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Last year was a good one in terms of sales for the premium brands, as manufacturers such as BMW and Audi grabbed market share from the volume marques, writes Paul Barker
It was a funny year for new car sales in the corporate market. Thanks to the changes to benefit-in-kind taxation laws, removing the 3% discount for Euro4 diesels, there was a huge spike in December 2005 as drivers scrabbled to change their car at a reduced tax rate, which meant January was a slow start to the year, down 14.8% year-on-year. The same reason accounted for what, on first glance, was a poor December 2006 in comparison, down 19.3% on the previous artificially spiked December.
Despite the boost 2005 received right at the death, 2006 was a good year. Fleet sales finished 2.4% down, which equates to 28,600 units - an expected result that again saw corporate prop up an ailing retail market that was down 5.3% on 2005.
As in 2005, volume brands again found their market share eroded by the premium names, specifically BMW and Audi, which both hit new corporate sales highs last year.
The 3-series was a particular sales success, with BMW's compact exec crashing into the top ten fleet models, a jump from 2005's 21st place. Its big German rival, the Audi A4, also surged up the list, rising six places to 16th position. BMW itself recorded a 10.4% rise compared with 2005 and moved above Toyota into sixth spot, while Audi is two places behind in eighth, up a place and passing Nissan in 2006 thanks to a 20.5% increase. Another two places down the manufacturers' table, Mercedes-Benz broke into the top ten despite a 1.6% fall, due to bigger drop-offs for Nissan and Honda.
Lexus reaped the benefits of a first diesel model, with the new IS fuelling a 77.0% rise for the premium Japanese brand.
But it wasn't good news for all the premium brands. Volvo struggled through a difficult year that ended 23.5% down, and will be hoping the funky new C30 signals a reversal in fortune. Brit brand Jaguar also limped painfully through the year, ending it 28.0% down, mainly due to the faltering X-type. And despite the new 159 and Brera models, it was yet another tough year for Alfa Romeo, dropping 11.6% to just 1769 fleet sales.
At the top of the makers' chart, Ford held strong all year to regain the top spot relinquished to Vauxhall in 2005. The blue oval was fairly static, up just 0.6%, but took advantage of Vauxhall's declared goal of reducing low-profit business that saw the Luton-based brand drop 10.7% on the previous year.
It was also something of a bounceback year for a couple of the volume manufacturers.
Fiat waved goodbye to a dire 2005 by launching an all-new Punto, which has shifted in large numbers for what we can no longer call an ailing Italian brand. Fiat more than doubled its 2005 total by reaching in excess of 22,000 units, with the Punto ending the year 258% up on 2005 with sales of 16,153 fleet units, compared with 4512 in 2005. That saw the supermini soar from 63rd in the top 100 models to the top 15 in 2006.
Peugeot passed compatriot Renault to take fourth spot on the manufacturers' list thanks in part to a successful introduction of the new 207 supermini. Meanwhile Renault struggled though with a product line-up that, Clio apart, is starting to show its age. A drop of 23.6% for Renault equated to more than 22,500 units fewer, with Megane, Scenic, Laguna, Espace and Modus all down on 2005. The new Laguna, coming at the end of 2007, will be a welcome addition.
Other manufacturers not enjoying the best of years included Nissan, Chevrolet and Smart. The former two both struggled from an absence of diesel engines (Chevrolet completely and Nissan in the core Almera and Primera), while Smart's model range was chopped with production halting on the Forfour and Roadster models.
Some of the minnows towards the bottom of the manufacturers' table showed extraordinary percentage growth figures. Dodge's can be explained by it being the launch year, after a couple of the SRT-10 supercar were registered in 2005, while a first serious crack at the fleet market seems to be reaping early rewards for both Ssangyong and Suzuki.
Looking at the sectors, the long-term decline of the traditional upper medium sector - once the fleet heartland - continued with a 10.4% fall in registrations. It finished the year at 21.6% of the market, and can be expected to fall below one-fifth of fleet models in 2007 despite the new Ford Mondeo arriving mid-year.
Reports in the national press reporting the decline of 4x4 sales is clearly false, with small off-roaders growing by 3.7% despite sales of the sector's three biggest models - Land Rover Freelander, Toyota RAV4 and Honda CR-V all being hit by a changeover from old to new model. Expect 4x4s to show an even stronger 2007 with a rush of new product heading for launch, including offerings from Vauxhall, Peugeot and Citroen. Meanwhile, the large off-roader market showed a massive 20% growth, proving there's still a place for the Range Rovers and Mercedes MLs. Cabrios were also up by more than 20%, highlighting the increasing number of 'free-choice' business car policies.
Luxury saloons were the biggest growth area thanks to a 31.4% rise. Company bosses are obviously feeling confident about the current market conditions, with the Audi A8, BMW 7-series, Mercedes S-class and Jaguar XJ all on the up.
The biggest sector, though again also on the wane slightly as more drivers head towards niche products, was the lower medium segment. Despite being down 3.0% on 2005, it still accounts for 27.7% of the market and boasts fleet's two biggest sellers in the Focus and Astra.
Last year saw diesel pass the 45% market share point, although the growth is showing signs of a slow-down, if not complete halt. The figures are slightly skewed by the surge in December 2005 diesel fleet registrations to avoid the extra 3% BIK taxation, which is why there's so little growth from 2005's 44.5% share. Most manufacturers are now predicting little further increase, especially with the focus for technical advances gradually shifting back towards petrol engines. The tax situation will be the deciding factor in which fuel is the sensible option, which is why the industry is calling for a clearly set-out Government policy so drivers can make an informed decision when tying themselves to a car for three years.
Ford was once again the biggest-selling manufacturer in the diesel market, but VW passed Vauxhall to grab second place, while BMW continued to wolf up business volume by bagging fourth in the diesel segment, amazingly outselling Peugeot and Renault.
The latter had a disastrous year, sliding down to seventh place behind Audi.
Further down, Honda jumped three places to 12th and Chrysler broke into the diesel top 20 at the expense of Nissan.
Even further down the manufacturers' list, Kia followed up 2005's 163.5% growth with another 50.8% increase, while Mazda increased diesel sales by one-third and Chrysler by an impressive 90%.
Comedy figure of the year, though, was Lexus, officially recording a 4229.5% diesel increase thanks to its first diesel, the IS220d, going on sale so late in 2005 that just 78 were registered. That jumped to 3377 in the first full year of sales.
Among the models, Ford's Focus topped the chart ahead of big brother and the previous year's champion, the Mondeo, while VW's Passat came in third ahead of the Vauxhall Astra and VW Golf. The Renault Megane fell seven places to 17th and BMW's executive 5-series jumped nine rungs to become the 11th biggest-selling fleet diesel, helped immensely by the new entry-level 520d 2.0-litre diesel engine launched in late 2005.
Looking forward to 2007, there's no prospect of a dramatic increase or decrease in company car registrations, according to all the major players. Instead, the big interest is going to be how buyer choice shapes the market, with more and more drivers given the chance to choose the models that suits their needs. Expect continued growth among MPVs, cabrios and especially off-roaders, which are set for another new product onslaught in 2007. In fact, a record number of new models will arrive in the UK this year, so look out for some significant changes in the business car chart over the next 12 months.
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