Demand for sustainable alternatives is rising
Aartselaar, 8 September 2015 – Each year, Alphabet Belgium conducts a study into the tipping point where motorists decide to switch from petrol to diesel (or vice versa) or to driving electric. In doing so, the leasing company advises its customers and drivers which power source is the best for motorists, based on elements such as purchase price, tax, non-recoverable VAT, consumption and residual value. The 2015 study shows that in most cases diesel-powered cars continue to remain the preferred option, although the demand for green alternatives is rising at a steady pace.
As a leading leasing company in Belgium and Europe, Alphabet Belgium is committed to providing its customers with the best possible advice to help them make the right choice from various mobility solutions. The company analyses the user cost of all cars on the market on an ongoing basis. For each segment, we compare the cost of the most widely used vehicles on the market based on the Total Cost of Ownership (TCO), to enable business customers to arrive at the best favourable and most responsible business choice.
Findings per segment
In the compact segment, petrol cars have the edge at an annual mileage of up to 20,000 km. Anyone who travels a higher mileage, however, is better off going for a diesel-powered car. Electric cars in this segment are less advantageous as they come with a higher TCO. This is due to the higher purchase price compared with conventional drives.
Examples of cars in this segment include: Citroën C1, Opel Adam, VW E-up
In the economy segment, petrol cars continue to be the best value choice given an annual mileage of up to 15,000-20,000 km. In addition, hybrid cars are highly competitive in this category as the TCO of these cars does not differ all that much from their diesel and petrol counterparts. When it comes to increased sustainability, hybrid cars are an excellent alternative to rein in CO2 emissions and fuel consumption levels.
Examples of cars in this segment include: Toyota Yaris, MINI Hatch, Renault Clio
The business and business+ mid-segments combine to make up the biggest and most important segment seen in Belgian car fleets. We are seeing a distinct shift in both segments. Petrol cars have assumed a highly competitive role in the segment of cars for lower annual 'mileages'. Whereas in the past, diesel was the go-to fuel for anything upwards of 20,000 km per year and for an average 48-month contract duration, this year has seen the tipping point shift to 25,000 km, making it more advantageous to go for a petrol engine. In this segment it pays to include both hybrid and electric vehicles in company fleets. Discounting the higher purchase price of these vehicles, the favourable tax deductibility, low fuel consumption, low CO2 emissions and consequently a lower Taxable Benefit (TB) combine to produce an advantageous TCO.
Examples of cars in the segment ‘business’ include: Audi A3, BMW 1 Series, VW Golf
Examples of cars in the segment ‘business+’ include: Mercedes C Class, BMW i3, VW Passat, BMW 3 Series
In the executive segment, those looking for a bigger and more luxuriously appointed car are best off going for a diesel engine. Some petrol cars have slightly more advantageous TCO given an annual mileage of 10,000 km or less, although this tends to be somewhat exceptional.
Examples of cars in this segment include: Volvo XC60, Audi A6, BMW 5-Reeks
In the smaller luxury segment, which takes in a handful of premium makes and models, no tipping point is known. Conventional diesel engines continue to come with a marked advantage. What is striking to see in this segment is the comprehensive selection of hybrid cars on offer. In addition, the full electric Tesla Model S is another serious contender. For high mileages and contract durations, these sustainable cars are often available to be leased at a cost that is similar to their diesel equivalents.
Examples of cars in this segment include: BMW X5, Mercedes S Class, Tesla Model S
Increase in excise duties on diesel
Excise duties on diesel and petrol are to be aligned by 2018. Energy consumption is to be taxed in consideration of CO2 emissions and pollution levels, which will drive up the price of diesel. This is certain to have an impact on the automotive industry, but by the same token this move will also boost demand for sustainable solutions. Not just hybrid and electric cars are becoming increasingly more efficient, other alternatives such as public transport, cycling and car sharing will be increasingly included as part of companies' mobility budgets.
Want to find out more about the classification of the vehicles per segment? Check our page about the marketability class table
As one of the market leaders for business mobility in Europe, Alphabet helps companies to manage their vehicle fleets efficiently and sustainably. Alphabet was formed in 1997 as a division of BMW Group and has built up extensive knowledge in the field of international vehicle fleet management and leasing. The extensive service includes both advice and financing. Alphabet business mobility solutions are all tailor-made in order to meet specific business needs.
With a database of over 550,000 vehicles of all makes in 18 countries, the organisation is one of the top four players on the market. In Belgium Alphabet now operates more than 43,000 vehicles and is among the top three.
With its expertise and technology, Alphabet leads the way in the field of Advanced Mobility Solutions: Alpha Electric offers companies extensive e-Mobility solutions, whilst Alpha City offers a cost-cutting Corporate Car Sharing arrangement. You will find more information on www.alphabet.be.
For further information, please contact: Ann Massart, Press Relations, Alphabet Belgium
03/459.59.71 or firstname.lastname@example.org.