Fleet & Mobility Barometer 2022: “Resilience amid turbulence”
"Fleets are resilient in a continually turbulent environment”, says Yaël Bennathan (pictured), Head of Arval Mobility Observatory, in an exclusive conversation with Fleet Europe about the Arval Mobility Observatory’s annual Fleet & Mobility Barometer, published today.
The Arval Mobility Observatory’s Fleet & Mobility Barometer 2022 is one of the best instruments to see what animates corporate fleets in Europe and around the world. Expanded to cover 26 countries (versus last year’s 20), the Barometer is based on a survey of just over 7,500 fleet and mobility managers, carried out from mid-November last year to early March this year. Countries covered include all major European fleet markets, plus three South American countries (Brazil, Chile, Peru), and three others in the European periphery (Russia, Turkey, Morocco).
What’s striking this year is the continued strong progress of industry-redefining innovation – in electrification, connectivity and alternative mobility – and the continued popularity of full service leasing; all backed up by a level of confidence in the future that can only be described as sky-high.
Here's a look at some striking data points for five megatrends, followed each time by a short comment by Ms. Bennathan.
Fleet confidence: strong optimism
- Optimism among fleet and mobility decision makers is strong. Fully 94% expect their fleet to remain stable or grow over the next three years.
- Only 6% anticipate a reduction in fleet size. Main reasons given: a drop in activity, and a drop in eligibility.
- Among companies expecting an increase in fleet size, the main reasons are: business growth (65%), the need for company cars as a lever for attracting and retaining talent (29%), and expanding the offer of company cars to employees not previously entitled to one (18%).
- Covid-19 as an explanation for an expected decrease or increase in the fleet fell from 60% last year to 27% this year.
“Companies are now familiar with the impact of Covid on mobility. They know how to manage it. On the other hand, corporate fleets now face not just one, but many challenges that are all covid consequences, which are more impactful on the global economy – raw material shortages, semiconductor shortage, delivery time delays, rising inflation. These must also be managed.”
“But nevertheless, the trend remains positive, as less than 6 % of companies are expecting a decrease of their fleet in the three coming years. There are signs that the market will continue to grow, firstly in the barometer and secondly in the number of employees that will continue to grow, the explosive growth of industries or sectors such as last mile delivery, the increased fight for talent, etcetera… So, in a nutshell: covid was only a catalyst for existing trends, but without a direct impact on fleets.”
Full service lease: growth continues
- One-third of companies consider introducing or increasing the use of operating lease to finance their fleet in the next three years. That is in line with the method’s pre-pandemic level of popularity.
- However, challenges including the pandemic and the chip shortage have obliged fleets to extend their lease contracts. While this has led to lower growth, this is expected to be a temporary phenomenon.
- Indeed, a sign of the growing acceptance of leasing is the fact that full service lease will increase in all types and sizes of businesses, including the smallest: 37% of SMEs now say they will introduce or increase their use of operating lease. That’s approaching the levels of acceptance for medium-sized and large companies observed for a number of years.
“We see that the pandemic has lengthened vehicle possession to 5.6 years, from 4.8 years just last year. And yet, full service leasing remains an interesting option in these uncertain times – actually, especially when times are uncertain: you minimise capital outlay and resale risk, and you maximise flexibility.”
“The fact that smaller companies are now also turning to leasing in greater numbers, may be partly due to the increased ease of digital offers, but the key driver is flexibility. Hence also the increasing appeal of mid-term rental and subscription formulas.”
“The rise of these new formulas is not a threat to leasing as such. Flexibility is one of the main selling points of leasing itself.”
Electrification: challenges remain
- 40% of companies have already added hybrid vehicles (HEVs), plug-in hybrids (PHEVs) and/or battery-electrics (BEVs) in their car fleet. A further 19% plan to do so in the next three years.
- Smaller companies are catching up: for their passenger cars, 20% are already using HEVs (vs. 23% of very large companies), 18% PHEVs (vs. 23%) and 14% BEVs (vs. 18%).
- Why electrify? To reduce environmental impact (52% of car fleets, 48% of LCV fleets); to reduce fuel cost (45%, 44%); and to support company image (39%; 40%).
- Electrification remains unevenly spread, which is a challenge. Electrified-vehicle adoption is highest in Western Europe (e.g. UK, Netherland, France, Germany) and the Nordics. It’s still low in Eastern Europe and remains marginal elsewhere (e.g. Brazil, Turkey, Morocco, Chile, Russia).
- Three out of four reasons for still delaying electrification have to do with charging – pointing to a major challenge.
“Overall, electrification has gone faster than previously expected. Some countries have already exceeded the expectations that were raised in 2020. We do see that different speeds persist; but even in Eastern Europe, notably in Poland, e-mobility is advancing rapidly. And even in Peru – a country not usually thought of as an electrification pioneer, 32% of fleets have already adopted at least one type of EV.”
“In terms of electrification, LCVs have been a bit behind cars. But with the choice in e-LCV models expanding, increasing government willingness to support this type of electrification and LEZs proliferating in many countries, there will be a catch-up.”
“However, for the foreseeable future, diesel and petrol cars will continue to represent a major part of the vehicle mix. Companies expect 55% of cars and 63% of LCVs to remain ICEs in three years.”
“The main obstacle to faster electrification is charging. More precisely, the growing gap between rising EV numbers and available charging stations. In France, the target was to have 100,000 stations by the end of last year. Eventually, 55,000 were realised. It’s the same problem across much of Europe.”
Alternative mobility: a favourite add-on
- Almost two-thirds (65%) of companies are already using at least one alternative-mobility solution (e.g. corporate car-sharing, bike-leasing, mobility budgets). An additional 14% plan to implement or invest in such a solution over the next three years.
- Penetration is highest in Western European countries like the UK, the Netherlands and Germany (more than 8 out of 10 companies). It’s lowest in Poland, but even there it’s still 4 out of 10.
- For most companies (9 out of 10), alternative mobility despite its name is not an alternative to company cars, but an add-on. And indeed, most companies indicate they don’t plan to give up the company car principle.
“The fiscal environment plays a role, hence for example the popularity of bike leasing in Belgium and Germany, or the prominence of the salary sacrifice option in the UK and in Belgium. But the vibrancy of alternative mobility is of course also related to the offers that are available in each market.”
“Only 14% of companies have already adapted or consider adapting their fleet and mobility policies specifically to accommodate remote working. Yet it’s something that is here to stay. We also see it influencing corporate real estate decisions, for example with companies deciding to move into more attractive location.” (Arval Mobility Observatory released a study last year on the impact of remote working on mobility and real estate – Ed.)
Connected services: increasingly used
- Telematics tools are increasingly used: now by 26% of car fleets, and 31% of LCV fleets. There is only a small difference in connected services penetration between smaller (37%) companies and the largest ones (40%).
- Penetration is highest in Brazil, Peru and Chile (around 60%), lowest in Germany and Austria (below 20%). Other markets are in between, many (e.g. the UK, Czech Republic, Russia) at around 50%.
- The main reasons to have connected services: locate or improve vehicle security (39%), improve operational efficiency (29%) and driver safety (31%), and reduce fleet costs (24%).
“Vehicle security and recovery is a major driver for telematics tools in South American markets. There are cultural reasons for the low score in Germany.”
“Connected services are even more relevant in the global context as these are a true enabler for CO2 reduction, cost and fleet optimisation. Which is obviously exactly what fleet decision makers need in an inflationary context.”
So, what do all these data points and trend lines add up to? “The 2022 Fleet & Mobility Barometer clearly shows that fleets are resilient in a continually turbulent environment,” says Ms. Yaël Bennathan. “The company decision makers we interviewed remain optimistic about the future and committed to pursue their investments in sustainable mobility.”
To read the Arval Mobility Observatory’s full Fleet & Mobility Barometer 2022, click here.