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Opinion 2007: The year ahead

Three critical but inextricably linked issues face company directors and fleet decision-makers in the New Year - cost control, duty of care and reducing the impact of at-work driving on the environment.

None of the issues are new. Indeed, cost control and budget management is the perennial ‘big’ issue facing fleet decision-makers; managing occupational road risk has been a key feature of best practice over recent years; and global climate change concerns have accelerated ‘green’ issues to the top of the fleet agenda.

However, what company directors and fleet managers need to understand is that the three issues must be treated collectively and not individually, a fact that has still to be grasped by some companies.

There is no doubt that vehicle-related taxes, promised changes in London congestion charge pricing and the likely introduction of road tolls in other urban areas will penalise high carbon dioxide emitting vehicles. Therefore, it is essential from both a corporate and personal financial perspective that companies and drivers start to focus more on operating and driving low carbon dioxide emission models.

The health and safety of at-work drivers, whether in company-provided vehicles or their own private cars is crucial from a financial, legal and moral standpoint. However, despite the reams of publicity relating to at-work driving and duty of care responsibilities, we continue to find companies turning a blind eye to the issue.

From a pure economic angle, companies with clear at-work driving policies and procedures, who continually preach best practice, not only have fewer accidents but the financial savings they garner are huge.

One of the many spin-offs of a comprehensive, occupational road risk management policy is employees’ adopting a smoother, less aggressive driving style with harsh braking and accelerating being consigned to the past. Not only does safety improve, as a result, but vehicle emissions are reduced, fuel economy and other operating costs are improved and, again, financial benefits come to the fore.

The focus on corporate social responsibility is also partly responsible for a move back to traditional company cars from the various cash-alternative schemes implemented in recent years.

Duty of care worries and concerns over the lack of management control over private cars used on business, for example in respect of their maintenance and upkeep, taxing and insurance, and employee licence checking, etc have all contributed to the move.

It’s true to say we’ve heard of many companies also being disappointed in not achieving the financial and administrative savings they’d anticipated when switching away from company cars.

I believe this trend towards the company car will continue in 2007 particularly with HM Revenue & Customs keeping a watching brief in respect of the tax-efficiency of the various opt-out schemes available. But, in saying this, cash alternative schemes will always remain popular and a key part of the remuneration package and will continue to be considered by companies in the mix of vehicle funding solutions available.

In 2006 ALD has launched two new products to help customers focus on both risk management and reducing vehicle emissions - our DriveSafe occupational road risk proposition and our CARbon Offset initiative.

. #AM_ART_SPLIT# With the recent development of DriveSafe CARRS (car allowance road risk solution) this is set to become an essential ‘must-have’ for companies who allow employees to use private cars on business - which most do. CARRS offers a simple, cost effective and efficient risk management solution for this, often ignored, issue.

Coupled with our industry-leading ProFleet2 technology that sees a wealth of management and driver information such as mileage and journey times transmitted from vehicles for online analysis, these value added products, we think, will result in long-term business success in an always competitive leasing and fleet management arena.

We’re also about to launch upgraded ProFleet2 services allowing a general ‘fleet manager’ view of driver data for business journeys and incorporate driver profiling and vehicle speeds into the reporting suite available.

We believe companies that can deliver budgetary controls with a focus on duty of care and the environment, backed up by comprehensive online management reporting, will be winners in the battle for business.

Following further significant industry consolidation in 2006, I see little dramatic change in the overall shape of the leasing and fleet management sector in 2007. But, with an ever-growing amount of legislation and bureaucracy impacting on fleets, companies will be looking for more third party involvement to ensure effective and efficient operations.

Therefore, with leasing and fleet management companies such as ALD Automotive delivering a high value product at low prices, we must continue to strive to deliver new solutions focusing on the critical issues to ensure customers reap added value.

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