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Exclusive research conducted for BusinessCar by industry giant Lex Autolease shows that emissions-based choice lists are far from universal. Paul Barker reports
Despite the continued focus on vehicle emissions, the CO2-based taxation system, and the obvious links between emissions and economy and therefore cost, many fleets are still not operating a CO2-based company car policy, according to a survey of fleet drivers carried out by Lex Autolease for BusinessCar.
Of those surveyed, 40.6% said they had an emissions-based policy, while 38.5% did not, with 22.9% unsure about whether their fleet has a CO2 restriction, itself an admission of a lack of focus on emissions.
"The fleet market is an interesting thing because the diversity of businesses that operate vehicles is massive and focused in different places - it has different people managing the fleets, such as procurement, HR etc," says Chris Chandler, principle consultant, strategic fleet consultancy at Lex Autolease. "We've got a fairly broad church - some fleets are absolutely focused on CO2 and will pay extra for vehicles that lower CO2, but the vast majority sit in the middle for cost and environment. We do, though, have very proactive companies that generate CO2 reduction targets on fleet and overall business efficiency."
The research showed a slowing in the introduction of CO2 caps. Just 11.1% of fleets with a cap introduced them this year, compared with 38.9% coming in during 2010 and 27.8% in 2009.
"Over the past three years we've gone from people talking about the benefits to saying they want to do it and asking how to bring it in," says Chandler. "So we go in and analyse the fleet and introduce CO2 grades. Clients balance vehicle restrictions and choice against environmental and cost benefit."
The wider financial climate has also been important. "My personal view is that there's a strong recessional link between the need for companies to save money and reduce cost, and an increased focus on the environment," says Chandler, pointing to the impact of the economic woes on the industry. "2011 is lower because most of them that went to make a move have done so by now."
Only 15.8% of those company car drivers not currently at the mercy of a CO2 cap are expected to be subjected to one next year, with 56.1% unsure if they would be and 28.0% sure they would not be.
Chandler points to the human resources and morale impact of limiting vehicle choice by CO2 as reasons for companies shying away from such a move. "With some companies, as long as a vehicle is fit for purpose it's accepted, but there are some clients where employee benefit and morale are important, so they need premium vehicles," he says. "The good news is that brands like BMW, Audi and VW have been leading the march, so it's not a case of having low-emitting vehicles meaning having a lower brand.
"It is an education, so people realise these cars are very driveable and you can have high-spec cars that fit into these grades," continues Chandler.
"It's not necessarily the fact that companies are bringing in a 120g/km cap that upsets staff, it's that certain vehicles are not on their own choice lists any more. It seems unfair to them, and it's a balancing act to ensure there is still a decent selection of vehicles at a certain level employees would expect."
The research also returned hybrid availability at what Chandler describes as "about the level I would expect", with 50.0% of fleet drivers saying the technology was available to them, while 47.9% of drivers surveyed said 4x4 vehicles are on their choice lists, helped by both the recent harsh winters and the growing number of lower-emission vehicles with all-wheel drive. "In the past few years we've seen some remarkable achievements from motor manufacturers, and if they continue we're in for an exciting time, but it's difficult to keep up," concludes Chandler.
Although capping emissions on vehicle choice lists is one method of managing costs, Chandler recommends the further step of a whole-life cost approach for complete control. "CO2 caps are good and useful but are a bit of a blunt tool," he says. "Some have whole-life cost caps instead, so high-tax poor-fuel economy vehicles would be ruled out anyway. But for simple fleets a CO2 cap links to the environment and people's tax and will do 85-90% of what WLC will do."
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