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Vans: driving force

by Curtis Hutchinson

Spiralling diesel prices and operational costs are hitting fleet operators, leading to demands for manufacturers to publish fuel economy and emissions figures for vans.

The UK market for light commercial vehicles has been strong and growing since before the beginning of the decade. Last year 337,741 vans were sold and in the year to date the market has shown few signs of cooling off despite the slowdown of the economy and spiralling fuel costs.

Speaking after the publication of the most recent new van sales figures Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, was confident the market would remain strong over the coming months.

"Van registrations over the year to May were up with volumes already at record levels. We expect these order and registration trends to hold over the next quarter."

While new sales are buoyant, at least for the time being, van operators are being forced to address important legislative and running costs issues. New duty of care legislation introduced earlier this year has affected van operations with employers being forced to review the way they manage their vehicles. Meanwhile, the used values of some vans have been hit by a fall in demand on the secondhand market and with diesel averaging £1.31 a litre in June, operational costs are rocketing.

Legal duty

Fuel economy
and C02 emissions are  becoming increasingly important issues for LCV operators desperately trying to control their costs and carbon footprints

In April, the Corporate Manslaughter and Corporate Homicide Act came into effect, following a long and protracted journey through the legislative process. Every van operator now needs to be aware of the detail of the law when employing staff to drive on business.

The new legislation makes company bosses directly responsible for the safety and wellbeing of staff at work and removes any grey areas involving accidents while employees are driving on business. Firms must now have a clear audit trail which proves they are safeguarding the safety of their staff and providing vehicles that are fit for purpose. Failure to do so, in extreme cases which result in death or injury, could lead to a manager's conviction.

"Real changes are taking place and it is not just the prospect of convictions which is driving the change," said Rob Bailey, head of Lombard Vehicle Management, one of the UK's top five fleet leasing companies. "Insurers are increasingly looking for duty of care provision, especially driver training, before quoting, and some are even refusing to quote without such provisions in place."

Bailey said fleets that undertake driver profiling and training can reduce the numbers of claims and the average cost per claim. "The message is clear. Fleets can save costs as well as lives. The better the care, the greater the savings," he said.

Despite the high profile media coverage which accompanied the act's arrival, over a quarter of businesses in a recent survey were still unaware of it. Twenty-eight per cent of companies questioned in the survey, commissioned by vehicle tracking specialist Navman Wireless, admitted to being ignorant of the new law. However, the survey also found that of those aware of the legislation, more than half are planning to make adjustments to the way they handle their fleet.

"The Act should prompt the call to action needed for companies to introduce systems enabling them to manage road risk," said Tony Neill, European vice president of Navman Wireless, the vehicle tracking specialist.

"But it is a concern that a significant number of companies are unfamiliar with the potential consequences of failings by senior managers. A corporate manslaughter conviction can lead to fines of up to 10 per cent of a business's annual turnover. In spite of this, it is still encouraging that a considerable number of businesses will be taking steps to improve their duty of care procedures," he said.

Fuel economy

On the forecourt:
what's new?

Citroen/Peugeot
Possibly the most high profile launches of the year come from the closely-related Peugeot and Citroën brands. The two French brands have launched the new-generation Citroën Berlingo and Peugeot Partner high cube vans, and the all-new Citroën Nemo and Peugeot Bipper. The Berlingo and Partner vans are bigger than the popular models they replace which has allowed both brands to accommodate the Nemo and Bipper, filling a gap above their existing entry-level compact vans. Citroën's new Berlingo has standard-fit Trafficmaster Smartnav, a satellite navigation system which, for £25 per vehicle per month, can be linked to Trafficmaster's Fleet Director. This provides van operators with detailed fleet management data on vehicles which can help reduce fuel and main-tenance costs and emission levels.

Ford
Ford has simplified its top-selling Transit line-up under the Drive for Simplicity banner to make specification differences between models clearer to buyers. The range now consists of the still generously-equipped Transit entry model, the Transit Trend, aimed at owner-operators, the higher specified Transit Limited and colourful Transit Sport.

LDV
The Midlands-based, Russian-owned van manufacturer, has expanded its Maxus range and is planning to deliver an electric version this year. It now has 51 Maxus models and has iexpanded its dealer network.

Vauxhall has launched its large Movano Luton van with 17.2 cubic metres of load space and a payload of 1,385kg. It has also launched a competitive LCV service and maintenance package costing £29.99 per month for the Corsavan, Combo and Astravan, and £31.99 for the Vivaro and Movano. Fuel economy and C02 emissions are also becoming increasingly important issues for LCV operators desperately trying to control their costs and carbon footprints.

According to the AA, the average price of diesel in the UK leapt during the first six months of the year from an average of 109.2p per litre (£4.96 a gallon) in January to 131.6p per litre (£5.98 a gallon) in June. This means it cost £87.36 to fill a Ford Transit panel van with an 80-litre fuel tank in January, compared to £105.28 in June; a difference of nearly £18.

This price hike has led to van fleet operators calling on all commercial vehicle manufacturers to publish fuel economy and emissions figures on their models, in the same way they have to for cars. Operators argue this would enable them to reduce their fuel costs and C02 emissions.

The call came from 80 per cent of 501 fleet owners surveyed by Northgate Vehicle Hire, the UK's largest LCV vehicle rental operator with a fleet of more than 68,500 vehicles.

The demand for more running cost and emissions information underlines their importance in the buying process, although operators are not necessarily motivated by a desire to go green. More than a third of businesses (36 per cent) said they intended to do nothing about going green over the next six months, although the majority have either implemented a range of initiatives or plan to take action during the remainder of 2008 to reduce emissions from their fleets.

Since the beginning of the year all van manufacturers have been forced by law to produce fuel economy figures and carbon dioxide emission figures for vans - but they do not have to publish them.

While fleet decision-makers operating company cars can study official emissions and mpg data from all manufacturers to help them compile vehicle selection lists, the same is not true for businesses running vans. Currently some van manufacturers are choosing to reveal the data while others do not.

Transparency

"Fuel economy and CO2 data should be published by the van manufacturers and be available to all fleet operators," said Northgate managing director Phil Moorhouse. "There are issues around both sets of figures being affected by whether vehicles are laden or unladen and their actual specification - factors that influence such data on commercial vehicles far more than in relation to cars. However, unless the vehicle manufacturers publish official data then more and more websites will spring up publishing their own figures that may or may not be accurate. We are being increasingly asked by our customers to help them work out their carbon footprint and manufacturers would do the industry a huge favour by agreeing a standard for both sets of figures and publishing them."

However, ongoing pressure on LCV manufacturers is expected to see the publication of this data early next year and this will have a significant impact on the way vans are sourced in the future. Operators choosing new vans should seriously consider those with the new generation Euro V compliant engines. This year's Budget announced a measure which will be introduced with effect from 1 January 2009, giving a VED incentive for early take-up of Euro V diesel-engined vans ahead of their mandatory introduction in 2011. The incentive, which has still to be announced, will last for the lifetime of the van.

Running costs

The average price of diesel leapt during the first six months of the year from 109.2p per litre (£4.96 a gallon) in January 2008 to 131.6p per litre (£5.98) in June

Meanwhile, the sector is bracing itself for further cost rises. From October an extra 2p per litre fuel duty will be charged on the cost of diesel and from 1 April 2010, fuel duty rates will automatically increase annually by 0.5p above inflation. Also Vehicle Excise Duty, or road tax, will be going up for most van owners from 1 April 2009. Vans registered before 2001 with engines bigger than 1549cc will pay an additional £15 in road tax - taking the cost to £200. All vans registered after 2001 will also see an increase of £15 per year from 1 April 2009.

Once consumption and C02 figures are freely available van operators will be able to make more informed decisions when sourcing new LCVs. In the meantime, they face a guessing game with the much-needed solutions only available from a limited number of van manufacturers.

Curtis Hutchinson is editor of Motor Trader