Coronavirus pandemic: Fleet industry transitions to keep wheels of business turning

The fleet industry and the wider automotive sector is transitioning rapidly as the UK and the rest of the world tackles the coronavirus (Covid-19) pandemic.

Prior and subsequent to Prime Minister Boris Johnson’s ‘lockdown’ address to the nation on Monday (March 23) there have been numerous developments and further changes impact on the fleet industry can be expected.

At the time of going to press the following is what is known:

  • Garages, fuel stations and car rental outlets are among the ‘essential businesses’ the Government is allowing to stay open.
  • When filling up with fuel it is advised to take ‘take sensible precautions’. These include: Following the social distancing guidelines and using disposable gloves when handling pumps or electric car charge point nozzles.
  • Individual businesses within the ‘essential businesses’ sectors may decide to close – Kia has announced that approximately 40% of workshops at its 196 dealerships will continue to run an essential-only service – and garage/workshops may have to rearrange existing vehicle servicing and repair bookings. Additionally, some garages are restricting some services such as collection and delivery and ‘while you wait’ servicing and are urging customers to clean their vehicles before handover.
  • All cars, vans and motorcycles which usually would require an MoT test are exempted from needing a test from Monday, March 30 2020 for six months, the Driver and Vehicle Standards Agency (DVSA) has announced. With legislation coming into immediate effect for 12 months, effectively it means that existing MoTs are valid for 18 months. Vehicles must be kept in a roadworthy condition, and garages will remain open for essential repair work. Drivers can be prosecuted if at the wheel of an unsafe vehicles. If drivers cannot get an MoT that’s due because they are in self-isolation, the Department for Transport is working with insurers and the police to ensure people are not unfairly penalised for things out of their control.
  • The DVSA has suspended MoTs for all HGVs, trailers and public service vehicles for up to three months from March 21, 2020. All HGV and PSV vehicles as well as trailers with an MoT will be automatically issued with a three-month certificate of temporary exemption. Operators will not receive a paper exemption certificate. Instead, the MoT will be extended by three months from its current due date. But the DVSA said that vehicles must be maintained, kept safe to drive and operated within the terms of Operators’ Licence conditions throughout that time.
  • Transport for London has temporarily suspended all road user charging schemes – the Congestion Charge, Ultra-Low Emission Zone and Low Emission Zone – in the city until further notice.
  • Car showrooms are among the businesses, premises and places that have been forced to close by the Government. As a result, new car and van deliveries are on hold.
  • Vehicle collections will almost certainly not occur. Vehicle remarketing companies have reduced their sale offerings to ‘online only’ sales at best as auctions are deemed to be ‘non-essential’ by the Government.
  • The suspension of vehicle production by almost every vehicle manufacturer in the UK and globally means that existing vehicle orders can be expected to be delayed and lead times will increase for future orders once plants again become operational. The length of factory closures varies, but typically runs to three or four weeks and longer in some cases with all manufacturers saying they will keep a production return under review.
  • Local authorities are delaying the introduction of planned Clean Air Zones later this year. Oxford City Council and Oxfordshire County Council, which were due to introduce the UK’s first Zero Emission Zone in the university city in December, now say the scheme will implemented in summer 2021. Meanwhile, Birmingham City Council has written to the Government requesting postponement to the launch of its Clean Air Zone. Scheduled for implementation in summer 2020, councillors have asked for a delay “until at least the end of the calendar year”. It is also likely that Leeds City Council will delay implementation of its Clean Air Zone, which is due for introduction on September 28. However, any delay has yet to be officially confirmed by the authority.
  • UK Road Offender Education, which operates, manages, administers and develops the National Driver Offender Retraining Scheme on behalf of the police, has suspended all classroom-based courses for an initial period of 12 weeks. The courses bring drivers together in one place, as an alternative to prosecution for some motoring offences including speeding. The organisation said that it would now work with forces and course providers to establish options to deal with drivers who had already been offered a course. Drivers will be contacted to explain what is going to happen next by the police force which issued the offer or the course provider. Drivers caught committing an offence when driving during the ‘lockdown’ are now likely to receive a fine and penalty points on their licence instead of the discretionary offer of a course that is no longer a current option.

Paul Ayris, fleet manager at Fleet Service Great Britain (Fleet Service GB) customer LiveWest, the largest provider of affordable homes in the south west of England, said: “We are monitoring the coronavirus situation daily. We will continue to provide essential business services to our customers and to protect our staff, and we have put contingency plans in place should our operations get disrupted at a point in the future.
“We appreciate that we are in uncertain times. We are working hard to ensure that it is business as usual for us and to continue to provide a full range of services to our customers. We recognise that we need to manage our services in a more flexible way and would like to thank everyone for their support.
“The need to have a functioning fleet is essential at all times, and especially at a time of national crisis. We are relaying on the support of our suppliers such as Fleet Service GB to provide the support they can in these difficult times, whilst appreciating they are in the same situation.”

Geoffrey Bray, executive chairman, Fleet Service GB, said: “With so many employees home-working and self-isolating many company cars are not clocking up the daily and weekly mileage they did previously. As a result, maintenance costs are reducing and some fleets are postponing services as well as maintenance and repairs because vehicle wheels are not turning.

“Equally, some garages and workshops are suffering from employees being off work and, as a result, are having to reschedule booked service, maintenance and repair work.”

Health and hygiene initiatives vital

Undoubtedly there will be changes in business practices as new health and hygiene initiatives are introduced to reflect the social distancing rules recommended by the Government.

For example, fast-fit giant Kwik Fit has said: “Where possible, our centres remain open and operating as normal, as is our mobile fleet. Our number one priority remains the safety and wellbeing of our people and customers, providing a safe and clean environment for everyone.

“The company has seen a 15% increase in enquiries for appointments for tyre fitting at customers’ homes, the majority of which are due to customers self-isolating after being impacted by the Government’s latest guidance on the coronavirus.

“The company, which operates a fleet of more than 200 mobile tyre fitting vehicles across the UK, has put special precautions in place to ensure that it is helping to stem the spread of the virus, while also ensuring that motorists have access to a safe car if they need it in an emergency.

“To avoid direct contact between the Kwik Fit technician and the customer, the company is asking customers to provide their car key without direct contact, for instance by putting the key on their front doorstep and going back inside. Once the customer is at a safe distance, the technician will pick the key up. Where possible, Kwik Fit will ask the customer to also provide the locking wheel nut from inside the vehicle. This way, Kwik Fit can carry out the work without entering the interior of the car.

“The technicians themselves are thoroughly cleaning their hands between each job and using fresh protective gloves for each vehicle. These measures, along with not coming into close contact with the customer, are designed to minimise any risk of passing infection between customers.

“We’ve temporarily changed our practices to help minimise contact and will not ask customers for their signature on paperwork or in store tablets. We will clearly demonstrate work that is required to make a vehicle safe, show drivers any parts removed and demonstrate any faults. Customers will be invited to receive quotations and invoices by email which we would appreciate them accepting to minimise contact.

“While normal life has been severely curtailed and many people are keeping travel to a minimum, it is still important for people’s peace of mind that their car is ready in case of emergency. Those car owners who are self-isolating have realised that mobile fitting is the perfect way to ensure their car is in a safe condition for when they are once more free to move around. We have responded to the increased requirements with greater stock levels to meet demand, but more importantly, by introducing key precautions to help reduce the spread of the virus.

“We will update our operations in accordance with Government advice and provide information via our website.”

Rival fast-fit National Tyres and Autocare, said in a statement: “We are taking extra precautions in our branches across the UK in response to the Covid-19 outbreak.

“All our staff routinely wear protective barrier gloves, fit seat covers and use floor mats before working on customers’ vehicles. Technicians work on ramps that are suitably spaced apart and customers do not need to interact with staff in the workshops space.

“As an additional precaution, and to minimise contact with staff and other customers, drivers have the option to call the branch when arriving rather than coming in to our reception area. We will see customers in order of arrival and they can remain in their vehicle until we are ready to begin work. Customers may wait in our reception area or if they prefer to leave the premises, we will give them a call to return when work is complete.

“We share everyone’s concerns in this unsettling period and will do everything we can to keep customers and our staff safe while working on a vehicle.”

Garage ‘concerns’ at MoT extension

Independent garages are “concerned” that their cash flow will be impacted by the Government’s decision to exempt all cars, vans and motorcycles from an MoT for six months.

Their trade body, the Independent Garage Association (IGA), has called on the Government to change the measure. The IGA has urged to Government to start with an initial six-week MoT extension period, which could then then reviewed on a weekly basis, rather than the six months plan.

In a statement, the IGA said: “There are a number of reasons why deferring MoTs by six months will have a huge detrimental impact on the independent sector, which carries out over 80% of the UK’s 30 million yearly MoT tests.

“The Government needs to consider that many MoT operations, being small businesses, will have their cash flow seriously impacted once this situation is over. Next year will bring about a significant reduction of tests in March/April/May and with some businesses in this sector only conducting MoT tests, in these instances, the crisis will extend for many years ahead.

“The current MoT failure rate is 31%, which means that nearly 10 million vehicles do not meet even the basic roadworthiness level of compliance. Any length of MoT extension will consequently increase the number of vehicles that are unroadworthy, even given reduced usage, so the Government needs to take this into consideration.”

Stuart James, IGA chief executive, added: “We understand that measures need to be put in place to fight the virus, and support these measures, however we do not agree with the six months extension of MoTs. We urge the Government to show a degree of flexibility, as the repercussions for the independent sector will be severe.”

Vehicle rental support employers

The British Vehicle Rental and Leasing Association (BVRLA), whose rental members operate 1,800 outlets UK-wide and a combined fleet of 371,000 cars, vans and trucks, said: “Many people think of vehicle rental as the car that they pick up from an airport on their annual holiday. In reality, around half of all vehicle rental transactions are with businesses supporting the transportation of people and goods.”

BVRLA chief executive Gerry Keaney said: “In these challenging times, vehicle rental is focussed on its most important customers. Right now, our members are providing cars to police forces, district nurses and Ministry of Defence sites; vans to plumbers and gas engineers; refrigerated lorries to food distributors and minibuses to schools with special educational needs.

“They may not have flashing lights or logos, but tens of thousands of rental vehicles across the UK are helping to keep our infrastructure running, our food stores stocked and our families safe and well.”

Used car prices tumble

Meanwhile, evidence is emerging of used car prices tumbling with the UK in the grip of the coronavirus pandemic. Conversely, the buoyancy of long-term used car prices could be helped by a slowdown in new car registrations in 2020.

Data from automotive valuation analysts Cazana, which studies market retail-driven pricing data on a real-time basis, suggests that over the middle two weeks of March the average price of petrol cars declined across all segments. Prices in the luxury car sector fell 16.96%, which the company called “very significant, and it was followed by: Executive cars down 7.33% and superminis down 5.87%.

By contrast the diesel sector is far more upbeat with prices increasing in all sectors apart from lower medium. Superminis showed the biggest positive uplift at 24.71% in retail pricing terms.

Cazana said: “Retail pricing for newly listed cars dropped by 6.6% between the second and third week of March representing a dip of on average £1,491 per vehicle.”

Used vehicle market experts at CAP HPI expect values to fall “by more than the seasonal norm over the coming weeks”. Its latest data reveals an average drop of 2.2% (-£275) on cars at the three-year/60,000-mile point. For newer used cars, the drop was 1.8% (-£425) at the one-year/20,000-mile point.

CAP HPI continued: “Our short-term forecasts for the coming months will be worse than otherwise would have been the case, as the effects of Covid-19 continue to be felt. At present, our longer-term forecasts for one to five years in the future are likely to remain broadly unchanged, as we wait to see longer-term impacts on new car registrations, especially following plant closures from many manufacturers. A fall in registrations this year could help support used values in the long term, and there are also a great many other factors which could yet influence values in various directions.”

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19

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