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The Road Ahead: 2013
18 January 2013
Marshall Leasing MD, Peter Cakebread, takes a look at some of the challenges and opportunities facing the industry this year, from pre-registration to electric vans.
It’s hard to sum up 2012 in just a few words. It was, at best, a mixed year for the fleet industry. On the one hand, a shortage of supply in the used car market helped stock to retain its value. On the other, the sales environment proved extremely tough as fleet operators tightened their belts. But a new year offers the chance to take stock and plan for the road ahead. As ever, there are both challenges and opportunities on the horizon.
Pre-registration set to become more prevalent:
The practice of pre-registering vehicles caused concern last year as many feared the negative impact it would have on the market. At the time, it seemed clear to me that the situation did not warrant serious alarm. However, having said that was the case in 2012, I can see pre-registration becoming more prevalent in 2013 as manufacturers react to reduced demand elsewhere in Europe and a relatively benign exchange rate. The impact this will have remains to be seen, but it certainly underlines the need for proper information flow, and the need for manufacturers to act responsibly.
Decisions awaited on VAT and capital allowances:
This year is set to be a very interesting one on the governmental side. There is much anticipation around the final decision on VAT recovery derogation, which could see the figure being increased from 50% – the level at which it has remained for over 15 years. The BVRLA has been championing this cause recently following its revealing research into business mileage figures.
Meanwhile, in April this year the CO2 emissions threshold for the main rate of capital allowances for business cars will be reduced from 160g/km to 130g/km. With less than 3 months to go, the industry has still not received clarification on the transitional arrangements. Will they be the same as in previous transition periods, where an order placed but not delivered will fall under the old rules? Details are eagerly awaited.
Finally, it will be interesting to see whether the government retrenches from its decision to remove 100% first year allowances on low emitting cars for leasing companies. According to the new plans, businesses will still benefit from the 100% first year allowance when purchasing new cars, but leasing companies will not. This is surely an untenable position, given that it will discourage fleets from taking on these environmentally friendly cars.
Customer service proves its worth:
Last year was tough for many leasing companies as the difficult climate forced customers to look hard at costs. Competition in the market was fierce and this is likely to continue in 2013. On a positive note, however, it has prompted a greater understanding of the importance of value added and customer service levels when selecting a fleet supplier. This certainly works in favour of companies who focus on building lasting relationships with their customers.
Electric vans offer a compelling case:
Early last year the government made its grant for electric cars available to vans. Nearly 12 months on, electric vans are starting to come to market and they bring with them some compelling arguments – particularly for London drivers. As a starting point, the cost savings offered by electric can be a significant one when making a hard-nosed decision over a van purchase. Meanwhile, the short journeys typically made by city-based vans help to eradicate the short range concerns that electric vehicles generally raise. And for those driving in London, an electric van brings with it exemption from the congestion charge. All this could well add up to positive sales in 2013. No doubt there’s still a long road ahead for electric, but perhaps the humble van can lead the way.
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