Issue no.475 This week’s news for company executives June 07, 2012

Fleet file___________________________________________________

Tax u-turn on emerging technologies puts diesel in pole position

DIESEL power is set to monopolise company car sales from 2015 - although some would argue it is close to dominance now - as a result of benefit-in-kind tax changes that have virtually killed the electric vehicle market before it has become established.

That is the claim of Mark Chessman, commercial director with responsibility for sustainability at Lex Autolease, following the recent 2012 Budget.

Whole life cost figures from the company suggest that diesel pump prices would have to rise to more than £7 a litre or electric vehicles list prices tumble by more than a third to bring parity to the operating costs of ‘average’ diesel and electric cars.

Chessman said: ‘There are winners and losers in every Budget. But the benefit-in-kind changes to company cars have poured cold water on the prospect of any meaningful power struggle for fleet dominance between diesel and electric. Or even diesel and petrol for that matter.     

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New Advisory Fuel Rates published by HMRC

Road tax rises planned as Government loses cash

ACFO in DVLA electronic driver licence checking talks

Jaguar tops vehicle ownership survey for the first time

Used car values bounce back with fleets hitting new peak

Competition Commission to probe private insurance market

Economy puts brake on revenues at Caffyns

FROM time to time the law of unintended consequences intervenes. The Digest is certain that is the case with the Government’s seemingly absurd Budget 2012 announcement concerning April 2015 changes to company car benefit-in-kind tax on electric vehicles (EVs). Just as the Government has recently completed a u-turn in relation to changes to VAT on caravans and cooked food - the so-called ‘pasty tax’ - and charity tax, so the Digest is certain that it will perform a similar manoeuvre in relation to benefit-in-kind tax on EVs. As new calculations from Lex Autolease make abundantly clear, unless there are radical and ‘game changing’ measures to support fleet demand for EVs then the Government’s zero emission ‘green revolution’ has failed before it has reached the starting gate. Put simply the sums in relation to EVs just don’t stack up - a fact we pointed out immediately after the Budget (Digest: March 29). It is difficult to believe Ministers realised the impact the tax moves would have when grant support is being given to EV sales. Watch out for another u-turn.

The Editor’s ViewThis Week’s Briefing

‘If 2011 was billed as the year of the electric vehicle, then you don’t need a time machine to realise that 2015 will be the year that diesel really begins to really monopolise fleet sales.’

The Government announced in the Budget that from April 6, 2015 the five-year exemption for zero carbon and ultra low carbon emission vehicles will come to an end. The appropriate percentage for zero emission and low carbon vehicles will be 13% from April 2015 and will increase by two percentage points in 2016/17; and from April 2016, the Government will remove the 3% diesel supplement differential so that diesel cars will be subject to the same level of tax as petrol cars.

Chessman said: ‘In withdrawing the benefit-in-kind discount from electric vehicles and hybrids and increasing the CO2 scale charge so rapidly, the Government has surprised many stakeholders right across the motor industry.  ‘The real fear is that this will make manufacturers think twice about committing to developing low emission technologies - be it electric, hydrogen or any other. It should be noted that the market still has not so fond memories of the LPG debacle and will not want to be burnt twice.  ‘The Government’s budgetary shift in policy away from supporting ultra low and zero emissions vehicles is particularly pronounced when you also examine what’s happening at the opposite end of the tax scale.  ‘Over the next four years, vehicles with no tailpipe emissions will be subject to a 15% increase in benefit-in-kind. Meanwhile, executives running the most polluting new petrol cars on the road will barely notice the standard 2% levy, which will also apply to most other company car drivers.  ‘Some argue that battery-powered vehicles have struggled to get a foothold in the market - even with heavy subsidisation - but the fact remains that only a handful of pure electric vehicles have been launched over the last 18 months.  ‘Historically, it has taken 10 years for fundamentally innovative vehicle technologies to really break into the mainstream. So, it’s particularly disappointing that the benefit-in-kind life support machine will be switched off before the market’s had time to make up its mind.  ‘The scale of the benefit-in-kind u-turn appears perverse at a time when significant investment has very recently been ploughed into the Plug-In Car and Van Grant. Not to mention the ongoing development of the public recharging infrastructure, such as Plugged-In Places.  ‘Battery-powered vehicles, whether they are pure electric vehicles or a hybrid solution, need time and assistance to find a natural equilibrium in the market. Even before the tax changes were announced, the medium term outlook for this segment was to fill a relatively small, but important, niche. ‘In light of that, and the current economic realities, perhaps it’s understandable that there is a tremendous lure to downwardly readjust or withdraw the incentives.  ‘However, it will be interesting to observe whether policymakers intend to level the playing field going forward, which has been seismically altered by the benefit-in-kind threshold changes and the removal of the 3% diesel surcharge.   

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‘For electric vehicles to survive and prosper well beyond 2015, we are going to have to see a combination of factors come into play with both positive and negative consequences for fleets and drivers.’

Calculations from Lex reveal the wide whole life cost disparity between a Ford Focus diesel and the electric Nissan leaf over a three-year period pre and post the forthcoming benefit-in-kind tax changes. The table (below) shows the whole life cost taking into account: lease costs, fuel/ electricity, disallowed VAT and employers’ National Insurance contributions.  Company Car Average Projected

Monthly WLC (April 2012 – March 2015)

Average Projected Monthly WLC (April 2015 – March 2018)

Nissan Leaf Hatchback 5dr Auto

£642 £693

Ford Focus Diesel 1.6 TDCi  115 Edge 5dr

£416 £421

 Lex says that diesel pump prices would need to rise from the current £1.47 per litre to £7.02 per litre (478%) to equalise the whole life cost of the Leaf and the Focus, all other things being equal. Alternatively, the price of the Leaf would need to fall by 37.2% by April 2016 relative to the price of the Focus to bring whole life costs into line, assuming the current £5,000 Government grant remains in place. If that was removed, the price would need to fall by 52.9%, all other things being equal, says Lex.

Potential ‘game-changing’ scenarios that, in theory, could rescue the plug-in vehicle market, according to Lex, include:

Frequent and sizeable increases in the fuel duty escalator Significant reduction in manufacturer list prices of electric vehicles Widespread adoption of battery leasing to minimise P11d A quantum leap in battery performance and costs Widespread imposition of emissions-related road charging schemes Sizable electric charging subsidies for homes and businesses Mandatory carbon reporting on transport emissions for businesses

 Chessman concluded: ‘The fleet industry’s carbon footprint will continue to fall for the foreseeable future, but we may look back and wonder what could have been given a little more encouragement for the green shoots of a potentially burgeoning electric vehicle market.’   

New Advisory Fuel Rates published by HMRC

HM REVENUE and Customs (HMRC) has published new Advisory Fuel Rates for the three months which started on Friday (June 1) and the they reveal a 1p a mile cut in the rate for diesel cars with engines above two litres and a 1p per mile rise in all rates for LPG cars.

Under HMRC rules, for one month from the date of change, employers may use either the previous or new current rates, as they choose.

Advisory Fuel Rates apply where employers reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel. They provide a range of rates based on engine size and fuel type, and when used, are deemed to be tax-free.

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The new rates with the rates for the three months March 1-May 31 in brackets are: Petrol

1400cc or less 15p (15p) 1401cc to 2000cc 18p (18p)Over 2000cc 26p (26p)

Diesel1600cc or less 12p (12p)1601cc to 2000cc 15p (15p)Over 2000cc 18p (19p)

LPG1400cc or less 11p (10p)1401cc to 2000cc 13p (12p)Over 2000cc 19p (18p)

ACFO in DVLA electronic driver licence checking talks

ACFO is holdings talks with the Driver and Vehicle Licensing Agency over how organisations will be able to check the validity of employee driving licences following changes due for implementation in 2014.

The Department for Transport has announced that as part of its ‘Red Tape Challenge’ to cut bureaucracy the regulation requiring drivers with a credit card-sized photo driving licence to hold a paper counterpart highlighting driving category exemptions and licence points will be removed. The measure, it is calculated, will save drivers up to £8 million.

Earlier this year ACFO welcomed the move, but warned that before the change was made a number of concerns highlighted by fleet operators needed clarification.

Checking the validity of employees who drive on business - either a company provided vehicle or their own - is a fundamental part of every organisations’ occupational road risk management policy.

ACFO chairman Julie Jenner said: ‘Most drivers do not carry the paper counterpart to their photo licence with them to enable employers to immediately check issues around driving compliance and infringements resulting in points.

‘However, while the removal of the regulation will reduce the amount of fraudulent activity by employees bent on trying to prove they have a clean driving licence, we need to know how information relating to points and driving class eligibility will be made available to employers responsible for ensuring occupational road risk management compliance.’

She added: ‘Directly checking individual driving licence validity and related details with the DVLA or via a third party checking agency is the only sure fire way to ensure at-work driving duty of care best practice is being followed.

‘But for employers that continue to self-check driving licences we need to know the procedures that the Government will put in place or whether they expect revenue-raising checks to be made with the DVLA online or by telephone.’

ACFO director John Pryor has already attended a meeting with the DVLA and representatives of the British Vehicle Rental and Leasing Association and the Freight Transport Association to discuss how businesses will be able to check employees’ driving licences.

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It is anticipated that June 2014 will see removal of driving licence counterparts with a new enquiry database launched at the end of 2013. Additionally from June next year a driver’s address will no longer appear on the credit card-style driving licence, although it will remain on the paper counterpart.

Pryor, group fleet and travel manager, Arcadia and Bhs Group, said: ‘The DVLA wants to know if the trade organisations, including ACFO, would be interested in working with it to access the new enquiry database that would negate the need for current driving licence counterparts.

‘While ACFO neither has the resources or the ability to develop a standalone electronic driver licence checking system, it is possible that we could work with the BVRLA and the FTA which already have systems in place and have indicated they would be interested in helping our members.’

However, the key issue for fleets is obtaining authorisation to meet data protection regulations from drivers to access their driving licence details. Currently, that it achieved through a signed mandate that is valid for three years.

Pryor said: ‘One option that we have put to the DVLA is that each driving licence contains a unique reference number. Drivers, on presenting the licence to their employers and signing relevant paperwork would be agreeing to the use of the number to obtain information from the electronic database.’

He added: ‘There is a long way to go before a solution is developed that is satisfactory to ACFO and its members. However, the fact that the DVLA approached ACFO to be involved in developing a solution underlines the importance it attaches to meeting the requirements of fleet operators.’

Kwik-Fit pilots TPMS service to keep fleets on the road

KWIK-Fit Fleet is set to further expand its product portfolio to businesses with the launch of a service to ensure vehicle Tyre Pressure Monitoring Systems (TPMS) are operating at maximum efficiency.

TPMS technology gives drivers an in-car dashboard warning when a loss of pressure occurs in any tyre. If tyres are not running at the pressure recommended by vehicle manufacturers then road safety, tyre wear and tyre life is compromised and fuel economy and vehicle emission suffer.

It is therefore incumbent on drivers to ensure that TPMS systems are correctly maintained so as to ensure peace of mind, maximise road safety and reduce vehicle operating costs.

A pilot service involving 50 Kwik-Fit centres across the UK is currently being established. It is anticipated that the service will be rolled out nationwide later this year and will also serve the retail sector as well as the fleet market.

Equipment has been sourced by Kwik-Fit that can read TPMS identification numbers and manually change the TPMS sensor number in the engine control unit. This will enable centres to replace sensors, rotate and reposition wheels as well as managing the switch from winter to summer tyres and visa versa.

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The European Union estimates that 9% of all road crashes involving fatalities are attributable to tyre under inflation and an estimated 41% of accidents with physical injuries are linked to tyre problems.

It is also calculated that average under inflation of 3-9 psi produces an increase in fuel consumption of up to 10% and a decrease in tyre life of 25%. Additionally, incorrect tyre pressures increase vehicle carbon dioxide emissions.

It is estimated that there are in the region of two million vehicles in the UK fitted with a form of TPMS. Typically cars fitted with run-flat tyres and prestige cars are equipped with the technology, although the Renault Laguna was the first high volume upper medium sector model to have TPMS as standard.

Now, in a two-year phase-in schedule starting from November 1, 2012 all new car models must be fitted with TPMS as standard and, from November 1, 2014, all cars manufactured must be equipped

Peter Lambert, fleet director for Kwik-Fit, said: ‘Tyre Pressure Monitoring Systems are an important vehicle safety aid. The fact they will become a standard feature on all new cars over the next two years means that it is essential that we are able to offer a service to customers that checks the systems are working correctly and rectify those that are not.

‘A properly serviced TPMS system provides peace of mind in terms of road safety and many further benefits to drivers, notably in terms of improved fuel economy and tyre life, knowing that a tyre is correctly inflated in line with manufacturer recommendations.

‘However, technology requires maintenance and TPMS systems will require checks and service support during the life of the vehicles. The technology is very sophisticated and if a dashboard warning light appears - either the low pressure warning icon or system failure warning icon - drivers have a duty and responsibility to act and not to ignore the warning.”

There are two types of TPMS fitted to vehicles: Direct sensors use a physical pressure sensor inside each tyre. The sensor will

typically send by radio frequency its individual ID code, tyre pressure, tyre temperature and condition of the sensor battery to the vehicle engine control unit.

Indirect systems, which are used on most run-flat tyres, measure the apparent tyre pressure by monitoring individual rotation speeds and the fact that an under inflated tyre has a slightly reduced diameter compared to a correctly inflated tyre. Data received from ABS and ESP wheel speed sensors is also used in the measurement process.

However, indirect systems have been ruled not to be accurate enough to achieve the objectives required to meet the standards set for mandatory TPMS fitment. Therefore, following introduction of the legislation all new car models will be equipped with direct sensors.

Direct systems are more accurate than indirect, however the batteries are typically designed to last for seven to 10 years of ‘normal motoring’ (8,000-10,000 miles per year). But, battery life longevity is largely unknown for higher mileage vehicles.

It is recommended that every time a tyre is removed the TPMS sensor is serviced, by replacing the items exposed to the elements, checking the internal components are transmitting correctly and the battery is still fit for purpose.

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Replacement sensors can vary from £50-£200 depending on make and model. However, the trade-off, if the technology is maintained correctly, is improved safety, reduced tyre wear and prolonged tyre life and improved fuel economy.

1link update features ‘most advanced SMR functionality’

A NEW update to the 1link Service Network features some of the most advanced service and maintenance management functionality available to UK fleets, according to developer epyx.

The e-commerce platform is used to buy service and maintenance by fleets totalling two million cars, vans, trucks and plant items from 16,000 franchise dealers, independent garages and fast fits.

Release 37 is said to be one of the most significant revisions undertaken in the platform’s 10-year history and has been developed with detailed input from both fleet and repairer clients. 

Key enhancements include: An improved scheduling module allowing fleets to manage, schedule and

book any service, MoT or inspection for any car, van, truck or item of plant. A new compliance module to help fleets control the full range of statutory

compliance that affects their vehicles - especially trucks, vans and plant items. For leasing companies the ability to create branded microsites for each of their

customers that allow service and maintenance bookings to be made directly into the platform. Each microsite can be fully customised.

New features added to the communication module to enable leasing companies to e-mail customers and drivers directly from the platform, creating a greater level of control over work direction.

 The use of 1link Service Network is continuing to grow, with Isuzu Trucks and BT Fleet among the latest signings to the platform.

FTA launches company car drivers’ handbook

THE Freight Transport Association has published a ‘Company Car Drivers’ Handbook’ to help plan and manage journeys.

Sponsored by Shell and endorsed by ACFO (Association of Car Fleet Operators), it contains essential information in an easy-to-read format ranging from driver licensing to performing vehicle checks, with tips on safe and fuel efficient driving, to name a few. 

There are blank pages for notes at the end of the book so drivers can keep useful details such as emergency telephone numbers for breakdowns, helping make the book unique to each company’s procedures. 

Sally Thornley, FTA’s general manager - compliance information services, said: ‘We have produced this publication as a direct result of requests from our members and it makes a welcome addition to the highly valued FTA ‘Goods Vehicle Drivers’ Handbook’ and ‘Van Drivers’ Handbook’.

‘Designed to be used in conjunction with an organisation’s specific policies, such as on mobile phone use or dealing with accidents, it should help anyone who drives a car for business purposes stay both safe and within the law.’

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The handbook is available now at www.shop.fta.co.uk priced at £3 for FTA members, £3.25 for non-members, with price reductions for multiple copies, or call 08717 111111, quoting code 5045.

Fleet solutions specialist spends £5m on new vehicles

FLEET solution providers Motiva Group has invested £5 million in new vehicles - with £3 million of that being spent in the North Staffordshire economy.

The Stoke-on-Trent group has bought more than 150 cars, vans and trucks from local franchises over the last six months.

These have been added to the rental portfolio the business runs under the M-Way brand, bringing its daily rental and short-term lease fleet to more than 650 cars and commercial vehicles.

Newcastle-on-Trent-based Greenhous Fleet Shop has supplied Vauxhall cars and vans, while Volkswagen vans and DAF trucks have come from Imperial Commercials in Cobridge.

DAF and Iveco trucks have been supplied by Guest Truck and Van in Etruria, and Cobridge dealership Mercedes-Benz of Stoke has delivered cars.

Peter Davenport, chief executive at Motiva Group, said: ‘It’s important for the whole of North Staffordshire that when firms get the opportunity to invest, they consider doing that in the local economy.

‘A lot of the £5 million we have spent will stay in North Staffordshire, filtering down into the manufacturing, service and retail sectors and helping to preserve jobs.

‘The majority of us here are North Staffordshire born and bred and we want the area to prosper. We feel a responsibility to build relationships with local suppliers and go that extra mile with them so we can keep money here.’

As well as M-Way rentals, the company specialises in fleet management and contract hire through its Motiva Vehicle Contracts division, and vehicle tracking technology through the Motrak brand.

The group now runs a contract hire fleet of more than 4,500 vehicles and it has access to more than 25,000 rental vehicles through partnership agreements across the country.

Broads Authority adds Toyota Hilux to fleet

THE Broads Authority, a member of the National Park family, has added nine Toyota Hilux Double Cabs to its fleet for use by rangers and construction maintenance teams across its sites around the Broads.

The Norfolk and Suffolk Broads is Britain’s largest protected wetland and third largest inland waterway.

With a need for reliable, excellent off road robust vehicles that meet the requirements of the Broads onsite teams, the organisation favoured the outright purchase of the Hilux HL2Double Cabs from Dingles Toyota in Norwich.

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The cars will be used by rangers in their bid to patrol the Broads sites and maintain the surrounding countryside. They will carry equipment for countryside management and attend events to tell people about the Broads and the work of the Authority. The construction and maintenance team undertake a variety of duties, from dredging mud to maintaining the moorings, and so again need vehicles that can accommodate tools with a good towing capacity.

Rob Holman, Director of Resources at The Broad Authority, said: ‘The Authority is striving to reduce its emissions at every opportunity and these vehicles will help us achieve that - and save money.

‘The new Hilux met all our operational requirements and will cut the equivalent of their own weight in emissions in a year compared to some of our existing vehicles.

‘They are much more fuel efficient and buying them, as opposed to leasing our current fleet, will save us a significant sum within a few years. It goes to show that going green is not always more expensive.’

The 4WD Toyota Hilux HL2 Double Cab costs £18,290 (commercial vehicle on the road price) has a 144bhp 2.5-litre D-4D engine with a combined fuel consumption figure of 38.7 mpg.

Santander wins awards for business and perk car drivers’ scheme

THE UK subsidiary of Spanish owned bank Santander has won Employee Benefits’ 2012 Award for the ‘most effective travel strategy for business and perk car drivers’.

The publication’s annual awards recognise a wide cross section of employee benefits. Santander won for its UK all employee car scheme and essential business user car scheme, which are managed by Zenith.

The other category finalists were GlaxoSmithKline for its company car scheme and KPMG’s CarFlex scheme.

Europcar guarantees diesel cars for corporate customers

EUROPCAR says it is helping its corporate customers meet their CSR and environmental objectives, while at the same time lowering costs, by guaranteeing availability of diesel vehicles for reservations.

Corporate customers booking compact and standard vehicles can now specify the fuel type as diesel at the click of a button. That, says Europcar, will not only enhance their environmental reputation but also enables them to make a positive choice to reduce their business travel costs.  

Ken McCall, managing director, Europcar UK Group, said: ‘By allowing corporate customers to choose a fuel type within a vehicle group, they can ensure they meet their emissions targets. They can also improve the fuel economy of their business journeys at a time there is increasing pressure on costs.’

Model update_______________________________________________

Order books open for new spec-busting Audi A3

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ORDER books for the third generation Audi A3 compact hatchback open this week with the German marques promising ‘an impressively strong specification and numerous technological advances’.

First deliveries of the three-door model are due in September with on-the-road prices starting at £19,205 for the 1.4 TFSI six-speed manual SE and topping out at £26,560 for the 1.8 TFSI seven-speed S tronic S line.

Three reworked engines are available at launch delivering efficiency gains averaging 12% - 1.4 TFSI (122 PS) and 1.8 TFSI (180 PS) petrol and 2.0 litre TDI (143 PS)

The 1.8 litre TFSI is linked as standard to a seven-speed S tronic twin-clutch transmission; the 1.4 litre TFSI and 2.0 litre TDI are paired with a six-speed manual gearbox.

Additional engine and transmission combinations, and new engines such as the 1.4 litre TFSI with innovative cylinder on demand technology, will follow, as will models equipped with quattro permanent all-wheel-drive.

Three specification levels - SE, Sport and S line - all including alloy wheels, air conditioning or climate control, MMI radio with electrically folding screen, Audi Music Interface iPod connection, Bluetooth interface and navigation preparation. Redesigned from the ground up following the principles of ‘Audi ultra' lightweight construction, the all-new A3 tips the scales 80 kg lighter on average than its predecessor, pegging the 1.4 TFSI model at just 1,175kg.

Suspension grades across the three specification levels are more interchangeable in the latest A3. As standard, SE models feature more comfort-oriented standard suspension, while Sport and S line versions move to a firmer sport setting which in S line models can be taken to an even more overtly handling-focused level with the no-cost option of dedicated S line sports suspension.

A3 Sport and S line customers can now, however, also take the opposite approach by combining the Sport and S line specification with the comfort of standard suspension.

New Chrysler 300C set for UK showrooms

THE 2012 Chrysler 300C, which goes on sale in the UK next week (Thursday, June 14), is new in every respect.

The car promises to be better built, safer, features more equipment and is more efficient than its predecessor. Powered by a 3.0 litre V6 turbo diesel engine, the model comes with a choice of two specifications.

Chrysler says the new engine benefits from Fiat Group Automobiles’ ground-breaking MultiJet 2 technology to provide what it claims is a ‘class-leading compromise between effortless power and fuel-saving efficiency’.

The 236 bhp unit produces 540 Nm of torque, peaking between 1,600 and 2,800 rpm. The engine returns 39.8 mpg on the combined fuel cycle and has emissions of 185 g/km.

Available in Limited (£35,995) or Executive (£39,995) guise, the 300C’s list of standard equipment includes: Rain Brake Support which helps keep the brake pads dry for better

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stopping power in poor conditions and is unique to the class; ventilated front seats and heated rears, Uconnect infotainment system with Bluetooth, dual-zone climate control, an 8.4-inch touch screen display, mirrors that darken automatically to limit headlight glare, cruise control, and 18-inch wheels.

New Mercedes GL 63 AMG set for 2013 UK arrival

THE new Mercedes-Benz GL 63 AMG will launch in the UK in 2013 with the marque promising that its seven-seater will be a standard bearer for luxury and refinement.

UK specification and pricing for the new high-performance SUV has still t be confirmed, but it will be powered by an AMG 5.5 litre V8 biturbo engine, which develops a peak output of 557 bhp and maximum torque of 760 Nm. Fuel economy is 22.9 mpg on the combined cycle with emissions of 288 g/km.

Power is transmitted to all four permanently driven wheels by the AMG SPEEDSHIFT PLUS 7G-TRONIC.

Ola Källenius, chairman of Mercedes-AMG GmbH: ‘The new GL 63 AMG completes our performance-oriented all-wheel drive offering. In addition to the ML 63 AMG all-rounder and the recently unveiled, characterful G 63 AMG the GL 63 AMG places particular emphasis on dynamism and style. Combining the first-rate comfort of the S-Class with the performance of an AMG sports saloon, the GL 63 AMG is unique in its segment.’

Manufacturer news__________________________________________

Jaguar tops vehicle ownership survey for the first time

JAGUAR has claimed top spot in the annual J.D. Power and Associates/What Car? UK Vehicle Ownership Satisfaction Study for the first time.

In the 2012 study, the British manufacturer overtook Lexus, which slipped to joint second place with Skoda, after topping the results for the past 11 years. However, Lexus did win two of the model categories with the IS (compact executive) and RX.(large SUV).

Jeremy Hicks, managing director of Jaguar Land Rover UK, said: ‘To be awarded the number one spot by JD Power is a huge honour - not only for the staff of the 90 Jaguar dealers in the UK but for the circa 2,000 employees at the Castle Bromwich factory and the talented designers and engineers based in Warwickshire whose determination, attention to detail and commitment to quality have delivered this result.’

Last year Jaguar sold 13,787 cars in the UK of which 10,632 were sold into the private sector and 3,155 to fleets. In the first quarter of this year Jaguar has sold 4,020 cars in the UK. Globally Jaguar sold 50,678 cars last year.

Honda was fourth in the rankings, which are drawn from the evaluations of almost 18,000 online interviews of UK car owners. Mercedes-Benz was ranked fifth, while Toyota, Audi, Volkswagen, Volvo, BMW, Nissan and Land Rover in 12th spot were all placed above the industry average.

Chevrolet was at the bottom of the list in 27th spot with Vauxhall 26th, Fiat 25th, Suzuki 24th, Renault 23rd, Mitsubishi 22nd and Hyundai and Citroen in equal 20th spot.

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The study also revealed the ratings of 118 individual models, with the Kia Sportage posting the top score for customer satisfaction followed by the Jaguar XF and Toyota Prius. The Vauxhall Vectra was ranked bottom of the model list.

The winners in each model category were: Toyota iQ was the best city car, Honda Jazz the best supermini, Skoda Octavia the best small family car, Toyota Prius the best family car, Lexus IS the best compact executive, Jaguar XF the best executive car, Volkswagen Scirocco the best sports and cabriolet car, Mercedes B-Class the best MPV, Kia Sportage the best compact SUV and Lexus RX the best large SUV.

The study measures customer satisfaction with the vehicle and dealer service, which is based on evaluation of 66 attributes grouped in four key measures. In order of importance, they are: vehicle appeal (31%), which includes performance, design, comfort and features; vehicle quality and reliability (22%); ownership costs (25%), which includes fuel consumption, insurance and costs of service/repair; and dealer service satisfaction (22%).

Light commercial vehicles_____________________________________

Jaama partners with Van Excellence to promote best practice

FLEET, leasing and rental management software supplier Jaama has become one of the first organisation’s to partner the Freight Transport Association’s Van Excellence scheme.

Jaama’s Key2 Vehicle Management system is being used by a number of light commercial vehicle fleet operators that have already joined the Van Excellence programme.

Van Excellence is an industry-led initiative to raise standards and improve the image of the UK’s growing van sector and includes a tough accreditation system and a strict code of practice, and is backed by many household names.

The launch of Van Excellence in 2010 has been widely welcomed in the industry, and many businesses have joined the scheme. Van Excellence is a standard set by van operators for use by van operators, sharing and formalising working practices already used by leading companies in the sector.

In the 18 months since the scheme launched, 27 fleets have achieved accreditation to the Van Excellence Code, with a further 80 having expressed interest or undergoing accreditation. The total number of vans operated by those organisations is 137,500.

There are, to date, 14 organisations that have joined the Van Excellence programme as partners and are suppliers to van fleets. Partners promote the Code of Van Excellence amongst their customers and encourage its standards to be adopted and followed throughout the light commercial vehicle sector. 

Among Jaama customers that have achieved Van Excellence as determined by the ‘Van Excellence Code’ are: Amey, DHL International (UK), Enterprise Managed Services, Norse Commercial Services and South Central Ambulance Trust.

Martin Evans, Jaama’s sales and operations director, said: ‘Technology is a major aid to making fleet administration easier for fleet managers and ensuring vehicles are operating in tip-top condition and comply with legislation.

‘Jaama is the industry’s benchmark for quality and innovation and is established as the UK’s most recommended software supplier in the fleet, leasing and hire markets.

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‘As well as Key2 technology delivering financial savings and improved operating efficiencies, businesses across the public and private sectors are generating administration benefits as fleet department employees become more productive. This means they are able to turn their attentions to other more strategic management areas as a consequence of the time savings generated by Key2.’

Mark Cartwright, the FTA’s head of vans and light commercial vehicles, said: ‘Van Excellence is all about recognising excellence across the sector. Jaama’s support of Van Excellence demonstrates their commitment in supporting van operators and FTA is delighted to welcome the company as a Van Excellence partner.’

Citroën offers four-year LCV warranty ‘special’

CITROËN LCVs are now available with a new no-cost ‘Upgrade to Business Class’ extended four year warranty, servicing and Citroën Assistance package.

Participating Citroën dealers and Business Centres are offering the no-cost ‘Upgrade to Business Class’ package on any Euro5 Citroën Nemo, Berlingo, Dispatch or Relay ordered by qualifying customers and delivered by July 31, 2012.

Scott Michael, Citroën’s commercial vehicle operations manager, said: ‘Prior to the introduction of the ‘Upgrade to Business Class’ programme we carried out extensive consultation with our dealers to develop the optimum package to meet the needs of our LCV customers - particularly small and medium enterprises (SMEs). 

‘Now, with ‘Upgrade to Business Class’, Citroën customers are able to purchase not just competitively priced, well-equipped LCVs with class-leading fuel efficiency and low emissions, but they can also take advantage of all the benefits of a comprehensive four-year motoring package.’

The no-cost Citroën ‘Upgrade to Business Class’ package includes: Four years/60,000 mile servicing (whichever comes first) Four years Citroën Assistance (provided by the AA), with Roadside

Assistance, At Home Assistance, Recovery, Onward Travel and European cover

Warranty extension to four years/120,000 miles (whichever comes first) The ‘Upgrade to Business Class’ package can also be used by Citroën LCV

customers in conjunction with a Citroën finance lease product.

Speed limiter trial suggests 37% MPG fleet saving

A SPEED limiter trial by safety, security and telematics provider Cobra UK suggests the technology could help fleets reduce fuel costs by nearly 40%, and help employers meet duty of care requirements by protecting their drivers.

In the independent test, Cobra achieved a 37% reduction in fuel use with its speed limiter; a figure which it believes could be further improved with a professional driver at the wheel.

Cobra’s speed limiter was restricted to 56 mph and fitted to a 2.0 diesel Volkswagen Transporter Sportline van. Over a 260-mile trip on semi-urban parkways, city roads and motorways in the East Midlands, the van returned 43.91 mpg. With the limiter removed and driving the identical route at usual motorway speeds, the fuel economy figure dropped to 32.01mpg.

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That meant a fuel cost saving of £16.86 with the limiter fitted for the trip alone, which could equate to an annual saving of £1,686 on a Transporter van covering 26,000 miles each year.

Whatever a fleet’s size, such a fuel saving cannot be ignored and should be a crucial consideration when looking at reducing whole life costs, according to Cobra. Protecting a driver while they are using a vehicle on company business is also paramount to any modern day company’s health and safety strategy, and a speed limiter goes some way to helping protect drivers’ licences, by reducing their speed and their chances of being involved in an accident.

Fleets will also benefit from lower emissions, as well as improved engine life. Restricting a light commercial vehicle to a maximum speed helps reduce the stress and strain on a vehicle’s engine, and given that many light commercials run on a double shift or seven days a week, a speed limiter can help protect the operator from expensive unplanned maintenance work.

Cobra UK managing director Andrew Smith said: ‘Any light commercial that is regularly driving on motorways, dual carriageways and A and B roads should see an impressive reduction in fuel running costs. Our test shows a 37% reduction in fuel use at a restricted 56 mph, but we estimate by setting the limiter at 70 mph, operators will see a 15-20% reduction in fuel use.’

Speed limiters can be fitted to the majority of light commercials up to and including 3.5 tonnes and are programmable to 56 mph, 60 mph and 70 mph. The limiter is compatible with Euro 4 and Euro 5 petrol and diesel engines, and comes with a two-year parts warranty.

In a bid to highlight the benefits of speed limiters, Cobra is offering its speed limiter at a special price of £249 including fitting, saving customers at least £50. The offer is restricted to light van fleets operating 25+ vehicles, and orders must be received by 5pm on July 31, 2012.

Mercedes-Benz Vito measures up for Montgomery

SIZE really does matter to Montgomery Refrigeration when it comes to its service vans - and the availability of an extra-long body variant helps to explain why the Belfast-based company relies on the Mercedes-Benz Vito. Montgomery Refrigeration has just taken delivery of the first vehicles from an order for 24 new Vito 113CDIs, which are being supplied by Newtownabbey dealer Mercedes-Benz Truck & Van (NI). All are the subject of a contract hire agreement with Mercedes-Benz CharterWay, a brand of Mercedes-Benz Financial Services. Most of the company’s new 2.8 litre vans are long-bodied, but eight are extra-long with a cargo length of 2,897mm, which can be extended by a further 200mm thanks to the through-loading facility beneath the front seats.  Refrigeration service manager Calvin Irvine said: ‘This means our refrigeration engineers can carry three-metre lengths of copper pipe to jobs, which they couldn’t do in the similar-sized vans by two other manufacturers that we operated previously.’  Northern Ireland’s leading supplier and installer of commercial and industrial refrigeration equipment currently runs a total of 35 Mercedes-Benz vans.

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Residual value update________________________________________

Used car values bounce back with fleet models hitting new peak…

THE used car market recovered strongly from the April downturn as average values improved by nearly 9% across the board last month and prices for fleet and lease vehicles reached record levels, according to BCA.

Fleet values reached a new high point, averaging nearly £7,934 (+7.9% versus May 2011) as BCA sold a slightly richer mix of cars during the month.

Month-on-month values improved in all three main market-sectors in a complete reverse of April’s figures. Fleet and lease values improved by 3.8% month-on-month up from £7,640 in April, part-exchange values saw a modest rise of £35, equivalent to an improvement of 1.2%, while values increased by over £2,500 in the nearly-new sector to £20,470 - an increase resulting from changing model-mix in a low volume sector.

Across the board, values improved from £5,599 to £6,098, reversing two months of declines and returning to an average value broadly on a par with those seen between November 2011 and February of this year.

Used cars averaged 95.4% of CAP ‘clean’ in May, up by nearly a point compared to April, while average age and mileage dropped slightly over the month, down to 62.5 months and 59,600 miles.

Year-on-year, May 2012 is a substantial 5.3% ahead of 2011, while average age and mileage have climbed by 0.6% and 1.7% respectively in the same period.

BCA’s communications director Tony Gannon said: ‘While May posted significantly improved figures compared to April, the market is now moving into a period over the summer months where we expect values to remain relatively flat.’

He added: ‘Families are now thinking about paying for their summer holidays, and while the Diamond Jubilee is now behind us, we still have the distractions of the London Olympics and the European Football Championships to come. History tells us these types of events have short-term effects on the retail sector and therefore impact on demand in the wholesale car market.’

Fleet and lease cars averaged £7,934 in May, up 3.8% month on month and the highest average monthly value recorded since BCA began monthly reporting in 2005. CAP performance was marginally down at 95.73% with the average age and mileage barely changing over the month. Performance against original MRP (Manufacturers Retail Price) was level month-on-month at 39.6%.

…but fleet sector used car values fall 1.2% at Manheim

AVERAGE used car values in the fleet sector fell 1.2% (£78 to £6,634) in May, according to the latest data from Manheim.

Average age remained the same at 50 months and average mileage increased by 644 miles to 59,687 compared with April.

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Overall average wholesale values were down 5.1% (£380 to £7,121) when compared with April and up 4.6% (£313) when compared with May 2011.

Although the overall average value fell by only 1.2% there were some significant movements in values within some vehicle segments.

For example: superminis fell 3.6% (£153 to £4,083), compact executives were down 4.8% (£439 to £8,723) and MPVs were down 10.3% (£693 to £6,011). Meanwhile 4x4s increased in value by 3.9% (£424 to £11,391) and coupes were up 6.5% (£727 to £11,832).

Daren Wiseman, valuation services general manager, Manheim Auctions said: ‘The fall in fleet values of 1.2% is surprisingly encouraging with market and economic pressures still present.

‘This fall in values represents no more than the seasonal norm and must be seen as a positive in such a challenging trading environment.

‘We are now seeing renewed interest in 4x4s as prices have now reached a point at which they are perceived as excellent value for money. However a word of caution; we still advise that values and reserves are set realistically in this sector in order to generate retail interest from a market that has limited appetite for them at the moment.

‘We look forward to June with an air of trepidation as we now enter a busy period of events with national interest and we can only estimate the impact and diversion of retail interest and the knock on effect on wholesale demand during the coming weeks.’  

Politics and regulation________________________________________

Road tax rises planned as Government loses cash in ‘green’ move

THE Government is considering reforming road tax, which could mean rises in Vehicle Excise Duty rates, as it loses cash as an increasing number of motorists opt for low emission cars.

Another alternative believed to be under discussion by HM Treasury is the return of a one-off ‘showroom tax’ payable when new models are bought, which could replace VED.

However, David Brennan, managing director of vehicle leasing and fleet management company LeasePlan, said any VED revision would be ‘clumsy and counterintuitive’.

He said: ‘We are very disappointed to learn that the Government is considering changes to VED. Any revision that penalises drivers for opting for lower emissions vehicles flies in the face of conventional wisdom and shows complete disregard for the ongoing innovations throughout the automotive industry.

‘It would appear that tax revenue in this sector is being put ahead of genuine environmental progress in the industry and any such measures could further hamper the weak UK economic recovery. With one in 10 vehicles on Britain’s roads being driven by business drivers, additional VED costs have the potential to damage UK industries which are reliant on keeping their people mobile.

‘The benefit-in-kind taxation exemption threshold was pushed down to 99 g/km in the most recent Budget and this level is already a suitable challenge to car manufacturers and environmentally-conscious consumers, without further revisions or additions.

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‘Industry and driver efforts to move towards more efficient and environmentally-friendly vehicles should be applauded, rather than simply viewed as a lost revenue opportunity. Motorists are already feeling the squeeze and paying a huge share of tax - this move would tighten the noose further.’

The current graduated VED system means that drivers of low emission vehicles pay less road tax than drivers of high emission vehicles. With an increasing number of low emission models reaching showrooms it means that HM Treasury is losing millions of pounds in revenue.

A report published last month by the RAC Foundation (Digest: May 17), suggested that the Government faced a potential £13 billion black hole as income from fuel duty and Vehicle Excise Duty falls as demand for more fuel efficient, low emission cars and electric vehicles rises.

Now a report in The Daily Telegraph (May 31) says that Government officials have started private discussions with the motor industry and drivers’ groups about an overhaul of VED rules.

Chloe Smith, a Treasury Minister, was reported as telling the House of Commons that ministers were ‘considering whether VED should be reformed to support the sustainability of public finances and to reflect the improvements in vehicle fuel efficiency’.

A spokesman for HM Treasury told the paper: ‘There are no proposals on the table and we will be listening to motoring groups.’

Competition Commission to investigate private insurance market

THE Office of Fair Trading (OFT) has provisionally decided to refer the private motor insurance market to the Competition Commission after it found evidence that insurers compete in a dysfunctional way that may push up premiums for drivers by £225 million a year.

The OFT found that private motor insurance premiums paid in the UK rose by around 12% between 2009 and 2010, and by a further 9% in the first three quarters of 2011. The OFT started its investigation following a public outcry over the premium rises and decided that a key reason for the increase appeared to be a rise in the costs of personal injury claims.

After a road traffic accident, the at-fault driver’s insurer is responsible for meeting the cost of repairs and replacement vehicles for the not-at-fault driver.

However, in its market study, the OFT found evidence that insurers of at-fault drivers have little control over the way in which repairs and vehicle replacement services are carried out or the associated costs. It found that the system inflated the average cost of a replacement vehicle and repairs by more than £700 per incident.

Instead, insurers of the not-at-fault driver and others, such as brokers, credit hire organisations and repairers, can take advantage of the lack of control as an opportunity to generate revenues through rebates and referral fees and so inflate the costs of insurers of at-fault drivers, said the OFT.

That, said the OFT, was an inefficient way for the sector to operate, raising the total costs for providing private motor insurance which drivers end up paying.

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The OFT’s decision was immediately welcomed by Louise Ellman, chairman of the House of Commons Transport Committee.

The Committee investigated the escalating cost of car insurance in autumn 2010 and Ms Ellman said: ‘The OFT’s provisional decision to refer the highly dysfunctional UK market in private motor insurance and related goods or services to the Competition Commission for full investigation is a major step forward.  ‘Like the OFT, we found evidence to support the view that various features of the private motor insurance market prevent, restrict or distort adequate competition in ways that do not deliver a fair deal to motorists.

‘I look forward to the Competition Commission driving a process of market reform that will start to deliver a fair deal for motorists. However, this investigation will only tackle part of the problem created by the way in which many insurers, claims management firms, solicitors and others exploit every opportunity to generate revenues through referral fees and personal injury claims that inflate the premiums all motorists have to pay.’

On the basis of the evidence collected, the OFT said it had reasonable grounds to suspect that there were features of the private motor insurance market that prevent, restrict or distort competition.

The market would work better if insurers competed primarily on the quality and value of the service each provided to insured drivers, rather than focusing on gaining the competitive edge through raising rival insurers’ costs and increasing their own revenues.

The study provisionally found that practices appeared to inflate the cost of replacement vehicles provided to not-at-fault drivers, making it on average £560 more expensive each time.

The OFT credit hire organisations tended to charge higher daily hire rates, in exchange for a referral fee of between £250 and £400 per car hire. Additionally, the OFT said that not-at-fault drivers appeared to receive replacement vehicles for longer periods than necessary, leading to inflated bills for the at-fault driver’s insurer to cover.

The report also provisionally found that the practices appeared to inflate the cost of repairs to not at-fault drivers’ vehicles by £155 on average each time. The OFT said that certain insurers received referral fees and rebates from repairers, paint suppliers and parts suppliers. Subsequently the fees and rebates appeared to be passed on to insurers thus increasing the repair bills being passed to the at-fault driver’s insurer.

Additionally, certain insurers had agreements with their approved repairers to charge higher labour rates when repairing the vehicle of the not-at-fault driver which they insured, leading to higher bills being passed to the at-fault driver’s insurer, said the OFT.

John Fingleton, chief executive of the OFT, said: ‘Competition in this market does not appear to work well for drivers. We believe the focus that insurers have on gaining the competitive edge through raising their rivals’ costs means that drivers pay more than they need to for their motor insurance policies.

‘We have provisionally decided that a more in-depth investigation by the Competition Commission, which has a range of additional tools at its disposal, may be necessary.’

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The OFT expects to reach a final decision by October.

Unanimous support for new driving offence

THE introduction of a new driving offence, causing serious injury by dangerous driving, is supported by 94% of drivers, according to a new poll.

Road safety charity IAM surveyed more than 1,400 people with just 6% saying the new law was a bad idea.

Causing serious injury by dangerous driving forms part of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which was passed last month and is amendment to the 1988 Road Traffic Act. The punishment could be up to five years in jail.

Until introduction of the new law, when someone drives recklessly and causes very serious injury as a result, they are often charged with dangerous driving. However, the charge doesn’t take into account the severity of the outcome. The new law would reflect driver recklessness that causes life changing injuries, with even tougher penalties attached.

When asked whether sentences should be based on the offence itself, or the outcome of that offence, for example causing a life-changing injury, the figures were close. While 53% of those questioned thought the sentence should be based on the offence itself, 44% thought sentences should be based on the outcome.

IAM chief executive Simon Best said: ‘People want to see tougher penalties to deal with situations where the victim of a road accident is seriously injured. But the Government needs to ensure that punishments for dangerous driving accurately reflect the severity of the offences committed.’

Alcohol sensors should be standard in cars, says ex-drugs czar

ALCOHOL sensors should be fitted in every car, according to Professor David Nutt, a former Government drugs adviser.

He has suggested that all drivers should breathe into a device and be within the legal drink-drive limit before their cars will start.

Nutt, president of the British Neuroscience Association and a professor at Imperial College, London, was sacked three years ago from his post as the Government’s drugs czar after clashing with ministers.

The drink sensors in cars are among seven proposals to reduce the harm caused by alcohol in Nutt’s new book, according to The Daily Telegraph (Friday, June 1).

Dealer news________________________________________________

Economy puts brake on revenues at Caffyns

DEALERSHIP group Caffyns has reported a slump in turnover due to challenging economic conditions and the closure of some dealerships.

Revenues for the 12 months to March 31, 2012 fell to £170.2 million (2011: £201.5m), although pre-tax profits increased to £1.46m from £270,000.

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During the year, Caffyns closed two underperforming sites and three further dealerships were consolidated into adjoining operations to reduce costs and increase profitability. Central support service costs were further reduced by more than £600,000.

In a statement the company said: ‘The major restructuring exercise has produced a stronger core business with higher quality, more concentrated businesses and a strong balance sheet.’

Chief executive Simon Caffyn said: ‘We have completed a large part of our restructuring and are now in a much stronger position.  

‘However, we have not yet seen signs of a sustainable improvement in consumer confidence. With difficult market conditions likely to be with us for some time to come, and continuing uncertainty over future events in Europe, we continue to take steps to improve operating performance. We are strategically well placed with resilient premium franchises to take advantage of any improvement in economic conditions.’

General motor industry news__________________________________

People on the move__________________________________________

Infiniti appoints new chief

INFINITI, the luxury car ram of Nissan, has appointed Johan de Nysschen to run the business with effect from July 1.

De Nysschen, currently president of Audi of America and with the German brand for 19 years, becomes senior vice president of Nissan Motor Company in charge of the Infiniti division. He will report to Andy Palmer, Nissan Motor Company executive vice president, product planning, business strategy, marketing communications and responsible for the Infiniti division.

De Nysschen will be located at Infiniti’s new global headquarters in Hong Kong, which officially opened last month.

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