Diesel under pressure as buyers’ preferences change

Diesel under pressure as buyers’ preferences change

Posted by

Martin Brown

September 2017

Demand for diesel cars fell by more than 21% in August while registrations of conventional petrol vehicles grew by almost 4%, according to the latest figures. Petrol hybrid and pure electric vehicles (EVs) also increased substantially, up 74.9% and 62.5%, results that are in line with Fleet Alliance’s preference for a balanced powertrain approach.  

According to the statistics from the Society of Motor Manufacturers and Traders (SMMT,) fleet and business registrations were down almost 4% for the month, compared to August 2016.

However, SMMT data showed fleet and businesses grew their share of the market, with 42,836 units out of a total of 76,433 – 56% of a market. That compares to 44,371 registrations in August 2016, when fleet and business accounted for 54% of the overall market of 81,640 units.

Year-to-date, fleet and business registrations are virtually the same as they were for the first eight months of 2016. SMMT data shows that 921,307 cars have been registered to fleet and business out of 1,640 241 units – 56% of the market. For the same period last year, 921,803 cars were registered to fleets.

However, with more than 76,000 new cars registered last month, the performance still represents the third biggest August in the last 10 years. Year-to-date, the market remained broadly in line with expectations and is down 2.4%.

The growth in the uptake of pure EVs and plug-in hybrids reflects what looks like a shift in the buying preferences on company car drivers.

A recent poll by trade publication, Fleet News, found that the number of company car drivers who expect to have a petrol hybrid as their next car is almost as high as those expecting to take on a diesel.

Asked what their next company car would be, about a third (35.1%) of respondents said diesel, while 34.2% said they will opt for a petrol hybrid vehicle.

At the same time, about a sixth (16.9%) said they will choose a petrol-powered car, while almost one in 10 (8%) had set their sights on a pure electric vehicle (EV).

This mirrors the experience of major leasing companies, who report growing take-up of petrol and petrol hybrid vehicles over recent months.

Ironically, the head of the company which first identified that vehicle emissions were higher in pollutants than manufacturers claimed, believes that electric vehicles will never completely replace diesels.

Atsushi Horiba, Chief Executive Officer of Japan’s Horiba Ltd which makes 80% of the world’s emissions testing equipment, believes that electric vehicles will never make up more than a third of vehicles worldwide, because it is not feasible to build the scale of infrastructure to enable above that level of battery-powered cars.

Vehicles with internal combustion engines, including those using diesel, will continue to have a place, particularly in emerging markets, he says.

Fleet Alliance’s view is that fleet operators need to take a balanced view to the mix of vehicles on their fleet and that diesel, petrol, and hybrid powertrains all have a role to play.

While petrol definitely has an increasing influence on the fleet mix, thanks to the improved fuel economy of the latest generation of petrol models, in many instances, especially for high mileage fleets, diesel is still the answer.

Managing Director, Martin Brown, said: “The improving fuel economy of petrol models and their cheaper list price really can help to make them as financially viable to run as a diesel.

“But not in every case. Diesel still has an important role to play, but its importance will diminish over time. What that timeframe will be is difficult to ascertain. But for now, don’t discount diesel when it’s still the most appropriate choice for your fleet.”

Brown said that diesel has been the fuel of choice for the majority of fleet operators for a decade or more for a variety of reasons, including its fuel and cost efficiency and the tax advantages it offered for drivers.

“It’s important not to become too blinkered in the prevailing emotional anti-diesel mindscape. For fleets, a balanced view is what is required.

“Diesel still has an important place in any fleet but it’s critical to evaluate all cars to see where diesel is still relevant – or where a petrol or alternative fuel vehicle might fit in.”

 

AugustTotalDieselPetrolAFVPrivateFleetBusiness
201776,43330,30542,1603,96833,59741,899937
201681,64038,53140,6022,50737,26943,2801,091
% change-6.4%-21.3%3.8%58.3%-9.9%-3.2%-14.1%
Mkt share 201739.6%55.2%5.2%44.0%54.8%1.2%
Mkt share 201647.2%49.7%3.1%45.7%53.0%1.3%

 

Year-to-dateTotalDieselPetrolAFVPrivateFleetBusiness
20171,640,241712,842855,90271,497718,934859,71361,594
20161,680,799805,793821,11553,891758,996859,94861,855
% change-2.4%-11.5%4.2%32.7%-5.3%0.0%-0.4%
Mkt share 201743.5%52.2%4.4%43.8%52.4%3.8%
Mkt share 201647.9%48.9%3.2%45.2%51.2%3.7%

 


You also might like…

If you liked this article then check out our posts about similar topics

2024 will be the year of the EV with greater supply and lower prices, says Fleet Alliance

2024 will be the year that companies look to accelerate down the electrification route, as they seek to meet their own E...

Automotive transmission specialist Xtrac opts for EV salary sacrifice scheme from Fleet Alliance

Xtrac, the world’s leading supplier of high-performance transmissions for top level motorsport and high-performance au...

Fleet Alliance reports strong uptake in EV salary sacrifice

Increasing numbers of businesses are adding the employee benefit of leasing an EV through a salary sacrifice scheme to t...

Edwin James Group targets carbon reduction with electric vans from Fleet Alliance

Edwin James Group has taken delivery of its first electric vans from Glasgow-based fleet management specialist, Fleet Al...

IBMG halves its carbon footprint with Fleet Alliance

The Independent Builders Merchant Group (IBMG) has seen a reduction of more than 50% in the carbon footprint of its flee...

Fleet Alliance offers new tool to help businesses assess EV readiness

Fleet Alliance, the Glasgow-based leasing and fleet management specialist, has introduced a new solution to help busines...

Spring Budget brings a welcome cut to fuel duty

Chancellor, Jeremy Hunt, brought some cheer for fleet operators when he confirmed that the 5p cut in fuel duty, announce...

Salary sacrifice remains the choice for everyone following Autumn Statement

Salary sacrifice is to remain the choice for thousands of employees wishing to move to electric cars Using the hashta...

Ready to make the management of your fleet more efficient?

Request a call back


Or Call Us On: 0345 601 8407
Schedule a call back