PwC research: One fifth of employers intend to reduce fleet choice

One fifth of organisations intend to reduce the choice of car available to employees, according to PricewaterhouseCoopers’ (PwC) Company Car UK report.

While the number of organisations offering a car benefit has remained fairly static over the last five years, increasing limits are being placed on vehicle choice and replacement timeframes.

Restrictions imposed on certain types of car include 79% on sports cars and 76% on convertibles. The greatest rise in restrictions has been for petrol turbos (45%, up 5% on last year); four-wheel drive cars (34%) and people carriers (14%), both up 4% on last year.

The greatest rise in car choice restrictions has been among financial services firms. For chairmen and CEOs, the choice of car is unlimited in 80% and 75% of organisations respectively.

The report also found that: 15% of firms plan to provide cheaper cars; one in four are planning to extend lease periods; 37% have placed a CO2 emission limit on car choice; and 36% restrict choice to diesel only.

Managing costs is the main area of focus for 87% of firms over the next year, while controlling CO2 emissions is the priority for 57%.

As well as extending lease periods and limiting car choice, other planned cost-cutting measures include re-allocating leavers’ cars (41%). There has also been a steady decline in organisations offering cash allowances only, from 10% in 2006 to just 4% in 2010.

The importance of environmental issues is demonstrated by 40% of organisations now having a green transport plan. As part of this plan, 53% provide or are considering providing alternative fuels, with three quarters of those that gave details stating hybrid cars as the alternative.

Other green transport initiatives being promoted include cycling to work, with 62% helping towards the cost of a bicycle and 16% providing safety equipment. Likewise car sharing is being encouraged by 40% of employers. Avoiding travelling altogether is also being assisted by some firms, with 42% allowing working from home and 76% enabling video conferencing.

Matthew Hunnybun, employment solutions partner at PricewaterhouseCoopers, said: “Company cars remain an important benefit in many businesses, reflecting employees’ needs and wants. For those companies with a large mobile sales force, cars are clearly essential to the business.

“However, companies are balancing these requirements with the continued need to reduce costs and environmental impacts, as part of their corporate responsibility agenda. The two goals go hand in hand, thanks to various cost savings related to greener car policies.

“Electric cars and vans are going to become an increasingly significant part of company car policies now that they are exempt from company car tax. The company car is here to stay, it is just the type of car that is evolving.”

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