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Civic slipping down the table leaves German cars occupying the top six places, reports Matt de Prez

The Audi A4 has retained its crown as the FN50’s most reliable car for the second year running, achieving the lowest number of mechanical breakdowns and warranty repairs among the UK’s 50 largest leasing companies.

It rose to victory last year – where it topped the charts for the first time – fending off its keenest rival, the BMW 3 Series, although BMW remains the UK’s most reliable car maufacturer.

In total, 80 models received a ranking by leasing companies in the 2020 listing.

Having launched in 2015, the A4 received a mild-facelift last year – bringing cleaner mild-hybrid engines and revised infotainment.

An all-new 3 Series launched in the same year, however, beating the A4 in the 2020 Fleet News Awards to win both the Best Premium Car and Best New Company Car trophies.

Whether the new model will enable the brand to reclaim its position at the top of the FN50, as it did between 2015-2017, remains to be seen.

Comparing this year’s figures with the previous shows a major move for the Honda Civic. It topped the chart in 2018 before slipping to fifth place last year. In 2020, the Civic has dropped again and now sits in seventh position.

Golf’s strong performance

It means the top six is populated entirely by German cars this year, with third place occupied by the Volkswagen Golf.

It’s a strong performance for the model, which is the best-selling fleet car in the UK and was replaced by an all-new model earlier this year.

The Golf pushed BMW’s 5 Series down to equal fifth place with the Audi A3 – also replaced by an all-new model this year – which climbs the chart from 11th and makes Audi and BMW the only brands to have two cars in the top five.

Mercedes-Benz enters the table in fourth place, with its C-Class model ranking in the top 10 for the first time since 2016.

It’s second entrant, the E-Class, has also climbed the table from ninth to eighth place this year – having placed 13th in 2018 – a good result that reflects the saturation of the newer generation car among leasing company fleets since it launched in 2016.

Hyundai makes an appearance in equal ninth position, with the i30 giving the brand a spot in the top 10 list for the first time.

Rounding off the top 10 is the ageing, but the nonetheless exceedingly popular, Nissan Qashqai.

It ties with the i30 in ninth place after a one-year hiatus and is the only model representing the crossover segment in this year’s top 10.

Both the Volkswagen Passat and Škoda Octavia dropped out of the table this year, placing 12th and 15th respectively.

The Audi A1 (23rd), Toyota Yaris (40th), Toyota CH-R (28th), Kia Sportage (33rd) and Ford Focus (16th) have all slipped out of the top 15 this year, although it should be noted that the margins between many of the models are very small.

While BMW failed to top the reliability ranking with its 3 Series, and the 5 Series lost ground this year, it still retained its title as the Most Reliable Manufacturer overall.

The Munich giant remains undefeated for six years.

Leasing companies ranked 27 models this year. Audi has held on to its number two spot this year with a strong performance from its A4 and A3 models, while Mercedes-Benz and Volkswagen sit third and fourth, respectively.

Honda has dropped from fifth to eight place this year, while Toyota – which saw improved positions for the Aygo (17th) and Prius (23rd) versus 2019 – has crept up one position to secure the final place in the top five.

Hyundai places sixth, while Volvo shoots up the table, occupying its highest ever position: seventh.

Volvo’s performance reflects its dramatic growth in the fleet sector, with strong year-on-year increases in registrations growing the presence of its vehicles on FN50 fleets.

Seat takes ninth place and is the VW Group’s third most-reliable brand, according to the FN50 survey.

Mitsubishi climbs two places, meanwhile, and occupies 10th position.

Kia drops out of the top 10 to 13th, having placed ninth in 2019 with the Ceed now its top rated model, in 18th place. Equally, Ford has dropped from 10th to 14th and has no cars in the top 15 reliability list (although Focus just misses out in 16th place).

Renault turning a corner

Renault may be happier, appearing in the top 15 for the first time.

The French brand appears to be turning a corner, with the Captur rising to 12th and both Mégane and Kadjar receiving a ranking.

This year’s newcomers mean that Mini (16th) and Vauxhall (19th) have been pushed from the top 15 list altogether.

How are models/brands ranked?

Each FN50 leasing company provides its top 10 most reliable models and most reliable brands and the ranking is based on 10 points for first place, nine for second and so on.

Some leasing companies also provide reliability data to add robustness to the survey responses. By Graham Hill thanks to Fleet News

The total market value for UK primary vehicle body repairs has fallen by 26.6% to £3.57 billion in 2020, as a direct result of the Covid-19 pandemic, new research suggests.

Furthermore, the report on the UK vehicle body repair and motor insurance market, published today (Monday, November 30) by independent market research company Trend Tracker, says accident repair volumes will not return to pre-Covid levels until 2022.

The Emerging from Covid-19 – The UK Vehicle Body Repair and Motor Insurance Market 2020-2023 Market Study reports that accident repair volumes declined by 30% in 2020.

However, it says that as repair costs have continued on an upward trajectory, predominantly due to the increased complexity of Advanced Driver-Assistance Systems (ADAS) and an increasing number of vehicles with hybrid or electric powertrains, the financial loss to the sector is calculated at 26.6%.

Mark Bull, director of Trend Tracker, said: “Anecdotally, the volume demand for insurer-funded accident damage repairs fell by approximately 80% overnight as the initial nationwide lockdown came into effect in March, however they had steadily recovered to approximately 75% of pre-Covid levels as Government restrictions eased, until November that is.

“The Trend Tracker research has monitored repair volume and values throughout the year to calculate quantitative figures that show a projected annual loss of £1.3bn in 2020 to the UK vehicle repair industry.”

Of the £1.3bn market contraction, which can readily be viewed as a direct saving to motor insurers’ claims expenditure, £5.6 million is attributed to a loss of parts sales, £4.1m as lost labour sales and £2.6m as lost paint sales, with the remainder being additional and consumable items.

“We would expect traffic volumes to return to greater levels during 2021,” Mark Bull, Trend Tracker

Meanwhile, offsetting some of the financial loss to the vehicle body repair market, the cost of repairs continues to rise year-on-year.

Since 2018 to the first half of 2020, overall repair costs generated via the Solera Audatex system have increased by 10.2%, from an average of £1,860 to £2,050 per repair.

Taking a longer-term view, since 2013 overall repair costs generated via the Solera Audatex system have increased by 48.5% and they show no sign of slowing, due primarily to ever-increasing vehicle complexity.

Bull explained: “While we know that 2020 has been devastating for many businesses across all sectors, the vehicle body repair sector was very much on the road to recovery until lockdown 2.0 came into effect.

“However, with the excellent news that a vaccine will be available shortly, we would expect traffic volumes to return to greater levels during 2021, which should correlate to a V-shape recovery in terms of the number of accident damage claims.

This is encouraging for bodyshops, although we predict that pre-Covid work volume will not return until 2022.”  By Graham Hill thanks to Fleet News

The number of public electric vehicle charging devices has increased 18% in the UK over the past year to 19,487.

The figure is included in the latest Electric Vehicle Charging Device Statistics report produced by the Department for Transport, which says that, of these, 3,530 were rapid devices.

This is an increase of nearly 10 times since 2015.

Rod Dennis, RAC data insight spokesman, said: “The rise in the number of charge points across the UK is very encouraging and sends all the right signals to drivers who might be thinking about opting for an electric model next time they change their car.

“Add in the fact that many people with electric cars can charge from home and overall it’s a positive picture.

“But there’s still a way to go and the focus now needs to be on installing as many fast chargers as possible, given that less than a fifth of public chargers are rapid.

“While the speed of fully charging an electric car can’t compete with the five minutes or so it takes to fill up a petrol or diesel model, a greater number of faster chargepoints could help tempt more people to ‘go electric’ sooner.”

The DfT report says there is an uneven geographical distribution of charging devices within the UK.

London has the highest level of charging device provision per 100,000 of population with 63, while Northern Ireland is lowest with 17. The UK average is 29 per 100,000 people.

Some UK local authorities have bid for Government funding for charging devices, and others have not.

The report says most of the provision of charge points has been market led, with individual charging networks and other businesses such as hotels choosing where to install devices.

Charlie Jardine, founder and CEO, EO Charging, the electric vehicle charge point and charging software developer, added: “It’s great to see an 18% increase in public chargers this year with a 7% increase in available chargers in the last quarter alone.

“We look forward to seeing this number grow as electric vehicles are set to be an essential part of how we ‘build back better’ from the Covid-19 pandemic.

“Whilst increasing the availability of public charge points is an important step in overcoming the barriers to EV adoption, 59% of vehicles on roads are company vehicles so businesses must carefully consider installing their own EV charging infrastructure.

“We’ve seen much evidence of businesses leading the way on this in recent months, with significant demand from our customers transforming their fleets across the UK and Europe from diesel and petrol to electric.”

At the end of last month, Richard Jones, managing director of Lex Autolease – the UK’s largest leasing company – labelled the country’s charging infrastructure “not-fit-for-purpose”.

He told Fleet News parts of the country are poorly served, limiting the wider adoption of EVs.  By Graham Hill thanks to Fleet News

The UK’s automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), is calling on the UK Parliament to ratify the Brexit trade agreement.

MPs are debating the draft deal with the EU today (Wednesday, December 30) after Parliament was recalled to put the deal into law, a day before the UK severs ties with the European Union.

The SMMT wants the immediate ratification of the draft UK-EU Trade and Cooperation agreement (TCA), to ensure all automotive companies benefit from continued tariff-free trade from January 1.

It says that the draft TCA delivers across several areas for UK automotive, keeping the sector connected to a market that accounts for eight out of 10 of its vehicle exports.

Furthermore, the SMMT says that the TCA delivers on the core ask to avoid tariffs for most finished vehicles, parts and components.

Mike Hawes, the SMMT’s chief executive, explained that for automotive, Brexit has always been about “damage limitation”.

“The draft Trade Cooperation Agreement, while no substitute for the completely free and frictionless trade with Europe we formerly enjoyed, will address immediate concerns,” he said.#

“The TCA provides the opportunity for tariff and quota-free trade, foundations on which the industry can build.

“Even with immediate ratification, however, there will be just hours to adjust to new trading rules, so a phase-in period is critical to help businesses adapt.

“All efforts should now be made to ensure its seamless implementation, with tariff-free trade fully accessible and effective for all from day one.”

The SMMT says that the inclusion of specific provisions on transitional phase-ins for both electric vehicles (EVs) and batteries is also welcome.

However, it argues that the deal does not deliver some key asks, including formalising co-operation on the development of regulations and standards after the end of transition.

Nor does it prevent increased administration and potential for friction at the border, as we leave the single market and customs union, it said.

Hawes continued: “Further ahead, we must pursue the wider trade opportunities that Brexit is supposed to deliver while accelerating the UK’s transition to electrified vehicle manufacturing. 

“With the deal in place, Government must double down on its commitment to a green industrial revolution, create an investment climate that delivers battery gigafactory capacity in the UK, supports supply chain transition and maintains free-flowing trade – all essential to the UK Automotive sector’s future success.”

The eleventh-hour post-Brexit trade deal struck between the UK and the EU has been welcomed by the fleet and leasing industry.

It had faced a significant rise in costs, with tariffs imposed on cars and vans, if no deal had been agreed when the UK exits EU trading rules tomorrow (Thursday, December 31). By Graham Hill thanks to Fleet News

Drivers urged to carry out regular maintenance checks to avoid costly fair wear and tear outlay, reports Fleet News.

The average fair and wear charge incurred by company cars has risen 12% in the past five years, according to this year’s FN50 (The top 50 contract hire companies).

Bear in mind these are charges on companies with fleets of cars. If you are an individual, sole trader or small business owner the contract hire companies treat you differently as the loss of you as a customer is less important than the loss of a multi-vehicle fleet so end of lease charges tend to be considerably more than those imposed on a fleet customer with the same level of damage on the vehicle.

So please keep this in mind when reading this article. Of course using a good broker who can assist with these end of contract charges can help to level the playing field and minimise the charges.

A company car would, on average, have faced a fair wear and tear bill at defleet of £289 in 2016. This year’s FN50 shows that has risen by £35 to £324, on average, not including salary sacrifice cars.

Looking at the 10 biggest leasing companies in isolation, the average fair wear and tear bill was £407.

That is £83 higher than the FN50 average and worrying, when the vast majority of cars are operated by these firms.

Compared with FN50 2019, however, the overall average charge has fallen for the first time in more than a decade; by £2 from an average of £326.

Tusker says it has found that the condition of returned vehicles has improved marginally over the past year. “We are seeing a reduction in the value of the recharge (circa 2%) and a reduction in the number of recharges applied (3%) since 2018,” says Tusker CEO Paul Gilshan.

“A variety of reasons could explain this, including lower mileage contracts.”

However, Tusker’s experience of a reduction in the number of cars incurring charges year-on-year was not replicated by the FN50 average.

The percentage of cars that incurred fair wear and tear costs rose by one percentage point to 44% from 43% the previous year.

Five years ago, just more than a third (36%) of cars were attracting fair wear and tear charges, before getting as high as one-in-two cars (50%) in 2018 and falling to 43% last year.

Bridle Group reported the lowest percentage of cars attracting charges, with just one-in-50 (2%) of its vehicle returns.

Alan Carreras, sales director at the top 50 leasing firm, explains: “There are a number of factors at play.”

Bridle Group’s customer base consists, predominantly, of public sector users, typically schools, colleges and community trusts for which it provides minibuses.

“They cover a reasonably low annual mileage – on average 7,000 miles per year – and, while this in itself doesn’t exclude them from attracting damage, the likelihood is lower than the ‘typical’ annual mileage, for obvious reasons,” he says.

“We also take a pragmatic approach to de-hire; we understand the difficulties some organisations face when attempting to balance their books.”

Carreras explains that a damage recharge, which might be acceptable under the current British Vehicle Rental and Leasing Association (BVRLA) fair wear and tear guidelines, is not something they would automatically apply.

“We wouldn’t look to put our clients in an unnecessarily difficult position at the end of contract especially where any potential issues might not negatively affect the actual resale value once the vehicle has been remarketed.”

FAIR WEAR AND TEAR GUIDE

Most rental and leasing companies adhere to the Fair Wear and Tear guide published by the BVRLA.

The aim of the guide is to provide an industry-wide, accepted standard that defines fair wear and tear when vehicles are returned at the end of a lease or finance agreement.

The guide also gives advice to drivers and fleets about what they need to do to avoid end of lease charges, where they can get advice on routine maintenance, servicing and appraising the vehicle at the end of the lease and what they can expect the day the vehicle is returned, as well as how to complain if things go wrong.

Some leasing companies offer a fixed-cost menu of charges set out at the start of the contract.

Others do not repair vehicles before sending them out to auction, so do not charge for the cost to repair the damage. Instead, they charge for the loss of value against the residual value due to the damage.

Nick Hardy, sales and marketing director at Ogilvie Fleet, the Fleet News Leasing Company of the Year (up to 20,000 vehicles), says its fixed-cost menu pricing approach creates a transparent process for customers.

“Transparency is at the heart of our relationships with clients and I genuinely believe that it’s the reason why we’ve continued to grow the business every year, including this – very challenging – year,” Hardy explains.

“Our truly ‘fair’ fair wear and tear policy is possibly the most transparent way we work with our clients. We explain what the extra costs might be at the outset of a contract. Nothing is hidden.

“Any charges we make are done on the basis of reduction on vehicle values, this only showing the true cost of any necessary recharges and we always verify the costs with photographic back up.

“If we don’t or can’t do that, there are no charges made. Our clients always know where they stand and we rarely have any issues.

“We know that our stance is quite unique, but unlike many others, we don’t see this area as a profit centre and so can be completely transparent about it all.”

Leasing companies, typically, also employ a damage waiver and, while the percentage of cars incurring damage charges has increased, so has the average damage waiver.

It now stands at £144, up from £112 in 2019. It was as high as £170 in 2016.

 

Simon Staton, client management director at Venson Automotive Solutions, says: “Comparisons year-on-year, however, can be misleading.”

The annual figures, he argues, will be influenced by those vehicles coming back off contract, how long they have been on that contract and the industries in which the vehicles operate.

Staton adds: “For company cars, the organisation may have the approach that for non-critical damage, scratches, scuffs, repairs are left and they are happy for the recharge.

For other organisations, vehicle condition is critical to company image and they will get the repairs done as and when they occur.

“Equally, a car being used as a pool vehicle may be treated better because the tracking of who’s driving it and when, compared with a company car being used for job requirements and travelling several thousand miles a year.” 

Implementing a few simple changes could significantly reduce wear and tear costs to the business, according to Staton.

“For example, regular maintenance checks by employees or the business can help identify issues early and avoid things getting worse and causing further damage,” he says.

“It is important for fleet operators to ensure they fully understand the contract they have with their fleet provider, so that they can avoid unnecessary costs at the end of the vehicle’s contract term.”

Venson also suggests implementing a fleet policy that recharges fees back to drivers if damage is not reported or routine inspections are not carried out.

Furthermore, it says fleets should regularly communicate and educate drivers on what needs reporting to the fleet team and consider using driver training, and an ongoing education programme, to ensure employees are driving safely which, in turn, will reduce accident damage.

Salary sacrifice charges rise but average waiver falls. The average fair wear and tear charge for salary sacrifice cars was £331, a £60 increase on the £271 reported last year.

It means that the average charge incurred by salary sacrifice vehicles is now on a par with the FN50’s leasing average, after being some 20% lower in 2019, the first year the figures were collated separately.

However, this rise is not necessarily down to cars having more damage: the more likely explanation for the higher charge is a reduction in the average damage waiver from £133 in 2019 to £79 this year – a fall of £54.

Salary sacrifice is the third largest market segment for funding type after contract hire, operating and finance, in this year’s FN50, representing 3.7% of the risk fleet overall.

The data also shows more cars attracted charges this year, with 34% facing a fair wear and tear bill, up from 31% in 2019. However, this is still significantly lower than the 44% reported for non-salary sacrifice cars.  By Graham Hill thanks to Fleet News

The Office for Low Emission Vehicles (OLEV) has attempted to clarify the types of hybrid cars and vans that will be allowed to remain on sale until 2035.

The Government have announced that new petrol and diesel cars and vans will not be allowed to be sold in the UK from 2030.

However, it said that it would continue to allow the sale of hybrid cars and vans that can drive a “significant distance with no carbon coming out of the tailpipe” until 2035.

BVRLA chief executive Gerry Keaney said that the 2035 extension for hybrids would provide an “essential lifeline” for those facing a greater zero-emission challenge.

However, he said that vehicle rental companies and van fleet operators would need “clarity on exactly what types of hybrid are in scope”.

Speaking at the Cenex Low Carbon Vehicle conference, following the Government announcement on the petrol and diesel ban,  Natasha Robinson, head of OLEV, said: “From 2035 all new cars and vans will need to be fully zero emission at the tailpipe and between 2030 and 2035 all new cars and vans must have significant zero emission capability.

“That means for example plug-in hybrids and what are called full hybrids would count, but what are known as mild hybrids, which just help with acceleration and deceleration, wouldn’t necessarily count as having significant zero emission capability.”

What constitutes significant zero emission miles hasn’t been decided yet, she said.

“What we are looking at is the really cleanest vehicles that are out there where the battery should be able to operate independently, so we would expect them to be able to operate as a zero emission vehicles for a certain amount of time – we will be talking to industry and talking to others more widely around defining that more tightly over the coming months – but at the moment just to be clear what we are looking at is those plug-in and full hybrids.”

Full hybrids include the likes of the Toyota Prius and the Kia Niro, while mild hybrids, which are rapidly becoming the norm on most engines, are offered by Ford, with MHEV engines on the Fiesta, Puma and Focus.

The BMW 320d and 520d are now mild hybrid too, while Volvo has all but one of its petrol or diesel engines as mild hybrid now (badged B instead of D or T).  By Graham Hill thanks to Fleet News

Fleet decision-makers and the leasing industry is bracing itself for a price hike on new company car and van orders in the event of a ‘no deal’ Brexit.

However, in a note from BMW, seen by Fleet News, the German manufacturer has announced a customs duty related increase of more than £3,000 on the recommended retail pricing (RRP) of the BMW i3, irrespective of whether there is a free trade deal or not.

BMW had announced at the beginning of October that BMW i3 models, along with the majority of other BMW models, would be subject to an “economic increase” in the recommended retail price rise from January 1, 2021.

Due to changes in the ‘Product Specific Rules of Origin’ legislation, it says that the maximum permitted content of non-EU and non-UK materials means these models will be subject to additional tariffs after the end of the Brexit transition period.

This will be the case, it adds, “whether or not there is a free trade agreement with the EU”, which means a further increase in the RRP of BMW i3 models is needed.

The current RRP for a BMW i3 (ZI3I), valid until December 31, is £35,120 – the previously announced RRP, to be effective from January 1, was £35,670. However, BMW says that the new RRP from January will now be £38,785 – an increase of more than £3,600.

Similarly, the current RRP for a BMW i3 (ZI3J), valid until December 31, is £37,650 – the previously announced RRP, to be effective from January 1, was £38,200. However, BMW says that the new RRP from January will now be £41,315 – again an increase of more than £3,600.

It says that for Direct Sales Agency Agreement vehicles, orders registered on or before December 31 will be charged the pricing valid on the date of order.

Meanwhile orders registered on or after January 1 will be charged as follows:

Vehicles which arrive in the UK on or before December 31 and which are marked sold on or before December 31 will be charged the pricing valid on the date of order as the vehicle will not incur additional import charges. Vehicles must be registered by April 30, 2021, to benefit from this pricing.

Vehicles which arrive in the UK on or after January 1, regardless of the date of order, or which are marked sold on or after January 1, will be charged at the new price, incorporating the customs duty increase and are not price protected.

BMW’s price hike comes after Renault issued its own price warning ahead of a free trade agreement not being reached.

In a letter from Renault’s fleet director, Mark Dickens, to customers, he says that the manufacturer has been in discussions with our factories to secure “increased production of vehicles and parts” to mitigate any risk of disruption to supply at the UK-EU border.

In addition, he said that Renault has increased capacity and staffing to ensure the “timely delivery of vehicles, parts and accessories to our customers”.

Any customer order created up to and including October 31, 2020, will be price protected regardless of the importation date, he says.

Any order placed from November 1 onwards, and that is matched to a vehicle imported from January 1, however, could be subject to revised pricing based on the imposition of vehicle tariffs.

In the event that tariffs apply on import, Renault says that those will be as per World Trade Organisation (WTO) terms, and will be added to the order price. Tariffs on WTO terms equate to 10% of the total new vehicle price including options.

Furthermore, it says any vehicle imported from January 1, ordered from November 1, could be subject to revised pricing based on the imposition of vehicle tariffs.

Finally, it says that any customer order created from January 1 would be subject to any new pricing irrespective of vehicle importation date.

Dickens wrote: “We will continue to closely monitor events and will keep you informed of any developments.”

Fleet News reported last month, how manufacturers had written to leasing companies warning them that they cannot guarantee company car prices beyond the end of the year, even for some models being ordered now.

In letters sent to vehicle lease provides by major carmakers, including BMW, Jaguar Land Rover and Mercedes-Benz, they say that the threat of a ‘no deal’ Brexit was to blame for the potential price hike.

Talks between the UK and EU are due to resume in Brussels at this 11^th hour. A free trade deal is looking less likely but still in the balance.

Any deal between the UK and EU would need to be ratified by parliaments on both sides, so time is running out for an agreement to be reached and to get the sign off before December 31.

Residual Value Concerns

A senior manager working at an FN50 vehicle leasing company, said the lack of clarity around pricing was a big issue for the industry.

He said: “Our view is that we should be advising clients to hold back on orders unless they choose from the manufacturers that have said they will honour prices.”

He envisages a number of cancellations from customers where any price protection doesn’t apply.

Furthermore, in terms of future residual values, he said they were in a state of “limbo”.

“There is an argument that they should increase proportionately to the increase in new vehicle prices,” he said, “but that would only be if we expected that the used market increases in value proportionately in three years’ time.

“There is an argument for that, but the future used values would then be increasing in value because of a one-off tariff that is being imposed rather than anything that relates to enhanced value.

“Such increases may be correct when looking at the actual price values of new vehicles, but it is also a value based on the future value prediction of a tax, which doesn’t feel quite right either.”

He continued: “If the tariff was imposed for just an – undetermined – period of time, and then taken away, what would happen to used car prices? Will they also increase now for a while and the turn back or will they stay at the higher value? Will future residual values also rise and then fall again in that scenario?

“In essence, the uncertainty will show through in the new car and used car market we believe and cause a de-stabilising effect. This is never good news for anyone in the automotive sector.”

‘Costly’ Brexit Preparations

The Society of Motor Manufacturers and Traders (SMMT) has revealed the cost to the sector of preparing for Brexit has surpassed £735 million, with more than £235 million spent in 2020 alone.

Most companies (67%) across the industry say they are doing everything in their control to prepare for new processes that will come into play on January 1, with 70% securing GB Economic Operators Registration and Identification (EORI) numbers, 60% spending significantly on stockpiling and 52% employing customs agents, as companies also try to prepare for any disruption or delay to supply chains.

However, significant gaps in the industry’s ability to plan still exist, with a lack of clarity on the nature of the UK-EU’s future relationship hampering the efforts of almost nine in 10 (86%) firms to prepare.

Critical questions remain unanswered. With the industry’s competitiveness built on Just-in-Time deliveries, companies cannot afford any supply chain delays so clarity on the operation of key new customs systems such as the Goods Vehicle Movement Service (GVMS) and the Permission to Progress (P2P) process, is vital, says SMMT.

Moreover, even if the UK and EU do conclude a Free Trade Agreement (FTA) from the end of 2020, there is uncertainty as to how companies will prove origin or products; if firms cannot do this then they will not be able to benefit from preferential trading terms.

Mike Hawes, SMMT chief executive, said, “As the UK-EU FTA negotiations enter the endgame, now is the time for both sides to deliver on promises to safeguard the automotive industry.

“Securing a deal is absolutely critical but it cannot be any deal. To work for UK automotive it must deliver for UK products and that means securing the right terms and conditions that allow our exports – now and in the future – to be zero tariff and zero quota trade.

A deal that failed to achieve this would be the equivalent to no deal at all, devastating jobs and slamming the brakes on the UK’s ambitions to be a world leading manufacturer and market for electrified mobility and battery technologies.”  By Graham Hill thanks to Fleet News

 A man who stole construction machinery worth over £22,000 was caught out by the digger’s hidden tracker.

Robert Smith, 56, of Cuckoo Lane, Rampton, Cambridge, took the digger and trailer overnight between September 27 and 28, 2018.

The machinery was stolen from a substation in Wittering on the outskirts of Peterborough, but at 8:20pm on September 28, the digger’s owner was told by a telematics company that the vehicle was on the move.

It was at this stage the owner knew it had been stolen and called police. Co-ordinates from the tracker pinged in a wooded area and the National Police Air Service (NPAS) helicopter was called to assist officers.

The helicopter captured a van being driven out of the same wooded area, leaving the stolen digger and trailer behind.

The helicopter tracked the van onto a main road and followed it until it stopped, and two men ran from the vehicle on foot.

The van then continued but was stopped not long after by officers from Lincolnshire Police, with Smith – the driver of the van – being arrested on suspicion of theft.

In police interview Smith answered ‘no comment’ to all questions.

He was later served a postal requisition charging him with theft from the person of another. Smith denied the offence but changed his plea to guilty on the second day of his trial at Cambridge Crown Court on October 28.

He stood trial alongside two co-defendants who were found not guilty by jurors.

Smith was sentenced at Peterborough Crown Court on November 3, where he was handed 12 months in prison, suspended for 18 months. He was also ordered to complete 70 hours of unpaid work and pay £2,945 in compensation to the owner of the digger and trailer.

DC Jon Edwards, who investigated, said: “This was a case where officers were helped immensely by the NPAS helicopter and it highlights how useful that assistance can be.

“Despite Smith’s ‘no comment’ interview, and claims he was out poaching in the area, he was essentially caught red-handed with the stolen machinery.”  By Graham Hill thanks to Fleet News

Fleet operators are at the nexus of the digital and physical realms.

Whilst more business is done online than ever before, just in time logistics help keep modern supply chains lean and profitable, and form a critical part of many business operations transporting materials from A to B.

Internet of Things (IoT) technologies are improving vehicle and driver safety, finding more efficient routes, and delivering great customer experiences.

These connections, which will soon benefit from 5G networks, power the modern economy but can also be exploited for unintended purposes.

Essentially, as more devices and systems connect to the internet, the greater the amount of targets threat actors (hackers) have to exploit.

Indeed, the attack surface of a modern vehicle has never been larger: infotainment systems; OBD II dongles needed for telematics and insurance; GPS navigation systems; digital key fobs; fleet management systems; dashcams etc. plus connected apps offering tracking and remote unlock services – these are all connected devices or systems that have the potential to be exploited by threat actors.

Heavy vehicles have connected more widely through satellite and cellular communications for quite some time.

Consequently, heavy vehicles currently have more avenues for remote access than light vehicles.

Coupled with a high level of electronic homogeneity within commercial trucking fleets, an adversary could easily develop viable exploits that could attack large numbers of vehicles simultaneously.

The benefits that connecting fleets brings must be balanced against cyber, safety and continuity risk to ensure a resilient business.

2019 blackhat threats on auto overtook whitehack threats for the first time (Source: Upstream).

Currently, ransomware is the preferred tactic used by threat actors with Check Point Research reporting a 50% increase in the daily average of ransomware attacks during 2020.

It’s taking its toll on businesses globally; this year the Australian logistics giant Toll Group suffered two ransomware attacks within three months and they have yet to disclose the full cost impact to the business.

Ransoms and unplanned costs can be hefty; IBM Security X-Force has reported seeing ransom demands of more than $40 million this year.

Although, that is a snip compared to the $400 million expenses Fedex faced in the first 12 months following the NotPetya malware incident in 2017.

Cyber-threats to connected fleets are not just limited to actions within a company’s own networks either, as the cyber threat may affect a manufacturer directly, and subsequently it’s customers.

With more research being conducted and the number of cyber attacks increasing, there may be additional disruption to connected fleets due to maintenance cycles and vehicle recalls.

In 2019 security researchers found Teletrac Navman, Global Telemetrics and LoJack smart tracker app APIs had authorization vulnerabilities, allowing a hacker or thief to take over the account, track individual vehicles in real time, suppress theft alerts, and extract personal data.

If a vehicle was alerted as stolen, the thief could also delete the alert and prevent any further action being taken.

One tracking device could be remotely triggered to immobilize the vehicle, stopping it from being driven (Upstream 2020). 

Threats come in other forms; using a vehicle as a weapon is a popular tactic for terrorists and extremists.

Lone actors and small cell operations don’t require large financial support when they can hire, or hijack, a vehicle and use it in an attack.

In recent years, individuals have driven vehicles as weapons into crowds of pedestrians in fatal attacks in major cities including New York, Edmonton, Toronto, London, Berlin and Nice, France.

The Global Terrorism Database recorded 12 incidents where vehicles were used as the weapon in a terrorist attack between 2015-2018 in the US alone.

There is a risk that threat actors with extreme political beliefs could utilise technology like connected vehicles to conduct an attack.

So what is being done?

Manufacturers are responding to threats by hosting bug bounty programs whereby white hat hackers try to identify any potential weaknesses.

These programs indicate a growing awareness of the vulnerabilities and potential damage, should they be exploited.

The Hackerone bug bounty platform hosts public vulnerability disclosure programs for both Ford and General Motors and shows the large number of vulnerabilities that existed before the programs launched.

Security by design principles are slowly becoming the standard for all IoT devices, yet with the myriad of devices that will be connected to the internet, let’s not forget the responsibility organisations and individuals have to ensure their devices, systems and networks are properly patched, updated and backed up safely and regularly.

Other measures can include encrypting data and systems, using multi-factor authentication (MFA) and even Intrusion Prevention Systems to prevent entry to vehicles and onboard systems being hacked.

With this type of security in place, it can also help to minimise operational risk and the business impact by including cyber insurance as part of an overall risk protection strategy.

Traditionally, cyber insurance has been an ‘add-on’ to existing commerical policies or only provided third party cover in the event of a breach, potentially leaving businesses woefully underinsured and without specialist expertise to remediate the short, medium and long-term impacts of a cyber attack.

It’s worth utilising tailored cyber insurance services as part of a comprehensive defense strategy against threat actors.

Connectivity, automation and electrification will continue to be the most dominant automotive technology trends in the next decade; Frost & Sullivan forecasts that by 2025, 55% of all trucks in North America will be part of connected fleets.

As technology advances, the potential for vulnerabilities to be exploited also grows, so fleet owners and operators need to consider the implications; how can they control cybersecurity risks while still embracing innovation?  By Graham Hill thanks to Fleet News

Cap HPI says it is prepared to handle any large volume shifts in pricing from manufacturers that may arise from a ‘no-deal’ Brexit.

Fleet News revealed last week how leasing companies are being warned about a potential price hike on vehicles if the UK and EU fail to strike a trade deal.

In letters sent to vehicle lease provides by major carmakers, including BMW, Jaguar Land Rover and Mercedes-Benz, they say that the threat of a ‘no deal’ Brexit is to blame for the potential price hike.

If no deal is reached and ratified before December 31, automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), has previously warned that World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks would apply.

That would have equated to a price increase of almost £3,000 on the average UK exported car to the EU, a £2,000 price increase on UK vans exported to the EU and a price increase of £1,800 on cars and vans imported from the EU, if fully passed on to UK consumers.

However, the UK is able to set its own tariff levels (as all countries can) and has since published the UK Global Tariff rates, which is the tariff schedule that will be adopted from January 1, 2021.

Following a consultation, the Government has agreed to simplify the tariff levels, with a 10% rate on all cars, vans and HGVs.

Manufacturers are working with Cap HPI on the scenarios relating to the potential charges and where the manufacturers have used the Cap HPI template, the new pricing change data will be ready in its system and visible in the event of a ‘no-deal’ Brexit.

It says that data will be available from January 1, 2021, to ensure fleets can continue to price vehicles accurately and easily.

Despite the Government’s target date of October 31 for a deal to be struck, negotiations are ongoing. If the protracted discussions end in a no-deal and no further talks are agreed, tariffs will come into force on January 1, 2021.

The impact will be significant, says Cap HPI, with vehicle manufacturers having to amend their vehicle and options prices to take these tariffs into account.

Jon Clay, head of vehicle identification at Cap HPI, said: “The team at Cap HPI has worked diligently with partners to ensure the new vehicle data systems are prepared for any eventuality.  If a no-deal Brexit is enforced, Cap HPI has ensured it has the teams in place to process the data supplied in an agreed format with the manufacturers.”

Vehicle manufacturers have been working closely with Cap HPI on a wide range of scenarios for some time to ensure a smooth transition for customers. Any pricing changes will start to be visible as early as the manufacturer allows, but most likely changing from January 1, it said. The changes will be made on a model range by range basis.

Experts at Cap HPI have offered guidance on the potential impact of Brexit on used car values.

Andrew Mee, head of forecast UK at Cap HPI, said: “As yet there is no evidence that Brexit concerns are having a negative effect on used car values.

“An outcome that sees tariffs on new cars may result in a reduction in new cars sales, which would be good news for used values.

“In the short term, higher new car prices may pull up some used prices, especially for newer cars.”

However, he said used values are still likely to fall during 2021 as the negative impact of coronavirus on consumer confidence, which could be worsened if Brexit has further negative impact on GDP and unemployment, is likely to outweigh the positive impact of higher new prices.

In the longer term, from three years into the future, the reduction in used supply should help lift used values, which by then Cap HPI expects will have recovered from the coronavirus impact.

Mee concluded: “We will not be altering our future value forecasts until we know for certain that tariffs are being introduced, how long they might last for, and post Brexit economic forecasts are updated, so that we can fully assess the broader picture.” By Graham Hill thanks to Fleet News