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BVRLA anticipates diesel bouncing back in 2020

Date: 22 January 2020   |   Author: Illya Verpraet

The rental and leasing organisation has published its annual report on the trends for the coming year and the sector is in for a bumpy ride in 2020, but it has both hands on the wheel.

With Brexit becoming a reality, electrification slowly gaining ground and attitudes towards diesel normalising, BVRLA chief executive Gerry Keaney says the, "sector is in for a bumpy ride in 2020, but it has both hands on the wheel".

The new BIK rates for electric, hybrid and diesel cars are predicted to have a major impact. The report states that the announcement of a 0% BIK rate for EVs in 2020/21 is likely to turn the already present curiosity around electric cars 
into conviction.

However, the availability of EVs was a problem in 2019 and it will only become worse with more demand. Brexit is cited as the main cause, as it makes sense for OEMs to divert zero-emission vehicles to the continent, where they can contribute to tough new EU emissions targets coming into effect next year.

Charging infrastructure can be a further barrier to EV adoption, as installing even just a few rapid or fast chargers can be expensive and difficult, involving discussions with landlords, electrical consultants, energy providers and even local network operators.

Diesel, meanwhile, may actually be due for a bit of a revival according to the report - with some caveats. WLTP-related confusion is fading, the latest generation of diesels is extremely clean and the announcement of tax rates for the next three years should create some stability. 

A number of other reasons are cited for the increasing confidence in diesel: drivers and fleets who moved away from diesel are now facing higher fuel consumption; there is an increasing demand for lower carbon emissions; and residual values are actually looking solid for 2020 thanks to the lower volume of used diesel cars on the market.

The report quotes KeeResources CEO Denis Keenan, who said: "There is significantly more confidence in diesel now and it is getting stronger. People are coming back to the view again that these are great cars for everyday driving."

It's not all good news for diesel, however. The complexity of the new RDE2 standard might still put people off, and local authorities may introduce diesel bans and taxes. The report urges the fleet industry to step up to its vital role in showing that diesel is still integral to meeting the transport needs of UK business.

On the subject of clean air zones in cities, the report is very clear, with all its experts agreeing that the government must do more to harmonise these operations. Bristol's plans to ban 
diesel vehicles altogether could set a dangerous precedent.

Nick Brownrigg, CEO of Alphabet, commented: "The government could take more of a stake in the clean air zones, and ensure consistency and understanding. Failure to do so would be an abdication of responsibility from central government."

Another major theme in 2020 will be data and IT. These modern technologies offer strong opportunities, although there are some significant dangers as well. 

Thanks to increasingly sophisticated fleet management, telematics and data analytics, fleets within fleets can be accommodated. Caroline Sandall, national chair of Acfo, said: "We are moving from blended fleet costs to granular detail for every vehicle and driver, treating each more like a retail customer."

Putting all this data - both from the OEMs and from the fleets - to good use is another matter. OEMs are unwilling to hand over vehicle data for nothing, while fleet companies are reluctant to pay for it until a solid use case can be demonstrated.

Finally, the report expresses concern over the repairability of modern vehicles and all the tech they have on board. The aftermarket is already struggling to keep pace with new technology. Combine this with dealerships closing and repair shop capacity shrinking, and it becomes clear that capacity and repair times are going to become a real issue.