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Lockdown Mk2: What’s different for fleets and what’s not

A more targeted approach to the latest restrictions in England means that things are not so locked down as last time. Natalie Middleton looks at what the second lockdown means for fleets as the car and fleet industries also reiterate their support.

There have been many industry developments in the car and leasing sectors since the last lockdown

Car sales and dealerships

Although new and used dealerships have had to close again, this is not as bad as the first lockdown and many are still available for ‘Click & Collect’ online-only sales and contactless delivery, enabling car purchases to keep going and expected to help avoid the “off-a-cliff” fall in registrations seen last time.

While some carmakers were offering online services during the first lockdown, others have had to quickly develop such services; for example, Citroën says it’s caught up fast in the sector, “developing and deploying online tools that might normally have taken 18-24 months but in under six months,” according to MD Eurig Druce. In September, it officially launched its online car sales in the UK, previously only offered in France and enabling customers to buy a car in as little as 20 minutes.

And while buyers can’t visit dealerships or see cars in the metal, carmakers and dealers have also pioneered developments such as virtual model tours, offered by manufacturers such as Citroën and SEAT.

The innovations by dealerships have been reflected in new research by Close Brothers Motor Finance. It’s found that two in three (66%) dealers have now introduced a delivery service or increased publicity of an existing service, and half (50%) adapted their social media offering. In addition, 43% have spent time building up the online presence of their dealership in order to attract more customers and allow them to access the showroom from their homes. Reassuringly, 89% of dealers remain confident in the outlook of their business over the next six months.

Seán Kemple, managing director at Close Brothers Motor Finance, said that digital transformation for dealers has been vital to maintain engagement with customers and “be more resilient in an ever-changing retail world”.

Yet Cazana’s director of insights Rupert Pontin has warned that some dealers may still not have ramped up services sufficiently to take advantage of this. He commented: “Click and Collect online transactional capability in the automotive sector has vastly improved during the year but there are still companies that are not where they need to be from a digital viewpoint to be able to operate competitively.”

He also said although the lockdown period has been cited to end on 2 December 2020, there is a general feeling that this may well extend to the New Year in a bid to contain the virus and many businesses are planning for this eventuality.

Pontin added that the closure of dealers, while well-intentioned, was perhaps “inconsistent with some other retail outlets’ permission to continue trading in a socially distanced manner and as such is disappointing and slightly worrying”.

The SMMT has also called for dealers to be able to reopen soon. Chief executive Mike Hawes said: “We need demand to be maintained from showroom traffic to sustain our critical manufacturing base, so this closure instruction was very disappointing. We need every manufacturer and every retailer to hold on to skilled, viable jobs so, given car showrooms are some of the most Covid-safe retail environments possible, we hope that they will be able to open quickly, and remain open, avoiding a long term dependency on furlough.”

It’s also worth noting that while, unlike last time, there have been no announcements on UK car plants being shuttered, any impacts of lockdown on lead times are not known at this stage.

Auction firms, which had already switched to online operations, are also still open for business. BCA has said it’s business as usual, with sales remaining online and extended opening hours for vehicle collections.

BCA COO UK Remarketing Stuart Pearson commented: “Having the experience of successfully managing the significant challenges placed on the industry during the first lockdown stands us in good stead. BCA will continue to utilise the wider resources of the group to provide our customers with choice, scale and efficiencies to support their businesses during the weeks ahead.

“Our extensive programme of real time online events and multi-channel buying options will continue as we aim to meet the demand for stock from our buyer base. The wholesale marketplace is performing very efficiently and this is good news for all professional operators in the used vehicle sector.”

And CAP has said that this time round, it will keep valuations going to reflect accurate vehicle values and to support more active automotive trading.

The data specialist stopped adjusting values during the first lockdown in April and part of May – due to scarcity of sold data and a “responsible approach to not affect automotive businesses’ bottom line”.

But it will continue to update values this time, due to the fact that many of the nation’s retail and wholesale businesses have signalled their intent to remain open and selling during this time. This comes on the back of the car sector’s work since the last lockdown to establish and develop new or pre-existing online sales models to continue trading in the event of further restrictions.

Vehicle upkeep, garages and repairs

As with the first lockdown, garages offering vehicle servicing and MOT tests are allowed to stay open as they’re again an “essential service” and many more seem to be open. But it’s important to check for any revised hours and new measures. Car washes in petrol stations are also allowed to stay open, potentially important in the current weather conditions.

Also important is the fact that, unlike last time, the Government has not introduced a second MOT extension. So if your vehicle’s MOT is due to expire during the current lockdown, you will need to sort it.

It’s also worth noting that, as with carmakers and dealerships, the automotive repair supply chain has fast-tracked the shift from offline to online transactions, building on an existing trend. National Windscreens for example has introduced a new website to enable the switch to online bookings and transactions. And Selsia has enhanced its accident reporting services for fleets with the launch of a new app, developed to make it quicker for fleet clients to report vehicle accidents to the accident repair management company.

As with the first lockdown, there are warnings about the need for car maintenance and to take action to avoid breakdowns due to vehicles being used less; LV has warned that the double whammy of a second lockdown and cold snap could lead to a big increase in flat car batteries. But it seems to be a lot less of a risk compared to last time, with many more drivers on the roads compared to before – on weekdays at least – due to more businesses and schools being open.

In fact, new research from the RAC has underscored the popularity of cars and drivers’ reliance on them for travel, including for work, with public travel at its least popular level in nearly 20 years.

The analysis finds that car access is still highly important for work purposes; the majority (64%) of those surveyed still expect to drive to offices or other places of work in the future; almost unchanged from the figure of 67% prior to the pandemic.

A little over a third of drivers (36%) say they expect to work from home more frequently in the future, as a result of the coronavirus crisis.

The dominant factor in all of this is the declining popularity of public transport as a result of the pandemic. For the first time since 2002, fewer than half of drivers (43%) say they would use their cars less, even if public transport was improved – down sharply from 57% in 2019.

Risk management and grey fleets

With many employees still working from home, fleets will need to continue any use of increased communications, such as newsletters or intranets, to keep drivers informed of any changes or ongoing messages.

It’s also important to note that with many drivers still using their vehicles to some extent – a look at weekday road traffic levels shows this is not like the previous lockdown – the usual considerations of fleet management and risk management still apply. This includes for grey fleets.

The Association of Fleet Professionals (AFP) warned in its July webinar that there was anecdotal evidence of employees turning to their own cars for business travel; there had been reports that demand for used cars in the £2,000 sector have been stimulated by this trend.

Deputy chair Stewart Lightbody said that at the time: “We are going to have to be very single-minded when it comes to ensuring that risk management is well-controlled.”

Of course, there have been many industry developments during the pandemic to support fleets, including virtual risk training and even Driver CPC training is now available online.

Fleets will also need to keep up their increased focus on employee health & welfare during the latest lockdown and potentially beyond.

Speaking earlier this year to Fleet World, AFP chair Paul Hollick said fleet operators have had to take action in a number of different areas during lockdown, from employees’ physical health to mental health, and emphasised how enhanced communications, including newsletters, can make sure employees still feel they’re part of the organisation and provide advice.

Fleets also need to ensure that drivers aren’t sharing cars and to make sure that those employees using public transport are fully aware of how to do this safely. Here too though, there are continued developments; for example at Addison Lee, where its entire MPV private hire fleet now has TfL-approved safety screens to protect both passengers and drivers.

And leasing and fleet management has also been updated since the last lockdown, with firms adding new digital interfaces, dedicated teams to support customers and new ways of working.

As with all of this, it’s important to remember that the fleet industry is ready to support companies with all areas of fleet management; whether it’s support with returning vehicles or extended contracts – or new ways of tackling risk management for drivers. Where there is a problem, the sector is always ready to help fleets with a solution.

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

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