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With a wide range of subjects potentially coming to the fore over the next 12 months, some of fleet's leading experts give BusinessCar their verdict on what will dominate the industry's thoughts in 2016.
Taxation
We expect the Government to give serious consideration to a number of key tax areas impacting the leasing and rental industry.
The growing uptake of electric vehicles, the advent of lease accounting, concerns around air quality and the slow fiscal strangulation of the company car driver means that some important strategic decisions need to be made about the future of company car benefit-in-kind tax, salary sacrifice, fuel benefit, fuel duty and capital allowances.
Technology
A growing number of fleets will demand autonomous emergency braking (AEB) as standard fitment on their vehicles. We will see the Government lead the way with public sector fleets by updating Government Buying Standards.
Uptake of telematics-enabled usage-based insurance will expand from the younger driver sector into both the rental and fleet markets.
Motoring agencies
Attempts to cut budgets and modernise elements of the motoring agencies (e.g. vehicle testing) could result in more strikes, lower morale and falling service levels.
We will see growing frustration with the DVLA as budget cuts result in it delaying the introduction of some of its digital fleet services, and growing impatience with the continued transference of costs and administrative burdens to industry via poorly implemented new schemes and legislation - for example PCNs, Dart Charge, Driver Licence Checking.
Taxation
The Government's measure to keep a 3% diesel surcharge will tempt fleet and business buyers to seek out alternatives, [but there will be] confusion among buyers around the tiered grant system [for plug-in models]. Costs and prices for models with differing ranges (and grants) will vary.
Alternative fuels
2016 will continue to be a growth year for alternative fuel and electric vehicles. The continuing grant support subsidies in the EV and alternative-fuel market will continue to make low-emission, EV and alternative-fuel vehicles popular.
Taxation
We were extremely disappointed the Government . decided against abolishing the 3% company car benefit-in-kind tax diesel supplement in April and instead retain it until 2021.
This type of knee-jerk reaction in relation to taxation and emissions does not give fleets and company car drivers vehicle policy or selection confidence for the long term. Clarity, so vehicle decisions can be made in full knowledge of what the tax burden will be, is essential.
Fleet management
2016 is the year when we will see businesses truly embrace employee mobility and not simply focus on the company car. For some years, ACFO has highlighted that the role of fleet decision-makers is to embrace travel choice: company cars, own car use, car hire, car share, and public transport and air travel. What's more, the job is also about educating employees to understand when not to travel and perhaps use video or tele-conferencing.
Fleet administration
HM Revenue and Customs has enabled employees to make changes to car and fuel benefits that impact on their tax codes online. The Driver and Vehicle Licensing Agency now provides access to a range of documents online including employee driving licence details, the V5C and individual vehicle records.
But the growth of digitalisation has not been without its problems, as ACFO has witnessed with the arrival of remote charging when using the Dartford Crossing.
ACFO applauds the removal of red tape and increasing digitalisation, but such initiatives must be introduced in discussion with the fleet community so the potential for increased administration, as reported by some fleet managers with Dart Charge, does not occur.
Taxation
HMRC's increased efforts to optimise the tax yield will continue to include greater focus on company expense systems. The increased potential for large tax assessments and penalties will cause fleets to consider improved expenses and mileage-capture systems.
Emissions
Fleet operators will be looking more closely at the long-term value and reward impact of cash alternatives and seeking more tax-efficient approaches.
The first year (December 2015) audits of the Energy Savings Opportunities Scheme and ongoing Mandatory Carbon Reporting will force more businesses to improve reporting and provide plans for improved performance. This will encourage greater use of fuel card data and integration with supplier systems.
Company car policies
HR professionals will be looking to optimise the recruitment, retention and motivation impact of company cars through increased choice of vehicles and attractiveness of car policies. The increasing range of low-emission vehicles across manufacturer model ranges, including coupes and SUVs, will provide policy makers with the opportunity to offer more lifestyle choices.
Technology
Vehicles with autonomous technology have already started to hit the roads, but with a clear impact on safety and regulatory requirements, the leasing market needs to ensure it is taking responsibility and educating itself about exactly what is required in a duty of care sense.
Meanwhile, the 'connected car' has become the norm among many corporate fleets, with telematics increasingly used to monitor and reward positive driver behaviour; a trend we expect to grow moving into 2016.
Fleet management
Sustainable mobility solutions are one to watch for 2016 and beyond. We expect corporates and SMEs to become even more serious about efficient driving next year - such as electric vehicles. Car and ride sharing could form part of the overall solution. As a trend expected to grow in 2016, corporate car sharing can be extremely effective in not only reducing emissions but also cutting down congestion on the UK's roads.
There will be a shift in focus from cars and drivers to overall business travel and mobility users, with more emphasis on individual mobility and extending vehicles to the non-company car eligible populations - a wider mobility approach rather than a narrow interpretation.
We expect further growth of employee car ownership schemes and fleets moving away from traditional contract hire cars to include a much broader mobility population.
Fleet management
Based on the general trend for company car drivers to travel fewer miles, we believe that replacement cycles will be extended further to four or five years, from the average of three.
Alternative fuels
As EVs and plug-in hybrids become increasingly mainstream, supply will reach the used market. This will start to determine their true value - demand is the only real unknown, which is preventing EVs becoming increasingly accepted within fleet.
Remarketing
The general feeling from both our buyers and sellers is that the new year will mirror 2015, with prices staying consistent across the year.
Daily rental
We expect to see an increase in the demand for rental in 2016. As companies grow and expand off the back of a strong UK economy, look to mitigate risk and even reduce costs, they could look to rent vehicles over a short-term basis.
A focus on duty of care of employees and a drive to avoid road-based risks may reduce employee own-vehicle use for short trips, changing rental habits and increasing rental demand.
Better public transport links and tools such a Uber could divert share away from mainstream rentals, but diversified rental markets such as car-share/on-demand rental platforms could mean a significant increased demand in 2016.
Technology
Data, privacy and cyber threats to connected cars will be hotly debated as US and EU standards-setters ponder how to deal with these issues. We will see ride-sharing and one-way car-sharing rapidly gain popularity as technology enables more consumers to easily access these mobility options.
Semi-autonomous technologies will continue to grab headlines, particularly traffic jam assist, autonomous emergency braking and highway autopilot. Technology rivals will continue to work towards an autonomous car, challenging the industry to speed up its development of those innovations.
Emissions
Emissions testing rules will be agreed to enable diesel-powered cars to remain dominant in Europe.
Remarketing
Vendors will be working in an ever more difficult wholesale trade arena. 2016 will see the pressure of increased volume in the trade as a whole necessitate some cute changes to both defleet and remarketing strategies.
As 2015 ended, many contract hire and leasing companies faced increased volumes of a greater variety of cars and this position will continue as the new year progresses. The accountants will be seeking to mitigate losses expected by optimistic forecast values, that were set some years ago by businesses eager to create the most competitive monthly rates.
The economy
It is clear that the economy in the UK is expected to continue to perform well and this will result in a general improvement in both wholesale and consumer activity. Confident businesses will be compelled to buy new cars, as will a financially comfortable consumer.
Glass's economic partner, Oxford Economics, forecasts that interest rates are unlikely to increase until the fourth quarter of the year and employment levels will continue to increase through 2016 and into future years. Combined with a steady currency rate against the euro and the dollar for the next 12 months and understanding that the European economies of UK neighbours are still in a fragile state of flux, means the UK is a good place to be.
It does mean there will be further pressure on new car sales and. pre-registration will not be disappearing any time soon.
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