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A major new report into the UK fleet market has found the prospect of transformational change to be imminent.


The Sewells Research & Insight Fleet Market Report 2017, based on detailed research among more than 500 fleet decision makers, found widespread interest in alternatively-fuelled vehicles, with as many as a quarter of businesses expecting to acquire a hybrid car and 12% planning to add an electric car to their fleets in the next 12 months.


Experience from the last major change to benefit in kind tax, in 2002-03, reveal just how swiftly company car buying decision can switch under tax pressures. By 2005-06, just three years or one replacement cycle after the carbon dioxide based company car tax system came into force, half a million drivers had given up their keys to their company cars, while the remainder had made a dash for diesel. According to HMRC, in 2002-03 only 33% of company cars were powered by diesel; today, it estimates that proportion to be in excess of 82%.

The prospect of a similar seismic shift now presents itself - the driver of a Ford Focus 1.5 TDCi with current emissions of 99g/km of carbon dioxide will be paying BIK tax based on 27% of the price of the car in 2021, but could reduce this percentage to just 2% if they opted for a battery-powered Focus.

Emissions are high on fleet agendas, with businesses also grappling with the introduction of the new, real world emissions tests. More than 70% of fleets that set an upper limit for carbon dioxide emissions on their choice lists are planning to review it; and 20% of fleets that don’t currently have an upper CO2 threshold are looking to introduce one.


Similarly, the changes to VED rates which came into force in April are forcing fleets to review their choice lists; 24% of decision makers say they will remove cars costing more than £40,000 from their policies in the light of the annual £310 surcharge these models will incur.


Ian Richardson, general manager of Sewells Research & Insight, said, “The overwhelming theme of this report is a sense of change. In the short, medium and long term, the fleet market faces serious pressures that could fundamentally shift customer demand away from the products and services that have served it so well for decades.


“For companies whose business relies on staff being able to drive into town and city centres, the selection of appropriate power trains is now of critical importance. The risk of either prohibited access or punitive daily fees to drive into areas with pollution problems is forcing fleets of all sizes to consider alternatives to diesel.


“But in the long term, even giving employees a state of the art electric company car is in danger of being considered ‘old thinking’. The new industry gold rush is for mobility solutions that allow the most appropriate and cost effective mode of transport for each journey. The quest to join the dots of taxis, car sharing, bus, tram, train, Tube and even bike hire into one coherent bundle that leverages corporate purchasing power, attributes costs to the right cost centre, and proves an attractive employment benefit for staff has well and truly begun.”


The Sewells Research & Insight Fleet Market Report 2017 analyses:


  • Fleet and business car sales figures and forecasts
  • The changing profile of company cars and the disconnect between fleet and private cars
  • Fleet funding choices
  • The shape of the fleet and business car markets
  • The future of diesel amid urban air quality concerns
  • The prospects for alternatively fuelled vehicles
  • Fleet reaction to the real world emissions tests
  • Early moves in the corporate mobility market
  • Brexit’s impact on fleet decision making, including recruitment freezes



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