Confidence still high despite Brexit

Willie Paterson, chief executive, Asset Alliance Group on trends in finance post-Brexit.

“At a time of unprecedented national uncertainty because of Brexit, and locally due to differences in environmental standards, I am encouraged by the ongoing optimism in the transport and logistics sector. Of course, times are changing. Our own research has shown a reduction in the number of small and medium-sized fleets operating in England and Wales in recent years, while the very largest operators grow larger.

And it is no secret that investment in new vehicles is cooling after a sustained and intensive period of purchasing Euro 6 assets. However, our latest Industry Monitor survey revealed confidence remains high, with the majority of decision makers anticipating growth in 2019, in spite of the ever-changing legislative environment.

It is true to say those same decision-makers are looking for support and guidance – and in the case of our Asset Alliance Group contract hire and leasing customers – long-term certainty and fixed pricing. Those anticipating price increases during and after Brexit have opted for long-term contract hire which has replaced quite a lot of our shorter-term business contracts. And this trend continues apace as the March 29th deadline looms.

The other major concern our customers are raising is the introduction of clean air zones and low and ultra-low emission zones, which the majority of our survey respondents believe is the change that will have the most onerous effect on the road transport industry this year. A little more than a week after the (current) Brexit deadline, London’s ultra-low emission zone will come into force, meaning vehicles below Euro 6 standards will be fined in the capital.

As you can imagine, this is heavily influencing the conversations being had with customers across the UK, and especially at our Hanbury Riverside base in Thurrock, just outside the M25. It is also leading to interesting debates in our regional offices in Wolverhampton and Lanarkshire about whether or not residual values could become localised, with a Euro 5 vehicle retaining appeal for those who operate outside of major cities.
We are also mindful of the need to consider emissions from refrigeration systems on our trailers, and we’re liaising closely with manufacturers on the fuel efficient and environmentally friendly options currently available and those likely to be on offer in the future.

We will keep a close eye on all of these developments, and await with interest the results of our next Industry Monitor report which will be published in April. As a true barometer of the health and confidence in the UK transport sector, it is guaranteed to be an interesting read.
Asset Alliance Group’s Industry Monitor 2019/20 will be launched at this year’s CV Show at the NEC Birmingham on Tuesday 30 April.”

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