Arval Mobility Observatory Fleet Barometer 2021: Fleets are more confident than before the pandemic

Fleets are more confident about the future than before the pandemic. “They’re increasingly catering to the mobility needs of all employees,” explains Yaël Bennathan, Head of the Arval Mobility Observatory in an exclusive interview with Fleet Europe. And that is just one of many remarkable findings in its Mobility and Fleet Barometer 2021, out today.

In its 17-year existence, the Barometer has become a widely recognised annual point of reference for the present state as well as the future direction of the fleet and mobility industry. Last year’s edition, for instance, confirmed the mainstreaming of telematics and predicted the electrification boom we’re witnessing today. 

But the 2020 Barometer was based on surveys conducted at the beginning of the year, just before Covid-19 hit. For the 2021 edition, 5,200 fleet managers were surveyed across 20 countries, all in the last few months, when everybody was already familiar with the effects of the pandemic.  

In other words, the Mobility and Fleet Barometer 2021 is a unique window into the effect of the corona crisis on the industry worldwide. “Perhaps the most important takeaway is that the crisis has accelerated certain pre-existing trends, especially when it comes to the introduction of mobility alternatives and the energy transition,” says Ms Bennathan. 

See below for Arval Mobility Observatory’s five main conclusions from the Barometer – check the entire study via the link at the end.

1. Companies are more optimistic about the future than before the pandemic

- 45% of fleet managers anticipate an increase in fleet size over the next three years, compared to just 31% last year.
- Main reasons: business growth (61%), employee safety in the context of Covid-19 (29%), talent recruitment and retention (26%).
- The enthusiasm is especially strong in the largest companies (59%), and more moderate in the smallest ones (31%).
- The most optimistic countries are Brazil, Turkey, the Netherlands, Poland and Switzerland.
- Only 8% anticipate their fleets will shrink. 

“Albeit in varying degrees, we noticed this optimism in companies of all sizes, and in virtually all countries – Russia was the sole exception. The optimism may seem paradoxical, but there are some good explanations,” says Ms Bennathan. 

“One: government support has helped companies weather the worst of the crisis. Two: companies clearly want to provide employees with safe mobility options other than public transport. And three: fleets have been going through a paradigm shift. They are now increasingly willing and able to cater to the mobility needs of all employees, not just those entitled to company cars.”

Hence for example the boom in alternate mobility solutions, which are typically offered on top of, and not instead of the company car option. But more on that in a minute. 

2. Electrification is accelerating – and has gone global

- 39% of companies surveyed have already implemented at least one of these vehicle types: pure hybrids, plug-in hybrids, battery-electrics.
- Include the intention to implement within the next three years, and the figure rises to 70%.
- Leading countries are France, the Netherlands, Denmark and Finland, where at least 50% already use at least one of these vehicle types. Include the intention, and it’s almost 80%.
- Worst students in the electrification class: Russia, Turkey, Czech Republic and, somewhat surprisingly, Luxembourg.
- The figure of those having implemented or intending to implement hybrids has increased from around 40% in 2020 to around 60% this year. For pure electrics, the increase is from 38% to 53%.

“The pace of electrification is increasing, and that’s a trend we see happening everywhere. So it’s really a global phenomenon now – not just in the mature markets. In Poland, for example, the implementation of battery-electric vehicles increased from 3% in 2020 to 18% this year,” explains Ms Bennathan. 

It’s a process driven by a variety of factors. Corporate social responsibility, sure. But also: “There simply are more and more models available, and their range is increasing. Plus, Total Cost of Ownership of electric vehicles is approaching – and in some cases has already surpassed – that of fossil-fuel vehicles.”

As is evidenced by the Barometer, companies sense that the barriers to electrification are falling away, both in terms of price and infrastructure. “Infrastructure is increasing. There are now 250,000 public charging points in the EU, UK and Turkey combined. Although it must be said that more than 75% is still concentrated in four countries – the Netherlands, France, Germany and the UK.” 

On the one hand, public charging infrastructure will struggle to keep up with the boom in EVs. On the other, as Ms Bennathan points out, “90% of EV charging happens at home or at the office at the moment. But this figure could change in the future, so the focus should be on the right type of chargers in the right places.”

3. Alternative mobility is booming (but some solutions more than others)

- No less than 71% of companies have already implemented alternative mobility solutions for their employees.
- Leading countries: the Netherlands, Switzerland and Brazil.
- Two solutions especially have made great strides: mobility budgets (29% vs. 14% in 2020) and corporate car-sharing (28% vs. 19% in 2020).
- In terms of three-year intentions, popular options are shared or leased bicycles (44%), booking apps (52%) and mobility budgets (58%). 

“All mobility alternatives are increasing, but the ones that are growing fastest are the most flexible ones, responding to a clear need from employees. So, flexibility is the big winner here.”

One remarkable evolution, Ms Bennathan points out: “The growth in cycling in Europe. Indeed, EU bicycle sales grew by 23%. If we focus on e-bikes, in France, their number increased by more than 500,000 last year. In Germany, it was more than 2 million.”

Of course, the pandemic has pushed some buttons. Public transport was shunned, to the benefit of those options that offered the best sanitary security. “Corporate car-sharing is a good example. It’s perfectly possible to implement sanitary protocols in between uses.”

Another major factor is the fact that lease companies and other providers are now offering a mature product, bundling the variety of mobility alternatives that are out there in a way that is attractive to mobility customers.   

4. Even in mature markets, operational leasing keeps growing

- In 2020, 39% of companies said they’d develop operational leasing in the next three years. In 2021, that figure has risen to 61%, with 23% saying they definitely will.
- The increase is prevalent in all company sizes, from smallest (41% vs. 31% last year), over companies with up to 100 employees (62% vs. 34% in 2020) to large (74% vs. 42%) and very large (79% vs. 52%) companies.

“This shows that even in relatively mature fleet markets, there is still plenty of margin for operational leasing to grow. Interestingly, even the smallest companies are now increasingly getting on board with operational leasing.”

And why the acceleration? “This is typical for times of crisis,” says Ms Bennathan. “Companies look into ways to save on capital expenses and discover that they can use leasing to control costs and redirect their investments towards their core business.”

5. Connected vehicles are increasingly common… even in Germany 

- 58% of companies have connected vehicles in their fleet.
- In terms of level of connectivity, there is no significant difference between cars and LCVs.
- Connectivity increases with company size: 31% of the smallest companies and 82% of the largest ones have connected vehicles. 
- The mains reasons to go connected are vehicle location and security (50%), operational efficiency (42%), avoid unauthorized usage (41%), driver safety (41%) and cost reduction (40%). 

“An important angle in all of this is Corporate Social Responsibility, as efficiency via connectivity also helps reduce CO2 emissions. Of course, safety and security are also important from a CSR point of view,” says Ms Bennathan. 

The cultural context is important, as some countries are more possessive of privacy and less keen on introducing connected technology – Germany is a famous example but by no means the only one. However, the advantages of connected technology are slowly evening out the resistance to it. 

“If we look at implementation levels, the average in the EU is 56% while in Germany it’s 49%. The gap is closing, and German fleets are now only a little bit behind the European average.”

Click here to read the Arval Mobility Observatory Fleet Barometer 2021 in its entirety.

"Even in relatively mature fleet markets, there is still plenty of margin for operational leasing to grow," says Yaël Bennathan, Head of Arval Mobility Observatory.
Image: Arval Mobility Observatory

Authored by: Frank Jacobs
Original article on FleetEurope.com website: https://www.fleeteurope.com/en/maas/europe/features/arval-mobility-observatory-fleet-barometer-2021-fleets-are-more-confident-pandemic