We discuss the challenges of the last year – and the challenges of the year to come…
What would you say to manufacturers who’ve had a tough year that may be tempted to reduce the number of vehicles they put on the Motability Scheme?
The Motability Scheme is an important customer and I think that’s well recognised. The cars are serviced through the franchises and the dealerships, we use their approved parts; so, I’d say we’re a pretty integral contributor to the ongoing success of the automotive supply chain.
We’re not seeing any evidence of manufacturers shying away from us but what we do recognise is that there are pressures on manufacturers; they’ve had a shocker of a year because of the pandemic, of course, as well as the adjustment to the green agenda, and so on. It’s a market that is going through a fair bit of turbulence at the moment, for a number of reasons.
Motability Operations are in constant discussions with manufacturers. No sooner do they put one price list in place, than they start negotiating for the next quarter and the next list. About 90% of the models available in the UK are represented on the Scheme.
Would an extension on the cap on Motability payments tempt some of the luxury marques to do more with Motability?
The cap is useful. It’s not just a very helpful tool in ensuring that Motability Operations can negotiate to try to get better value, it also helps to ensure that we’re getting a suitable range of vehicle choice on the Scheme in terms of style, gearboxes, engine types, and so forth, to actually meet customers’ needs. The Scheme isn’t really there to give people a ‘luxury’ car. It’s there to try to get people mobile, with the right vehicle for their needs, and with good value, in a sensible way.
Electric vehicle upfront payments tend to be very steep, comparatively. Is there an inevitability that the average advance payment is only going to go up as they increase in market share?
Electric vehicles are currently more expensive, and they’re not necessarily in ready supply. Negotiating leverage in the electric vehicle market is not what it might be in diesel or petrol, of course.
The Scheme has improved its offering on electric, and the trend forecast is that there will be a rebalancing, and they will become more competitive but it’s going to take another four years or so for that to happen. It’s not just a challenge for the Scheme. The country’s policy is that we want to be emission free by 2030 for new cars, so there’s a lot to be done. We will try to get the right electric vehicles to meet customers’ needs but there’s no doubt that at the moment, there is a pressure upon affordability.
How might manufacturers and dealerships specialising in WAVs, for example, cope with the transition to zero emissions?
We would like to move, in a forward leaning manner, as far, and as hard as the market will allow us to. There are some problem areas like wheelchair accessible vehicles (WAVS), and where the batteries go in the floor plates, for example. We’re currently trialling a full electric WAV with some customers, just to see how that may, or may not work.
Are you concerned with the perceived lack of accessible public charging infrastructure?
Currently, with electric vehicles supplied by Motability Operations, they’re arranging for customers to have the charging facility at home, if they’ve got home parking facilities. For customers who aren’t able to fit a charging point at their home, they are given free access to BP Pulse (public charging points).
The charity recently did a survey with Zap-Map, slanted towards accessibility. We know that accessibility of charging points, not just their availability, is a challenge, and that puts a lot of people off. The Government’s keen to make sure that all infrastructure is accessible. We’re working quite closely with the Office for Zero Emission Vehicles, to get a proper British design standard that is accessible for charging points. It’s a big push for us this year.
What do the early signs tell you about the impact of Brexit on the car industry, and of course, Motability?
Well, it certainly had us absorbed before Christmas. If there had been no deal, the 10% plus tariff imposed on imports, and the accumulation factor (as some parts may be imported as opposed to the whole vehicle) would have had an immediate and significant effect on price listing.
There are some short term disruptions and teething problems with imports and exports, concerning whether they’ve got the right paperwork or not.
What kind of supports are still in place for customers that haven’t necessarily had the best value from their lease this year, simply because they’ve not been able to get in their cars, because of self-isolation, lockdown and shielding?
Firstly, all customers are given an automatic lease extension, so that nobody loses their car if they need it. We then extended the named drivers and so forth, so that if people couldn’t get out and about, because maybe they were highly vulnerable or shielding, a member of their family, or a named person could do their errands for them. We also realised that if people are not out and about as much, then we see savings on the costs of car insurance, so we passed that on with the £50 refund to every customer. So that was around 630,000 cheques, I think. And we’ve enabled people with exceptional financial needs relating to Covid-19, to take an advance of the £600 good condition bonus, which is normally paid at the end of the lease.
We’re closely observing customers’ and beneficiaries’ behaviours. The number of enquiries we’re getting is down, but it’s still high, and we’re still able to achieve hundreds of handovers a day. With public transport being daunting for many people, the chance to do your pharmacy, or to do other errands with your vehicle, is very important.
The pandemic’s been a bit of a catalyst. Certain trends that may have taken us five or so years to get to, we seem to have done in a year. We don’t quite know how everybody is going to behave ‘on the other side’. I think we’ve got to be very alert, sensitive and listen to people, because I think perspectives may be different in a year’s time to what they were before the pandemic.