The UK market sees approximately 2 million new cars registered every year, with around 50-55 percent classified as fleet or small- and medium-sized enterprise business vehicles depending upon definition.
The challenging UK economic climate was expected to continue through 2013.
“While I believe there will be a degree of growth overall, it is likely that businesses across the country will still face strong headwinds,” according to Matt Dyer, commercial director for LeasePlan UK.
Fleet policy in the UK increasingly requires the need for detailed financial modeling and total cost of ownership (TCO) analysis, as well as expertise to deal with a wide range of tax issues, a changing regulatory environment, the green lobby, and duty of care legislative drivers.
Accurate mileage capture will be a key focus for fleets in 2013, a need driven not only by a desire to control in-house costs, but also to protect themselves from tax authorities (the HMRC) increasingly looking to clamp down on inflated mileage reimbursements paid to car drivers “tax-free.”
There was further outsourcing of fleet services in 2013, due, in part, to the ongoing trend of reductions in organizations’ in-house fleet management teams. For many fleets, a balance will have to be struck between cutting costs, while retaining quality of service and employee engagement.
“Contract hire remains the favored method of vehicle acquisition and, while it is the largest market for operating leases across Europe, growth has been impacted by the economic recession. However, with the tough economic environment leading to a reduced appetite for risk, liquidity remaining key, and cost control the No. 1 priority, contract hire’s popularity will continue for the foreseeable future,” according to David Yates, marketing director for ALD.
Telematics has now broken through into the mainstream and is no longer the preserve of large commercial fleets, which need to keep track of their vehicles. Companies of all sizes are realizing they need better tools to manage the growing cost of their fleet and, for many, telematics is now seen as the best option.
“Telematics not only provides a solution to reduce costs, but also a fully auditable solution to avoid a lengthy, and potentially costly, tax investigation,” Yates said. “But, drivers are also now embracing the many positive benefits telematics can offer and the ‘big brother’ factor has subsided. Telematics in the UK is no longer a future fad; it is ‘here and now’ and vital to an efficiently run fleet.”
Overall, managing UK fleets is becoming more complex and decision making is moving up the chain.
● Capital: London