manager title still exists, ment representative, included the fleet manager, who the role is inextricably tied to procurement. brought real-world experience with fleet requirements, But, procurement ‘best practices’ have changed too and other stakeholders. However, like the earlier eduring this changeover, and the evolution shows some procurement attempts, the focus remained cost cutting fits and starts... only at the start of the relationship. Contractual price In the early 1990s, outsourcing fleet administration savings or the tremendous signing bonuses defined became part of a corporate outsourcing trend. Within success. Once again, the fleet manager was left to deal 10 years, the first fleet-related reverse auction kicked with costly fleet complexities that never revealed off an e-procurement revolution. themselves on the procurement vendor scorecard.

However, the early promises of e-procurement -Successful companies adapt, however, and today, lower procurement administration costs, increased the procurement has become more sophisticated. The use of preferred suppliers, shortened acquisition cycles, role of procurement is no longer just that of a sourclower requisition costs, and improved ability to monitor ing manager. It has evolved into full-time contract demand – were overstated and fulfilment. Just as importantly, undelivered. While purchase advanced procurement stratorder automation reduced costs, egy has moved beyond cost “The shift from transactional obtaining the lowest cost from savings, too. relationships to continuous suppliers fell short due the Because corporate fleets exist complex supply chain. to serve business goals, contributstrategic partnerships promises The fleet department was left ing to productivity, customer to deliver measurable and to pick up the pieces when the service, operations, and more, sustainable business value.” inevitable service problems they bring quantitative value developed. The biggest problem? along with cost. The new, full-time Hidden costs!

Given the role gives procurement complexity of vehicle ordering, an apples-to-apples managers access to the company’s stakeholders for a comparison of vehicle acquisition costs is a challenge. better understanding of the fleet’s true business value Even worse than a comparison of vehicles is a and its impact on corporate return on investment. comparison of fleet services! Hidden costs are Many astute fleet managers recognised and kept up bound to arise in a comparison of accident services, with this three-decade-long transition, and many administration, driver mileage, fuel, information procurement people have become full-time fleet services, Maintenance, outsourced administration, experts. No matter what the title, however, the transiregistration, and safety. No two vendor programs are tion is complete. This shift from sourcing-driven transthe same, and in most cases, even identical types of actional relationships to continuous strategic fees have different bases. partnerships promises to deliver measurable and Electronic procurement may have faltered, but by sustainable business value.

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business news

Manheim expands global reach with Brazilian deal anheim has acquired a majority shareholding in Sao Paulo-based auction firm CarBizz as part of its plan M to expand its global footprint.

The deal marks Manheim’s first move into the Brazilian automotive market, which it said represents a significant long-term growth opportunity despite facing short-term economic challenges.

Owned by SGC Investments, CarBizz specialises in the remarketing of used fleet cars and commercial vehicles. The business employs approximately 50 people and will be led

by Carlos Domingues, who will serve as general manager.

Fleet Logistics reaches record fleet size milestone thanks to US demand

Alphabet drives international expansion of car sharing solution lphabet is reporting increased demand for its AlphaCity corporate car sharing solution, which A is now available in eight European countries with more to follow.

Since its launch, the product has attracted more than 8,000 registered users and over four million kilometres driven. Now the firm is rolling out the scheme in new markets, saying that Italy will be the next launch location with additional countries to follow soon.

Carsten Kwirandt, head of marketing and business development at Alphabet International, said: “Corporate car sharing is becoming more and more attractive throughout Europe. Our customers tell us constantly that flexible and individual products like AlphaCity are exactly what they need today to meet their increasingly diverse mobility needs.”

leet Logistics has reported that the size of its contracted F fleet has reached 137,000 vehicles due largely to new European business from US-based companies.

The independent fleet management provider is targeting a fleet size of 145,000 units by the end of this year, along with an enhanced product range and increased country scope.

The company is now on track to easily beat its target for the year, adding that strong interest from both new and existing customers has fuelled growth at a faster than expected rate.

At the same time, Fleet Logistics has expanded into several Eastern European countries and has now gone live in Turkey.

Enterprise Rent-A-Car acquires UK’s Burnt Tree CV rental firm

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nterprise Rent-A-Car has announced the acquisition of Burnt Tree, one of the UK’s largest providers of commercial vehicle rental to private companies and public sector organisations.

The deal will see Enterprise take on Burnt Tree’s diverse commercial fleet of 17,000 vehicles, including commercial vans, HGVs, refrigerated trucks and accessible minibuses, its proprietary fleet management technologies, as well as its network of 20 branches and a team of 400 employees.

In the immediate short-term, the Enterprise Flex-E-Rent and Burnt Tree businesses will continue to operate as two brands, with a view to creating a combined entity, which will be headquartered in Shrewsbury. The acquisition will swell Enterprise’s fleet of commercial vans and trucks to more than 25,000.

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International Fleet Academy to meet needs of global fleets his year’s International Fleet Academy hosted by T NAFA Fleet Management will once more provide fleet professionals with the chance to learn from the best and most knowledgeable individuals on the subject of global fleet management.

The event takes place 5-7 November at Rosen Shingle Creek in Orlando, Florida and is designed specifically to meet the needs of those who manage fleets outside of the United States and Canada.

The event will include a panel debate on 5th November on the crucial differences between diverse regions. Built on data from several key industry resources, panellists will conduct an interactive discussion involving a myriad of cultures, levels of fleet experience, and personalities.

For a limited time, attendees who register before 30th September can take advantage of early-bird pricing. More information is available at: www.nafafleetacademy.org.

For the latest news, visit internationalfleetworld.com

Latest ARI appointments to play critical roles in European expansion

a

RI has hired two industry veterans as part of its on-going strategic expansion throughout Europe.

Majk Strika will serve as director of international sales and Henning Schick will assume the role of director of strategic accounts and supply chain management Europe to help lead the continued growth of its global footprint “Majk and Henning’s extensive expertise and proven leadership will be vital in support of our strategic focus of continuing to develop a strong global presence that better serves the needs of our current and potential multi-national clients,” said Mark Bryan, senior vice president, European operations at ARI.

fleetweet a few soundbites from a month in fleet

@labcoatman Ben McKenzie, Australian actor and game developer

This idea that poor people don’t have cars throws sinister light on our governments’ decisions to spend more on roads than public transport

@bobbyllew Robert Llewellyn, comedian, actor and EV pioneer

New VWGL appointment forms part of growth plans

V

olkswagen Group Leasing has appointed Nigel Kerr as its new head of sales as part of its ambitious growth plans to become the UK’s leading vehicle leasing and finance business and to expand internationally.

With over 25 years’ experience in contract hire and vehicle management, Mr Kerr was previously the director of asset finance at Lombard North Central Plc. Corporate solutions director Martin Ballard commented: “Nigel brings with him a wealth of experience that will support our drive to become the number one leasing company in the UK, as well as sustain our continued commitment to provide our customers with the best leasing and vehicle management offerings on the market.”

TenneT ramps up use of fleetster corporate carsharing software

D

utch energy company TenneT is to increase its use of the fleetster corporate car sharing software following an indepth trial that has seen the firm considerably reduce its administration costs.

The firm previously ran its pool cars using a Excel Sharepoint file that was managed by an external service, proving both labour intensive and costly to run.

Six months ago, TenneT turned to using web software and apps by fleetster and since then its 1,200 users have made 1,000 vehicle entries and 370,000km of pool vehicle use with the existing eight vehicles.

The software is now being expanded to three other locations after the firm saw a 90% improvement in administrative expenses. Other benefits include automatic software updates as the system is web-based.

Here’s 1 of many things people assume about elec cars. When you arrive at charge point the car is ‘empty’. Not the case

@balldeborah Deborah Ball, Bureau chief, Wall Street Journal

#Pope Francis asked for the smallest car possible for his Korea trip and he got it.

The papal ride will be a (well-named) Kia Soul

@deanslavnich Dean Slavnich, motoring journalist

So far this year, one in five vehicles Ford sold in Europe was equipped with 1.0 EcoBoost.

Brilliant engine, so pleased to see it doing well

@PaulRosengren Paul Rosengren, Communications professional, PSEG

@Edison_Electric calls for utilities to "walk the talk" and starting 2015, commit 5% of fleet budget for #electric cars

@KT_Neumann Karl-Thomas Neumann, CEO of Opel

We're planning a new entry level model! No budget car, but a real @Opel (quality, innovation, German engineering)! 2/2 / KTN

internationalfleetworld.com / 09

Impress with less.

The new C 220 BlueTEC with CO₂ emissions of just 108 g/km.

A Daimler Brand

A lightweight construction, state-of-the-art materials, and a super-efficient engine make the new C-Class Estate the best in its segment. It gives you everything you could ever want from a car of this class – even smaller fuel bills, and even greater driving enjoyment. www.mercedes-benz.com/fleet

Fuel consumption urban/extra-urban/combined: 7.6–5.2/5.1–3.7/6.0–4.3 l/100 km; combined CO₂ emissions: 140–108 g/km.

Provider: Daimler AG, Mercedesstraße 137, 70327 Stuttgart, Germany

Efficiency class: B–A+.

environmental news

Tesla aims for 100,000 global sales in 2015 T esla Motors is planning to triple its production volume to 100,000 cars in 2015, with a new model, factory improvements and additional markets fuelling its growth.

In its Q2 2014 Shareholder Letter, the company said it had delivered 7,759 Model S electric luxury cars during the second quarter of the year, up 17% on the first quarter. However, moving into new markets including China and the United Kingdom had increased waiting times to four months, despite increased battery cell production at Panasonic in Japan.

At the start of August, the company completed upgrades to its factory in Fremont, California, which will allow it to increase production from 800 units per week to over 1,000 by the end of the year and to manufacture the Model X SUV on the same line in 2015. The latter is likely to outsell the Model S with which it shares a platform.

Pausing production for the upgrades is estimated to

have reduced annual output by 2,000 units, but the company expects to have delivered 35,000 cars this year, up 56% on the 22,500 in 2013. With sales underway in additional markets and the Model X in the range, this is expected to almost triple during 2013.

Further ahead, Tesla and battery partner Panasonic will announce the location of the Gigafactory – the world’s largest battery plant – in the near future.

Expected to be operational by 2017, it will employ 6,500 people building packs for over 500,000 vehicles annually by 2020. The €26,000 compact executive Model 3, due in 2017, will take a large share of this volume.

Both partners expect to reduce costs through economies of scale, cutting packaging, transportation and duty cost and optimising the batteries themselves.

Tesla will continue to purchase cells from Panasonic’s factory in Japan, and ongoing discussions will set out plans for sales, operations and investment in the facility.

Rebuildable battery could revolutionise EVs

A

Californian technology company has developed a lithium-ion battery pack with individually replaceable cells, allowing electric vehicles to get upgrades and have faulty units exchanged in minutes.

Patented by NTS Works in Santa Cruz, the Lifetime Rebuildable Battery features individually removable cylindrical lithium-ion cells, supplied by Samsung Electronics, and could improve the affordability and sustainability of electric vehicles.

Battery packs contain a bank of anywhere between tens and hundreds of lithium-ion cells, but these only account for between a quarter and a half of the total cost. The rest comes from crash protection, vibration isolation, thermal cooling and the attached electronics.

12 / internationalfleetworld.com

If the cells can be removed individually, owners can upgrade to a higher energy density or replace faulty cells without adding the cost of the battery pack itself, in turn reducing used market concerns about replacement costs of the car’s most expensive component.

Cells are individually monitored using a system built into the walls of the pack, copper heat conductors keep them cool and the structure is designed to withstand a crash. Removed cells can be reused for energy storage at wind farms long after they become unsuitable for an electric vehicle.

The technology is being demonstrated in an electric bicycle, but external companies have shown an interest in itting it to devices ranging from power supplies to electric buses.

For the latest EV news, visit evfleetworld.com

France to offer €10,000 scrappage for EV purchases T

he French Government has announced a €10,000 purchase incentive for drivers who scrap a diesel vehicle to buy an electric model, as part of a €10bn energy transition bill.

Incentives will be prioritised for areas with poor air quality, and build on the existing subsidies of €6,300 for vehicles emitting less than 20g/km, or €4,000 for those with CO2 emissions under 60g/km.

The bill also lays out plans for seven million charging points to be installed nationwide by 2030, up from the current 10,000. These will be installed in new and existing car parks, and through tax breaks given to consumers installing charging equipment at home.

Announced by Ségolène Royal, minister for ecology, sustainable development and energy, the French Government’s Energy Transition, the subsidy is part of plans to reduce France’s annual energy costs by €70m, cut fossil fuel consumption by 30% and halve its overall energy use by 2050. New jobs and the promotion of a domestic clean energy industry are also claimed benefits.

Opel confirms price cut for next Ampera

O

pel has confirmed a successor to the Ampera range-extended electric vehicle as part of a 27-strong product offensive before 2018, but the company has yet to reveal whether it will be based on the next-generation Chevrolet Volt due to be unveiled at the Detroit Motor Show next January.

Speaking on Twitter, Opel chief executive Karl-Thomas Neumann said the company had an ongoing commitment to electric vehicles, and that the Ampera would be replaced with a more affordable model. General Motors cut the price of the Ampera and Volt last October following streamlining of the production process.

Chevrolet recently showed the first image of the new Volt, announcing that it would be unveiled in Detroit next year ahead of its US sales launch.

Preparations are already underway, with $449m (€335m) invested in GM’s electric vehicle factories in Michigan this April ready for production to start.

EV 6.1% in numbers

in brief London to get electric van rapid charge network Transport for London has begun mapping locations for a network of rapid charging points – which provide an 80% charge in half an hour – for electric commercial vehicles across the city.

Managed by the Energy Saving Trust and Route Monkey, the project will log three months of usage data from Londonbased leets to ind the best locations.

New Jersey businesses to get free charging points PSE&G is offering a 100% workplace charging point grant to drive electric vehicle adoption in New Jersey. Once complete, the funding will provide charging for 150 cars within the utility company’s service territory, allowing it to monitor usage and get a clear picture of future energy demand.

China to remove purchase tax on electric vehicles The Chinese State Council has announced plans to waive the substantial purchase tax on plug-in vehicles between the 1st September and the end of 2017, as it looks to offset the air quality problems from the country’s growing car population.

EVtweet of the month @KT_Neumann Karl-Thomas Neumann, chief executive of Opel

We see #eMobility as important part of the mobility of tomorrow and we will continue to drive down costs & deliver affordability.

Average reduction in fuel economy from using air conditioning in a hybrid car, against 3.8% in a petrol model.

65g/km SOURCE: Emissions Analytics

CO2 emissions for the Mercedes-Benz S500 PLUG-IN HYBRID, launching at the end of the year.

SOURCE: Daimler

internationalfleetworld.com / 13

manufacturer news

Hyundai shows next i20 supermini has released the first images of its all-new i20, hOnyundai ahead of its public debut at the 2014 Paris Motor Show. sale from early 2015, the supermini will initially be offered in five-door form and features a longer wheelbase under a slightly longer body, which is said to result in one of the segment’s most spacious cabins.

Its upmarket new styling includes a gloss black C-pillar to give the impression of a floating roof, plus the only panoramic sunroof in the segment.

in brief Global light vehicle sales continue to grow in July The growth in global light vehicle sales continued in July, according to new data from LMC Automotive, although the selling rate slowed to less than 85 million units/year, the weakest rate since September 2013.

LMCA added that Western Europe has now turned a corner, and the US and China continue to expand but key markets in Eastern Europe and South America face signi icant headwinds, while sales in Japan are also now falling.

Sofico acquires Car Systems in France

Kia reveals third-generation Sorento ia has revealed its third-generation Sorento SUV, which debuts at the Paris Motor Show and is expected to arrive in Europe in the k first quarter of 2015.

Incorporating elements from the Cross GT concept at the 2013 Chicago Auto Show, the new Sorento adds in the long bonnet and the distinctive wide D-pillars from the previous generation as well as a more upright version of Kia’s familiar ‘tiger-nose’ grille and a lower stance.

Increased dimensions bring more space for passengers in all three rows while, as previously revealed, Kia says the model’s cabin will “raise the bar in luxury”.

New Skoda Fabia to include 82g/km GreenLine model

S

koda’s third-generation Fabia will feature an all-new engine lineup including the most fuel-efficient GreenLine model to date.

Set to make its debut at the Paris Motor Show, the supermini will initially offer four petrol and three diesel engines – all of which are Euro 6 compliant and feature a start-stop system and kinetic energy recuperation as standard.

From late 2015, the line-up will gain the GreenLine version with a 75PS 1.4 TDI engine and offering a fuel consumption figure of 3.1l/100 km, with CO2 emissions of 82g/km.

14 / internationalfleetworld.com

Belgium-based So ico, a privately owned provider of global leet, leasing and mobility software, has acquired French IT solutions company Car Systems. The acquisition is said to be in line with its plans for global expansion in the leet market.

Lightfoot driver behaviour product launches in Spain Spanish leet operators are to be offered access to the Ashwood Lightfoot driver behaviour product under a new distribution deal with Disvent Ingenieros.

Lightfoot provides real-time, in-cab visual and audible training and creates simple, user-friendly, weekly reports showing performance and con irmation of sustained fuel and CO2 savings.

EU-supported project to develop driverless car parking system A new EU-funded project has launched with the aim of helping drivers with the burden of inding a space at train station or airport car parks.

The €5.6m EU funding will enable the V-CHARGE consortium to provide a fully automated parking and charging system for electric cars at public car parks by 2015.

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SPOTLIGHT Volkswagen Passat

Eighth wonder...

Long before its official public debut at the Paris Motor Show in October, Volkswagen has dropped the veil covering the all-new, eighth-generation Passat. Danny Cobbs recently travelled to the Volkswagen Design Centre in Potsdam, Germany, to have a first look.

DESIGN After 41 years in existence, there’s little to tell that this Passat is the same car which had, during its seven previous incarnations, spawned over 23 million sales worldwide. With swooping lines, longer bonnet, shorter overhangs and trapezoidal tailpipes, the design of this Passat has a clarity which makes it much more contemporary and fashionable than anything before wearing the same moniker.

Overall length is 2mm shorter than the previous model, although the wheelbase is 79mm longer. It also sits lower too, by 14mm, and wider by 12mm, while the unladen weight has been reduced by 85kg.

Both the four-door saloon and estate will be available from launch, with each offering more cargo space than past variants.

The saloon’s boot is roomier by 21 litres, up from 565 litres to 586 litres, while the estate delivers a maximum load area of 1780 litres, an increase of 47 litres.

ENGINES Just the EU6-compliant 2.0-litre TDI 150hp will be available from launch, although higher-output versions are planned to follow shortly afterwards – a 190hp or a 240hp bi-turbo with a 4MOTION all-wheel drive system.

There are also plans afoot to introduce a 1.6TDI 118bhp plus an emissions-busting plug-in hybrid which will see a 1.4-litre TSI coupled to an 80kW electric engine.

All versions will have a Stop/Start system and a regenerative braking mode. A DSG auto box will be an optional extra, instead of the standard 6-speed manual, but will be included on the 2.0-litre 240hp bi-turbo. Fuel efficiency gains across the range are said to have been improved by up to 20%.

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INSIDE The benefits from the longer and wider wheelbase make a dramatic and immediate difference to the overall sense of spaciousness within the cabin; with improved leg and headroom.

All models will feature a far more comprehensive list of standard equipment, including DAB radio, Volkswagen’s latest modular 5-inch touchscreen with proximity sensors, including the Car Net remote app, plus plenty of connectivity through Bluetooth and USB ports.

Higher-spec trims will gain from the optional Active Info Display, which replaces the instrument cluster with a fully configurable interactive 12.3-inch TFT screen. A heads-up display unit and the latest version of Park Assist, where the car will park itself forwards into a perpendicular space, will also be available.

Most markets will get a three-trim model range comprising the familiar Trendline, Comfortline and Highline grades, with pricing starting at €25,350. Fleet-honed Business versions will also be available in some countries, usually based on the mid-spec version.

FLEET FACT More than 80% of all new Passats will be heading for fleets.

WHAT WE THINK...

Sleek new lines, a reconfigured and larger cabin, and higher level of standard equipment, but no radical change to what is fundamentally a stalwart of the VW line-up. Over the years, the Passat has become a known and well-supported commodity by the fleet user, and from what we’ve seen thus far, there’s no reason to believe this model won’t continue that success. DC internationalfleetworld.com / 17

RVs

Analysing leasing and residual value confidence in the Eurozone and beyond...

Optimism over future RVs The European contract hire and leasing sector has enjoyed a positive year, with RV forecasts remaining strong, says Experteye.

L

eading the way is the UK, which has seen a +7% rise in the forecasted future residual values built into contract hire rentals, with Germany reporting a +2.6% rise, Portugal +2%, Italy +1.9%, Spain +1.8% and France static (0%).

After a strong year, positivity across Europe continues in the latest quarter.

Owing to seasonal registration patterns, the UK saw forecasted residual values downgraded slightly (-1.7%) in the last quarter, and there was a very minor reduction in France (-0.6%). However, in Germany they are up by +2.2% since May 2014, Portugal +2%, Spain +1.8% and Italy +1.3% showing a continued positive overall view of the economy and future used vehicle market.

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

Overall, the news is good for companies that lease their vehicles. Rental rates have fallen in all but one country in the last year, with Portuguese fleet operators seeing prices come down by -5%, Spanish customers enjoying a -1.6% fall, France -1.5%, the UK -0.9%, Italy -0.2% and only Germany up by a slight +0.4%.

Market summaries – 3 and 12 months to July 2014 FRANCE: After a year in which forecasted residual values remained static (0%), there has been a -0.6% fall in RVs in the last quarter. Servicing, maintenance and repair (SMR) budgets are up by +1.7% for the year, and +0.2% since May 2014. Rental rates fell for both the year and the quarter, with a -1.5% drop since August last year, and a -0.2% reduction in the last three months.

GERMANY: SMR budgets fell by -3.4% last year, but rose very slightly (+0.1%) in the last three months. German leasing companies remain upbeat about the future used vehicle market, with a +2.6% improvement in forecasted RVs in the last 12 months and +2.2% in the last three months. Rental rates have seen very small changes, with a +0.4% rise for the year and +1.0% for the quarter.

ITALY: The shift in SMR budgets in Italy has been quite dramatic. Since August 2013 they have fallen by -7.9% with a -6.6% drop in the last quarter. Forecasted residual values are up by +1.3% since May 2014, after a +1.9% rise for the year. Rental rates have crept up by +1.6% in the last quarter, having fallen by -0.2% last year.

PORTUGAL: Portuguese fleet operators have benefited from a strong reduction in their leasing costs after rental prices came down by -5% in the last year and -2.9% for the quarter. This may have been helped by a +2% rise in forecasted residual values for both the year and the quarter, and a -6.4% fall in SMR budgets since August 2013, and -1.2% since May this year.

SPAIN: In Spain, forecasted residual values have gone up by +1.8% for both the year and the quarter. SMR budgets are also on the rise, with a +2.8% increase since May 2014, following a year that saw them go up by +2.1%. Rental costs rose by +0.8% in the last quarter, after a year that saw a -1.6% fall.

UK: Having risen by +7% since August 2013, UK forecasted residual values came down by -1.7% in the last quarter. This takes the UK from being by far the most positive nation in the last year to the most pessimistic in recent months, but reflects a typical seasonal registration pattern. SMR budgets have seen a slight shift, having gone up by +0.3% for the year, then falling by -0.2% for the quarter. Rental rates are down by -0.8% since May 2014, having fallen by -0.9% for the year.

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 -0.6% +0.0% +0.2% +1.7% -0.2% -1.5% +2.2% +2.6% +0.1% -3.4% -1.0% +0.4% +1.3% +1.9% -6.6% -7.9% -1.6% -0.2% +2.0% +2.0% -1.2% -6.4% -2.9% -5.0% +1.8% +1.8% +2.8% +2.1% +0.8% -1.6% -1.7% +7.0% -0.2% +0.3% -0.8% -0.9% Forecast Residual Values

France Germany Italy Portugal Spain UK

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

• Twelve-month comparisons show change since August 2013.

• Three-month comparisons show change since May 2014.

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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.

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INTERVIEW Jose Luis Criado, LeasePlan

Infrastructure key to global leasing expansion Europe is still central to the global vehicle leasing business reckons LeasePlan MD, Jose Luis Criado, and there is great potential for expansion elsewhere, as he tells Steve Banner.

D

espite all the talk about the potential of countries such as China and India, Europe remains the key global market so far as vehicle leasing is concerned. So says LeasePlan International managing director, Jose Luis Criado.

With its headquarters based in Almere in the Netherlands, LeasePlan manages over 1.4m vehicles worldwide, is active in 32 countries and employs over 6,500 people.

“The BRIC countries plus Mexico and Turkey all have potential for growth and Brazil, Mexico and Turkey in particular are without doubt maturing rapidly,” he observes. “However it should not be forgotten that although we talk about them a lot, the total leasing market across all six of these countries adds up to less than half a million vehicles.

“Europe on the other hand totals 8m to 10m with the USA adding perhaps 4m to 5m on top of that,” continues Criado, who began working for LeasePlan 25 years ago. “So if that half-million doubles over the next three to five years, while the growth figure may look flashy the reality is that it will still be a long way behind what Europe and the USA have already achieved.”

Last January LeasePlan Canada started operations through a licensing agreement with a partner, and along with its existing operations in the USA and Mexico, LeasePlan can now offer complete North American coverage.

Surely China is bound to generate huge growth given its size? “I think significant expansion in China is still a little way away,” he replies.

“Remember that leasing is a sophisticated type of service and requires an infra-

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structure to support it,” he adds. What he means by that is that it needs everything from comprehensive dealer networks to an appropriate taxation structure.

“Once you get outside China’s big cities then the infrastructure we are used to in the West simply isn’t there,” Criado continues. As a consequence he believes that if leasing does begin to expand significantly, it will be in the country’s urban areas in the first instance.

How about India?

“We’ve been there for over 15 years and demand has not grown in the way that we thought it would,” he observes. “India has certainly come a long way from the viewpoints of legislation and taxation, but it has not created a middle class as rapidly as China has.” And it is of course the middle classes that tend to end up driving leased cars.

But what sort of cars are they likely to be driving in the foreseeable future?

Electric cars produce zero exhaust emissions but still suffer from a limited range between recharges, he points out, and require state subsidies to make them economically viable.

“At present we’re fuelling them with our taxes, and if we generate the electricity they require by burning fossil fuels then the environmental argument starts to look a bit hollow,” Criado comments. “If anything pushes their adoption then it is more likely to be regulations (denying cars entry to inner city areas unless they are zero emission - SB) than economics but I believe that their technological limitations mean that it will be at least ten years before they have a major impact.”

Plug-in hybrids make rather more

sense because they help address the range issue. “They certainly have a role to play when it comes to urban and suburban use,” he believes.

Their provision may form part of what is increasingly being referred to as Mobility as a Service; a transport package for employees which may involve everything from car sharing to the provision of passes to make it easy to use public transport.

Such packages have a role to play, Criado believes, but are not a universal panacea. It comes back to the infrastructure required to support them; some global cities have it, but many do not.

“I do not think they will result in the leased company car disappearing,” he comments. “But driver mobility will become more important.

“The vehicle leasing industry will undergo a shift of focus from services built around the vehicle to services built around the individual driver.

“We’ve been offering a mobility package in the Netherlands for about ten years, but until recently demand for it hasn’t been all that strong,” Criado continues.

“However we have seen a growth of 300% over the last half-year with 100,000 business mobility cards being issued.”

Something that is having a massive impact is telematics; and it is going to have an even greater impact in future, he believes. “It is changing our industry more quickly and more radically than anything else,” he contends.

Clearly it gives fleet operators the ability to track vehicles, download a huge amount of information from them remotely and route them more efficiently. “What it can also do though is make it easier for governments to

“The vehicle leasing industry will undergo a shift of focus from services built around the vehicle to services built around the individual driver.”

impose a tax on usage,” he comments.

While Europe may boast the world’s largest leasing market, many of its countries took a hammering during the recession and remain in the doldrums. Far from being disheartened by this situation, paradoxically Criado is encouraged by it.

“The countries in southern Europe suffered a lot more during the recession than those in the north and are less mature markets so far as leasing is concerned,” he says. “Spain has 500,000 leased cars compared with 1.5m in France.

However, this leaves those countries with a lot more room for creativity and growth.

“Furthermore, their businesses can improve their efficiency; and car leasing is an efficiency-driven product which firms can use to find savings.”

To do so however they will need the help of lessors who can offer their experience and advice says Criado, especially when it comes to helping a fleet shrink its carbon footprint.

“Leasing has got to be much more than an offer that says ‘I park a car at your door and you pay me a fee’,” he observes.

“In effect we’ve got to act more and more as consultants, especially so far as our global clients are concerned, although if the industry heads in that direction then leasing companies have got to appreciate that clients want transparency,” he says. “They want to see exactly how the figures break down and LeasePlan has been offering open calculation for this reason for many years.

“If a fleet wants a partnership of this type though it has got to be with a single leasing company,” he concludes. “It simply will not work if it is trying to deal with 25 different suppliers.”

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TECHNOLOGY Connected Cars

Do we want connected cars?

Connected cars will have more than Bluetooth and internet access, reckons John Kendall.

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ransporting us from one place to another is fast becoming just one of the things that a car can do for us. Connectivity is something that we expect from most cars today, in the form of an available Bluetooth connection. Some cars also offer a mobile Wi-Fi hotspot enabling occupants to connect to the Internet via the 3G/4G mobile networks. But these are comparatively narrow de initions of connectivity and for further advances in autonomous driving there will be more ways that vehicles can connect with each other and communications networks. The UK recently announced that it would permit autonomous ‘driverless’ cars on its roads from January 2015, in the form of a trial in three cities, which have yet to be identi ied.

Sweden has also announced a trial, involving 100 Volvo cars to be used in a trial around the city of Gothenburg.

Volvo says there will be research into four speci ic areas as part of the project: • How autonomous vehicles bring societal and economic bene its by improving traf ic ef iciency, the traf ic environment and road safety.

• Infrastructure requirements for autonomous driving.

• Typical traf ic situations suitable for autonomous vehicles.

• Customers’ con idence in autonomous vehicles and how surrounding drivers intereact smoothly with a self-driving car.

Customer research and technology development is under way and the driving trial is not expected to begin until 2017. Volvo Cars and Volvo Trucks were also involved in the European SARTRE (Safe Road Trains for the Environment) project, completed in 2012, which was trialling a system where up to four car drivers could opt to join a convoy behind a truck and hand over control of the vehicle to the electronic convoy while they checked emails, made phone calls or carried out other work.

The vehicles were driven autonomously at speeds of up to 90km/h and sometimes just four metres apart.

Mercedes-Benz recently announced that it has also been carrying out preliminary trials with an autonomous driving system based on its Actros heavy truck. The vehicle used radar, GPS and Wi-Fi among its communication systems. The vehicle will be on display at the IAA Hanover truck show in September.

Connectivity is going to be an important issue before autonomously driven vehicles become a reality. Spanish telecommunications company Telefónica carried out research into connectivity in January this year

to produce its second Connected Car Report. Opinion research was carried out in Brazil, Germany, Spain, the UK and US to ind out what drivers want from connected cars and what they think about them.

Telefonica lists a number of areas where connectivity could play a role.

These include instant diagnosis of vehicle problems and remote access to a car via smartphone or tablet computer. This could be to activate the air conditioning or heating, or to be noti ied if the car has been moved without authorisation.

Safety is going to be a key aspect of connectivity before autonomous driving could be a daily possibility. The Telefonica Connected Car Report suggests that among those that responded to the survey 73% thought that safety and diagnostics features were the most important. Some 60% of respondents expressed a preference for being able to use a smartphone or tablet to check the condition of their car before setting off on a long journey. A similar percentage thought that connectivity would give them more

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TECHNOLOGY Connected Cars

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control through understanding when the car had a problem. 44% of respondents thought that such knowledge would help ensure they were being quoted the right price for repair work.

According to the report, the body representing mobile phone network operators, the GSMA, reckons that safety and security applications such as eCall, which will automatically alert the emergency services if an accident happens will be the most common services supported by connected cars. GSMA believes that 41.7 million new cars will be itted with such systems in 2018, compared with 7 million in 2012.

Fuel ef iciency also proved to be an important feature in car purchase decisions according to the Telefonica research, rating as the top preference in all the countries surveyed. Connectivity could offer bene its in the kind of information given. According to the Connected Car Report: “Drivers have been able to view their fuel consumption for many years, but with connectivity, the feedback is dramatically improved. Drivers can arrive at a destination and their vehicle will tell them exactly how much fuel they have used and how much the journey cost them.

More than that, the vehicle can then start offering advice about how to lower that fuel consumption via a change in driving habits, be that lower speed or less braking. This is a wholesale move from one, infrequent data point to real-time, actionable feedback and another powerful way for consumers to take control of their vehicle to make driving cheaper.”

The question that car manufacturers are currently trying to answer is how should connected services be delivered?

Should they be built into the vehicle or should they be designed for compatibility with smartphones, using systems like Google’s Android Auto or Apple CarPlay. Neither choice is

easy. The vehicle manufacturer either has to develop a system that is compatible with a range of phones and operating systems, or choose to support selected systems. If they choose to design compatibility into the vehicle the system will need to be easily upgraded as other compatible systems develop. And if the manufacturer chooses to support particular systems such as Android Auto or CarPlay, there is a risk that other phone users will be excluded.

Although the mobile phone networks will play an important part in future car connectivity and autonomous driving, other systems will be necessary too. Current systems such as active cruise control rely on radar sensors to keep vehicles a set distance apart and trigger either braking or acceleration to control speed. These will be necessary technologies for autonomous driving. Vehicles will also become part of the communications chain in autonomous driving with data being passed from one vehicle to another, giving information about traf ic ahead. There may also be data passed from roadside transmitters to vehicles and from vehicles to roadside transmitters carrying similar data. These transmissions may use the mobile phone network or Wi-Fi. It will need co-ordination between manufacturers to ensure that systems are universally adopted to ensure that they can be used both by drivers who usually drive the same vehicle and those who regularly drive a range of vehicles.

It is certain that whatever systems are adopted, cost will be added to vehicles or driving. If there is a trade off between that cost and added convenience, for instance reduced fuel consumption and improved safety and the costs are transparent, it will be easier for drivers to accept.

Joined-up thinking Information will be transferred from one vehicle to another to warn of changing traffic conditions.

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Alphabet promotes sustainable Business Mobility A three-step approach to lower emissions Sustainability has become a priority for many companies. In particular for Business Mobility, sustainability has established itself as more than just a short-lived trend. Companies like Alphabet International are taking concrete, long-term action to incorporate greener practices into their solutions. Its comprehensive three-step sustainability approach – Avoid, Reduce, Compensate – provides Alphabet customers with clear, flexible measures for reducing their carbon footprints.

Consultancy and sustainability go hand-in-hand Because each company has different sustainability needs and targets, Alphabet first consults with a customer to identify its priorities. Then Alphabet develops a tailored Business Mobility solution that reflects a company’s goals and includes suggestions on how to integrate all or part of the three-step sustainability approach. “In contrast to one-size-fits-all solutions, a tailor-made one from Alphabet allows companies to integrate environmentally-friendly mobility solutions into their fleets in a cost-efficient, convenient way,” said Carsten Kwirandt, Alphabet’s Head of Marketing and Business Development.

Avoid emissions when possible The first step that Alphabet advises companies to follow is avoidance.

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Companies can work towards this by implementing innovative Business Mobility programmes like Alphabet’s Corporate CarSharing solution, AlphaCity, and its holistic eMobility solution, AlphaElectric. AlphaCity decreases CO2 emissions by optimally utilising pool cars, which are made available for daily business use and for employees to use privately at the weekends. Also, AlphaCity uses the latest cars equipped with fuelsaving technologies that produce significantly less CO2 emissions than older cars. AlphaElectric’s electric vehicles (EVs) also provide excellent ways to avoid producing carbon emissions – especially when a company charges the vehicles with 100% green electricity.

When you can’t avoid, reduce There are various ways companies can reduce their current CO2 fleet emissions.

Alphabet consults with companies on the best ways to do so and then proposes tailormade solutions. Alphabet’s team of experts begins by examining a company’s car policy and makes suggestions on how to optimise it in terms of CO2 emission reduction. When

compiling a fleet, Alphabet selects vehicles based on a company’s individual Business Mobility requirements and sustainability targets. Here electric vehicles as well as hybrids may come into play along with traditional combustion vehicles.

Furthermore, Alphabet offers “driver ecotraining”, which teaches employees ways to drive more fuel-efficiently, and thereby reduce carbon emissions.

Compensate as a last resort Emitting CO2 is inevitable in Business Mobility but compensation in the form of carbon offsets renders these instances more eco-friendly. Alphabet supports its customers in compensation through its CO2 compensation programme managed by the specialists at First Climate. Based on the amount of CO2 a fleet emits, companies can purchase carbon credits to support environmental projects, such as the construction of a renewable energy power plant. “Carbon offsets are an ideal tool for companies who consciously take responsibility for their unavoidable emissions,” said Dr. Jochen Gassner, Executive Board Member at First Climate.

“Alphabet demonstrates comprehensive commitment to sustainability by offering this option to its customers.”

Further information at www.alphabet.com

MANAGEMENT Greener Fleets

Limiting your environmental impact Alternative fuels could help to reduce your fleet’s environmental impact, but managing what you already have effectively is probably a better way for most fleets, suggests Steve Banner.

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n their own both fuel cards and telematics systems can be invaluable when it comes to controlling fuel costs and shrinking a leet’s carbon footprint. Combine them and you have a single, powerful, cost-effective weapon that can be wielded in order to cut expenditure signi icantly and make a major, positive difference to a company’s environmental impact.

That certainly appears to be the view of major US-based global fuel card provider FleetCor Technologies. It has been quietly either buying or acquiring a stake in a number of telematics businesses both at home and overseas with an eye to arranging things so that they enhance its existing card offer.

Last October it purchased US telematics specialist NexTraq, which provides services primarily to small and medium-sized businesses. Its package includes vehicle tracking, route optimisation and fuel usage monitoring, it boasts 100,000 active subscribers and it has grown subscriber numbers by over 20% annually during the last couple of years.

“NexTraq serves the same commercial leet clients with its telematics solutions as we do with our fuel card solutions,” points out FleetCor chairman and chief executive of icer, Ron Clarke. “This represents a big cross-marketing opportunity for us to deepen our existing client relationships.”

It also means something for which Clarke, quite rightly, makes no apologies. “It means we can generate more pro it per client,” he observes.

Earlier in 2013 FleetCor bought US-based Telenav’s enterprise telematics business, which specialises in tracking the location of mobile workers – engineers who repair domestic appliances for example – and use vans to get from one location to the next.

“It provides us with a set of mobile applications and capabilities designed speci ically for a business workforce that is predominantly ield-based, which is exactly the same pro ile as our fuel card clients,” said Clarke at the time. “We hope to tailor the Telenav application to become a valued add-on to our fuel card programmes the world over.”

In June of this year FleetCor bought a minority stake in Masternaut Group Holdings of the UK at the same time as Summit Partners – one of FleetCor’s earlier investors – acquired the majority share. With customers in 32 countries and multiple of ices and partners throughout Europe, Masternaut helps leets keep track of over 300,000 vehicles, over 15,000 users interact hourly with its systems and over 50m data transactions are processed and con igured into 20,000 reports daily.

“It allows us to put another marker on this adjacent telematics space in an important FleetCor geographic region,” says Clarke.

The ability telematics packages give leet operators to spot drivers who continually speed or meander some miles off their agreed route – activities which result in more fuel being used and more CO2 and pollutants such as NOx emitted - have long been understood by leets in the West.

To these advantages might be added the ability to direct the nearest service engineer to an urgent call-out rather than inadvertently despatch somebody who happens to be on the other side of the country, again saving fuel while providing customers with a more ef icient service. Historic telematics data can also be used by businesses to help them plan routes more effectively – possibly in conjunction with specialist routeing and scheduling software – thereby potentially cutting the number of vans required to deliver parcels and packages; and that means lower fuel bills and fewer emissions.

On top of that there is no reason why you cannot consider mounting a telematics-linked unit on the dashboard that glows green when the driver is driving frugally thereby minimising emissions, turns orange when the driving style becomes a little ragged and goes red if the driver, say, speeds or accelerates harshly.

Such packages have been developed by South Africa’s MiX Telematics which has started to make headway in China; a country facing some severe environmental pressures.

Working with local partner Rainboway, MiX acquired ten new customers last autumn, attracted by the prospect of potential fuel cost savings of up to 15%. With 15 locations across China, Rainboway has boosted its sales presence in Guangzhou and Shenzen and appointed a full-time reporting specialist and a driver trainer; in-vehicle systems such as the one offered by MiX can prove useful when it comes to identifying driver training needs.

On the other side of the globe, July saw MiX sign up three new customers for its leet management solution in Brazil.

They are hauliers Transportadora Garbuio and Panorama plus a leet of 15 cars and pick-ups operated by Australia’s WorleyParsons, which provides services to the energy industry worldwide.

They operate in and around Monte Belo’s hydroelectric construction plant in the state of Para in the Amazon region.

internationalfleetworld.com / 27

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MANAGEMENT Greener Fleets

software to lower fleet costs ¡ Using Fuel cards accompanied by a suitable software programme enable operators to spot vehicles and drivers who burn too much fuel.

Data on vehicle performance can inform future purchasing decisions. Data on driver performance can result in individuals who cannot keep their foot off the accelerator pedal being sent on training courses to show them how to drive more frugally; and frugal drivers tend to have fewer accidents.

Such training is likely to prompt drivers to drive in the correct gear – usually a higher one than they are in the habit of using – drive more smoothly, and slow down. They are all approaches to driving that are recommended by international leet management and leasing company SG Fleet Group, which has operations in Australia, New Zealand and the UK. It goes on to advise that fleets determined to cut their petrol and diesel bills and their carbon output should keep a close eye on tyre pressures – leave your tyres under-inflated and you use more fuel – and ensure their vehicles are regularly maintained. The use of roof racks should be avoided because they increase aerodynamic drag, air-conditioning should be used sparingly because it can increase fuel usage by up to 10% and vehicles should be downsized to more fuelfrugal models wherever possible.

It has a further suggestion to make; drivers should be encouraged to clean out the interiors of their cars every so often. “It doesn’t take much to acquire an extra 20kg of stuff and the more weight your car has to lug around, the more fuel it burns,” it observes.

Greener vehicles Turning to alternative fuels and the environment, the vast publicity zero-tailpipe-emission electric vehicles have received is somewhat at odds with their still-modest global sales. Although the availability of wireless charging systems currently being developed by companies such as Qualcomm may boost their appeal, range concerns mean that their use remains confined to niche applications, with range-extenders required to make them a more practical bet for the majority of fleet applications.

That at least is what General Motors will be banking on

with the launch of the new extended-range Chevrolet Volt, set to make its exhibition debut in the USA at the Detroit Motor Show next January. It will go on sale in the US shortly thereafter, with GM pumping $449 (€334m) into its electric vehicle manufacturing facilities in Michigan to get it into volume production.

It is interesting to note however that sales of the Opel/Vauxhall Ampera, which is based on the Volt, have been slow in Europe.

A replacement, which may or may not be Volt-derived is apparently in the pipeline and is likely to be priced more keenly than the current Ampera. Even the most environmentally aware fleet’s enthusiasm for all things Green can be blunted if it concludes that the front-end prices of zero-emission vehicles are too steep.

With so much of the discussion centred around batteries and range-extenders, the environmental advantages of other alternative sources of power are sometimes forgotten; though not by everybody.

In the USA, for example, the new Ford Transit will be available with WiNG technology from Westport that will allow the 3.7-litre petrol engine it is offered with there to be run on compressed natural gas (CNG). Customers will be able to opt for CNG only or a bi-fuel arrangement under which the engine switches over to petrol if the CNG tank is empty.

Popular in markets such as Germany and Italy, and capable of being generated from landfill gas which gives it considerable environmental kudos, CNG has its supporters in North America too; among urban bus fleets in particular. US Oil operates 17 Gain Clean Fuel stations dispensing CNG and is in the process of constructing 15 more.

The problem for fleets looking to minimise their environmental impact is that much of what they do can be torpedoed without warning by the whims of ambitious politicians.

In the UK, Mayor of London – and potential future prime minister – Boris Johnson, has declared war on diesel cars, with a plan to charge many of their owners an additional £10 (€12.50) if they wish to drive them into the congestion charging zone in the centre of the capital. That is over and above the existing £11.50 (€14.50) levy imposed on most vehicles, with some exclusions; electric cars for example are exempt.

New technology in action...

Extended range Chevrolet Volt will go on sale in the US shortly.

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WiNG technology allows Ford Transit’s 3.7-litre petrol engine to run on CNG.

New Renault Trafic is among the many LCVs to be available with an ECO button.

The environmentally-friendly approach Bicycling Boris argues that his plan is justi ied because of the impact emissions of NOx and particulates have on urban air quality. In doing so he is apparently blithely ignoring the fact that over the past dozen or so years it has been UK government policy to encourage sales of diesel cars in a bid to drive down CO2 emissions because they burn less fuel than petrol cars.

Despite Boris’s strictures, there remains an argument that one of the best approaches any fleet anywhere can take to minimise environmental damage is to run diesel vehicles equipped with one of the fuel economy packages that are now available.

Typically they comprise a Stop/Start system that kills the engine if it is allowed to idle in a traffic jam or while waiting at the traffic lights, regenerative braking which captures and uses energy that would otherwise be lost, low-rollingresistance tyres and aerodynamic modifications.

Renault’s latest Trafic van is among the many light commercials on sale in Europe that is available with an ECO button. Pressing it cuts engine torque and power and alters throttle pedal response thereby allowing fuel savings of up to 10% to be garnered, says the manufacturer.

The most environmentally-friendly approach fleets can take of course is not to run vehicles at all; or to run as few as possible and get the maximum use out of each one. That is the argument in favour of corporate car-sharing programmes promoted by companies such as Alphabet with its AlphaCity scheme.

About to be introduced in Italy, AlphaCity is already established in eight European countries with more in the pipeline. It started in 2010, and now has over 8,000 registered users who have driven more than 4m kilometres to date; not vast numbers in the scheme of things, but the attitudinal shift required by fleets and drivers can make such programmes a challenge to implement.

Remember that Daimler’s car2go offshoot pulled the plug completely on its British car sharing operation in May of this year citing the UK’s “strong culture and tradition of private vehicle ownership” as a key reason.

No matter whether it is owned by a fleet or operated privately, the inside of a car constitutes the driver’s personal space; and few people are truly happy about sharing it.

“The most environmentally-friendly approach fleets can take of course is not to run vehicles at all.”

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MPG MARATHON 2014

ALD Automotive • Shell FuelSave MPG marathon 2014

MPG Marathon promoting smarter driving for better business

8 – 9 October 2014. Four Pillars Waterpark, Cirencester, UK.

We want YOU!!

FUEL prices have seldom been far from the top of every fleet’s agenda. It’s a cost nobody can ignore, but the combination of fuel-efficient cars, advanced fuels, route planning technology and ecodriving skills means that fuel is a cost that can be managed.

The MPG Marathon is a live demonstration of how both vehicle and driver can make a massive difference to fuel costs and emissions.

Now in its fourteenth year, the MPG Marathon pits teams of contestants together over a two-day event to push for the best fuel economy.

This year's event will be based at the Four Pillars Waterpark Hotel, South Cerney, near Cirencester, UK, on Wednesday 8th October – Thursday 9th October 2014.

Previous competitors have included everyone from celebrities, academics and motoring journalists to senior figures in the automotive industry, with coverage across regional and national press.

Visit thempgmarathon.co.uk for more info...

30 / internationalfleetworld.com

MPG marathon 2014

SIGN UP

NOW Visit the website thempgmarathon.co.uk and register to drive in the UK’s premier economy driving event, for FREE! in association with

internationalfleetworld.com / 31

FLEET FOCUS Norway

EVs charge up Norwegian market Government incentives and hydro power fuel EV growth in Norway, but businesses are less convinced, reckons John Kendall.

Nissan LEAF The Nissan LEAF is a favourite among Norwegian EV buyers.

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orway is a comparatively small European country in Northern Europe, bordering Sweden to the east, Finland, its southern neighbour in the north and similarly a short border with Russia to the east in the far north of the country. The sea borders the entire western, northern and southern boundaries with the North Sea and northern Atlantic Ocean and the Barents Sea to the north.

The population of 5,149,192, according to CIA estimates in July 2014, is comparable with the Republic of Ireland. Around 1.0m live around Oslo, the Norwegian capital, in the south of the country. Altogether some 80% of Norwegians live in urban areas. Some two-thirds of the land mass is mountainous and the rugged Norwegian coast has some 50,000 islands off its fjord coastline. This includes Svalbard to the north of the country in the Barents Sea, which like a large part of the northern half of Norway, lies inside the Arctic Circle.

Norway has held two referendums on membership of the European Union, the last in 1994 and on both occasions opted to stay out. Even so, it is a member of the European Economic Area and according to the CIA, makes a sizeable contribution to the EU budget. The state-owned petroleum sector is the largest export revenue earner in the country’s economy and the country is the third largest exporter of natural gas and seventh largest oil exporter. State revenues from the petroleum sector are invested in the world’s largest sovereign wealth fund. According to the CIA, this was valued at over €633 billion in January 2014. Returns from the fund are used to help finance public expenditure.

Hydropower facilitates EV uptake Norway’s mountainous terrain and position in the northern hemisphere means the country is able to harness hydropower to generate electricity. Just 2% of the country’s electricity is generated using fossil fuels, according to the CIA. Hydropower generates 92% and a further 2% is generated from other renewable sources.

That puts Norway in a strong position when it comes to the use of electric vehicles (EVs). According to Statistics Norway, of the 2.5 million cars on Swedish roads in 2013, 17,770 were EVs, compared with 8,031 in 2012. By the beginning of April 2014, a further 5,000 had been added, with 44% of EVs registered in Akershus and Oslo counties. Some 33% were registered in the three larger Norwegian cities of Oslo, Bergen and Trondheim.

Model S challenges LEAF dominance The majority of the EVs are Nissan LEAFs. Research by cars21.com carried out last year shows that 78% of EVs were registered by individuals and 22% by companies, compared with a market norm of 60/40 for individuals/companies. The report suggested that there are over 4,500 public vehiclecharging points available in the country. The report quotes a 2013 survey of EV owners from the Norway EV Association, which profiles EV users; “The typical Norwegian EV user is a

middle-aged family father with higher education and income, who owns a Nissan LEAF as one of two cars.”

This year the LEAF is facing competition from the Tesla model S. In the first half of 2014, the Tesla has been the second best-selling car in Norway, with 3,134 registrations and a 4.3% market share. Orders were taken two years before delivery and the high number of registrations is a reflection of the arrival of the Model S on the Norwegian market. Orders for it are now cooling off, as those customers are satisfied.

The cars21 user pro ile continues: “He uses his electric car on a daily basis instead of a traditional petrol or diesel car. He uses the electric car for commuting, after work activities, and not for longer holiday trips. His next car will also be electric.

The typical EV owner has a charging outlet at home and probably also at work. He uses public charging stations less frequently.” Even so it appears that the widespread public charging network is now stimulating EV demand outside Norway’s cities.

Tax incentives for business drivers As the business car EV take-up suggests, EVs may have captured the imagination of private buyers, but do not figure greatly in fleets. Øystein Halsebø is general manager of ALD Norway, “For electric vehicles, the government has given very attractive benefits,” he says, “That means no import tax, no VAT, reduced road tax, free parking in public parking spaces, use of bus-lanes, 50% reduction in company car taxation and no toll ring city tax etc.” The toll ring city tax is a toll applied to cars entering Norwegian cities such as Oslo, Trondheim and Bergen.

VAT is levied at 25% in Norway and the city toll ring could add around €5 per day to a commuting journey, which could total over €200 in the course of a year. Øystein says that the first models were small cars bought by families as a third car. Now after the Tesla and e-Golf, he expects that demand for electric company cars will rise. At the same time sales of light CV EVs have remained small with approximately 220 sold. Øystein also reckons that sales of EVs have now passed the 30,000 mark.

Øystein Halsebø is General Manager of ALD Norway.

internationalfleetworld.com / 33

FLEET FOCUS Norway

Volkswagen Golf is the best selling car and business car in Norway.

Hybrid uptake slow in Norway Hybrids have not been so popular, as Øystein explains, “In the early phase, hybrids were smaller vehicles, not typical company cars. They have limited import tax advantages as they do not consume much less fuel than a similar diesel vehicle but are heavier. (Norwegian registration tax is based on weight, emissions and horsepower).

“When mid size and large station-wagon hybrids become available at reasonable prices, company car sales will increase. Plug-in hybrids will be the future. People could benefit from low cost electricity and drive in the morning peak traffic with zero emissions.

The year to date market share for hybrids is 7.8% vs. 6.7% for 2013.” On the other hand, plug-in hybrids do not currently attract the same incentives as battery electric cars.

LeasePlan is more specific regarding market share for plugin hybrids, which was reckoned to represent 0.9% of the total business car sector at the end of July 2014. Similarly, the company estimates that for business use, EVs represented 6.1% of the business market at the end of July 2014, compared with 18.3% for private buyers.

Volkswagen Golf popular with fleets According to ACEA data, Norwegian new car registrations had risen by 2.5% to 72,385 in the first half of 2014, compared with the same period in 2013. In 2013, new car registrations reached around 142,000 and business car registrations were responsible for around 43% of that total, approximately 61,600. By comparison, business sales dominate the light CV sector. Of the 31,000 new light CVs registered in 2013 around 90% or 27,400 were for business use.

Since the Volkswagen Group is strongly represented in Norway and the Volkswagen Golf is the best selling car in the country, it is not particularly surprising that it is also the best selling car for business use, enjoying a 7.3% market share.

The Toyota Auris is the second best selling business car with 3.9% of the sector. It’s not surprising to find a Scandinavian car in the top three and the Volvo V40 claims a 3.6% business car share. SUVs are growing in popularity, which is perhaps not surprising in a country which experiences extensive snow and ice in the winter months. LeasePlan reckons that SUVs now account for some 19.5% of Norwegian business cars.

Volkswagen also makes a strong showing in the light CV sector, which as we have already suggested is dominated by business sales. Volkswagen took a 38.1% market share in 2013, according to LeasePlan and a 34.4% share according to ALD. Small and mid-sized vans dominate the sector, with the Volkswagen Caddy the best seller, according to ALD, followed by the Volkswagen Transporter, Peugeot Partner, Ford Transit Connect and Mercedes-Benz Vito.

Opportunities for car sharing Norway might not prove to be a popular place for car sharing

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schemes, because of the relatively small population and small cities, but the comparatively high penetration of EVs and highly urbanised populations could counter that. LeasePlan reports that, “Up until now car sharing has not taken off, but more and more large companies are moving to newly developed urban areas with few parking spaces, so we expect to see an increase in this product.”

ALD does not appear to have seen much growth yet, though, “The car sharing is in an early phase,” reports Øystein Halsebø, “In the beginning it was more linked to EVs and CO2 friendly cars. This is a concept more for big cities and there are not that many big cities in Norway. The car-sharing pool in Norway is estimated at around 500 vehicles.”

Norway appears to have several taxes that apply to business cars, as Øystein explains, “The import tax on vans is substantially lower than on passenger cars.

“In addition we have a scrapping tax of 2,400 NOK (€316).

All passenger cars have a load of 100% of the calculated tax while LCVs are charged 22% of the components in the tax.

“Company car drivers are taxed according to this basic rule: from 0-280,100 NOK list price (€36,870), you add 30% on top of your salary, from 280,100 NOK ((€36,870) upwards you add 20%. For EVs you reduce the list price by 50%.

Van drivers who bring the vehicle home for the evening have to record when they drive straight to a job location next morning, which is not where they normally work. GPS tracing systems help people to avoid the risk of paying tax on vans. The basic rule for a van is to be left overnight in the of ice location.”

LeasePlan also highlights the problem for EV lessors, because the lease is not VAT exempt as it is for private buyers.

Leasing is the most popular method for financing business cars. LeasePlan estimates that operational leasing is responsible for around 30% of business. The company has also seen a trend towards a cash allowance and private leasing. “Private leasing increased by 57% last year from 2.1bn NOK (€0.27bn) in Q2 2013 to 3.3bn NOK (€0.43bn) in Q2 2014.”

What is special in Norway is that all car dealers give buybacks”, says Øystein Halsebø of ALD. “This set up involves the customer, the car dealer and the bank (leasing company) or the Captive. The customer has a lease and the bank is not involved with the sale and risk of the used car. The dealers just buy back the car from the bank for the price they agreed before the start of the lease. This is the most common solution in volume because the distribution is done by all local dealers across the country and mostly used by the small and mid size customers with straightforward needs.”

MARKET REPORT Norway

Driving in Norway Keep headlights on, give way to trams in Oslo and avoid alcohol are among the tips from the UK Institute Of Advanced Motorists (IAM).

N

orway has a lot to recommend it – breathtaking scenery, great food and friendly people. So even if you are driving for business, Norway is a more attractive place to drive than others with less varied terrain. It is also a user-friendly country to drive in – but there are a number of rules and customs that drivers should be aware of before they take to Norwegian roads.

There are around 2.5 million registered private cars in Norway, which covers 323,802 km². This is comparable in size to the UK, which has 28 million cars on the road but covers 243,610 km². So traf ic density in Norway is comparatively low.

The first thing to be aware of is the general speed limit for cars is 80km/h. On motorways it is either 90 or 100km/h and in built up areas as low as 30km/h. Traffic calming speed humps are not always signposted.

Another important factor to consider is the drink-drive limit is very low – 20 milligrams of alcohol per 100 millilitres of blood. Naturally, the best advice is simply don’t drink and drive at all.

As is the case with many countries now, it is obligatory for vehicles to drive with dipped headlights at all times. If you are taking a right hand drive car with you, it will need black adhesive triangles on your headlights, or clip-on beam deflectors to avoid dazzling oncoming traffic.

If you will be driving in Norway in winter, your car must be equipped with winter tyres, which can be with or without

studs. Studded tyres are permitted from 1 November to the first Sunday after Easter Sunday.

In terms of in-car equipment, it is compulsory to have at least one high-visibility vest in your car in Norway. And in the event of a breakdown you must display a red warning triangle in the road.

As you would expect, you will need to carry a full valid driving licence from your issuing country. And if you plan to hire a car while you’re in Norway, you will need to have held your full licence for at least a year.

Although traffic is usually light and sparse, traffic jams naturally occur in and around Oslo. Do note that in Oslo, trams have right of way over all other traffic, including pedestrians.

Norway has an excellent safety record, and as such road rules are very strictly enforced. Aggressive driving such as risky overtaking can lead to police issuing you with a fine of between €100 and €1,000, so do beware.

Other useful pointers are that you should always yield to traffic coming from the right unless signs say otherwise, regardless of whether it’s a major or minor road; you must always stop for pedestrians at a zebra crossing; your car horn should be used only in emergencies; and you should leave a three second gap between your car and the car in front.

We’ve talked a lot about rules and regulations; but it’s important to say that many who have driven in Norway, especially in the fjord areas, describe the experience as incredible.

internationalfleetworld.com / 35

INTERVIEW Derrick Bishop, Bishop Fleet Optimization

Does your fleet need telematics?

Permanent telematics installations do not always provide the information required and can carry a high cost. Are there alternatives, asks John Kendall.

G

PS navigation-based telematics systems have become part of the suite of fleet management tools; most notably for the heavy truck sector and to a lesser extent with light CV and car fleets. The technology can be particularly useful for fleets on service operations, when information about the location of individuals with specific skills can help to speed up response times.

Telematics systems come at a price though and it might be that the information they provide is more complex than some fleets need it to be. Is there a more cost-effective alternative? The answer is “yes” according to Derrick Bishop, managing director of consulting firm Bishop Fleet Optimization. Derrick has a background in developing GPSbased systems.

He argues that GPS/telematics gives a clear picture of surplus vehicles on a fleet, but the expense of a three-year contract that might come with it is not necessarily what all fleets need.

Derrick has developed an alternative, still GPS based, for those who wish to identify inefficiencies in their vehicle usage, i.e. more vehicles on the fleet than are actually needed, as well as develop customised benchmarks, optimise the location of their depots, or base costings on fleet activity. Bishop argues that most vehicle utilisation patterns are repeated on a daily, weekly or monthly basis, so GPS/telematics systems offer very little knowledge gain after the first month.

The Bishop Fleet Optimization system is based on the data gathered by a GPS device that is locked in place into the vehicle’s lighter socket. The device is kept in place for five weeks. After this it is removed and the captured data downloaded for analysis. Two weeks later, the company will deliver a written report on the findings.

36 / internationalflfeetworld.com

The data loggers gather data every five seconds for five weeks.

Using the device does not involve purchasing the equipment and there are no associated on-going costs, according to the company. Bishop Fleet Optimization reckons that the costs are around 10 to 15 times lower than the cost of a permanent GPS/telematics installation.

“It’s all down to collecting good data,” says Derrick. “95% of our clients have managed an actual reduction in fleet size of between 14% and 37%. We did one recently in Sydney Australia, with a fleet of around 600 cars and we achieved a 27% reduction in fleet size, with no loss of service delivery capability. It’s just getting rid of waste, not cutting.

“The data loggers lock into the cigarette lighter socket of the vehicle. They drive around for five weeks gathering data every five seconds, when the vehicle is moving and we’re not getting data gaps, because the system can ‘see’ through buildings. The data is accurate when you start lining it up against logbooks. Normally, the organisation is using logbooks anyway, so we carry out a bit of a random sample. Consistently they are out by about 40%. You can imagine that people forget to write something in and the destinations are called for example, ‘London’, ‘the city’, and ‘the west

end.’ So they are not necessarily precise.

“We’re just looking at a large US government fleet with around 16,000 vehicles,” continues Derrick. “We’re just getting an audit started at the moment.

In our estimate a logbook audit will have around 0.5 million trips in five weeks and if you want to try and code that, it would take an army of people. A five-week utilisation snapshot is the best option.

“What we’ve been finding in the hospital sector is that some of the hospitals are in the wrong places,” says Derrick. “I could give you four examples in the last three months where between 60% and 80% of the departments aren’t the nearest option for vehicles to be deployed to go to see those clients out in the community.

“We’re looking at the distance between where the home base is and where the client is, multiplied by 100,000 data points. We’re saying, “Your base should not be there. You’re driving an extra 10-15km, or whatever it is, to get between A and B. This is how long it’s taking you in terms of trip duration to get from there to there and here’s the reason; your base is in the wrong place.”

“So we’re starting to get into not just how many vehicles you need, but from an operational standpoint, where should the departments be? Obviously there are other things that need to go on – if they need a specific machine nearby, or certain expertise and that’s joined to a department that needs to be at a major hospital or whatever, that also comes into the decision. But just from a purely logistics perspective, we can give them a perfect data set.”

How does the company process the data? The data is downloaded from the GPS data logger to a PC and the files are downloaded onto a server based in New Zealand. The data is then uploaded into a Bishop Fleet Optimization software package for analysis. Clients are given

“95% of our clients have managed an actual reduction in fleet size of between 14% and 37%.”

secure access to their data. The webbased system allows users to search by site, department, or vehicle type, then generate the report they want, or download it. The company has deliberately limited the number of reports that can be generated based on experience with other projects, where companies only use a relatively small number of reports from the many possibilities offered.

“One of the faults that GPS companies have globally is that they keep providing large wads of tables,” says Derrick.

“Every fleet and site is different,” he says, “Some will have a lot of idling, some will just be driving around without any trip planning, because we can see the spatial gap on the Google Earth maps and can calculate it. Some are taking vehicles home when they shouldn’t.

“We provide that evidence in the first report and then about every three years we do another audit.” Giving the example of an Australian health authority, Derrick continues, “I think we cut the fleet by about 23% and I’ve just done another audit now, after they implemented our recommendations on change. I found another 18% last month and we’ve found all these departments that are in the wrong place. So if you take it from 2011 when we first started, we’re probably going to cut the fleet by around 50%, with no loss of service delivery capability.”

internationalfleetworld.com / 37

NAFA International Fleet Academy

People power Reproduced with the kind permission of NAFA Fleet Management Association, this is the latest in a series of extracts from the International Fleet Academy Global Fleet Guide.

CHAPTER 5

Policy implemention Establishing a Steering Committee can be one of the most effective ways to develop a leet that works locally and around the world. This chapter will examine the importance of involving staff at every level with the implementation policy, and their vital role in the successful running of an international leet.

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Staff engagement Even with the support of senior management, buy-in at the local level is a ‘must’ if the implementation plan is to be carried out successfully. Procedures for policy implementation should be agreed upon at the local level, simpli ied and harmonised to align and it together as part of the global policy. Supplier agreements with manufacturers, leasing companies, maintenance, fuel providers and others are central to successful implementation. These documents must be reviewed, written or re-written and enforced with all eyes focused on improving the organisation’s total cost of leet ownership.

Speci ic implementation strategies need to be spelled out in a timeline – from rollout onwards. A phased-in approach is recommended, enabling the leet manager to monitor success and correct unexpected issues. The implementation plan is a living document, capable of adapting to change. Your global leet provider should offer the expertise to support you with development of a global implementation plan.

The implementation plan is based largely on thorough benchmarking by the global leet team. A realistic view of what has to be done can only be achieved by measuring the entire multi-national organisation. This ensures an accurate baseline of all existing costs, vehicles, contract terms and services in each country.

Begin by looking at the most attractive inancing methods and TCO in each operation. Then establish benchmarks for each country and use this data as the basis for developing objectives and strategies. All cost data should be provided in local currencies for conversion to a common platform.

Ongoing analysis Following implementation, a periodic revisit of the benchmark criteria and performance measurement must be done until a fully-established, inely-tuned global leet policy is in place. The highest strategic level should measure and quantify success that results directly from the global leet and improvements that directly impact TCO. Data can include cost savings, user satisfaction, productivity improvements, safety and compliance upgrades, streamlined data management and similar benchmark standards. This data should enable you to answer questions such as: • How much fuel is my leet burning?

• Is fuel consumption being reduced?

• Are maintenance costs being reduced?

• Is the accident ratio being reduced?

• Are drivers operating appropriate vehicles?

• Am I calculating true depreciation against targeted expenses?

Readers can review the full article – and much more – by purchasing the Global Guide through the NAFA website: www.nafa.org/

“An integrated global fleet can help unify fragmented local programs into a corporate asset that supports strategic goals.”

Answering these questions requires accurate reporting from all nations. The data must come back to headquarters in a format that can be compared to the benchmarks. Challenges in accomplishing this include converting currencies and units of measurement, developing a common data transfer format for reporting from different leasing companies, and obtaining cooperation from all suppliers around the globe. The reward for overcoming these challenges is a inely-tuned system for managing performance and reducing leet TCO. Multi-national team involvement One of the important keys to success is to invite all of the players to help design a globalisation solution and get all managers involved beyond their traditional market boundaries. This global leet team typically includes a Central Steering Committee made up of all departments involved with leet – Finance, HR, Insurance and Purchasing – as well as parties up and down the leet management process chain, including suppliers, national or regional leet managers, outside consultants and end users.

The Steering Committee sets objectives and builds an implementation plan that is well-defined, supportive, adaptable to different countries, universally measurable, and whole-heartedly supported by management. The group’s main role is to help the global fleet manager and key players stay focused on developing and then sustaining a global policy that works locally in locations around the world.

Conclusion An integrated global fleet can help unify fragmented local programs into a corporate asset that supports strategic goals. Maintaining harmony among business units and countries in a complex and fragmented global market poses challenges in policy and procedures, fleet reporting and data collection and consolidation.

Though the road to a global leet is dif icult, a growing number of multi-national companies see it as the fastest way to get to where they want to go. It is up to the leet manager to pave the way for the organisation to take full advantage of the opportunities available.

Next month...

We examine the challenges of data information management (DIM) for a global fleet.

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PROFILE Suzuki

Small cars

big business

Thanks to its growing range of small and affordable cars tailored to individual market tastes, Suzuki’s global reach is ever-expanding.

Now established as a market-leader in Kei car technology and with a number of new models poised for launch, the brand is on track to continue its upwards trajectory in 2014...

“New S-Cross has been well received by customers since launch.”

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Manufacturer Suzuki Total sales 2013 2,710,888 Headquarters Hamamatsu, Japan Global market share 3.3% No. of models 16

view

from the top

Kei car sales continue to soar...

T

he Suzuki Motor Corporation has one of the most complex management structures of all the automotive manufactures, incorporating over 100 subsidiaries across a global network of manufacturing and operational centres.

The Japanese brand has enjoyed global sales growth for three consecutive years, thanks largely to Suzuki’s strategy to manufacture bespoke models for each of its major markets, and the growing popularity of the brand in the global arena.

Maruti Suzuki India Limited, commonly referred to as Maruti, is the brand’s most successful subsidiary and represents the Corporation’s biggest global market, achieving 1,271,500 sales in 2013, up +22% over 2012 igures. The Maruti Alto 800 was the best-selling car in India in 2013, winning over buyers with its low cost of ownership to capture 137,406 sales last year. The Maruti Suzuki Swift also performed well in the market, with the premium hatchback accounting for 106,236 Indian sales in 2013.

While Suzuki continues to expand into international territories including South Africa, South America andSouth East Asia, the brand withdrew from the United States and Canada in late 2012 after a period of extended decline. This accounts in part for the drop in the global sales igure from 2012 to 2013 as Suzuki wound down its American operations. Commentators cite Suzuki’s core line up of small cars as a factor in the brand’s struggle to maintain a foothold in a country where saloons and minivans dominate, coupled with a poorly managed dealer network and strong competition from other emerging brands.

While its small car offering may have cost the brand sales in the US and Canadian markets, it’s range of mini, or Kei cars, are big business in the home market of Japan.

The Kei car segment emerged in 1949, when the Japanese government mandated new Kei car (keijidosha, or light automobile) rules, designed to encourage smaller, more ef icient vehicles with commensurate tax, insurance and parking bene its.

Suzuki has established itself as a market-leader in Kei car technology, producing a range of variants speci ically for Japanese buyers. An intimate understanding of the real world requirements of Japanese customers helped the brand capture its highest ever sales volume of mini vehicles in 2013, partly owing to the impact of three new models: Spacia, Hustler, and Carry, to achieve 110% of its sales target for the segment.

Another possible reason for the drop in global sales from 2012 to 2013 was Suzuki’s decision to prioritise the European market, a strategy re lected in a +55% sales uplift for the territory during this period. The UK represents the most signi icant market for Suzuki in Europe, accounting for 33,080 total sales in 2013.

The new S-Cross crossover, Suzuki’s challenger to the all-conquering Qashqai, was well received by customers and journalists alike following its launch in late 2013, and accounted for 15% of the UK sales mix in the irst half of this year. Suzuki also reported some success for the Swift 4x4 with customers in the public sector who require an economical but rugged vehicle, particularly during the winter.

SUZUKI Global sales, by territory Territory Japan Maruti Suzuki India Europe of which UK Rest of the world Total

2013 728,112 1,271,500 223,176 33,080 488,100 2,710,888

2012 673,139 1,045,615 144,292 24,880 797,318 2,660,364

% change +8% +22% +55% +33% -39% +2%

Andrew Wale, national corporate sales manager at Suzuki GB, reveals how the S-Cross has revitalised the brand’s fleet offering and why Suzuki appeals to savvy business customers.

How has Suzuki performed in the UK market so far in 2014?

Sales in the UK are up 17% year-onyear with a igure of 21,890 units at the end of July. S-Cross has certainly helped and represents over 3,300 units or 15% of the current sales mix.

As a traditionally retail-focused brand, does the fleet-friendly S-Cross signal a new era for Suzuki?

The S-Cross has signalled a new era and has helped us double our leet sales over the past 12 months. It has provided an excellent platform for the launch of the new SUV and Celerio in early 2015. Achieving competitive S-Cross residual values and reducing our SMR costs have been key to achieving competitive monthly contract hire and PCH rentals. Combine this with high levels of speci ication and low BiK’s which appeal to business customers and you have an appealing proposition for leets.

What sorts of fleets are drawn to Suzuki, and why do you think this is?

Historically Suzuki has been popular with public sector fleet customers – models such as the Swift and the SX4 4x4 provide the ideal mobility solution in remote areas, and with salary sacrifice customers looking for reliable, economical, competitively priced stylish cars with high levels of standard specification. The S-Cross has created interest from a much wider range of fleet customers, and appeals to customers who are more motivated by what they get for their money rather than the prestige of a (more expensive) premium marque’s badge.

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internationalfleetworld.com / 41

PROFILE Suzuki

¡

Where are they made?

Manufacturing plant locations

FIN fleet in numbers

136 The number of subsidiaries of the Suzuki Motor Corporation.

110%

Percentage of sales target achieved by Mini or ‘Kei’ vehicles in Japan in 2013.

5

The number of cars manufactured every minute by Maruti Suzuki.

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1

Suzuki Takatsuka, Mie Prefecture, Japan

2

Suzuki Kosai, Shizuoka Prefecture, Japan

3

Suzuki Iwata, Shizuoka Prefecture, Japan

4

Suzuki Sagara, Shizuoka Prefecture, Japan

5

Suzuki Osaka, Osaka Prefecture, Japan

6

Suzuki Toyokawa, Aichi Prefecture, Japan

7

Magyar Suzuki Corporation, Esztergom, Hungary

8

Suzuki Egypt S.A.E, Cairo, Egypt (Suspended Aug 2013)

9

Chongqing Chang’an Suzuki, Chongqing Province, China

10

Jiangxi Changhe Suzuki, Jiangxi Province, China

11

Suzuki Myanmar Motor, Yangon, Burma

12

Suzuki Motor Thailand, Rayong, Thailand

13

Suzuki Motor Vietnam, Đồng Nai Province, Vietnam

14

Hicom Automotive Manufacturers, Pekan, Malaysia

15

Suzuki Maruti India, Manesar, India

16

Suzuki Maruti India, Gurgaon, India

17

Suzuki Pak Motor Co. Ltd, Karachi, Pakistan

7 8

17

15 16

9

10

11 12

13 14

6 2 3 5 1 4

Fleet friendly models ready to launch...

S

uzuki has a busy schedule of launches planned for the next two years, with a number of key models waiting in the wings. First up is the launch of the refreshed Maruti Swift to the Indian market in November 2014. Updates include the integration of daytime running lights and a redesigned grille, while the interior has been given a nip/tuck with an upgraded infotainment and navigation system for the top trim levels.

Close on its heels is the European launch of the Celerio (pictured right), Maruti Suzuki’s budget city car, which is due to arrive in the UK in January 2015. While the Celerio will primarily by a retail model, Suzuki hopes to capture UK business sales with a strong contract hire proposition and targeted marketing to the public sector. Suzuki claims best-in-class C02 emissions of 85g/km for the model, produced by a 990c threecylinder petrol engine developing 67bhp. The Celerio is billed as a more spacious Splash with the price and economy of a smaller, cheaper Alto, and is ultimately expected to replace both models in the brand’s lineup.

Suzuki irst teased its iV-4 concept at the Frankfurt Show in 2013, outlining plans for a compact crossover to rival the Nissan Juke. The iV-4 features the carmaker’s trademark SUV clamshell hood, as on th Grand Vitara and the Jimny-inspired iveslotted front grille, but adds detailing such as heavily sculpted lines and a fog light with built-in laser sensor on the roof. It also taps into the trend for vehicle personalisation, with a choice of exterior parts, colour and texture to be offered.

The production model will offer 4x4 capabilities in the form of the ALLGRIP system, and Suzuki promises class-leading CO2 emissions although exact figures have not yet been made available. The model will be unveiled by the Magyar Suzuki Corporation in 2015 before going on sale to Europe towards the end of the year, and should be well placed to capture both retail and corporate sales in a growing sector.

It is unlikely to that an alternatively-fuelled Suzuki will swell the ranks in the near future, however. “The Swift Range Extender has been under evaluation in Japan for at least a year, but there are no plans to introduce it in Europe. Suzuki is planning to introduce hybrid adaptation in the coming years, although currently we are concentrating on high ef iciency and lightweight petrol engines,” reveals Andrew Wale of Suzuki GB.

SUZUKI fleet model range

Wagon R

Spacia

Lapin

Variants: Kei car Markets: Asia Fuel: 3.3-4.1l/100km* CO2: 77-96g/km*

Variants: Kei car Markets: Asia Fuel: 3.4-4.0l/100km* CO2: 80-93g/km*

Variants: Kei car Markets: Asia Fuel: 3.8-5.3l/100km* CO2: 89-122g/km*

MR Wagon

Solio

Hustler

Variants: Kei car Markets: Asia Fuel: 3.3-4.0l/100km* CO2: 77-92g/km*

Variants: : Kei car Markets: Asia, Oceania Fuel: 3.9-5.2l/100km* CO2: 91-120g/km*

Variants: Kei car Markets: Asia Fuel: 4.2-4.3l/100km* CO2: 79-100g/km*

Alto / Celerio

Splash

Swift / Swift Sedan

Variants: 5dr hatchback Markets: Africa, Asia, Europe, Oceania, South America Fuel: 4.3-5.1l/100km CO2: 99-118g/km

Variants: : 5dr hatchback Markets: Asia, Europe Fuel: 4.7-5.7l/100km CO2: 109-131g/km

Variants: 5dr hatchback Markets: Africa, Asia, Europe, Oceania, North America, South America Fuel: 4.4-6.4l/100km CO2: 100-147g/km

SX-4 / SX-4 Sedan

SX-4 / SX-4 S-Cross

Ertiga

Variants: Crossover, 4dr saloon Markets: Africa, Asia, Europe, Oceania, North America, South America Fuel: 6.2-8.0l/100km CO2: 141-178g/km

Variants: Crossover Markets: Africa, Europe, Oceania, North America Fuel: 4.2-5.7l/100km CO2: 110-130g/km

Variants: 7-seat MPV Markets: Asia, Africa Fuel: 6.6l/100km CO2: 153g/km

Landy

Jimny

APV

Grand Vitara

Variants: 7-seat MPV Markets: Asia Fuel: 6.3-7.9L/100km* CO2: 145-184g/km*

Variants: Mini SUV Markets: Africa, Asia, Europe, Oceania, South America Fuel: 6.1-7.3l/100km CO2: 162-167g/km

Variants: 7-seat MPV Markets: Asia, Oceania, South America Fuel: 8.2l/100km CO2: 190g/km

Variants: 3 or 5dr SUV Markets: Africa, Asia, Europe, Oceania, North America, South America Fuel: 6.6-9.6l/100km CO2: 174-221g/km

*converted from Japanese JC08 test cycle

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Volkswagen e-Golf The first production electric Golf makes the unfamiliar familiar, says Alex Grant.

SECTOR Lower medium PRICE €34,900 RANGE 190km CO2 0g/km

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t seems manufacturers have two approaches to plugfirm, yet comfortable, ride quality. in vehicles. Some choose to package the technology Squeeze the throttle harder and the motor delivers a in a futuristic bodyshell, while others opt to typically urgent surge of electric acceleration, the sensinormalise it, fitting it to an existing car. The Volkswagen tivity of which can be altered through Eco and Eco+ drive-Golf sits firmly in the latter group. ing modes, which also limit power output, top speed and Whether that’s good or bad depends on personal taste. air conditioning. Unusually, there’s no regenerative brakThis isn’t a glaring billboard for a company’s environing until the battery dips under around 90% charge. mental credentials, but the e-Golf takes an unfamiliar Beyond this, there are a number of ways to vary the technology and slots it into a familiar car. It’s just another driving experience. From the default D mode, nudging drivetrain choice for the ubiquitous German hatchback. the gear lever to the left or right offers three levels of So it’s unlikely to have passers-by craning their necks. regenerative braking or the option to switch it off for a The e-Golf shares its blue pinstriped smoother drive. Pull the lever back and aerodynamic grille with the BluemoB mode means it’s possible to drive tion, though the bookends here are a without touching the brake pedal; just pair of energy-efficient all-LED headlift off the throttle and it’ll scrub speed lights, and the smoother front bumper off so quickly that the brake lights is unique, lit with C-shaped daytime automatically switch on. running lights.

Volkswagen is claiming a range of up Equipment levels vary between marto 190km depending on the weather, kets but the e-Golf is based on the midtopography and road type, and the spec trim level, but with an upgraded e-Golf can coast at low loads without EV-specific satellite navigation system, using any energy at all. A full charge automatic air conditioning and parking takes 13 hours using the supplied sensors added in. While the e-up!, which domestic cable, eight hours from a carries a large price premium, subsidies wallbox or dedicated charging post, mean the e-Golf isn’t far off the price of a and 80% of the range can be recovered An easy route into close equivalent DSG-equipped 1.6 TDI SE. in half an hour using a rapid charger. electromobility, which The drivetrain comprises a 115hp Rapid charging capability is optional shouldn't be overelectric motor and 24.2kWh battery, in some markets, but allows the car to which adds just under 200kg to the connect to the European standard conlooked in favour diesel’s kerb weight. It chimes into life nector now being rolled out at sites of the 204hp Golf with a twist of the key and operates like along major routes. It doesn’t make this GTE plug-in hybrid a conventional automatic – just slot it a perfect long-distance car, but the abildue next year. into D, and it pulls away silently with ity to undertake longer journeys when that familiar feeling of Golf solidity and needed removes a barrier to ownership.

what we think

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Mercedes-Benz GLA-Class A viable threat to the crossover class, but the AMG Line trim is essential, reckons Alex Grant.

SECTOR Crossover PRICE €30,553–€55,870 FUEL 4.0–7.5l/100km CO2 105–175g/km

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ercedes-Benz is the last of the “big three” German opens wider and without intrusion from the rear lights. premium brands to launch a C-segment Launched with a slimmed-down version of the A-Class crossover, but the GLA should make for a very engine range, the GLA-Class now features most of its sibling’s desirable part of the range. powertrain options. These include the excellent 105g/km, Given the meteoric rise of crossover sales, the three110hp Renault-Nissan 1.5-litre diesel at the most efficient pointed star has been notable by its absence until now, end, making this the one of the most efficient cars in its class, with the the Q5/X3-rivalling Class only available in and 7G-DCT dual-clutch transmissions and 4MATIC fourselected markets and not offered in right-hand drive. wheel drive are offered from the CLA 220 CDI upwards.

Perhaps the likely sales success of the GLA-Class will lead That said, the most powerful diesel engine, as tested to a change of heart next time. Despite its bulked-up hatchhere, is close to the equivalent two-wheel drive BMW X1 back styling, this is longer and taller than the A-Class and, on fuel consumption and emissions, and in line with the at 4.4 metres, sized to take on the Audi Evoque and Q3, neither of which are A3, BMW X1 and Range Rover Evoque. available with an automatic gearbox and The potential hurdle here is styling. two-wheel drive as in the GLA. This isn’t as clearly defined as a The downside is that it’s not the most crossover as its closest rivals, and needs polished drivetrain, considering the badge the deeper bumpers of the AMG Line on the grille. That 2.2-litre diesel engine is trim to make it look like a downsized coarse at low speeds, the gearbox is slow ML-Class. For the upgrade in on-road to respond from a standing start and the presence, this is worth every cent.

AMG Line’s sports suspension isn’t as soft DNA from the A-Class is also found as the ride height suggests. inside. The two cars share their dashHowever, engine grumble is barely boards and tombstone-shaped front audible at motorway speeds, the claimed seats, complete with red-stitched artififuel economy figures seem entirely realcial leather, and passenger space is istic on highway routes and, once moving, almost identical. the gearbox is quick and smooth when Likely to be a big seller, But, were it not for the short gap changing between its seven ratios. it’s surprising that the between the two launches, you’d be 4MATIC versions feature hill descent conGLA-Class has been excused for thinking that this has trol and an off-road mode as standard, learned from the A-Class’s shortcomshould conditions get tricky, and 170hp is such a long time ings. The rear windows sweep up to plenty of power for a car of this size. coming. The Renaultimprove visibility, there’s an extra Ultimately, though, this is a segment Nissan 1.5-litre diesel 20mm of headroom in the back and the where style counts and – though it’s defishould help this. boot space is 41% larger than the hatchnitely worth the upgrade to AMG Line spec back, accessed through a tailgate which – the GLA-Class has plenty in its favour.

what we think

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Citroën C1 Much improved, but without losing the frill-free charm of the original, says Alex Grant.

SECTOR City car PRICE €8,890–€14,550 FUEL 3.8–4.3l/100km CO2 88–99g/km

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itroën has sold over 760,000 C1s since the original launched in 2005, and it’s become such a familiar sight that it’s easy to forget how clever and trend-setting the design was, and still is today.

With low running costs and high residual values, the C1 also enjoys a large fleet presence considering the majority of cars are still sold to retail customers. Citroën expects the SME and public sector, plus downsizing company car drivers to continue making up the fleet side of its sales, but the previous model recorded some large-scale fleet orders during its time on forecourts.

So there’s familiarity behind this car’s fresh styling. The weight-saving glass tailgate, fixed headrests and exposed metalwork in the cabin have remained, and there’s still space for four adults, this time with a useable boot. Minimal use of plastic trim means the C1 and 108 offer

what we think Evolution rather than revolution, but C1 is back in line with the rest of the class. The lower-powered engine makes more sense, though, despite the new addition.

Toyota Aygo

PRICE: €10,500–€15,700 FUEL: 3.8–4.2l/100km CO 2: 88–97g/km

Peugeot 108

PRICE: €8,890–€14,700 FUEL: 3.8–4.3l/100km CO 2: 88–99g/km

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more load space than the Aygo, too.

While it’s still low on frivolity, bright fabrics, colour accents on the dashboard and a smartphone-controlling MirrorLink touch screen help bring the cabin up to date, and the optional retractable fabric roof is a fun, if noisy, addition unique to PSA’s city cars.

All three feature a new version of the 69hp petrol of their predecessors, now down to 3.8l/100km, but PSA has kept the new 82hp for its own cars. It’s a sparky engine which feels well matched to the quick, light steering and firmly sprung inner-city agility, but it lacks refinement and vibrates through the cabin at idle.

Citroën hasn’t strayed too far from the tested path with the C1, but it didn’t have to. The old car could still stand its ground in this sector, despite starting to show its age, and a choice of three stylish newcomers means drivers have a few more options on their choice lists.

Volkswagen Transporter BlueMotion Transporter may be one of the oldest medium vans, but still has plenty to offer, reckons John Kendall.

SECTOR Medium van PRICE from €20,360 (approx) FUEL 5.8–8.8l/100km CO2 153–232g/km

6

still competitive. Payload is 871kg for the 2,700kg gross 5 years on and Volkswagen’s Transporter is probably, vehicle weight BlueMotion model, but if more flexibility in name at least, the longest running panel van series is needed, the 114hp engine with the BlueMotion techin the world. The current model has been with us since nology options can be specified with a range of short and 2003, which means that we can’t have long to wait until its long wheelbase models with more variety of payload and replacement appears, particularly with the Ford Transit Cusload space. These models will not be as fuel efficient as tom, Renault Trafic/Opel/Vauxhall Vivaro and shortly the the SWB BlueMotion model, but they will use less fuel Mercedes-Benz Vito giving the sector several new choices. than standard Transporter models.

Since the 2009 facelift, the diesel engine range has been In common with most other medium panel vans, the focussed on Volkswagen’s 2.0-litre TDI common rail diesel Transporter uses a front wheel-drive layout. Like some with a range of power outputs from 84hp to 180hp. In comother Volkswagen BlueMotion car models, the standard mon with its other product ranges, the Transporter is transmission has only five-speeds, but also available as a BlueMotion model, only the more powerful 140hp and equipped with a range of technologies to 180hp engine variants are offered with keep fuel consumption to a minimum. the six-speed option. The impressive DSG This includes automatic engine automated transmission is not available Stop/Start, to reduce fuel wasting engine with the BlueMotion model either. idling, regenerative braking, cruise conThe Transporter cab may appear trol and low rolling resistance tyres. slightly dated compared with the newer Power output for the BlueMotion model rivals, but there’s a fair bit of similarity is 114hp, so low fuel consumption is not where the basic layout is concerned. All the product of a low-powered engine. have the gearshift mounted on the dashThe Transporter BlueMotion is availboard so cross-cab access is relatively able as a short wheelbase low roof easy. The high driving position gives model and offers EU combined fuel good all-round visibility, and there’s reaconsumption of 5.8l/100km, with CO2 sonable storage space, if lacking some of emissions of 153g/km. These are some The Transporter the latest ideas from rivals. of the lowest figures for vans in this BlueMotion has a lot On the road, the Transporter is still a class. The combined figure is better to offer, particularly pleasant vehicle to drive with relatively than either the Transit Custom ECOlow noise levels, good ride and handling netic or the new Opel Vivaro ecoFLEX. with low fuel conand good performance, despite the BlueThe short wheelbase low roof body sumption and that Motion package. The standard cruise offers 5.8m3 of load space, slightly less reassuring Transporter control will be appreciated by those than the Transit Custom but more than driving experience. covering long distances. The T6, when it the L1H1 Vivaro/Renault Trafic. It arrives, will have to be good… might be ageing, but the Transporter is

what we think

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MANAGEMENT Global Fleet Forum

global connecting the international fleet community

Join the Cars are going electric, but should we get plugged in?

Jos Dings, Director, Transport & Environment

Global Fleet Forum is International Fleet World’s new international network and digital forum, launched in March 2014.

At the heart of the Global Fleet Forum is a team of fleet professionals who play a key role in the industry, either as fleet managers, consultants or fleet suppliers. These fleet experts provide a regular feed of information that is posted on the website forum in the form of discussion topics.

Typical areas of interest include, but are not limited to: taxation, finance and accounting, legislation, environmental issues, fleet safety, insurance, fleet management, supply issues and security.

Fleet suppliers are permitted to respond to queries if it is felt that their response represents honest and impartial advice. This aspect of the service is strictly moderated in order to ensure that the quality of information provided remains of the highest standard.

We have already attracted a strong network of international fleet professionals, and our expert contributors have submitted a number of thought provoking discussion topics, a few of which are previewed to the right.

We hope you will consider joining us in this exciting new venture into the world of fleet.

To find out more about the Global Fleet Forum and request membership, please visit:

theglobalfleetforum.com

48 / internationalfleetworld.com

We just published a new paper on how electric cars are faring these days in Europe, and since I get asked a lot what we think about them, let me try to summarise my thoughts here.

Let me first say that, whether you like it or not, electric transport or e-mobility will be very much needed if we want to decarbonise our society. Recent years have shown us how hard it is to ‘decarbonise hydrocarbons’ – to move to lower-carbon fuels for combustion engines.

Oil is simply bad – unconventional oil is worse. For biofuels I have seen no credible scenarios for sustainable use on a vast scale. For gas the same applies; the fossil variety is hardly better than oil and with the current geopolitical situation quite a strange bet, the ‘sustainable bio’ variety is small scale.

Hydrogen suffers from poor overall efficiency and a lifecycle that is either dirty (when made from gas) or expensive (when made from clean electricity). That almost leaves electricity as the only longer-term energy option. The good news is that while electricity is often quite dirty now, it is quickly becoming cleaner.

Last year around 70% of all new capacity in power generation was renewable, clean, and from our very own sun and wind. Take that, oil industry!

Note that I said e-mobility, not electric cars. Yes, we need to think beyond just electric cars and include electric rail, e-bikes, electric quadricycles, everything. Currently, for every electric car sold in Europe, 60 e-bikes are sold. This shows where the real change is. Why is an e-bike subsidy nowhere to be found?

Electric cars obviously do not do much good for the environment when they are bought – at colossal expense – as second cars, used instead of bikes or public transport, and only used sparingly. Then they are a waste of space and resources. If they are used as shared vehicles or in fleets, the cost-benefit ratio is much better. Governments should consider sponsoring such initiatives, even when that means smaller subsidies for individual vehicles.

What I personally like about electric cars is that they really

debate...

in association with

Meet the experts...

Giles Margerison, Sales Director, TomTom Telematics

challenge carmakers to rethink their vehicles to make them much lighter and more energy efficient because then their range is so much better. I also like it that they break down the huge barriers to entry in the car industry – Tesla comes to mind – introducing a much-needed shakeup of the petrolheads. And I like that they lend themselves very well to vehicle sharing – mobility of the future.

Our report shows that we need a bit of patience – the learning curve on e-mobility is still steep; every new model is much better than the previous one. And we need to think of clever ways to accelerate investment: tough CO2 standards for cars for 2025/2030; smart, California-style incentives for innovators, on the vehicles side as well as the fuels side; and, crucially, an all-encompassing strategy to accelerate all forms of e-mobility across Europe. Europe currently does not have one. But it should.

Ross Durkin, Managing Editor, Fleet World replied…

I recently listened to a number of colleagues from the contract hire and leasing industry discuss electric and fuel-cell electric vehicles. This topic is regularly and enthusiastically covered in various Fleet World publications, so I was a little surprised not only at the limited amount of information they had on these areas, but also on their general lack of enthusiasm for the new technologies.

In truth I was a little disappointed at first, but the more I thought about it, the more I realized that for those in the business of financing company cars, the aversion to risk remains strong. Given the choice between guaranteeing the residual value on a plug-in hybrid versus a diesel, I know which the leasing companies will be most comfortable with.

I would be interested to hear how many fleet managers have asked their leasing company for quotes on these new powertrains. If you have, what has the reaction been?

TomTom Telematics, the B2B division of TomTom, is now the fastest growing telematics provider in Europe. Giles joined TomTom Telematics in 2010, bringing over 10 years fleet and transport experience, ranging from commercial vehicle rental, contract hire, leasing and maintenance.

This combination of knowledge and experience in fleet management operations and fleet technology gives an intrinsic understanding of the issues facing the fleet and vehicle manager of today.

John Cameron, General Manager, Trimble Field Service Management (FSM) John is responsible for worldwide operations and development at FSM. Prior to joining FSM, he was general manager of Trimble’s Spectra Precision Division and before that general manager of Pacific Crest Corp., a company he co-founded and was acquired

by Trimble in 2005.

John holds a bachelor’s degree with highest honors in Mechanical Engineering from UC-Berkeley and a master’s degree from Stanford University.

Jos Dings, Director, Transport & Environment Dutchman Jos has been heading T&E since 2004, overseeing significant growth in size and impact of the environmental organisation. He previously worked as head of the transport division at CE Delft, a respected environmental policy consultancy in the Netherlands.

He holds a Mechanical Engineering degree from Delft University, but likes economics a lot more. Jos puts sustainable transport into practice by regularly making his 2x30km commute by bike.

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fleet in figures

Can global sales growth be sustained?

Global sales are still rising, but could economic instability in the Eurozone, Eastern Europe and South America spell trouble? John Kendall reports.

Ford F-150 The Ford F-150 pick-up truck is the best selling light vehicle in the US.

Could Eurozone undermine rising Western European sales?

News that the Eurozone is continuing to struggle is bound to work its way through to car registrations before long. Both France and Italy are giving observers cause for concern.

According to UK broadcaster the BBC, French growth remained at 0% for the past three months and the French Finance Minister, Michel Sapin, has admitted that his Government forecast

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of 1% growth in 2014 is an impossible target. French consumer prices have fallen 0.4% month-on-month and it is likely that it will miss its 3.8% target for reducing the public deficit, as agreed with the European Commission.

The Italian economy is now back in recession and according to the BBC, has debts of €2.1 trillion, which could rise further. Germany’s gross domestic product (GDP) has declined by 0.2% in Q2 too.

The BBC also reports that Spanish

exports have risen notably and unemployment is falling, although it remains at 24.5%. Greece too is showing a budget surplus but the economy is shrinking.

The BBC also points to external factors affecting the European economy such as sanctions against Russia. While the BBC points to German exports to Russia falling by 14% in the first four months of 2014, it still isn’t clear what impact the sanctions are having on the fragile recovery across Europe.

Registrations data for July shows that the tightening economies in Europe are not yet having an impact on the rising tide of registrations across Europe. LMC Automotive data shows that Western European car registrations rose by 5.9% in in the period up to the end of July 2014, compared with 2013 to reach 8,251,151, with an identical increase in July compared with July 2013. Registrations rose by 5.9% to 1,125,413 during the month. The annual selling rate reached 13.6m units/year in July and LMCA identifies the UK, Germany and Spain as the markets making the most progress.

Russian decline not helped by tightening sanctions The Western European increases are contrasted by a marked decline in Eastern European car sales. LMCA data shows that Eastern European sales fell by -8.3% to 2,535,029 in the January to July 2014 period, while compared with July 2013, July registrations fell by -15.9% to 354,273. LMCA points to contracting Russian sales, the result of escalating sanctions against the country in response to the Ukrainian crisis.

Canada-based Scotiabank comments that; “Car sales in Russia have weakened in recent months and will be further pressured by slowing economic growth and the recent 50 basis point increase in the central bank rate to 8% to stem inflation and support the ruble amid geopolitical tensions over Ukraine. The central bank also indicated that it would continue to raise interest rates if inflation risks persist.

As a result, we have downgraded our sales outlook for Russia, with full-year 2014 purchases now expected to post a double-digit decline to 2.44m units – the lowest level since 2010.”

Overall, global sales are still rising, with a total of 50,743,745 new cars sold in the irst seven months of the year,

an increase of 3.7% compared with the same period in 2013. LMCA notes that the selling rate has slowed to 84,866,948 units/year, a 2.3% increase on the same period in 2013, but also the lowest rate since September 2013. The igures are due to continued expansion in the US and China offsetting the contraction in Eastern Europe, South America and Japan.

Scotiabank attributes the advancing global sales to, “strengthening global job creation and industrial activity, as well as rising consumer confidence and improving financial conditions.”

The engine of global sales growth Both LMCA and Scotiabank identify China as the engine for global car sales growth, disagreeing only about numbers. LMCA suggests that sales have grown 9.2% in the period to the end of July this year, reaching 13,327,136. Scotiabank puts the figure at 18.36m for the same period, taking the increase to 15%. “We expect a similar increase in the second half of 2014, as several leading indicators of vehicle sales have quickened in recent months alongside stimulus measures introduced by Beijing. Manufacturing activity is advancing at the fastest pace in eighteen months, while money supply growth is picking up partly due to last month’s targeted 50 basis point reduction in the reserve requirement ratio for financial institutions in rural areas, including firms providing consumer and auto loans. Employment growth – the key driver of vehicle sales – also remains solid, while urban income growth continues to advance at a double-digit pace.”

Scotiabank also comments on vehicle financing; “Auto financing in China has historically focused on luxury vehicles, but most mass-market automakers have set up financing subsidiaries in recent years and volumes are advancing at a double-digit pace.”

LMCA is more cautious about China,

quoting a selling rate that has slowed for the second consecutive month to an 11-month low of 22.2m units. This may be due to a relaxation in forward buying among customers trying to beat an expected introduction of local purchasing restrictions, reckons LMCA.

US forecasts up Scotiabank is revising its US light vehicle sales forecast for 2014 upwards by 300,000 units to 16.3m and expects further expansion next year to a total of 16.8m in 2015. LMCA notes that the selling rate in the US declined slightly from June to 16.5m units per year and forecasts market growth of around 5% for the full year. LMCA data suggests that to the end of July 2014 sales rose 4.9% to 9,581,373.

Brazil may have been cheered by hosting the football World Cup, but the competition has not helped the country’s declining car sales. LMCA expects it to pick up in August, but the outlook remains slow because of a slowing job market, tight credit conditions and weak business spending. Scotiabank expects the October General Election in the country to hold the market back too.

“In addition, the pace of credit creation continues to moderate, as lower bond market yields have yet to filter down to posted loan rates,” says the bank.

Sales in Argentina picked up in July, says LMCA, but that was just before the country defaulted on its debt for the second time in 13 years. The Argentinian Government is placing the blame for its default on the US and filed legal action against the US in early August. US hedge funds demanding a full pay-off of its Argentinian debt appears to have triggered the latest Argentinian debt crisis. Most US hedge funds accepted around 30% of their original holding in a debt restructuring in 2005 and 2010, while a minority have opted to sue for full repayment.

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A STRIKING ACQUISITION

The new NX hybrid crossover. Striking design meets innovative technology. Discover more at lexus.eu/NX

The new NX