While rising fuel prices are the hot fleet topic, the alternatives to conventional petrol and diesel are not yet viable options for business.

Instead, with the government’s low-emission vehicle taxation strategy, finance directors should also focus on established fleet best practices and the latest car technology to drive fuel bills down.

Alternatives such as LPG (liquefied petroleum gas), CNG (compressed natural gas), electric, hybrid and biofuels may have their place in niche fleet operations. However, each technology also has its drawbacks depending on vehicle use. For example, hybrid only really comes into its own as a result of exemption from the London congestion charge, while other technologies are mainly only suitable for urban, depot-based van fleets.

Meanwhile, many vehicle manufacturers are making significant strides in improving MPG and reducing CO2 emissions through technological improvements to traditional petrol and diesel engines. Far from waiting for the promise of tomorrow’s technology, which ultimately may include hydrogen, FDs should get the best out of what is available today and that means choosing the most fuel-efficient petrol and diesel company cars (see page 15), enhanced by the latest advancements.

BMW has fitted its EfficientDynamics technology to 95% of its range with the promise of £400 a year savings in fuel bills as a result of stop/start and brake energy regeneration breakthroughs.

Audi is using a range of technologies to give its petrol powerplants (FSI engines) the edge over many of its counterparts. Renault has a range of downsized, turbocharged engines with lower CO2 emissions and higher standards of performance than previously.

A number of car manufacturers, including Ford and Volkswagen, are introducing ‘green’ models ­ Ford ECOnetic and Volkswagen BlueMotion.

Having chosen the greenest vehicles, drivers should then be educated in the mechanics of eco-driving.

Essentially, by driving smoothly with no harsh braking and acceleration, fuel bills can be cut significantly. In addition, there are the spin-off benefits of lower maintenance costs due to reduced wear and tear and fewer crashes due to a safer style of driving with increased hazard awareness to the fore.

Route planning, the introduction of tele-matics, vehicle maintenance, particularly ensuring tyre pressures are checked at least monthly, and adhering to speed limits ­ driving at 85mph rather than 70mph uses 25% more fuel ­ all have their place.

Finally, companies should ensure their fuel management system, whether based on actual fuel costs or fixed reimbursement rates, is fair, robust and properly managed. Using fuel cards ensures cost effectiveness.

Finance directors may not be able to influence petrol or diesel prices, but through the careful selection of company cars, driver education policies and controls, fuel bills can be effectively managed down while leaving alternative technologies in the showroom.

Vehicle tax change is too fast

FDs say implementation dates are too tight for government changes to vehicle taxation intended to encourage the take-up of low emission company cars. The 229 FDs, CFOs and controllers polled by YouGov on behalf of Lex are unhappy at the timescales, costs and value of April 2009 changes in Vehicle Excise Duty and business car capital allowances.

More than half of respondents (53%) said implementing the changes had placed a strain on their business, while 56% said the government had not given enough warning – in fact the small print of the capital allowance rules has still to be announced.

Lex managing director Jon Walden said: ‘The raft of government changes has unnerved the UK business community.
It’s imperative that the government gives clear advice and flexible timeframes to implement future changes in legislation and that support for UK businesses in implementing these changes is made a priority.’

Despite the business and driver financial savings that can be achieved by operating low emission company cars, 42% of businesses said they had no plans to make vehicles more environmentally-friendly this year. The poll also revealed that:

• 34% said they would make redundancies if fuel hit £2 a litre;
• 40% were unfamiliar with the change in capital allowances to an emissions-based system;
• 57% did not think making their fleet ‘greener’ would attract new business.

Jon Walden is the managing director of Lex