Confidence returns to company car market with businesses expecting fleet growth, according to international survey
The international company car market is well along the road to recovery recording a sharp increase in business confidence, according to independent research from the Corporate Vehicle Observatory (CVO).
The annual fleet barometer supported by fleet and fuel management company Arval, looked at the state of the market across 14 countries – including Turkey and Brazil for the first time – and discovered a new spirit of optimism from almost 3,500 interviews conducted with fleet decision makers between February and March this year, compared to the same time last year.
The 2010 CVO survey has shown a significant turnaround in businesses expectation for the growth of their company car fleet over the next three years, with this view now particularly strong amongst larger companies. In the UK survey in 2009 a significant percentage of fleets were expecting their fleet size to decline over the coming period. Now almost half of large businesses expect their fleet to grow and this is a sentiment that can be seen across the fleet size spectrum although not with the same intensity.
As well as the UK, senior directors of companies ranging from 10 to 1000 employees were surveyed in Belgium, Brazil, The Czech Republic, France, Germany, Greece, India, Italy, Poland, Portugal, Spain, Switzerland and Turkey.
Interestingly UK companies are now more optimistic about fleet growth than their European counterparts, again a significant turnaround from the position seen in 2009.
Mike Waters (pictured, right), Director of Market Insight for Arval, believes the research shows that the company car hasn’t been hit as hard as expected by the global recession, commenting: “The research shows that only 18% of businesses have actually reduced their fleet size as a response to the financial crisis and only 26% have reduced their overall fleet budget. Instead, decision makers have recognised the important role company vehicles play in their business mix and have focussed on better management of their fleet policy instead.
“Over half of the respondents from the UK said total cost of usage was more important than monthly bills or purchase price. Therefore taking a holistic view of the vehicle life cycle and strategies to cut fuel consumption were the main drivers to control costs employed by company directors which reinforces the key role effective management of fuel spend now plays in the overall fleet cost mix.”
With optimism seemingly returning regarding the company fleet, the survey predicted strong growth for leasing and contract hire, particularly from larger organisations as they continue to pull themselves out of recession.
The Green Divide
However the survey, now in its third year, revealed a wide discrepancy between the attitudes of large and smaller businesses – particularly when it came to green fleet policies.
Only 8% of smaller enterprises (SMEs) had at least one green vehicle compared to 74% of larger businesses. A tiny 1% of SMEs had hybrid vehicles compared to 40% of businesses with between 100 and 1000 employees.
Waters concludes: “There is a marked divide in attitudes between the larger and smaller companies particularly when it came to the green agenda. The bigger businesses are more geared up for a lower-carbon future, but despite the fact that only 3% of smaller companies have fuel efficient labels at the moment , 43% plan to introduce them in the future. This reveals a genuine green appetite but that SMEs need greater support and advice on how to make the necessary environmental changes.”