Fleet Trends 2023 – Arval Fleet Barometer Reviewed

26 Jul Fleet Trends 2023 – Arval Fleet Barometer Reviewed

The Arval Mobility Observatory Fleet and Mobility Barometer 2023 is a hotly anticipated industry research platform that is an excellent resource to understand the macro trends that are impacting the sector.

The survey consists of 8622 interviews with fleet managers within companies owning at least 1 company vehicle. 20% of the interviews are held with companies who have more than 250 employees. 68% of the interviews were held with European fleet managers, to which the quoted numbers refer.

The Barometer indicates four key macro trends that can help fleet stakeholders shape their future company car fleet.

#1 – COMPANY CAR USAGE REMAINS VERY STRONG

Key Stat

The vast majority of surveyed companies (91%) expect their company car fleet to grow or remain stable.  This is a comforting statistic after the turmoil of the Pandemic. An increase in fleet size is expected from 27%, whilst 64% anticipate stability. Only 6% expect a decrease.

Business growth (66%) is the key driver for those organisations expecting an increase, whilst 39% suggest HR related needs, such as talent recruitment and retention, is integral to their company car fleet needs. It is worth noting that the talent recruitment/retention need is a 34% yoy increase on 2022 (29%), showing how company car fleets are being used as a key differentiator as organisations struggle to recruit key talent in a post-covid world.

Company cars as an effective incentive is further demonstrated by the increasing number of companies planning to offer vehicles to employees with no company car eligibility, a 36% yoy increase to 26% from 19%.

The threat to company car growth from home working has not materialised, with only 15% of surveyed companies having changed or are considering changing their mobility policy and of those companies the most common change is the introduction of alternative mobility solutions (17%), however this is only marginally more popular than other changes such as changing mileage, car-sharing etc.

The inevitability of EV introduction is top priority for 27% of companies, who suggest implementing alternative fuel technologies is one of their top 3 challenges: whilst adapting to the restrictive public policies on petrol and diesel vehicles in the run-up to the bans on ICE vehicles concerns 26% of companies.

Fleetworx perspective – we are certainly witnessing fleet growth in companies where drivers are opting back into car schemes to take advantage of electric vehicles – particularly when they can enjoy tax advantages over petrol/diesel drivers. This study shows the Benefit in Kind (BiK) European landscape, outlining which countries can use favourable taxation to entice drivers to make this switch.

#2 – FULL-SERVICE LEASING INTENTIONS REMAIN STABLE 

Key Stat

34% of surveyed companies intend to introduce, or further increase, the use of an operating lease in their financing and fleet management model.

This has remained stable over the past 4 years, other than in 2021 when it peaked at 61% – maybe a pandemic-induced response as fleet stakeholders looked to off-load the risk back to the lessor. The previous two years had seen 34% of companies using or considering full-service leasing. As a full-service lease passes all the risk and reward to the lessor, it is important that the fleet stakeholder retains some control over the costing structure so as to avoid many commercial trap doors inherent to this financing arrangement.

Fleetworx perspective –  90% of our clients currently use full service leasing, although, importantly, an increasing number are recognising that they need to unbundle certain features as the transition to electric vehicles takes place; operational compromises can otherwise effect the roll-out of effective BEV strategies.

#3 – THE ENERGY TRANSITION CONTINUES AT PACE

 Key Stat

77% of European companies considering or already implemented alternative fuels

 The inevitability of the energy transition, particularly among western Europe and Nordic countries, is evidenced by the 16% yoy increase in the number of European countries considering or having already implemented alternative fuels. 77% of companies surveyed are expecting this over the next 3 years, whilst 58% are already using alternative fuels. The rapid advance toward new technologies is again evidenced by the 20% yoy increase of companies already using alternative fuels.

There is almost a sense of resignation among fleet stakeholders that the fleet roadmap is heading toward electrification and is no longer an option, as all reasons for transitioning are lower than 2022.

• Lower environmental impact 34% (54%)
• Reduce fuel expenses 33% (45%)
• CSR compliant 25% (40%)

Although fleet electrification is looming large, ICE vehicles remain prevalent as companies surveyed expect over half of their fleet (61%) to be diesel/petrol in 3 years.

If this number of vehicles do remain ICE by 2026 it is dangerously close to the 2030 ICE vehicle bans adopted by many countries. And considering the average vehicle possession length is 5.6 years it will be necessary for companies to begin EV trials well in advance of 2026 so they have a reasonable transition period to fine tune their EV strategy.

 Fleetworx perspective –100% of Fleetworx clients have introduced or are in the process of introducing alternative fuels into their fleets, but not across all countries. We support our clients with the policies and practical supply chain solutions, which vary by market, recognising the different levers being used in each market to promote the transition across EMEA.

#4 – MOBILITY AWARENESS ALMOST UBIQUITOUS 

Key Stat

89% of European companies are either directly involved in, an influencer to, or informed of, mobility solutions in their organisation.

Decisions about mobility are predominantly made at C-suite level, with the CEO making mobility decisions in 35% of companies.

Adoption is also high, with 72% of companies having already implemented at least one mobility solution and a further 16% expecting to do so within 3 years. However, of all the available mobility solutions, the most widely adopted are the easiest to implement

• Public transport – 30% now or 3 years, 21% now
  • Bike share/lease – 29% now or 3 years, 17% now
  • Ride sharing – 28% now or 3 years , 19% now
  • Short or mid term rentals – 28% now or 3 years, 19% no

The broader, more embedded solutions such as a mobility budget (26%, 15% now) and app to book mobility solutions (20%,10% now) are still lagging relative to the simpler solutions,

Although mobility solutions are becoming an integral part of a company’s mobility strategy ,the adopted solutions are all considered add-ons, and the likelihood that a company will relinquish all or part of its fleet remains low, at just 10-12% of surveyed companies.

Fleetworx perspective – this reflects our experience. We observe that most of our clients have some form of mobility focus, such as encouraging public transport, but we see little evidence of more nuanced solutions such as ring-fenced mobility budgets being formalised and built into policy.

To discuss your car fleet and how Total Fleet Category Management from Fleetworx could help you deliver fleet excellence contact Graham Rees on +44 [0] 1926 353 300