In these tough times for business, the motor trade has had it tougher than most.
Redundancies, plants on extended shutdown, component manufacturers struggling and dealer forecourts desolate as a Spaghetti Western film set.
The Government-backed funding package for the motor industry, announced last week by business secretary, Peter Mandelson, has had a qualified welcome. Those at the front fender end of selling vehicles appeared to like the prospect of greater liquidity in the market (without access to credit, how can dealers close sales?) along with the potential for “scrappage schemes” that are already in gear elsewhere in the EU.
In the fleet motor market, companies are responding to the economic plight by holding on to contracted vehicles longer, according to the results of a Fleet Operator Attitude Survey featured in Fleet News. The survey also suggests businesses intending to negotiate hard with their leasing company on costs and keep a tight rein on fuel expenditure.
Fleet consultant, Colin Tourick, oft quoted by Fleet News, feels that deals will be hard to come by and firms should rather be looking to work with their contract hire provider to nail cost savings. And while he extols the virtues of extending replacement cycles on vehicles, it comes with issues that need to be managed – servicing, tyres and MOTs.
A spokesman for the British Vehicle Rental and Leasing Association told PR Media Blog: “In the current economic environment many companies are looking to extend their contract hire terms by six months or a year, giving them greater flexibility in uncertain times and saving costs, though these can sometimes be cancelled out by the greater maintenance costs associated with an older vehicle. Modern cars are very reliable so there are unlikely to be any added safety issues involved in extending the life of a fleet car by one year and 20,000 miles. There may be an issue in extending the contract of a heavily used vehicle that has already got well over 100,000 miles on the clock.”
As companies running fleets may be new to the concept of recession and extending contract lives, it provides a great opportunity to leasing companies to be the font of cost saving knowledge to fleet managers and financial directors.
The same can be said of a perennial, non-recessionary, problem: road safety.
This year will see anniversaries for the Corporate Manslaughter and Homicide Act and Road Safety Act, respectively making it easier to prosecute companies for manslaughter following a work-related death and penalising those who cause death while using mobile phones or speeding at the wheel. And now, the Health and Safety (Offences) Act 2008 – implemented last month – means even greater exposure to the law for fleet managers failing in their risk managment responsibilities. And with ordinary motorists getting jail sentences, how long will it be before a fleet driver implicates not only himself, but his bosses too?
The signs are not good: the RAC’s most recent Report on Motoring revealed a majority of company car drivers confessing to using mobile phones while driving (73%), driving too close to other motorists (75%) and failing to signal clearly (79%). RAC called for better training to improve driver behaviour; could this be a place where the leasing community could help companies – already under pressure to keep their businesses afloat - manage their road risk?
The BVRLA seems to think so, commenting: “Government guidelines clearly state that an organisation is responsible for the health and safety of any employee driving a vehicle for work. We would advise anyone managing a business fleet to take this very seriously and many of our members are able to help their customers manage this risk.”
And if compliance with the law isn’t a sufficient incentive for fleets to seek the best advice, they might be swayed by improved fuel efficiency, reduced vehicle damage, downtime and wear and tear.
Looking after both drivers and vehicles is a good advert for a company which takes its duty of care seriously. Reputation is such a critical ingredient for any organisation to protect, it makes no sense to let it perish in the wake of a road accident that could have been prevented.
Update: The latest on uptake of extended vehicle leasing contracts and the problems that come with them.
Jon Clements is a Chartered PR consultant specialising in B2B PR, corporate and marketing communications and is the founder of Metamorphic PR.