Why 2020 will be a pivotal year for fleets
Jon Lawes, managing director at Hitachi Capital Vehicle Solutions discusses the trends that are likely to dominate the fleet management sector in 2020.
After what has been an incredibly busy year of exceptional change for the industry, 2020 will yet again be a landmark year for fleets. Government and legislation changes have given us the certainty needed to drive positive change in 2020, working with businesses to run cleaner fleets while saving money.
Clean Air Zones are coming
The growth of the electric vehicle sector as fleets start to realise their Road to Zero strategies will be a major focus area for the industry in 2020.
Clean air zones (CAZs) to promote the use of lower emission vehicles and improve the levels of air quality in the UK’s major cities will have a significant impact in the year ahead. Faced with the complexity and lack of CAZ uniformity, fleet managers will need to keep abreast of these changes in order to comply with emissions standards and provide flexible vehicle contract terms with tailored funding solutions.
Addressing fleets’ environmental concerns will require careful decision making in the selection of vehicle disposal and leasing options. For example, we’re bringing forward the termination of Euro 5 vehicles to be replaced with Euro 6 equivalents to reduce the risk and potential costs incurred from driving in these zones.
New Benefit-in-Kind tax bandings heavily incentivising the uptake of electric and plug-in hybrid will provide a much-needed financial enticement for company car drivers as businesses seek alternatives to the traditional company car.
It is clear to see that attitudes are now shifting towards cleaner mobility solutions, with the SMMT’s monthly car registrations data for November 2019 highlighting a record market share of 10.2% for alternatively-fueled vehicles (AFVs).
Fleet managers are looking to work with agile leasing companies who can provide solutions not only to future proof their fleet, but to take advantage of more appealing company car and salary sacrifice schemes. For example, in navigating through the ‘transition’ from traditional ICE fleets to a ‘greener’ fleet mix, customers will need solid solutions as well as reliable advice.
Some fleets are more advanced than others on this journey, however there is increasing demand from fleet managers for leasing companies to enable them to make this switch by assisting with their electrification strategy. It’s vital that, as a sector, we are supporting businesses as they navigate the changing fuels landscape, ensuring they have the right vehicle, with the optimum fuel type, to support day-to-day business operations, driving costs and minimising environmental impact.
Solutions can include a mix of drivetrains (from diesel to BEV) and funding options (from contract hire to employee ownership schemes) shaped to meet the primary challenge facing fleet operators at this moment; namely, the need to effectively and practically blend different solutions within one fleet policy during a period of uncertainty. It’s important that solutions providers support fleets to address short and mid-term challenges, and help make a real difference at a time when planning past three years will be difficult.
A key challenge will be to establish an adequate charging infrastructure framework to support the mass adoption of electric vehicles, which is why we are collaborating with a range of partners on Optimise Prime, the world’s largest commercial EV trial, to help the industry overcome these barriers.
Diesel and petrol model innovation
Cleaner, more efficient petrol and diesel options coming to market as we enter the year ahead mean they still have an important role to play for fleets. To achieve best asset use, delivering both efficiencies and cost savings, fleet managers need to take into account a driver’s specific needs, such as the distance they need to travel, types of journeys regularly taken and drivers personal readiness for change to AFVs. Advanced telematics are enabling customers to make informed decisions and improve the running and management of their fleet.
2020 will see the industry continue to go through unprecedented technological and legislative driven change. But, with a commitment to smoothly navigate fleet drivers through the challenges they face, fleet managers must keep their finger on the pulse and react quickly to any developments to ensure their fleets are prepared for whatever the year has in store.