The right vehicle for the job

Tough economic times have resulted in many organisations holding off a purchase of a new commercial vehicle. But now the market is recovering and there are many exciting vehicles to choose from

The past few years have been tough on everyone; businesses large and small have felt the pinch of the recession, while consumers cut back on spending. Schemes such as the Scrappage Incentive Scheme and Automotive Assistance Programme have helped the automotive industry to keep its head above water and now, with recovery setting in, UK automotive and all that rely on it can look to the future with a bit more confidence.

The collective belt-tightening of recent times was certainly seen in the commercial vehicle market. But the flip-side to this is there’s now a pent-up demand that should see registrations climb. Operators that held off a purchase, pushing their vehicles that bit further, now are in a position to invest in new kit.

It’s a great time to get back into the new commercial vehicle market as quality, efficiency and safety have now reached all time highs. Efficiency is top of many operators’ lists; at the light end of the market this is achieved through increasingly efficient diesel engines. More mpg and lower CO2 emissions are rewarded by lower tax rates and a better result at the pumps.

The latest heavy vehicles boast enhanced load-carrying capabilities so that the miles per tonne figure continues to climb without impacting on efficiency.

MARKET RECOVERY
SMMT registration data show that tractor units and vans are leading the recovery. Overall, truck volumes were up by a cumulative 7,937 for the nine months to the end of June: 94 per cent of that is due to tractor unit sales. For vans, although the numbers are different, the picture is very similar with registrations rising for 18 months in a row. Van figures have recovered strongly from the depths of recession in late 2009 and early 2010. This trend is reflected across most of Europe suggesting that the recovery could be sustainable.

A recent development in the commercial vehicle market is an enhanced profile for electric vans. As an area of the market that has traditionally been occupied by niche and specialist manufacturers, the entrance of mainstream and mass-market operators is sure to increase the competitiveness of offerings from all parts of the market.

With a typical range of up to 100 miles, electric vans are best suited to back-to-base and local delivery/trade use, but in coming years the range is set to grow as technology develops. Charging works best if vehicles can be plugged-in overnight – a move that also capitalises on lower electricity rates. This said, charging infrastructure developments are pointing towards the availability of rapid charge facilities that can top-up vehicles in minutes rather than hours.

As with all new technology, purchasing an electric commercial vehicle currently comes with a slightly higher price tag than its diesel equivalent. However, the higher purchase price can be outweighed over the life of the vehicle with charging costing around three pence per mile. Electric vans also benefit from no Vehicle Excise Duty (VED), can benefit from local authority free parking and are exempt from congestion and low emission zone charges.

THE RIGHT VEHICLE
Emissions are set to continue to dictate the market as legislators set increasingly challenging targets for manufacturers, and operators are encouraged by tax and fuel prices to consider efficiency at the top of their purchase criteria lists. With this in mind, it is important that buyers always consider the most appropriate vehicle for their needs.

Opting for the biggest load space isn’t necessarily the best bet as it can be more affordable to run a small van fully loaded than a half-empty larger van. Often operators buy a van that can carry the biggest load they will ever carry, despite the requirement being infrequent. It’s worth considering hiring a bigger van for the few times it’s required, with the greater efficiency on a typical day outweighing the hiring cost.

Looking ahead to the looming introduction of Euro VI for trucks and Euro IV in the London LEZ, it is inevitable that these factors will distort the market. In the longer term the addition of more LEZs across the UK and the general introduction of more advanced, even lower carbon technology, will all influence the nature and frequency of vehicle buying decisions.

Because of the diversity of the commercial vehicle market and the constant onslaught of new and innovative technology, buyers are faced with a tough task when deciding on the best vehicle for their needs. One of the best places to see the latest models and to talk to experts is the CV Show that is held each year at the NEC in Birmingham.

The annual event showcases everything from light vans to artic-tractor units and from CV converters to aftermarket products in the ‘Workshop’ part of the Show. Next year’s CV Show 2012 runs from 24-26 April and more information is available at www.cvshow.com.
In the short term, the economic outlook remains uncertain, and the commercial vehicle landscape looks to be as challenging as ever. Despite this, the underlying confidence of businesses and the wide range of exciting new vehicles coming on to the market points towards a slow but steady recovery that will hopefully set the UK market in good stead for years to come.

Written by the Society of Motor Manufacturers and Traders

FOR MORE INFORMATION
www.smmt.co.uk

About the SMMT
The Society of Motor Manufacturers and Traders (SMMT) exists to support and promote the interests of the UK automotive industry at home and abroad. Working closely with member companies, SMMT acts as the voice of the motor industry, promoting its position to government, stakeholders and the media.

Around 1.5 million cars and commercial vehicles and three million engines are produced annually in the UK, accounting for nine per cent of the UK’s total exports. With an annual turnover of 40 billion and a workforce of over 700,000 people, the UK is a key global player within the automotive sector and the industry is a significant contributor to the UK’s economy.

Like all industries, the automotive sector is facing a challenging time. The current economic climate and weak consumer confidence has resulted in falling registrations, across the entire vehicle market. While UK automotive production feeds global demand, strong and decisive action in the UK is needed to stabilise the new car market in particular, to assure the long term health of this vital contributor to the UK economy.

Through representation to government at home and abroad, national and international events, reliable automotive data and practical advice, SMMT plays a central role in the working life of the motor industry. Whether the industry is your business or it impacts on your organisation in any way, SMMT can deliver real business benefits to help your company meet the challenges of the future.