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Fleets warned of coronavirus-related grey fleet surge

Date: 16 July 2020   |   Author: Sean Keywood

An increased number of grey fleet vehicles is one of the challenges set to face managers as a consequence of Covid-19, it has been said.

Stewart Lightbody made the comments during the first webinar held by the Association of Fleet Professionals (AFP), formed earlier this year through the merger of Acfo and ICFM.

Lightbody, the AFP's deputy chair, said during a talk on the effects of Covid-19 on the fleet industry that with the public advised to avoid public transport for all but essential journeys, there was likely to be an increase in grey fleet as employees looked to pick up cheap used cars to travel with instead.

He said: "There will be an increase in employees using personal cars to travel. I don't think we can get away from that until confidence comes back in public transport.

"I think the key area is managing grey fleet. If there is this massive increase in second-hand car usage, then actually how is that going to be managed, and how is it going to be visible to the fleet operator, and how are they going to control it?

"Grey fleet has always been a challenge and I don't see that stopping anytime soon, and the volume coming through might be increasing significantly."

Lightbody said that fleets would also need to make sure their policies were robust to address drivers switching to such vehicles.

"I think it's fair to say that employees will be testing our policies and procedures. [With car allowance], there will be a growth of taking the money and running a second-hand vehicle, so strong and robust car allowance policies are going to be key."

According to Lightbody, an increase in people switching to cheap cars to avoid public transport will also impact the used market.

"There will be high demand for cheap, sub-£2k cars which was probably an untapped market before, but that is actually going to have an effect on the slightly newer ones - is there going to be a demand for them when people just want a cheap runaround? 

"That ultimately will affect residual values, and the market is going to take some time to think about what effect that will have."

Reporting the results of a survey of AFP members, Lightbody said 50% of fleet managers expected coronavirus to cause a slowdown in EV strategies.

He said he found this surprising, as the increase in home working will lead to reduced mileages and potentially make EVs viable for more fleets.

He said: "Drivers are less inclined to travel, and more inclined to make the right choice, which I think really opens up the opportunity for the EV discussion, as where people were doing a significant amount of miles, I think probably now a lot of drivers are in a different place.

"Less miles because of less usage is a real opportunity to embrace EV. I think everybody before probably just overstated how many miles they actually do in their journey planning. 

"If it wasn't fit for your business before, take the time to have a review and look at it now."

Overall, Lightbody said fleets would need to adapt to new ways of doing business, with more remote working and a major focus on efficiency.

"We have learned a lot, especially that we can do a lot of things we used to be able to do without necessarily being face to face, with less travelling," he said. 

"If driving is the most dangerous thing we do, then the less we can do of it has to be good. But actually we still need to run our businesses and keep them going, so I think there is going to be a real focus on less business trips, and making the ones we do have to do more effective."

The AFP also used the webinar to announce further details of three new committees, entitled 'Future Roads', 'Risk, Compliance and Health', and 'Future Mobility Steering'.

The Future Roads committee will look at topics including smart motorways, new roads and road layouts, low emission zones, power provision from road use, route planning and optimisation, road charging and tolls, alternative vehicles, urbanisation, parking, and the integration of technology.

On the agenda for the Risk, Compliance and Health committee will be driver health and wellbeing, corporate compliance, and also managing the coronavirus crisis.

The Future Mobility Steering committee will discuss changes in the mobility landscape, as well as driving and shaping the future of mobility as it evolves.

AFP chair Paul Hollick said: "Together with the Electric Vehicle, Low Carbon and Alternative Fuels, and LCV committees that we have already announced, we are confident that we now have a full set of forums that will very quickly become crucial to thinking and action in our industry.

"One of the key aims in forming the AFP earlier this year by merging Acfo and the ICFM was to create a platform from which the fleet sector could speak with one voice on important topics, and these committees are an important part of that process."