With the price of Brent Crude oil still well above US$100 per barrel, businesses are looking at alternative fuel vehicles to help them manage costs. New research from the Grant Thornton International Business Report (IBR) finds that around one in four business leaders have introduced, or are considering introducing, alternative fuel vehicles. And that the majority are doing so in an attempt to mitigate the price of oil.
24% of businesses globally have introduced, or are considering introducing, alternative fuel vehicles. Some evidence of a split between mature and emerging markets is evident, with 28% of businesses in the G7 at least considering adopting such vehicles, compared to just 15% in the BRIC economies.
Significantly, the biggest driver for businesses to look at alternative fuel vehicles is the price of oil, which is cited by 69% of respondents globally. The impact on the bottom line is clearly of utmost importance with a further 55% of businesses citing tax relief and 62% cost management more generally. Businesses are also increasingly aware of the environmental impact of their fleets with 58% citing saving the planet as a driver towards the adoption of alternative-fuel vehicles.
Daniel Taylor, partner & head of automotive at Grant Thornton UK said: “With the United States and the EU pressing ahead with sanctions against Iran, the world’s fourth largest oil producer, it seems unlikely that prices at the pumps will ease significantly in the near future.
“Many dynamic businesses are therefore looking to determine whether switching their fleets to alternative fuels could offer cost savings, allowing them to free up resources which could be better employed in efforts to expand their operations. And of course, switching to ‘greener’ fuels also boosts their environmental credentials.”
Amongst those respondents who have not considered alternative fuel vehicles, cost (49%) emerges as the greatest constraint, closely followed by the difficulty of charging/ refuelling (48%) and a lack of choice (38%).
Daniel Taylor, continued: “Given the high cost of alternative fuel vehicles at present, incentives will be a key driver of more widespread adoption. However, increased production of alternative fuel vehicles should lower costs, increase awareness, and spur businesses to consider them when opportunities arise to expand or replace their fleets.”
The IBR also reveals that reliability (88%) and safety (81%) remain the key considerations for business leaders when purchasing cars for their business, with price (77%) and fuel consumption (73%) not far behind. Meanwhile, just 47% of businesses cited the type of fuel as a key consideration.
Daniel Taylor concluded: “The results suggest a bright future for the alternative fuel vehicle industry provided it can produce vehicles which compete with existing ranges in terms of quality, driving experience and critically price, whilst offering cost savings in terms of refuelling.”
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Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of over 12,000 businesses per year across 40 economies. This unique survey draws upon 20 years of trend data for most European participants and 10 years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com .
Data collection is managed by Grant Thornton International's core research partner -Experian. Questionnaires are translated into local languages with each participating country
having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 6,000 businesses from all industry sectors across the globe conducted between November 2011 and February 2012. The target respondents are chief executive officers, managing directors, chairmen or other senior executives.