VOSA issues contract for new testing centres Will being an authorised testing facility bring commercial benefits? page 3 Do happy customers = economic recovery? A customer satisfaction survey says a lot about the state of the economy page 5 A new standard in technical service It’s here: a qualification for technical customer service advisors page 7 Airports hear the case for better car rental Just 1% of air passengers use car rental – meaning huge potential for growth page 3
— Promoting responsible road transport since 1967 —
The newsletter of the British Vehicle Rental and Leasing Association
VOSA issues contract for new testing centresWill being an authorised testing facility bring commercial benefits?page 3
Airports hear the case for better car rental Just 1% of air passengers use car rental – meaning huge potential for growth page 3
TfL ‘will fund electric vehicle charge points’Transport for London agrees rental has a key role to play in boosting the use of electric cars page 4
Do happy customers = economic recovery?A customer satisfaction survey says a lot about the state of the economy page 5
2010: not a good year to be a manufacturer Fleet purchases will rise in significance as post-scrappage scheme retail sales look set to slide page 6
A new standard in technical service It’s here: a qualification for technical customer service advisorspage 7
BVRLA leasing members continued to make impressive progress in reducing their carbon impact last year, cutting average emissions and mileages.
The companies, which operate a combined fleet of around 1.6 million cars, saw the average CO2 emissions of vehicles brought on fleet in 2009 fall to 144g/km. This represents a fall of about 4% from the 149.9g/km reported for vehicles added to fleets in 2008 and is 9% down on the 2007 figure.
The reductions obtained by BVRLA members continue to outstrip those seen across new registrations as a whole. According to the Society of Motor Manufacturers and Traders, average new car emissions in 2009 fell to 149.5g/km.
“Our members continue to lead the way in lowering road transport emissions and disproving the myth that company cars are gas guzzlers,” said BVRLA chief executive John Lewis. “The government’s emissions-based tax regime has given fleets and their drivers a great incentive to drive cleaner cars and the message is clearly getting through.”
Leasing companies also reported a 2% fall in the average contract mileage for cars added
to fleets in 2009, down to 19,183 miles from the 19,617 seen in 2008. The decline in average mileages has lost some of the momentum seen in earlier years, perhaps as a result of some fleet vehicles being driven more in the recession.
According to BVRLA estimates, the association’s leasing members were responsible for nearly half of all new fleet car registrations in 2009, spending more than £7bn with car manufacturers. New cars brought on fleet in 2009 had an average retail list price of £19,698.
“The high-profile scrappage scheme has provided a valuable boost to the car industry in its time of need, but it is a one-off,” said Lewis.
“These figures show just how vital the leasing market is to carmakers and explain why they are all investing so heavily in their fleet sales operations this year.”
Overall, new fleet registrations fell to 882,491 last year – their lowest level in 15 years – as companies extended contracts or decided not to replace cars. The BVRLA expects them to surpass the million mark again this year as the economy recovers and fleets replace extended contract vehicles. n
BVRLA News
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Green shoots? As the leasing sector looks forward to better prospects in 2010 it can congratulate itself on its progress towards cleaner, greener motoring
So the UK economy has finally emerged from its worst recession since the 1920s. This may have brought some sighs of relief, but they are very quiet ones. To use a medical analogy, the patient may be out of intensive care, but is still bedridden and in need of round-the-clock support.
No one in the vehicle rental and leasing sector is under any illusions that this year is going to be anything other than tough, with customers demanding savings in costs, efficiency and emissions.
But, looking on the bright side, after two years in the Credit Crunch trenches, our industry is battle-hardened and ready for action.
BVRLA News articles may be used copyright free by members provided that an acknowledgement is given.
The Vehicle and Operator Services Agency (VOSA) has published its long-awaited contract for authorised testing facilities (ATFs). VOSA has also produced a document designed to persuade garages and other vehicle operators of the commercial benefits of converting their premises into ATFs.
Although the BVRLA supports the principle of testing and inspection taking place at the same location, it questions whether the commercial benefits are enough to convince its members.
The association has expressed concern to VOSA that repairers who currently take vehicles off their own premises to be tested on behalf of their customers might lose out. These businesses usually charge for their time on an hourly basis. If the repairer becomes an ATF this lost income would not necessarily be covered by the optional pit fee, capped at £50 a test, which it could charge.
The BVRLA considers the contract to be fair to ATF operators with regard to VOSA examiners failing to attend test bookings. A refund of the reservation fee will be given to the ATF if the examiner arrives more than two hours after the agreed start time for the test. If the examiner fails to attend at all, compensation will be paid and a replacement test, to take place within three days, will be offered.
However, the association believes the contract does not address whether enough ATFs will be minded to offer third-party tests rather than just test their own vehicles. This could adversely affect its members, who would probably have to travel farther to find a test site.
The BVRLA’s Commercial Vehicle Committee is set to discuss these concerns with VOSA on 11 February. Further information about VOSA’s ATF plans can be found on the ‘VOSA lobbying’ page of the BVRLA website. n
www.bvrla.co.uk
VOSA’s ATF contract fails to make a business case
BVRLA members encourage airports to see car rental’s untapped potentialWith only 1% of the airline passengers who pass through UK airports using car rental services, the opportunities for growth have not gone unnoticed by the BVRLA.
Last year the association started discussions with Manchester Airports Group (MAG), the largest UK-owned airport operator, on new ways to promote car rental (see BVRLA News, November 2009). In addition to Manchester Airport, MAG runs East Midlands, Bournemouth and Humberside airports – serving more than 28 million air passengers each year.
So far this year BVRLA members involved in the project have met with MAG and Bristol International Airport to highlight the importance of making airport-based car rental services more user-friendly.
According to the BVRLA, the airports represented at its meetings have enthusiastically welcomed the initiative, especially as car rental often provides the most cost-effective and convenient means of onward transport for air passengers.
The BVRLA believes that travellers need to be given better information about car rental. In its absence they often simply ask friends or family to pick them up from the airport or get a taxi.
To help increase the use of car rental services, the BVRLA aims to work with airports to promote car rental in baggage halls and other waiting areas. The association also wants to ensure that airports recognise car rental as a key means of improving their profitability. n
Block exemption looks set to stay for another three years
The BVRLA has persuaded Transport for London (TfL) and the Office for Low Emission Vehicles (OLEV) of the invaluable role the short-term hire sector can play in helping motorists use electric vehicles.
The association recently led a delegation of its members to meet TfL, the capital’s transport authority, to discuss how they could access funding for charging points. Together they convinced TfL of the role car rental can play in providing:
❱ an opportunity for motorists to try an electric vehicle with no risk before deciding to purchase ❱ an electric rental car, as an alternative to second car ownership, for occasional use.
TfL confirmed that it plans to match-fund rental companies that install charging points if it succeeds in its bid for a share of the government’s £30m Plugged in Places fund to develop infrastructure for electric vehicles. It expects to know
in March if its bid was successful, but has not yet finalised the details of how it would work with rental companies to implement the scheme.
Charging points vary in cost and speed of charge – from a domestic socket which for about £250 can be installed at home for overnight charging, to a rapid 30-minute charger. The rapid chargers are probably more practical for a rental company but, at £25,000 to £50,000, are prohibitively expensive for most operators. More viable are off-street ‘smart boxes’ that can charge a vehicle in 3-8 hours. These cost between £1,200 and £2,000 to purchase and install.
OLEV, which oversees the Plugged in Places fund, was initially sceptical that charging points in car rental premises would be available to the public. But after the BVRLA explained that, on average, each of its members’ rental vehicles was used by 55 individuals during its typical on-fleet lifetime of six months, OLEV agreed to support match-funding.
TfL is aiming to have 25,000 charging points in London by 2015. It expects most to be in workplace car parks. The BVRLA has suggested that members with corporate customers based in London consider raising awareness of this opportunity.
One North East, the regional development agency for the North East of England, has also submitted a bid for Plugged in Places funding. It is aiming to install 620 charging points in the region this year.
After the successful bids for Plugged in Places funding are announced in March, a second round of bids will be accepted in June. Information on Plugged in Places and Winning the Argument, a document for BVRLA members to use when encouraging regional development agencies to adopt schemes similar to TfL’s, can be found on the ‘Low-carbon vehicle technology’ page of the association’s website. n
www.bvrla.co.uk
Transport for London promises to help fund members’ electric vehicle charging points
In a recently published draft regulation the European Commission confirmed that it intends to extend the motor trade’s block exemption from normal EU competition rules for a further three years.
The Commission also announced its intention of encouraging competition in the after-sales market – a move welcomed by the BVRLA.
The BVRLA has advised the Commission not to dilute any of the regulatory protection currently enjoyed by its members, in particular their ‘end user’ status. So far the association has been reassured by reference to rental and leasing companies as end users in the guidelines that accompany the proposed changes.
The BVRLA was also gratified to see that the Commission’s proposals for vehicle repair and maintenance services reflect its long-running calls for greater competition in the sale of parts and free and unfettered access to manufacturers’ repair data.
These developments would help smaller vehicle repair businesses, creating a more level playing field in the after-sales market. This would, in turn, increase choice for both BVRLA members and their customers when getting their vehicles serviced.
The full text of the BVRLA’s response to the Commission’s proposals can be found on the ‘Consultation responses’ page of the association’s website. n
www.bvrla.co.uk
The Government Equality Office has backed the BVRLA’s call to preserve rental companies’ discretion to use differential pricing when renting to younger or older drivers.
The Office endorsed this position in its policy statement on the Equality Bill, being debated in Parliament, which sets out to ban unjustifiable age discrimination in the provision of goods and services. Without an exemption, rental companies would be obliged to rent vehicles to younger drivers – the most accident-prone group – on the same terms as maturer, more experienced drivers.
The GEO has acknowledged the unfair situation this would create and accepts that rental companies should be able to pass on the higher costs of renting to younger and older drivers. n
Does customer satisfaction reveal better economic times ahead?Could fleet operators’ satisfaction with the service they receive from their leasing companies prove to be a bellwether for the state of the economy?
Perhaps. The UK’s leading fleet customer satisfaction index, the fleeteye CSi survey (formerly known as Landmark), has closely tracked the fortunes of the country’s economy over the past five years.
Fleeteye, which continuously monitors scores from more than 600 fleet operators, found overall satisfaction ratings to be at a five-year high of 81.4% in 2007, before the credit crunch began.
The average scores awarded by customers – covering service elements such as ordering, invoicing, driver satisfaction and communication – then plunged to an all-time low of 75.7% last August. Scores tracked downward ahead of the economy’s official entry into recession in 2008, mirroring the impact of the frozen credit markets on finance-led businesses and their customers.
But, according to Rick Yarrow, managing director of Experteye Research Ltd, which operates the fleeteye survey, scores have levelled out in recent months and are now showing signs of an upturn in satisfaction.
“The survey reflects the continuing state of flux of the vehicle leasing industry as both suppliers and operators monitor relationships and review their strategies for the future,” said Yarrow.
“It currently indicates that 40% of operators are reviewing their leasing providers, which is itself an indication of how deeply the recession has affected overall satisfaction levels. But perhaps signs of improvement being shown in the latest scores prefigure operators’ increasing expectation that the economic outlook will improve in the coming months.”
The latest survey findings indicate that fleet operators are most satisfied with the vehicle ordering and delivery process and the ability of leasing companies to deliver against agreements. They are least satisfied with the quality of account management and the level of communications. n
www.fleeteye.net
80
79
78
77
76
75
74
Vehicle order and delivery process 81.1%
Delivering against agreements 80.2%
Products and services 79.3%
Invoicing 78.8%
Overall driver satisfaction 78.5%
Quality of reports and data provided 76.9%
End of contract process 76.4%
Day-to-day management of fleet 76.1%
Account management 72.6%
Communications 72.4%
source: fleeteye CSi survey
Jan
Feb
Mar
Ap
ril
May
Jun
e
July
Au
g
Sep
Oct
No
v
DecS
atis
fact
ion
(%
)
Customer satisfaction with fleet operators in 2009
Average scores in 2009 suggest that the fall in customer satisfaction may have bottomed out
source: fleeteye CSi survey
82
81
80
79
78
77
762005 2006 2007 2008 2009
Sat
isfa
ctio
n (
%)
Customer satisfaction with fleet operators, 2005-2009
80.�%
81.3% 81.4%
79.�%
77.2%
Satisfaction with fleet operators, as measured by the fleeteye CSi survey, has tracked the performance of the economy
Customer satisfaction with fleet operators by activity
Customers are most satisfied with vehicle ordering and delivering against agreements; least happy with account management and communications
The UK economy finally returned to growth in the last quarter of 2009, after six consecutive quarters of recession. However, the growth stood at a miserly 0.1% and could yet be revised downwards as the Office for National Statistics gets more numbers in.
Most economists agree that any recovery will be slow and fragile. According to the CBI, the country is roughly 10% poorer than it was in early 2008 and won’t recover this lost ground until 2012 at the earliest.
It says the next two years will see banks rebuilding capital and reducing leverage. Businesses will begin to invest in working capital again but conserving cash will remain a high priority.
But in contrast to the recovery being forecast for the wider economy, things could be about to get worse for automotive manufacturers.
The Society of Motor Manufacturers and Traders is expecting a significant fall in the number of new cars sold in 2010 (1.78 million) and 2011 (1.86 million). It predicts that sales for vans will also fail to recover their 2008 heights, hitting 187,000 in 2010 and 213,000 in 2011.
So what does this mean for the vehicle rental and leasing industry?
“2009 saw a real slump in the business car market, which saw its share of new car registrations fall below 50% for the first time in 16 years as companies put off their buying decisions and chose to run their existing fleets for longer before replacing them,” said the BVRLA’s chief executive, John Lewis.
“These vehicles will need to be replaced soon and with an economic recovery under way, we expect fleet car sales to pass the million mark in 2010, providing a vital shot in the arm for manufacturers.”
According to David Brennan, chairman of the BVRLA’s Leasing and Fleet Management Committee, and managing director of LeasePlan, his sector of the industry is “cautiously optimistic”.
“Whilst the government and the CBI are very cautious about the fragile recovery, our clients still need mobility solutions and, further, are looking for advice in terms of how to optimise their costs and implement the greenest car policies,” he said. “After a very bumpy market for used vehicles in the last 18 months, early signs in January are of a stable market and we are hoping the stability will continue through the year.”
David Alexander, chairman of the BVRLA Rental Committee and UK operations director at Europcar, said that prospects for the rental sector were looking rather patchy.
“Corporate spending is likely to remain steady, but there are concerns around the leisure market. Unemployment could well grow after the election and that will hit the discretionary part of our trade,” he said. “There is also uncertainty over fleet costs, which will be hit by rising vehicle prices and the increased variety of low-emission models the sector is offering.”
This cautious view of 2010 was echoed by Nigel Martin, chairman of the BVRLA Commercial Vehicle Committee and commercial vehicle sales director of Ryder.
“The improved activity levels our sector saw in the final quarter of 2009 continued into January,” he said. “Last year a lot of operators were either de-fleeting or putting off their decisions. They are now looking at their core fleet requirements, although many of them are still taking a very cautious, short-term and price-sensitive approach.
“There is a desire to have the cleanest, most modern vehicles available, but people are baulking at paying a hefty premium for Euro V trucks.” n
Economy 2010: better for us but worse to come for manufacturers
Outlook for the economy and customersEconomy❱ UK recovery most likely to be weak and volatile❱ Any recovery will be vulnerable to shocks❱ Precarious position of government finances and bank funding would exacerbate any shock❱ Similar story for other industrialised economies with high levels of debt and/or fragile banking systems
Customers❱ Focus on cutting costs
l Employment likely to fall further and then will rise only slowlyl Efficiency of fleets paramount
❱ Big investment decisions likely to be postponed until after the election❱ Customised and flexible solutions increasingly important in world of scarce credit❱ Customers will value stability of their provider
Commercial vehicle registrations 2009:Vans: 186,386 (down 35.6% on 2008) Trucks: 34,746 (down 39.5% on 2008) so
For further information about all BVRLA courses, contact Clare Wilsdon: [email protected], 01�9� 5�570�
Training programme 2010
Contract hire short coursesIntroduction to Fleet: 14 AprilAone-daygeneraltrainingandindustryinductioncoursecoveringtheessentialsofcontracthire,taxandlegislation.Thecoursealsoincludescompetitoranalysisandprovidesbackgroundindustryknowledge.Oncompletiondelegateswillbeabletoadvisecustomersmoreeffectivelyandnegotiatecontractsmoreconfidently.Thiscourseissuitableforsupportstaffandotherswithaneedtobeinductedintotheindustry.
Theory has become practice with a pilot of the proposed Technical Customer Service Advisor qualification.
Backed by the Institute of the Motor Industry’s Automotive Technician Accreditation (ATA) scheme, the qualificationaimstoprovideabenchmarkforthecompetenceoftechnicalcustomerserviceadvisorsintherentalandleasingsector.Candidateswillbeabletogain‘accredited’statusbycompletingaseriesofassessmentsbasedontheNationalOccupationalStandardssetbytheInstituteoftheMotorIndustry(IMI).
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