The largest segment of the company car market is likely to continue, weakened perhaps, and changed certainly, but not killed off. That is the fleet car segment, where cars are not management perks, but a trade tool.
Successive Chancellors have made no secret of the fact that they would like the company car 'perk' to fade slowly away. Their thinking seems to e having some effect. Personal tax liabilities have crept up to the point where some executives now need their pocket calculators to assess whether a car is really still a benefit worth enjoying.
On the employers' side, the combination of are cession and a liability for national travel company contributions n car and fuel benefits has caused many a fleet renewal to be postponed or re-thought. For all this, though, the largest segment of the entire huge company car market is likely to continue - weakened perhaps, and changed certainly, but not killed off. That is the 'fleet car' segment, where vehicles are provided as a tool of the trade rather than a management perk (though the difference, of course, is not always clear).
Traditionally, fleet business has been dominated by the 'big four' - those with British-based car plants; namely Ford, Peugeot, Rover and Vauxhall. Probably this has been more a recognition of wider availability and cheaper running costs than any great feeling of patriotism. Judged on volume, the Big Four still dominate matters. Times have changed, however, and just about every concern which imports a saloon, hatchback or estate car with an engine between one and two liters now feels that it has a chance to grab at least a small share of fleet business.
The main reason for the change is that many firms no longer buy and maintain their own fleets of cars. Instead they use a great number of contract, contract hire and fleet management schemes. This means they can afford to be more flexible in car provision: running costs between rival makes and models often vary only slightly, and the hire company usually takes all the risks on reliability and resale which made in house fleet managers so conservative in their choices. The result is a far greater element of 'user-chooser'. And why not? choice simply recognizes that cars are important to the people who use them. The employer who is prepared to offer a choice is likely to have more satisfied and better motivated staff.
Some other trends are apparent, too. After a dip in popularity, diesel has bounced back. The fuel is cheap, the engines are economical and the cars are far more pleasant to drive than they were. 'Down-sizing' (another ghastly industry catch-phrase) has also taken hold. It is another natural consequence of recession - companies either keep cars longer or replace them with smaller ones - but also, perhaps, of a more fundamental shift in opinion, small cars are now better equipped, more space efficient and more refined than ever, making many of them a tempting proposition.
But the fuse wire is still burning on what could turn out to be the biggest explosion in the company car market, the arrival of the Japanese; or rather, the made-in-Britain Japanese. Nissan already has a factory up and running, Honda's is working too (and expanding fast), while Toyota's will be in action by the end of 1992. Only a very unpleasant fight between Nissan and its British concessionaire, whose distribution contract Nissan has terminated, has stopped the impressive, Sunderland built Primera already taking a chunk of fleet sales. It is a natural rival to the Vauxhall Cavalier whose sales it wants to steal - so much of arrival that it almost looks like the Vauxhall's twin brother.
Successive Chancellors have made no secret of the fact that they would like the company car 'perk' to fade slowly away. Their thinking seems to e having some effect. Personal tax liabilities have crept up to the point where some executives now need their pocket calculators to assess whether a car is really still a benefit worth enjoying.
On the employers' side, the combination of are cession and a liability for national travel company contributions n car and fuel benefits has caused many a fleet renewal to be postponed or re-thought. For all this, though, the largest segment of the entire huge company car market is likely to continue - weakened perhaps, and changed certainly, but not killed off. That is the 'fleet car' segment, where vehicles are provided as a tool of the trade rather than a management perk (though the difference, of course, is not always clear).
Traditionally, fleet business has been dominated by the 'big four' - those with British-based car plants; namely Ford, Peugeot, Rover and Vauxhall. Probably this has been more a recognition of wider availability and cheaper running costs than any great feeling of patriotism. Judged on volume, the Big Four still dominate matters. Times have changed, however, and just about every concern which imports a saloon, hatchback or estate car with an engine between one and two liters now feels that it has a chance to grab at least a small share of fleet business.
The main reason for the change is that many firms no longer buy and maintain their own fleets of cars. Instead they use a great number of contract, contract hire and fleet management schemes. This means they can afford to be more flexible in car provision: running costs between rival makes and models often vary only slightly, and the hire company usually takes all the risks on reliability and resale which made in house fleet managers so conservative in their choices. The result is a far greater element of 'user-chooser'. And why not? choice simply recognizes that cars are important to the people who use them. The employer who is prepared to offer a choice is likely to have more satisfied and better motivated staff.
Some other trends are apparent, too. After a dip in popularity, diesel has bounced back. The fuel is cheap, the engines are economical and the cars are far more pleasant to drive than they were. 'Down-sizing' (another ghastly industry catch-phrase) has also taken hold. It is another natural consequence of recession - companies either keep cars longer or replace them with smaller ones - but also, perhaps, of a more fundamental shift in opinion, small cars are now better equipped, more space efficient and more refined than ever, making many of them a tempting proposition.
But the fuse wire is still burning on what could turn out to be the biggest explosion in the company car market, the arrival of the Japanese; or rather, the made-in-Britain Japanese. Nissan already has a factory up and running, Honda's is working too (and expanding fast), while Toyota's will be in action by the end of 1992. Only a very unpleasant fight between Nissan and its British concessionaire, whose distribution contract Nissan has terminated, has stopped the impressive, Sunderland built Primera already taking a chunk of fleet sales. It is a natural rival to the Vauxhall Cavalier whose sales it wants to steal - so much of arrival that it almost looks like the Vauxhall's twin brother.
