The
introduction of the Euro 6 engine emissions standards will have a significant
impact on the way commercial vehicles are acquired in the coming years. That is
the view of Andrew Morley, Sales Director of Prohire Plc, one of the UK’s
fastest growing commercial vehicle hire and fleet management specialists.
Euro
6 became mandatory for all new truck registrations from 31st December 2013. The
standard is the latest stage in the legislative drive to reduce harmful vehicle
emissions that started in 1993 with the introduction of Euro 1 and since that
time emissions have been reduced by up to 97%.
Of
course, in developing products that meet the emissions standards demanded by
Euro 6, engine manufacturers have incurred hefty R&D costs.
As
is the way of the world, the vehicle manufacturers have had little option but
to review their own pricing structures to recoup their investment costs.
As
a result, commercial vehicle prices – from the lower end of commercial vehicles
to top-end tractor units - have increased by up to 16 per cent since the turn
of the year.
To
beat the increases, many fleet operators were tempted to bring forward new
vehicle orders prior to the end of 2013. Others, meanwhile, have delayed fleet
replacements altogether.”
Critics
of Euro 6 contend that the benefits to the environment that it will bring are
minimal while the increase in vehicle costs that are the result of its
introduction will be damaging to the stability of the road transport sector at
a time when the economic recovery is showing signs of gathering pace.
There
is also a belief that, thanks to Euro 6, vehicle payloads will be compromised
and additional fuel costs incurred.
At
Prohire it is our view that lower gross vehicle weight vehicles that operate in
urban areas will gain little from the introduction of Euro 6: their operating
costs will increase and any environmental benefits will be negligible. Meanwhile, for some tractor units, there is
an argument that suggests that the increase in up-front capital costs can be
off-set by fuel savings over time.
What
is undeniable however is that across the board, fleet operators can minimize
their exposure to the upsurge in commercial vehicle capital costs that Euro 6
has precipitated by moving away from purchasing vehicles outright and embracing
some form of long term hire agreement when the time comes to add new vehicles
to their fleets.
There
are several reasons why, with the advent of Euro 6, long term hire makes sound
commercial sense that; these being that the increased capital cost isn’t born
by the operator in one hit and as the funding is ‘off balance sheet’ then this
frees the operator up to use their working capital in other areas of the
business.
Whatever
the benefits, or lack of benefits, Euro 6 is now a reality.
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