Fleet management: Could the recession cause the trend towards greener fleets to go into reverse?
Companies appear to be changing the way they operate vehicle fleets in response to the recession and climate change but if the economy improves, will the trend towards greener fleets go into reverse? By Andrew Donoghue.
Life was simpler in the 1980s. Greed was good and the company car was all about status. But a gradual increase in pollution legislation, combined with rising fuel prices and fears about climate change, have chipped away at these attitudes. And against this long-term background of environmental/social change, the recession and lack of funds are wreaking further short-term havoc. So what is the future for the fleet sector? While turning to cheaper and more energy-efficient vehicles makes sense in a recession, if good times return will the high-end company car return to its position as the ultimate perk, or has the tide of public opinion changed the status of the company car irrevocably?
Trying to ascertain whether UK plc is falling out of love with the company car is not easy. According to the Energy Saving Trust (EST), there are three million company cars on the UK’s roads emitting an estimated seven million tonnes of carbon dioxide (CO2) every year. According to John Lewis, chief executive of the British Vehicle Rental and Leasing Association (BVRLA), research carried out among its members shows the average mileage of company cars was significantly down in 2008 to 19,617 miles, compared with 21, 643 miles in 2007. Isolating the exact cause of this drop is difficult, to say the least, but, according to Lewis, financial and environmental factors are certainly at play. “Motivated by a desire to cut costs and reduce their carbon footprint, fleet managers have been looking to monitor unnecessary business mileage and make sure that any essential travel is completed in the most environmentally-friendly way,” he says.It is not just the BVRLA that has recorded a drop in car mileage. Figures released by the Department of Transport revealed the country’s motorists travelled some 3.1 billion fewer miles last year. “The focus on cost reduction is no mystery,” says Nigel Underdown, head of transport advice at the EST. “Most companies are looking very hard at their fleets because they are a big spend.”
Clearly, environmental, financial and, to some degree, health and safety issues are combining to change companies’ behaviour when it comes to fleets. But trying to separate the long-term impact of environmental considerations from the effects of the recession is less clearcut. For a lot of companies going green is basically a watchword for greater efficiency that translates directly into cost savings. True, some models of car may have higher upfront costs (see above), but these are often a trade-off for better fuel efficiency over the vehicle’s lifetime. The ESG, for example, recently claimed that British business could save around £3 billion a year by moving to greener fleets.