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11 Jan 18

Denis Gorteman, D'Ieteren: “We don’t need subsidies, we need clarity”

On the occasion of the Brussels Motor Show, Fleet Europe asked Denis Gorteman, CEO of Belgium’s Volkswagen Group importer D’Ieteren Auto, to shed his light on today’s fleet market and the factors influencing it. As it comes to alternative powertrains, he has an intriguing viewpoint.

Mr Gorteman, how will the automotive year 2017 in Belgium go down in history?

"I think you could say 2017 was an excellent year in terms of car sales, with a 1.3 percent overall growth compared to an already outstanding year before. LCVs did even better, posting a 12-percent increase. Interestingly, in December, we witnessed a rush to showrooms of premium SUV brands, such as Porsche, because of the announced changes in the PHEV taxation rules."

Talking about taxation changes, what will be the impact of WLTP?

"By the looks of it, the taxation will remain NEDC-based until the next federal elections in 2019. This means that WLTP-type-approved cars will be taxed on their correlated NEDC value, which is calculated by the so-called CO2MPAS method. But what will happen after 2019? If WLTP values apply, the official emission values and therefore taxes will increase by an estimated 15 percent, with a disruptive effect on the market."

Perhaps this could mean a breakthrough for electric vehicles?

"Possibly, but what we need first and foremost, is fiscal stability and clarity for the next five years at least. Electric vehicles can only become successful when all stakeholders – dealers, importers, energy companies, and so on – can count on a clear fiscal context, so they can confidently invest in infrastructure, services and products. We need dialogue with the different governments – also about diesel, which I am sure has a future alongside petrol, hybrid, CNG and electricity."

Do you expect the negative attitude towards diesel to turn around?

"Euro 6c diesels are incredibly clean and will retain their TCO advantage for long-distance driving. I believe the commotion will eventually fade away. I do however fear that EVs will face strong headwind with regards to their overall greenness. If you take into account the sourcing of raw materials for batteries, the energy needed to recycle batteries and indeed how the electricity to charge the batteries is produced, you may get a less favourable picture."

Still, you believe that about 35 percent of VW Group sales in Belgium will be electric by 2025.

"Indeed. With the arrival of our electric I.D. range in 2020, our EVs will be TCO-competitive. They will have no cost disadvantage anymore compared to petrol or diesel cars. Already this year we will be launching the all-electric Audi e-tron, which will boast an attractive TCO as well vis-à-vis competing premium SUVs."

Today, electric vehicles are quantité négligeable in Belgium, partly because of their TCO disadvantage. Should there be more tax incentives?

"I am not fond of subventions to push the market in a certain direction. We are not the agricultural sector. As soon as you cut subventions, the market you created crumbles. Look at the 15-percent premiums on the purchase price of low CO2-vehicles that were valid until 2011. We don’t ask money, we ask clarity for the next 5 years so stakeholders can confidently develop an electrification strategy."

Electrification seems to go hand in hand with car-sharing. Is the end of the company car near?

"There is a need for mobility – and this need is increasing. For companies based in Brussels and Antwerp, employee mobility is the number one issue. Even though we are evolving towards multimodality, the car will keep its place. First, because the other mobility solutions do not cover the entire territory. Second, the company car is a way to compensate for the high labour taxes in our country. If we need to reduce company cars, let’s talk about a drastic tax shift. Also, we need a uniform taxation for all modes of mobility. It is the only way forward to cope with the complexity of multimodality. Taxation should not steer people in one direction or another. Freedom of choice in the mobility scene is paramount."

Do you think the cash-4-car programme is a missed opportunity?

"I don’t believe it will have a tremendous impact. You mustn’t forget that it is a huge decision for the employee. Choosing to turn in your company car in exchange for more salary [note: at a reduced tax rate, corresponding to the benefit in kind of the car] means renouncing a company car for the remainder of your employment. Apart from families living in cities and having two company cars, I don’t see many people opting for it. A better solution would be a fully-fledged mobility budget, in which all transport modes are taxed on the same basis, as I mentioned before."

Next to the trend towards ever more SUVs, which other shifts do you expect?

"First, we need to know what will happen with WLTP/NEDC. If a WLTP-based taxation comes into effect in 2019, we will surely see downsizing. If not, I think the B SUV and C SUV segments will continue to expand, considering their powertrains will gain efficiency. Concerning plug-in hybrids: especially those with a small battery are expected to be affected greatly – probably more than the expected 15 percent on average. Looking at our own best-selling PHEV, the Audi Q7 e-tron, it has a sufficiently large battery to remain attractive."

Any advice for fleet managers in Belgium?
"Recalculate the TCO of your vehicles considering the higher cost of diesel. Do not just look at theoretical mileage, but also at how the car is used in real life when choosing the powertrain. Plug-in hybrids, for instance, hold a considerable cost-saving potential under the right usage conditions. Finally, be aware of the evolutions that are coming in the area of the connected car, which will offer great opportunities in terms of fleet management."  

Authored by: Dieter Quartier