Leasedrive Blog

Black holes have become an annual topic of my blogs, the last written on March 30 last year. So no surprise for me to comment on the latest news that the Asphalt Industry Alliance (AIA) estimates the cost to councils of bringing our roads up to good condition is now £10.5bn.

The annual report of the AIA reveals that council highway teams, responsible for 95 per cent of roads, ‘fixed’, at a cost of £113m, 2.2 million potholes, half a million more than the year before. I say ‘fixed’ advisedly as if your council is anything like mine then substitute ‘botched’ for ‘fixed’. The latest ruse seems to be to send out teams to dump a bit of tarmac into a hole, roll the truck back and forth a few times over the mound and go on to the next one. That’s if they do anything at all!

Potholes reported by telephone used to be filled in within 24 to 48 hours, report online, the recommended channel, and you’ll get a response if you’re lucky a week later and the hole will still be there. One cyclist reported a massive pothole to his local council in Yorkshire. The council surrounded it with a big yellow circle. Thinking that meant it would be filled in, a week later he went past to see the hole still there, the yellow paint weathered away and a bright white line running smack through the centre of the pothole! Not surprisingly his photo and story sent into Cycling Weekly made it Letter of the Week.

One in five local roads in England and Wales are now classified as in poor condition, meaning they have five years or less life left in them. A year ago, local councils reported a shortfall in budget to properly repair and maintain roads of £5.3m, now the deficit is £6.2m and will only go up as budgets get squeezed further. The hapless motorist is stuck well and truly in the middle and, in some cases, literally in potholes following vehicle damage.

An AA/Populus survey of nearly 23,000 drivers has revealed that in the last two years, a third of motorists have suffered damage to their vehicles from potholes, rating the condition of local roads as ‘poor’, ‘very poor’ or ‘terrible’. Scottish drivers appear the worst off, nearly half at 44 per cent reporting damage to their vehicles from potholes. In north east England, 59 per cent of drivers rated their roads worse than a year ago indicating just how much those living in the worst areas for winter weather suffer the most come the spring. Overall, only ten per cent rated their roads ‘very good’ or ‘excellent’.

The AIA reports that local councils last year paid £32m in compensation to drivers who suffered vehicle damage from potholes, up a staggering 50 per cent. Meanwhile, they paid staff wages of over £13m to process those claims!

It is estimated that the cost to SMEs in terms of vehicle damage, delayed deliveries, lost productivity and higher fuel consumption is £52bn.

The government says it has handed out £3bn to local councils to maintain roads but the extra £215m announced last autumn doesn’t even cover the £338m of damage caused by the unprecedented record rainfall last year. Water is one of the prime causes of road damage along with frozen water expanding in cracks in the road in winter.

The problem is that fleets and private motorists are being hit by a double whammy at the moment, rocketing fuel prices and rising vehicle repair costs through pothole damage. Local councils don’t have the money to properly repair roads, let alone maintain them in good condition and central government does not seem to recognise that it needs to not only jump start the economy but keep UK PLC on the move.

We’re a nation centrally run by amateurs reliant on local amateurs to enact what the ‘fat cat’ Whitehall mandarins closeted in their ivory towers bureaucratically dream up next.

It’s high time the waste stops. Central bureaucracy needs to be stripped out. Government needs to get a grip on an integrated transport policy. Fuel duty needs to be directed back into road infrastructures.

The Government estimates the whole HS2 project will cost £32.7bn. It needs to stop dreaming and take a reality check. However, worthwhile long-term such a concept may be, in the current climate it cannot afford to throw that amount of money on so controversial a scheme. Better to can the whole project, spend £10.5bn on bringing our road network back to good condition and invest what it can afford on new roads and upgrading existing rail lines and rolling stock. As any rail industry person will tell you, signalling alone needs a radical overhaul, which is the real reason why HST cannot run on existing lines.

Without doubt, Government needs to act decisively before we all fall in a black hole for good.

The contrasting fortunes of two of Europe’s largest car makers could not be more marked. As VW Group looks set to declare record profits of over $30bn, PSA Peugeot-Citroën SA is haemorrhaging money at the rate of around $200m a month!

Four months ago the French government came to the French maker’s aid with loan guarantees and has declared it will do all it can to support the ailing car maker. Watch this space.

Meanwhile, VW Group seems to do no wrong. The only worry is its dependence on the Chinese market which now accounts for thirty per cent of its global sales. Surely, too many eggs in one basket there, despite China’s impressive economic growth record in recent times. By contrast, it’s only a mid-level player in the USA. Too dependent on the fortunes of one superpower and not big enough yet in the other should dictate a slight change in direction.

However, VW Group appears on the cusp of creating an automotive revolution with $70bn invested in a mega-platform strategy.  MQB, an acronym for modular transverse matrix in German, is destined to be the platform of choice for all the group’s small to medium-sized front-wheel drive cars while MLB will cover larger longitudinal-engined VW, Audi and Porsche models and MSB premium rear-wheel and four-wheel drive vehicles including Bentley, Lamborghini and Porsche.

The ‘plug and play’ platform system could see VW poised to become the world’s biggest vehicle manufacturer within the next year or two. MQB will see two out of three of the group’s models built around the platform. Parts normally ordered from component manufacturers to the order of five million plus will be more than seven times that figure with huge savings in economies of scale. The downside is that one component failure could lead to recall numbers multiplied by the same amount, not something worth thinking about it!

MQB began to be developed in 2007 and will be rolled out in earnest over the next four years, saving the group an estimated $19bn by 2019. Economies of scale, indeed!

Vehicle manufacturers are just starting to realise what they are up against and trying to claw back what will undoubtedly be a huge competitive advantage for the VW Group. PSA Peugeot-Citroën SA is lagging some ten years behind, indicating the widening chasm between those on top of their game in the automotive world and those who are fighting to survive.

And the man behind the idea? A gentleman called Ulrich Hackenberg who touted his idea for thirty odd years before VW identified the full potential of his idea – the global car, built like Lego.

If MQB, MLB and MSB repay VW Group’s massive $70bn investment several fold, Ulrich Hackenberg’s name is likely to be whispered in the same revered tones as Henry Ford, pioneer of car mass production. Now that would be some accolade.

Meanwhile, let’s just hope that Peugeot is not reduced to producing bikes and pepper mills!

Driving in a snow blizzard recently was not a pleasant experience.

The snowflakes came hurtling thick and fast at the windscreen and as the blizzard turned to a white out, it was clearly unwise to continue the journey, so at the next safe opportunity I turned around and headed back.

With the wind behind me, the snow flurries were no longer so intense and visibility rapidly improved.

This set me thinking that the experience was actually worse than driving in thick fog. At least with the latter, lack of visibility was the only hazard, with the former the inability to see was compounded by a realisation that things were starting to get rather slippery underfoot.

Party games involving a blindfold soon make one aware of just how reliant we are on sight, which made the news that one-in-three drivers would fail the legal standard of vision for driving rather alarming!

Specsavers Corporate Eyecare conducted screening tests over an eight-month period on its drive safe roadshows. Two out of five visitors hadn’t even had an eye test in the last two years – the recommended timeframe.

And over 80% of those found to have failing eyesight claimed they were good enough to drive and were patently unaware of their irresponsibility.

I remember at my last eye test the head optician remarking that their industry body had, for over 20 years, been lobbying the Government for a clearer standard than the number plate test at 20 metres.

Apparently, they were advised that a benchmark had been agreed based on the standard eye test Snellen chart. Again, for those who want to know, it’s having a visual acuity of at least decimal 0.5 (6/12).

The Snellen chart test is obviously the most precise. But here comes the irony: the above mentioned precise figure is actually a line higher than that you would be required to read off if doing the number plate test at 20 metres! Senseless or what?

The Specsavers findings have serious implications for employers, who must exercise due duty of care towards their ‘at work’ drivers.

From the research, it would seem fair to assume that one in the three at work drivers have eyesight below the legal requirement with obvious repercussions for employers, especially if those at work drivers are involved in a road accident.

The obvious measure is to ensure that all at work drivers have their eyes tested within the regular recommended timeframes, once year for contact lens wearers and two years for spectacle wearers and those with normal eyesight.

By ensuring that they comply with the Health and Safety Executive (HSE) ‘Driving at Work: Managing work-related road safety’ guide, through introducing mandatory eye tests, employers not only meet their duty of care obligations but can also save money through fewer accidents, reduced working time lost and healthier employees.

Quite frankly, it’s a no brainer. A bit like my decision to turn around in the blizzard.

Driving blind in adverse weather conditions is no fun. For those unaware that their eyesight is sub standard, it may be fun but at the same time highly dangerous – for them and other road users.

2012 was a highly successful year for us. The hard work took its toll though and the Christmas break, starting for me late on Christmas Eve, couldn’t have come early enough. It was time to recharge the batteries to face the new challenges of the year ahead.

Talking of batteries, I couldn’t help reflecting on the current state of electric vehicle development. Getting right down to the heart of the problem, battery range continues to be a major limiting factor for EVs. The range of a typical EV remains between 90 and 100 miles in the best of conditions and, obviously, drops substantially when the going gets cold.

All well and good for nipping around town but not the best scenario for those contemplating longer journeys further afield. With a recharging network still somewhere off the ideal and no current agreement on a standard plug and socket, an EV still has to be considered at best a second or third family car for use around town.

Given the significant advances made by vehicle manufacturers around the world in extracting ever more from the internal combustion engine, both in terms of fuel economy and low carbon vehicle emissions, it strikes me that battery manufacturers may have missed the boat in terms of developing for themselves a major new market.

The battery that can compete with the internal combustion engine, that is delivering the same range as an average tank of fuel, is some years off. Depending on whom you listen to the battery that delivers a range of 500 miles will not see production until sometime between 2020 and 2030. When it finally sees the light of day in an EV, the battery will not even be a lithium-ion one but a lithium-air, delivering much higher energy density comparable to that of petrol.

However, even then, there is debate as to whether the range will be the claimed 500 miles or a more realistic 500 kilometres. The difference between a diesel and high performance petrol sports car.

The majority of us rent mobiles now, replacing them at the end of contract periods to avail ourselves of the latest technology. Does this model work for EVs?  If you lease the battery, not only is the upfront cost of the EV less but the cost is spread over the ownership term of the vehicle. And for those holding on to vehicles for more than five years, there is not only the possibility of acquiring improved technology, i.e. a longer range/shorter charging time, but the avoidance of a massive replacement cost running to thousands of pounds.

Most would consider the battery lease route the most sensible option but as we all know one manufacturer, Renault, has taken the opposite view and sells its EVs and batteries separately.

The battery lease route provides more consistent depreciation valuations but an EV without a battery is useless so that creates its own unique residual valuation challenges. The debate continues.

My own batteries now fully replenished I look forward to the year ahead. The best thing about life is looking forward to getting out of bed and enjoying the day ahead. I feel blessed that I work in an industry so full of interest and one that rewards those that put in the hard work.

I hope that the fleet industry will lead the way for driving UK PLC out of the current economic quagmire. We need to capitalise on the successes of 2012.

As the recipient of the Helen Rollason award at the 2012 BBC Sports Personality of the Year awards ceremony, volleyball Paralympian Martine Wright so eloquently put it, “This is the time to get together, we need to remember the summer but we need to build on this legacy and go ahead and inspire the nation.”

As a nation, we had so much to celebrate in 2012 and the same should be true for the year ahead.

The news that London homeowners are going to be incentivised with free electric recharging points, worth £1,500, in return for off-street parking via parkatmyhouse.com got me thinking about not only what such a clever idea it was but also where I first heard about it.

One of the partners in the project is Chargemaster, whose chief executive David Martell, was one of the guest panellists at the recent ICFM annual national members’ conference held at the MINI Plant Oxford. It was he who highlighted during the debate on the future of urban mobility the ridiculous scenario currently faced by EV drivers of no standard plug and socket! And he tipped off the 195 attendees of the imminent announcement of the aforementioned recharging initiative with other partners, energy company SSE and Source London. For EV owners, it means that for the first time they can reserve a recharging point, no doubt alleviating anxiety over battery range.

David Martell’s was just one of the many interesting contributions to a lively and thoroughly enlightening debate on the future of urban mobility, ably chaired by Professor Stephen Glaister CBE, Professor of Transport and Infrastructure at the Department of Civil & Environmental Engineering, Imperial College London. He is a director of the Railway Technology Strategy Centre, a former board member of Transport for London and director of the RAC Foundation. His transport credentials shone through and helped steer the all too short 90-minute session. So interesting was the topic, members were eager for more.

Dr Colin Herron, MD, Zero Carbon Futures highlighted the lack of strategy and plans for a transport infrastructure and contrasted this with Japan where all new cities are carefully planned with no on-street parking and consolidated deliveries. The former allows free-flowing traffic and the latter avoids HGVs from clogging up road networks.

Caroline Watson, transport strategy manager at Energy Saving Trust drew attention to the fact that while fuel had rocketed by 18 per cent in the last two years, pure EVs offered up to five times savings compared to diesel in some situations.

Increased urbanisation was a common theme. Suzanne Gray, general manager of BMW Project  i at BMW Group UK and lead on the Mini E project advised the audience that since 2008 more people in the UK lived in urban than rural areas. As a consequence, downsizing of vehicles, use of different fuels and modes of transport heralded the future along with rental rather than ownership. Darren Lindsey, head of government & public affairs, Michelin PLC, underlined that 60 per cent of UK citizens now lived in towns and cities as well as the fact that new tyre technology could reduce rolling resistance and thus vehicle emissions by 7g/km.

From Government, Richard Bruce, head of the Office for Low Emissions Vehicles reckons there will be a struggle for vehicle manufacturers to get vehicles below 50g/km and more EVs will therefore be commonplace along with a different variety of cars. Professor Allan Hutchinson of Oxford Brookes University focused on the population explosion leading to further urbanisation. Car growth was inevitable but individual ownership was not the answer. Vehicle utilisation should be based on choice, convenience and fun.

This conference was undoubtedly the most successful in the ICFM’s 20-year history. It’s success was in no small part due to conference hosts BMW and other conference main partner, FMG. Together with support partners Michelin and Fleet Hire Vehicle Management, the Institute was able to showcase wonderfully why all those involved in fleet, at whatever level, would benefit from its education and training programmes and networking opportunities.

For those who missed it, there’s now an excellent short four-minute video on the Institute’s home page at http://www.icfm.com/