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Mike Waters' blog: 10 June 2014 - Practical efficiency

Date: 10 June 2014

Mike Waters is senior insight & consultancy manager at leasing and fleet management company Arval

The market is changing and we are now seeing vehicles that place a significant stake in the ground for ultra low emission technology and the associated practicalities.

One particular new release also offers a new package both in terms of vehicle size and cost.

With a raft of good hybrids on the market from a range of manufacturers, what's changed? Well we now have a plug in hybrid SUV with pricing consistent with conventionally fuelled equivalents which is a pretty good start.

Even after the Government's £5,000 electric vehicle subsidy, new vehicle technologies normally come with a price premium and for many this is a barrier to adoption.

The low running costs and favourable tax position don't always provide enough of an incentive for businesses and consumers to take the step.

Delivering emissions of just 44g/km, the manufacturer concerned is anticipating high levels of demand for this vehicle and I think they could well be right.

However the key for me is the consistency of pricing. This approach puts pressure on the other manufacturers to bring their pricing into line so it will be interesting to see the stance that they take over the coming months.

I don't want this to become an advert for a particular manufacturer, so I won't name them because there are a range of really good hybrids out in the market delivering a cost effective and efficient option.

The point is that a competitive entry price further increases the practicality of the most efficient vehicles and is likely to boost demand.

It's a familiar story, and one that we see outside of the automotive arena all time.

New technology is expensive at launch and then as it becomes more common, more available and the manufacturers make improvements the price falls so the product filters onto the mass market.

When we get to a point where the greenest vehicles don't just deliver low running costs, they also have a competitive entry price, they cement their position as a desirable alternative to efficient diesel models and one that more people are likely to opt for.



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