Andrew Miles enters another world.
Individuals buy cars but fleets prop up the market by some distance. Manufacturers providing those fleets, even by small percentages, maintain an active (if not necessarily profitable) factory. Having no insider information other than the latest issue of Fleetworld (a Stag publication) to guide my curiosity, my lunchtime reading thus became electrified.
The cover revealed a new (to me) tagline. “Driven by something different” having ousted the previous “Simply Clever” from Škoda, shows a shiny new Octavia, parked waterside with father and daughter enjoying the view (of the water, not the Lower-medium sector, 26% BIK, one litre TSI from £20,795,) with the tagline(s) Work. Life. Balanced.
Inside, the review proffers four out of five stars, praising space alongside standard equipment with additional points accrued for notching up overall quality, criticising the infotainment as “difficult to use,” and that the hybrid version can only manage 37 miles using electricity. Barely mentioned is car feel but do such matters concern the fleet manager?
It would appear not. Further into the publication, many pages are given over to myriad telematic products, assuaging that beleaguered fleet manager to keep pace of Roger, where he is, how he’s driving, if he’s crashed or broken down and probably if Roger chose tuna pasta salad over the halloumi wrap; the devil really is in the detail, here in fleetland.
Such a publication relies on advertising where practically every single one offers the very best service to maximise efficiency, free up opportunity and bamboozle all but the most tech-savvy. If you’re not on top of your BIK’s, P11d’s, CPM’s, WLTP’s, RDE2’s or your projected CO2 levels *, you’re nowhere. My sandwich suddenly became rather boring.
The overwhelming tone of the majority of this work is the demise of the internal combustion engine, swamped by the rise of those powered by volts and amps. To paraphrase, I love the smell of a catalytic converter in the mornin’, would it seems, be almost over.
It takes no rocket scientist to understand why; the U.K. government offers subsidies (many, indirectly) that the fleet manager will find difficult to ignore. Should Roger, Daphne, or Ologundie still require a company owned vehicle after this pandemic, why on earth should that car (and, more increasingly, vans) be propelled by the fetid petrol or diesel? Be they pure plug in’s or hybrids, the arguments for electric over those rock-oiled dinosaurs becomes clearer every day.
Every manufacturer worth their electrons are producing for the fleet market. These next figures stem from Tom Brennan, the Mercedes-Benz fleet manager here in Blighty. The EQ sub-brand is a large umbrella; EQ badges denote pure electric. EQ Power badges are PHEV’s, whereas EQ Boost are the 48volt mild hybrids.
Ten Battery Electric Vehicle’s (BEV’s) wearing plate sized stars are imminent – thirty two overall electrified vehicles within twenty four months. “Customers are starting to demand these vehicles. We have to expand our portfolio to meet those needs. We are at a tipping point where overall life costs are more attractive to electric power than anything else. Potential fuel saving costs alone usually swing in the favour of electric power”, sayeth Tom.
Another magazine example given is the case for the BMW 330e M Sport. The under bonnet PHEV makes 300 bhp, costs just 10% BIK, should garner in excess of 200mpg, emitting mere grams of CO2, “looks the part” on the M4 or the car park, costing just pennies to recharge overnight. Ye olde worlde 320d, once undisputed flamboyant father of the fleet uses polluting dark fuel, costs more in tax, servicing and insurance along with being so last year. This vehicle may not be to DTW’s tastes but it does carry a heavy argument for What chance diesel? How augers petrol’s fare?
‘But I need to drive up to Inverness from South Wales returning via Norwich before heading home in one day’, I hear you cry along with, ‘what about range? I can’t afford to sit in a service station for eight hours, waiting for the swine to recharge!’ If this global phenomenon has taught us anything, it is the need not to travel. If technology allows even Neanderthals to confer with colleagues in all of those places at once, what need is there to hastily travel up and down the road network all day? Such travel marathons, akin to the 320d are so passé but are still available should the need arise, for now.
Obviously written by people within the fleet industry, for the fleet industry, Fleetworld may be telling Gordon how to use a plug (or suck eggs for that matter). With no mention here of the hydrogen (or any other) alternatives, our senses may soon become accustomed to the internal combustion engine only in the annals of history.
* Benefit In Kind, an expenses and benefits tax form, both of which relate heavily to company car use, Costs Per Month, World Harmonized Light Vehicle Test Procedure, Real Driving Emissions Step 2 and of course, good ole fashioned Carbon Dioxide.
20 thoughts on “(Electric) Fleet Of Foot”
* Carbon monoxide?
Good morning Andy. Well spotted, a senior moment on my colleague, Andrew’s part, now corrected.
How can I subscribe to Fleet News? I need something more interesting to read now I don´t get “Car” any more.
Speaking of electric cars, Elon Musk overtook Jeff Bezos as the richest person in the star system, due to a rise in Tesla´s stock price the other day. Tesla is worth more than the biggest six car companies. The stock market is a funny entity.
Magazines like this are the way into mainstream journalism. I expect many of the writers will graduate to the other, more prominent newsstand titles or bigger websites.
Fleet managers are opportunistic and buy with focus on low costs not driver’s enjoyment. Whatever reduces the running cost of their fleet will be accepted. Company car users aren’t any better and take anything as long as they get the biggest car for the least PIK. As long as the monthly lease fee for a Passat with all imaginable assistance systems is actually lower than the one for a car without all that crap company cars will come fully loaded with nannying electronics.
And they dominate the market with (German numbers) sixty percent of Golfs going into corporate fleet lease contracts, eighty percent of 5ers and A6s and close to hundred percent of Cayennes and Q7s.
The really dangerous thing is that this gives politicians the leverage to force anything into the market at their will with the help of tax reductions or direct subsidies. One result being that PHEVs are bought in masses which at the end of their lease contract still have the charge cable in the original plastic bag untouched.
It’s done to create a used car market for this stuff that the few remaining private buyers can be forced to buy by tax increases, usage restrictions and other political measures.
And PHEVs are just the beginning. Anything a Brussels bureaucrat decides to heave onto the car owning/driving public will be enforced upon you, starting with traffic sign reading automatic speed limiters (mandatory from 2022) and incapacitating automonous driving contraptions at a later point in time.
And that’s the really dystopic vision.
A small note: the “Brussels bureaucrats” are only doing what the national governments agree to do as members of the EU. If the decisions weren´t coming from Brussels they´d come from national bureaucrats and it´d be much the same. In some cases it would be worse because it would easier for large corporations to lean on small states. In the last analysis, as long as you want some kind of governance you´ll end up with “bureaucrats”. Most of what they do is useful and needed and some of it is annoying but in aggregate governance is better than no governance. In the bigger scheme of things I´ll take some bureaucratic niggles if that´s the price of an organised and civilised society.
Now the UK is out of the EU Britons will find the bureaucrats are just going to be more local and not any less awkward to deal with.
Another thought. When the user is not the buyer, or more generally, the more stakeholders there are in the design of a thing, the harder it is to design it according to a particular vision. For a hospital or system that is not a bug but a feature. Cars are very much unlike hospitals though and it is rather wierd that such a personal item could be subject to the demands of such cold-blooded creatures as fleet managers. It´d be a lot easier if there was a special set of cars designed just as company cars so that the baleful influence of accountancy could be restricted. The Americans had the Crown Vic, for example, as the national company car. Here in Europe a large swathe of the market is affected, with people even chooising the cars that fleet managers prefer just to match the expected residuals at resale time. You may not want a boring car but at resale time you are competing with those cars for the next owner´s money.
There are cars designed for the fleet market:
– Passat Variant
– Golf three door (German Post alone takes 15,000 of them with special equipment fitted at the factory)
– BMW 3er, Audi A4, Mercedes C Class
– BMW 5er, Audi A6 (Mercedes E class has a relatively high percentage of private buyers)
– Porsche Cayenne, Audi Q7
Most of today’s cars are designed for a three year life under a corporate fleet lease contract including free fuel and servicing (and most of them are meticulously maintained as a result), then three years under extended warranty in the hands of a private owner. The third owner is running the car at his own risk with any defect being the possible end of the car for economic reasons. That’s with engines designed to last 200,000 kms and not as long as possible any more, with Multitronic gearboxes blowing up at 150,000 kms and all kinds of electronic gremlins setting in after a couple of years.
A friend of mine is running a leasing company. They provide Passat Variants at 400 pieces a shot to a company servicing fire extinguishers. All these Passats are the same colour and have identical equipment with large stickers on their doors and all are more or less finished at the end of their lease contracts. As long as the cars can be bought cheaply by the leasing company (some of the discounts or direct subsidies they get from manufactures are incredible) and residual values are kept high the determining factor -depreciation- of the lease fee can be kept low and that’s the only important thing. Fleet managers negotiate for cents per month and car in their contracts.
How is the ‘user-chooser’ or ‘perk’ company car market doing these days? Back in my city days, a monthly leasing allowance for car was a standard part of the package, even though there was no need for a car in the course of one’s work. You could top up the allowance out of your salary for a more expensive car. Before they introduced a 25% limit on the top-up, some of my junior colleagues were driving around in Jaguar XJS and BMW 8 Series, rather to the annoyance of their bosses!
As I recall, the BIK tax banding was dependent on the business mileage one did; 0 to 2,500 miles, 2,501 to 25,000 miles and over 25,000 miles. I did only a small amount of business mileage, but a round trip from London to Edinburgh, normally a journey I’d make by air, would take me over the 2,500 mile threshold, otherwise the BIK tax was really punitive. By the late 1990’s the BIK was really beginning to hurt, so I opted out of the scheme and took the allowance in (taxed) cash instead.
One real advantage of the scheme was being able to have cars like a 325i convertible while living in central London and having no off-street parking. Just for fun, I got a personal car insurance quote for that car when I got it in 1993. The AA quoted me a £6,400 annual premium for fully comprehensive cover, with a £1,000 excess!
Funnily enough, I had a 320i followed by 325i E30 convertible, each for three years, and neither suffered any damage while parked on street. Someone drew a line along the side of the first one with a Sharpie marker (black, on a white car) which came off with T-Cut. And someone knicked two of the BBS alloy wheel centre caps on the second one, but that was it. Maybe I was just lucky?
Work. Life. Balanced.
Three separate sentences, so presumably entirely unrelated.
To be fair to fleet managers, in viewing provisioning of a company car exclusively in terms of overall cost to the business, they are behaving entirely rationally. The goal they have to hit is providing the lowest cost relI able transport to the usrs that won’t (a) undermine the company’s image in customers’ eyes, and (b) cause the more productive human resources to take their productivity elsewhere. As such the company car news to be seen in the same light as a Transit, laptop, or phone. A commodity. It’s a deeply depressing viewpoint from the perspective of anyone interested in cars qua cars, I agree…
I used to think that the Vevtra C was there as a fleet special, as the Plod and also the then Inland Revenue seemed to be the only users.
Likewise I did wonder if the Vauxhall Astra J estate was a special knocked out by Elsesmere Port just for West Yorkshire Police, they were the only Astra estates I ever saw.
Many cars are offered as special versions for official authorities that are not available to the general public.
BMW has a 5er with 100 PS and Audi has something similar on offer.
After the end of the lease contract the ECU gets flashed so the engine has the full power but all tyres need to be changed for ones with higher speed rating.
These cars also are nearly the only ones making use of the delete option for air conditioning at no extra cost.
I don’t know if it’s true, but supposedly in Germany there is a rule (whether from the tax office or from the leasing companies/fleet managers) that only sedans and station wagons can be used for fleet vehicles. No sports cars, GTs or coupes.
This led on the one hand to the extinction of coupes below the luxury class and on the other hand (so the rumour goes) to the relevant vehicle suppliers serving the niche of 4-door “coupes”.
If this is true, then the increase in leased vehicles in the last decades has changed the product range of vehicle manufacturers in a similar way – extinction of vehicle categories – as now (due to design) the turn to SUVs for moving batteries.
Rest assured that German tax law knows no restriction on the type of car you can use as a company car and write off their cost against tax – that’s called ‘Dienstwagenprivileg’.
But most companies offering their employees a free choice of car from the catalogue of companies like LeasePlan or Auto Leasing Deutschland (ALD) set a limit for the lease fee and most demand that the car has four doors and a tin roof, but that’s a matter of corporate regulations and nothing to do with lease contracts or tax laws. Otherwise I know people driving Porsche turbos, open top 911s and even a mid engined Ferrari and a Plus8 as company cars and writing off all the cost.
Yeah, sure, that comes from the company rules. I should have guessed that when I think back on all the company cars we’ve had over the years. So scrap tax office or leasing companies and keep fleet managers and their company rules. The advantage of this is that it also reduces the number of people who are responsible for the lack of variety in the range of vehicles on offer.
As I recall when such fleet publications first appeared (around the late ’90s) they were mostly about vans, buses and trucks with a few mentions on cars, those mainly used for taxi purposes. By the early 2000s they were split between cars and commercial vehicles 50-50 and by now they are almost car-exclusive with occasionally having a supplement for discussing heavier equipment. A somewhat amusing transformation, although I’m not really a fan of it – it’s hard not to view the company car regulation in some countries as an indirect tax evasion which then distorts the fleet market.
It’s still another world – and I do hope it can preserve something of it’s old ways of fleet managers walking around the repair shop amongst their machines and discussing various 3-letter abbreviations of fleet performance. It has some kind of pride attached to it.
These are wretched magazines for wretched people. Avoid.
When I was in London, some time back, it was clear this company car tax nonsense was already quite pervasive. It was an annoyance which got in the way of what you wanted to do. In the end it was a matter of negotiating something better for all parties and attaining remuneration in a different manner. Part of the arrangement was that the company purchase certain real estate, some available to a selected contractor to be used as needed. There were standing reservations made with particular hotels around the UK to provide decent rooms when no property was immediately available in reasonable distance. Hence part of the remuneration pack was lodgings or residences. This was a lot more valuable than a company vehicle with all the hassles and compromises that would have entailed. In the end everyone involved benefitted.
As for cars and motorcycles the recommendation has to be outright purchase (privately)- the best way. At one point I had a good collection (all of which eventually exported to other climes and some of which on-sold). Never run a company car when you can get the way more valuable with just a little thought and negotiation.
You can apply this approach in all sorts of ways. Just consider what it is you want to do with yourself and where you’d need to be applying your hard earned paycheck to do that activity. Get someone else to get you that item. For example, most companies have a solid training budget which is rarely fully subscribed. On the other hand their payroll (and car leasing) budgets are areas which are more highly contested and much more carefully controlled (as well as likely being fully subscribed). It is difficult for a manager to give you extra pay, even should he prefer to. The better paycheck opportunity here is limited, yet you need to get a better deal (that is, more). In this instance the best path would be to negotiate free training and attainment of recognised qualifications to a value (tax paid remember) which well exceeds the amount of pay you’d have failed to attain in your negotiations had you proceeded along that path instead. Or you go for accommodation. Or you go for food, clothes, homers or some other item (one fellow used to take away the machine turnings- they were copper, bronze, brass etc., another got spare parts for his projects, another got sponsorship for his club, another got the excess lunch food and on it goes). Remember, whatever you do it is likely going to be different from what everyone else is doing. That is why it’ll be worth a lot more to you.
Be uncommon. Cut your own deal. Focus on what you want (what you’d spend a paycheck on anyhow). Get it given to you directly.
A late colleague did something similar back in the time when he was resident in Holland. He had magnificent employer supplied digs and ran his own transport (for which he’d managed to wangle free fuel). He’d got a little bit senior for motorcycling to the office every day in the winter. That’s when matters ended up becoming more adventurous. He up and purchased a nice old diesel car from a tough looking Polish gentleman. The car had a Russian registration. Goodness knows where it had come from prior to that. My colleague drove his car all over Europe. He parked it in places where I was certain it would be ticketed yet often wasn’t. He did not observe speed limits, ever. He used to joke about a dude in Russia getting plenty of unwelcome mail. After three years he decided it was time to move it on. I heard later that the car ended up with some fellow who drove it to Morocco or Tunisia or somewhere like that. It’s probably still there, years later, working hard. Meanwhile the previous Russian owner knows where his old car has been travelling by all the documentation that keeps arriving from all over the show.
Ah, amusing times.
Here´s a milestone to look out for: when all the cars named and shown on the cover of AutoCropley are electric (without it being a special edition on electric cars). I noticed already AC has more and more e-cars and hybrids on the top of its on-line edition.