Memorandum by HSBC Vehicle Finance (RH
40)
I am writing in response to your invitation
on behalf of the Transport sub-committee to give evidence on the
UK road haulage industry. HSBC Vehicle Finance manages and finances
over 200,000 cars and 35,000 commercial vehicles. As a major provider
of personal car and business fleet funding and management we are
keenly interested in all developments in the transport sector.
The cost of running vehicles is a major overhead
for most of the businesses to whom we supply vehicles. Our customers
like stability so that they can plan ahead to meet the cost of
their overheads. Over recent years, the motor industry has been
placed under increased scrutiny—and in some cases subjected
to new measures—by a range of Government bodies (Ministers,
taskforces, EU, OFT, Competition Commission etc). Taken together,
all these activities have served to produce market instability
and it comes as no surprise to us that consumer confidence has
been shaken. Businesses are responding by leasing commercial vehicles,
as they find it ever more difficult to predict the cost of ownership
in an unsettled market.
With manufacturers coming under pressure to
reduce prices, an unknown factor is the knock-on effect on the
value of used vehicles ("residual value"). During the
past year, light commercial vehicles have suffered falls in residual
value of up to 15 per cent, while the residual value of heavy
goods vehicles have been hit even harder. We expect further deflation
in residual value for light commercial vehicles this year as more
product comes to a market in which there are fewer buyers. Consumer
confidence is likely to be further eroded by confusion over twice
yearly registration prefix changes introduced by the Government.
While we would stress the importance of regulatory
stability for the haulage industry, we believe that the Government
could introduce some deregulation to enable it to compete with
hauliers from across the European Union. We would support a relaxation
of the rules governing lorry weights. We also believe that the
planning powers of local councils to restrict the access of large
vehicles to town centres are often too stringent, and all too
readily imposed, to the detriment of the local economy.
We would also support proactive steps from Government
such as the introduction of schemes to protect the local environment.
The number of heavy goods vehicles on the roads could be reduced
by measures to encourage common interest alliances between companies
using such vehicles. For example, instead of two half full lorries
delivering to two shops in the middle of the day, the shops could
be given an incentive to share the load and use one lorry only.
No incentives currently exist to promote the use of "white
fleets".
One of the best ways to help the environment
is to cut back on emissions through the promotion of vehicle efficiency.
Those vehicles with telematics installed have a far better fuel
consumption record than those without. We would support measures
to increase the use of telematics and to require that vehicles
be adequately maintained. Proper maintenance of vehicles promotes
road safety too. This could be further enhanced by introducing
a tougher driver training regime.
Peter Hollinshead
Head of Purchasing Vehicle management
February 2000
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