News

The SMMT vehicle registration figures for 2006 look like a roller coaster. Record sales for the first quarter, a dip, then a rise again to the end of September followed by a plummet to the end of the year. The reason for these dips and rises, of course, is legislation specifically the introduction of digital tachographs and the Euro-4 emissions standard. You'd think that the market's uncertainty over which new trucks to buy would be good news for  the rental and leasing sector as operators delaying new purchases hire in vehicles to take up the slack. So it would be reasonable to assume that John Lewis, director-general of the British Vehicle Rental and Leasing Association (BVRLA), is a happy man.

In fact, he's fuming.

Many rental and leasing companies are reporting record utilisation levels, "but this is for Euro-3 trucks with analogue tachographs," says Lewis. "If I didn't know better I'd say there was a recession on the way - we usually see these levels of utilisation when operators are deferring new acquisitions due to economic uncertainty. "But it's more likely this situation is down to the introduction of legislation - the utilisation of Euro-4, digital tachograph-equipped trucks is extremely low." It is this uncertainty in the market, particularly due to the issues surrounding digitachs, that is causing Lewis to get hot under the collar. And if he's shouting, you can bet his members have been shouting even  louder at him. The BVRLA recently warned that the slow take-up of smart cards could threaten the UK road transport industry's ability to cope with the inevitable peaks and troughs in demand.

Digitach dilemma

"We understand the dilemma operators are facing," says Lewis. "The introduction of speed limiters, digital tachographs and Euro-4 have all had an impact on their businesses over the past few months. However, the effect of ignoring digital tachographs means drivers aren't getting their cards - rendering them useless to employers if they are faced with a new vehicle equipped with a digitach. "This is reflected in the fact that with the Christmas peak season looming, many of our members are being asked to provide hire fleets that specifically exclude vehicles fitted with digital tachographs. While that may be OK right now, the UK hire fleet continuously invests in modern vehicles for its customers.

"Our concern is that the slow take-up of driver cards means operators may find themselves needing rental vehicles but being unable to operate them. This, of course, has implications for the driver and the employer." Lewis cites one fleet which took five digitach-equipped vehicles from one of his members and then had to hire in agency drivers to drive the vehicles as its own drivers did not have smart cards and were reluctant to acquire them.

It's a poor state of affairs, says Lewis, and the BVRLA is calling on the government to offer some respite on this issue: "There is no incentive, nor advantage, for operators in opting for either digitachs or Euro-4 emissions. It beggars belief why the government can't incentivise the take-up of driver cards. In France the employer pays and gets a tax break as a result. "I'd like Vosa to declare a 'light-touch' enforcement policy on digital tachographs for the next 18 months. It's what's happening in Germany, where they are allowing the paper printout to be used."

Sure, the BVRLA's noise in this area is driven by its members' understandable desire to rent more of the latest vehicles. But there is some altruism in Lewis's motivations and it's clearly in the best interests of UK Road Transport plc to continue to invest in newer vehicles rather than delay adoption and risk being put at a long-term commercial disadvantage.

Rising fuel costs

The report by Sir Nicholas Stern on The Economics of Climate Change, published a few days before our interview, sits on Lewis's desk - and judging by the copious margin notes he has been poring over the fine print: "If you consider the rising cost of fuel we've endured this year, it's clear that the price sensitivity of transport, particularly private motoring, has not been reached. "We've hit record fuel price levels, yet it's had no impact on the amount of motoring we do. It seems clear to me that, given the Stern Report was commissioned by the Chancellor, this is just another platform for raising taxes without it being transparent."

The Stern Report has boosted public interest in environmental issues and the use of alternative fuels, putting the spotlight on hybrid trucks. Lewis and his team have been reviewing the BVRLA's position in this area and they have come to a clear conclusion: "Diesel continues to represent the long-term future for commercial vehicles," he says. "We've been trying to assess the 10-year cycle and we've come to the conclusion that you can forget gas.

"Diesel will be a cleaner fuel from an emissions point of view by the time we've passed Euro-5. Forget hydrogen; the technology is too bulky and it's too difficult to transport. Hybrids to 7.5 tonnes GVW may have some merit for urban operation, but we consider diesel the best option, though with a higher mix of biodiesel."