Business booms for Fleet Service Great Britain as customer-centric, technology-led company enters fourth year of operation

Senior management team members (left to right): Pete Hitt (head of operations), Sarah Clifford (head of service delivery), Geoffrey Bray (executive chairman) and Marcus Bray (head of sales) with Fleet Service GB employees.

Business is booming for Fleet Service Great Britain (Fleet Service GB) as the co-ownership company moves into its fourth year of operation.

Fleet Service GB was launched in April 2015 by an experienced management team with a focus on delivering customer service excellence and a comprehensive range of fleet management solutions underpinned by industry-leading technology.

The company is now managing almost 7,000 cars and commercial vehicles for a wide range of clients that include Stannah and VPS Group; has relocated into new headquarters on a Corsham business park four times larger than its launch premises; and its growing customer base means that it now employs 22 people.

Fleet Service GB is led by head of sales Marcus Bray, who with his father and stepmother was instrumental in the growth of Fleet Support Group from a kitchen table concept to becoming the UK’s largest privately owned fleet management company managing 55,000 vehicles and drivers before the business was sold.

Mr Bray said: “Fleet Service GB is growing at a manageable pace based on a partnership approach with customers.

“Fleet Service GB is successful because as a fleet management company it truly understands the needs of each client and becomes a genuine extension of a customer’s management team. Hand-in-hand we identify and specify objectives and work together to find and deliver solutions utilising cutting-edge technology.

“Fleet Service GB continually strives to deliver fleet solutions that are the most cost-effective for customers, while always ensuring that vehicles, drivers and journeys are managed efficiently and effectively.

“Fleet Service GB through online solutions and technology such as its Driver App and Achieve Driver Management programme provides customers with all the necessary tools to manage vehicles, drivers and journeys with work-related road safety compliance to the fore.”

Fleet Service GB’s unique co-ownership company, in which members of the senior management team are all shareholders, meant that employees, said Mr Bray: “Would not simply go the extra mile, but the extra 10,000 miles to deliver world-class solutions.”

He continued: “We spend our customers’ money as if it was our own, but Fleet Service GB is not part of a giant corporation and does not have venture capitalists sitting on its back.

“Fleet Service GB is a profitable but cost-conscious company. As the customer base expands the business is investing in people and new fleet management solutions that deliver cost savings to clients.”

Services include in-life car and commercial vehicle fleet, maintenance, accident, risk and hire management; a range of other services that includes fines management; and a 24×7 service that includes an out-of-hours facility manned by expert staff and not outsourced to a third party as with most fleet management providers. Additionally, Fleet Service GB uses its expertise to assist customers with vehicle funding and disposal decisions.

Mr Bray said: “Through the technology already being utilised and that which continues to be developed by our own experts in partnership with customers, Fleet Service GB is on the road to delivering its vision of a totally integrated vehicle, driver and journey management solution that provides fleet decision-makers with all required information via a straight-forward dashboard to make critical decisions.”

Stannah, the UK’s leading independent supplier of lift products supplying goods as diverse as loading systems, service lifts, platform lifts, homelifts and stairlifts, and VPS Group, which specialise in securing, maintaining and managing vacant property across a wide range of customer and industry sectors, are two of Fleet Service GB’s largest customers operating more than 700 and 650 cars and light commercials respectively.

Martin Carter, Stannah’s group information systems director, who manages the company’s fleet, said: “Stannah is very open with Fleet Service GB about what it is trying to achieve. We want to maximise the use of technology to collect data so we can exactly identify what our costs are so we can effectively and efficiently manage the fleet.

“In Fleet Service GB, Stannah has a partner that understands what it is aiming to do and gets on and does it for us. Fleet Service GB understands the culture of the Stannah business, makes the right decisions on our behalf and is very good at doing so.”

Steve Mulvaney, head of fleet at VPS UK, said: “Fleet Service GB is responsible for the day-to-day management of the fleet. The Fleet Service GB team is hugely knowledgeable and experienced and through its skill VPS is benefiting from financial savings delivered across the fleet as well as ensuring compliance with best practice

“Fleet Service GB is going the extra mile in managing the VPS fleet and continues to deliver enhanced service, fleet efficiency and sustainable cost reduction and control through the data provided.”

Life-saving eCall technology mandatory in all new cars and vans

Emergency call devices that automatically alert rescue services to crashes now have to be fitted to all new type approved models of cars and light commercial vehicles.

The European Union eCall in-vehicle system automatically dials 112 – the European Union emergency number which also works alongside 999 in the UK – in the event of a serious road crash.

The mandatory fitment of eCall came into effect on March 31 with the aim of speeding up emergency response times to road traffic crashes. It is estimated that it could save up to 2,500 lives across Europe each year – 10% of fatalities.

According to the European Commission, the automatic emergency call system will reduce response times by up to 40% in urban areas and up to 50% in rural areas.

eCall is designed to automatically call emergency response, including notification of a vehicle’s location. Using GPS, the in-vehicle hardware sends a 140 byte ‘data telegram’ including time of the emergency call, the vehicle type and location, the drive type, the number of passengers, the direction of travel, the way in which the emergency call was triggered and other information.

The system, which has its own sim card, activates automatically as soon as an airbag is deployed. A driver can also manually use the feature, for example if they witness an incident.

For some years a number of vehicle manufacturers including BMW, PSA Peugeot Citroen, Vauxhall and Volvo have offered their own systems, where vehicle occupants can either call for emergency help or the vehicle does it automatically if the electronic safety devices are activated, but eCall is an industry-wide standard.

BT is the UK provider of the emergency call centres for 999 (112), which will pass the appropriate information on to the relevant police control room.

Erik Jonnaert, secretary general of the European Automobile Manufacturers’ Association (ACEA), said: “eCall has the potential to save many lives by shortening the reaction time of emergency services. This means that ambulances, fire engines and the police can intervene as quickly as possible within the ‘golden hour’ after a collision.

“The rollout of eCall is just one of many developments designed to limit the effects of road accidents. Looking towards the future, ‘active safety’ technologies – which can prevent accidents from happening at all – offer massive potential to further improve road safety, for example by automatically intervening when a driver fails to react in time.”

Employees to face demands in 2018/19 for unpaid tax as OpRA impacts

Thousands of employees with a company car or cash allowance option are expected to face a demand for unpaid tax in 2018/19 as Optional Remuneration Arrangements (OpRA) begin to bite.

The new rules came into effect on April 6, 2017 and apply to car salary sacrifice schemes and car or cash allowance programmes. Essentially the new rules mean employees opting for a salary sacrifice arrangement or taking a company car in lieu of a cash alternative will pay tax on the “greater of” the existing company car benefit value and the salary sacrificed or cash allowance given up.

When the government published details of the new rules following the initial announcement in the 2016 Autumn Statement it said that car arrangements in place before April 6, 2017 would be protected until the earlier of April 2021 or “a variation, renewal, modification of the arrangements” was introduced. Additionally, ultra-low emission vehicles (ULEVs) – currently those with CO2 emissions of 75g/km or less – are exempt from the regulation.

However, due to the rapid introduction of the new rules, HM Revenue and Customs (HMRC) had no official mechanism in place to report a higher salary sacrifice/cash allowance in 2017/18. Additionally, many company payroll departments were not set up to handle the impact of OpRA rules on tax. As a result, detailed information will not be reported until P11D submissions are made by employers in July.

Consequently, it is widely believed that in many cases only employees who entered into a company car arrangement for the first time or exited a scheme for the final time in 2017/18 will have had their tax arrangements correctly reconciled.

Therefore, many tax experts believe employees can expect to have their tax codes changed in August, following submission of their P11D, to take account of any unpaid tax under OpRA rules.

Employment tax expert Alastair Kendrick, of Ak Employment Tax Services, said: “Employees have, I believe, been left in the dark. It is a terrible piece of communication because many employees have been unaware of the “greater of” rule where they had a cash or car option. Many employees will have chosen a tax efficient car, but they will actually pay tax on the value of the higher optional cash allowance. They have been paying tax on a company car, but the wrong amount and will get a shock when they are told what the correct amount should be.

“As a result, when employees realise the impact of OpRA rules they have been asking for their contracts to be changed to remove the cash option, but they will potentially face a bill in 2018/19 for unpaid tax relating to 2017/18.”

He added: “Most employees will not have a contract of employment that is ring-fenced until 2021 so the exemption rules may not apply and protection against OpRA could be removed at that point. Contracts of employment are generally reviewed annually, so OpRA could bite and that is what many employers and employees have failed to appreciate.”

Furthermore, there is an anticipation that depending how HMRC interprets “a variation, renewal, modification of the arrangements” could result in employment lawyers contesting demands on employees for underpaid tax.

See HMRC 480 (2018) ‘Expenses and benefits: A tax guide’ at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/683008/480_2018__Expenses_and_benefits_a_tax_guide.pdf

MoT changes: New defect types and stricter rules for diesel car emissions

The MoT test will change on May 20, with new defect types, stricter rules for diesel car emissions, and some vehicles over 40 years old becoming exempt.

The changes affect cars, vans, motorcycles and other light passenger vehicles and, while the 40-year exemption may not apply to company cars and vans the other changes most definitely do.

It should also be remembered that the changes apply to the way that the MoT test works in England, Scotland and Wales. The MoT works differently in Northern Ireland.

The Buzz first highlighted the changes in February, but as the implementation date draws closer the five main changes are:

Defects will be categorised differently

Defects found during the MoT will be categorised as either: Dangerous, major or minor with the first two resulting in a test failure. The category of defect the MoT tester gives each item will depend on the type of problem and how serious it is.

MoT testers will still give advice about items vehicle owners/operators/drivers need to monitor. They are known as ‘advisories’.

An example provided by the Driver and Vehicle Standards Agency (DVSA) of a ‘dangerous’ vehicle item is one with ‘a direct and immediate risk to road safety or has a serious impact on the environment’ which would result in an MoT failure and the vehicle not able to be driven until a repair was carried out.

A ‘major’ vehicle item, which would also result in an MoT failure and a reminder to repair as soon as possible is deemed as one that ‘may affect the vehicle’s safety, put other road users at risk or have an impact on the environment’.

A ‘minor’ vehicle item, which would result in a vehicle passing its MoT along with a reminder to repair as soon as possible is described as one having ‘no significant effect on the safety of the vehicle or impact on the environment’.

An ‘advisory’ again would not stop a vehicle passing its MoT, but is deemed as potentially ‘becoming more serious in the future’ and should be monitored and repaired if necessary.

Stricter rules for diesel car emissions

There will be stricter limits for emissions from diesel cars with a diesel particulate filter (DPF). A DPF captures and stores exhaust soot to reduce emissions from diesel cars.

The vehicle will get a ‘major’ fault and thus result in an MoT failure if the tester:

  • Can see smoke of any colour coming from the exhaust
  • Finds evidence that the DPF has been tampered with.

New items included in the MoT

Some new items previously not included in the MoT will now be checked. They include checking:

  • If tyres are obviously underinflated
  • If the brake fluid has been contaminated
  • For fluid leaks posing an environmental risk
  • Brake pad warning lights and if brake pads or discs are missing
  • Reversing lights on vehicles first used from September 1, 2009
  • Headlight washers on vehicles first used from September 1, 2009 (if they have them)
  • Daytime running lights on vehicles first used from March 1, 2018 (most of those vehicles will have their first MoT in 2021 when they’re three years old)

There are also other smaller changes to how some items are checked.

The MOT certificate will change

The design of the MoT certificate will change. It will list any defects under the new categories, so they’re clear and easy to understand.

Some vehicles over 40 years old won’t need an MoT

Cars, vans, motorcycles and other light passenger vehicles won’t need to have an MoT if they’re over 40 years old and have not been substantially changed. Currently, only vehicles first built before 1960 are exempt from needing an MoT. When the rules change on May 20, vehicles won’t need an MoT from the 40th anniversary of when they were registered.

  • Electric vans up to 3.5 tonnes first registered since March 1, 2015 must now undergo an MoT – bringing them into line with MoT rules governing electric cars and all other light commercial vehicles. The Department for Transport has made the decision following a public consultation that concluded last year. Electric vans first registered before March 1, 2015 remain exempt from the MoT. However, the government is awaiting European Union approval to lift the weight limit for electric vehicles to 4.25 tonnes – currently 3.5 tonnes – above which businesses require an Operator Licence. While, expected to be a formality, the approval is likely to mean a subsequent lifting of the MoT requirement to 4.25 tonnes.

Fleet operating costs to rise as air conditioning re-gas prices escalate

A shortage of ‘old style’ air conditioning gas is resulting in price increases for a refill and service, garages have reported.

The price increases of around £10 – some independent garages are quoting almost £60 for an air conditioning gas refill and £75 for an air conditioning service – are due to changes in vehicle air conditioning gas regulations that came into effect on January 1, 2017.

The European Union regulatory changes were on the table for more than a decade and essentially have seen the introduction of a new air gas refrigerant known as R1234yf.

It is claimed to be more environmentally-friendly with a lower global warming potential than the gas it replaces, which is known as R134a. It is this ‘old style’ gas that is impacted by the price increase.

Mainly due to the phasing out of hydrofluorocarbons (HFCs) by the European Union – HFC refrigerant is the R134a air conditioning gas used in most cars and vans – there is a shortage.

Last year, 2017, saw an 11% reduction in availability of HFC refrigerants. But from 2018 to 2020 there will be a 37% decrease in availability, which is in turn forcing the price up for that particular refrigerant and therefore the cost of vehicle air conditioning services, including recharging. There will be further reductions from 2020 of another 50%.

As a result, over the coming years’ further price rises for an air conditioning recharge can be expected unless supply of R134a is relaxed by the European Union.

The Independent Garage Association (IGA) said: “[We have been] in contact with manufacturers, suppliers and trade bodies to try and find the root cause [of the price increase], but we don’t have a clear picture or primary reason for the increase beyond the simple facts of supply and demand economic.”

Consequently, the IGA believes that European Union rules and introduction of the quota system for the supply of R134a air conditioning gas has triggered the price increase.

Use of the new gas (R1234yf) has been phased in as manufacturers have introduced new models to the market, from January 1, 2017 – although some manufacturers made the change ahead of the mandatory date – meaning there is now a complete ban on the use of R134a. That means all cars and light vans registered from that date must use the new air conditioning refrigerant in their systems.

A further impact on fleet operating costs is that the new gas is significantly more expensive than R134a gas with potential re-gas costs of between £150 and £300 depending on vehicle make and model, the quantity of gas held in the system and labour charges. Nevertheless, as more vehicles use R1234yf) current charges can be expected to reduce.

Despite the increase in the cost of R134s, garages highlight that the benefits of regularly servicing a vehicle’s air conditioning system include:

  • It keeps the air conditioning unit lubricated and working. If it dries out the seals can become brittle and will need to be replaced, which can be costly.
  • Periodic servicing keeps a vehicle’s service record up to date. Generally it should be done every two years.
  • Conditioned air in a vehicle is easier to breath and can have health benefits.
  • A working air-conditioned unit will quickly demist the inside of windows.

Businesses face added risk as keyless van theft increases

Keyless van thefts are on the increase with vehicle security company Tracker suggesting that 82% of models recovered last year were stolen without the owner’s keys – up by nearly 100% compared to 2016 (44%).  

The Ford Transit was again the most popular van stolen last year and accounted for more than half of the LCV recoveries made by Tracker.

“Keyless entry technology has now been widely adopted in the LCV market, and this is evident in the fact that last year there was a two-fold increase in LCVs being stolen without the owner’s keys,” said Andy Barrs, head of police liaison at Tracker.

“The relatively new trend in vehicle theft termed ‘relay attack’, that allows criminals to harness more sophisticated theft techniques to overcome existing vehicle security technology, such as immobilisers and keyless entry systems, has played a significant part in this increase.”

The impact of van theft went beyond just having the inconvenience of being without a vehicle, according to Tracker.

As well as the hassle of dealing with insurers to get a vehicle replaced, owners needed to consider the financial impact – increase in insurance premiums, cost of replacing tools and the administration cost of dealing with everything. Brand reputation and productivity could also be at risk if a business could not serve its customers.

Mr Barrs said: “It’s not just about protecting a van from being stolen but safeguarding a business too. Technology is just one part of vehicle security and more vigilance needs to be taken across the board; this includes van owners, manufacturers, dealers, insurers and the police. Whilst a tracking device won’t stop a van being stolen, it can significantly increase the chances of the police locating and returning it to its rightful owner.”

Meet the team – Pete Hitt

Name: Pete Hitt

Job Title:  Head of operations

Explain your role in 10 words: Fast moving total cradle to grave fleet management service provision.

What’s the best aspect of your job?  Vehicles

What’s the worst aspect of your job?  Vehicles

How long have you worked at Fleet Service GB? Three years

What was your first paid job?  Served cream teas at Wookey Hole Caves

What’s your favourite car?  1995 – Ferrari F355

What one thing would you like to achieve before you retire? Cycle from Land’s End to John O’Groats unsupported in less than 10 days.

Outside of Fleet Service GB, what would your dream job be? Test driver and quality control for a premium motor manufacturer.

Who in the world would you most like to meet? Peter Kay

What is your favourite way to spend a day outside of work? Early morning dog walk in woods, brunch, cycle ride, rugby on TV.

If you won the lottery how would you spend the cash? Look after nearest and dearest and then mostly cars and self propelled toys.

Not a lot of people know that …………………… I have a fear of any fairground rides that are any more involved than the dodgems!!!

Fleet chiefs must select right car for the right job, says FSGB, as ‘war on diesel’ intensifies and manufacturers axe models

Fleet decision-makers must remain focused on operating the right cars for the right job amid media hype surrounding the ‘war on diesel’.

The so-called ‘demonisation of diesel’ by a largely ill-informed national media has been blamed for the slump in new car diesel registrations – down 17.1% last year and 24.9% in the first two months of this year, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

The organisation has blamed the dramatic decline in diesel demand – fleet’s favourite fuel this century – on a variety of factors including: recent government changes to vehicle taxation, air pollution concerns and the Volkswagen Group ‘dieselgate’ emissions cheating scandal.

However, a number of manufacturers are moving away from producing diesel cars as buying habits change with Toyota the latest to announce that it will axe all diesel cars from its model line-up by the end of 2018.

However, the SMMT has also highlighted that the anti-diesel backlash – alongside the slow take-up of electric vehicles – means that the UK could miss its environmental targets. Last year new car tailpipe emissions increased for the first time in two decades as the drop in diesel demand heralded a move to petrol models that consume more fuel than diesel equivalents and emit, on average 15-20% more CO2, the SMMT said.

SMMT chief executive Mike Hawes said: “The industry shares government’s vision of a low carbon future and is investing to get us there – but we can’t do it overnight; nor can we do it alone. The anti-diesel agenda has set back progress on climate change, while electric vehicle demand remains disappointingly low amid concerns around charging infrastructure availability and affordability.

“To accelerate fleet renewal, motorists must have the confidence to invest in the cleanest cars for their needs – however they are powered.”

That said the SMMT, included today’s new breed of Euro6 compliant diesel engines.

The UK government last year said it would ban the sale of new diesel and petrol cars from 2040 – although not hybrids – with the Scottish government saying it would make a similar move from 2032.

How sustainable the switch back to petrol will be would be heavily influenced by legislators and the most vocal lobbyists, according to the latest analysis by automotive industry analysts and consultants Experteye.

Commenting on last year’s UK rise in new car carbon dioxide (CO2) emissions, Experteye’s newly published ‘European Automotive Report – 2nd half 2017’ report said expectations were for a further rise in 2018 as new car petrol sales gathered further momentum and the diesel decline continued.

The report said: “The challenge legislators across Europe need to get to grips with is that this is not a single issue with a one size fits all solution. Even electric vehicles create environmental issues, whether it is the potential for increases in greenhouses gases in countries like Germany and the UK, which rely heavily on fossil fuel electricity generation, or the drain on rare minerals like cobalt and lithium. Any government or European-wide strategy needs to listen to all sides and not follow the loudest voices to avoid yet another knee-jerk reaction.”

However, the Experteye report warned: “With some of the tax benefits being removed and new charges coming in, the decision about diesel has once again started to have more to do with function and need.”

Fleet Service Great Britain’s message to customers to focus on ensuring they acquire the right new cars for the right operational reasons and don’t get blown off course by media hype comes with a number of vehicle manufacturers announcing that they will be ending the production of diesel cars.

Last year Volvo said it was to stop manufacturing petrol and diesel cars with all new models fully electric or hybrid by 2019. It was the first mainstream carmaker to make the move (The Buzz; July 2017).

This year it has been followed by Porsche, which, while diesel accounts for a small proportion of sales, has confirmed the axing of diesel models from the Macan SUV and Panamera ranges, although the new Cayenne is still expected to feature a diesel powertrain. Nevertheless, it is a clear signal that the manufacturer sees its future based on the sale of petrol and electric models.

Fiat Chrysler has also announced that it will end diesel car production by 2022, following a drop in European consumer demand in the wake of the ‘dieselgate’ emissions cheating scandal that hit the Volkswagen Group, which includes Porsche.

While on the eve of this month’s Geneva Motor Show Toyota said that it would phase out diesel from all its passenger cars in 2018 due to ‘strong customer demand’ for hybrid electric vehicle versions of its core models. The decision makes Toyota the second mainstream motor manufacturer – following Volvo last summer – to announce that it is to axe diesel cars from its powertrain line-up.

In 2017, hybrid electric vehicle accounted for 41% of Toyota Motor Europe’s total sales, an increase of 38% year-on-year to a total of 406,000 units. By contrast, the diesel mix for Toyota passenger cars was less than 10% during the same year.

However, Toyota will continue to offer diesel engines in commercial vehicles including Hilux, Proace and Land Cruiser to meet customer needs.

Johan van Zyl, president and CEO of Toyota Motor Europe, said: “Toyota has been pioneering hybrid electric vehicle technology for more than 20 years. For several years, hybrid electric vehicle have been the dominant powertrain where they have been offered.

“In our latest new model, the Toyota C-HR, hybrid electric vehicle accounted for 78% of sales last year.

“As part of our electrified vehicle strategy, we are progressively expanding our hybrid electric vehicle offering with a second, more powerful 2.0-litre engine. Starting with the new generation Auris, this expanded hybrid electric vehicle line-up is a natural reaction to our passenger car customers’ demands.

“Toyota’s hybrid electric vehicle mix in passenger cars reached equality with the diesel mix in 2015. Since then, hybrid electric vehicle sales have substantially exceeded those of our diesels. In commercial vehicles, where personal and business needs, for example, torque and payload, remain, we will continue to offer the latest technology diesels.”

Meanwhile, Honda’s new CR-V SUV will not be available with a diesel option, although a hybrid powertrain will be available for the first time. The car was revealed at this month’s Geneva Motor Show with first deliveries of models fitted with the 1.5-litre VTEC Turbo petrol engine expected in the autumn with hybrid models following early in 2019.

Finally, amid the switch away from diesel, the Experteye report warned that there could be reduced second-hand demand as fleets and leasing companies defleeted smaller diesel cars, which are traditionally bought by private consumers.

The report said: “With that in mind it is unsurprising to see the residual value setters generally continuing to reduce residual values on smaller diesels like the C segment.”

The report continued: “The smaller MPV and SUV segments are also starting to reflect a change in residual value setters’ approach as the industry moves away from incentivised diesel to a wider mix of powertrains, as concerns grow about future demand for used diesels in the market place given the sharp decline seen in new diesel sales.

“The media reporting of ‘dirty diesel’ has pushed buyers away from replacing what are dirtier older diesels with clean and efficient Euro6 engines and instead encouraged the sale for petrol powered vehicles which has resulted in the first increase seen in CO2 emissions since almost the start of the century in a number of countries. Thanks to political grandstanding the downward trend shows no sign of stopping and we may soon be back to the circa 32% diesel market share we saw in 2000.”

The report concluded: “As expected, residual values have remained relatively stable at an overall level across most of Europe and this is going to continue through 2018 and 2019 but the devil is in the detail.

“Petrol residual values have been on the rise as residual value setters see the change in the demand in the new car market, whilst diesel values have remained stable in some markets and falling in others. As 2018 progresses we expect to see this divide widen, however with diesel making up the majority of fleet vehicles we expect the overall impact will be a fall in the Residual Value Index of a percentage point or two this year and again in 2019.”