A strong start with hurdles ahead

04 February 2021 #Uncategorised

With LCV registrations up 2% in January, 2021 is off to a strong start and reflects a structural shift in the sector.

This week we see our first 2021 registration figures for the LCV market. At 2% up on last year, it is a strong start and once again reflects the structural shift in both the sector and across the wider economy. Of particular interest is a 25% increase in sales of heavier vans at the expense of the rest of the sector. Although this is just January’s result, it is part of a long-term trend as vehicle operators seek out the most productive tool available.

Sales of battery electric vans, although still small, are increasing steadily and likely to accelerate through 2021. However, in a report published this week by the Department for Transport looking at the barriers to uptake, it seems that SMEs are likely to struggle to invest in new technologies as their profit margins become squeezed by rising fuel prices and congestion. One of the ways to tackle both issues is telematics – widely used by fleets, but only about 20% of SMEs make use of them. With telematics systems able to help operators drive more efficiently and safely, this sort of low hanging fruit is what the industry needs to hit its voluntary target of 15% carbon reductions by 2025 – now just four years away. It can also assist with reduce operating costs, helping those profit margins become a little less squeezed.

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