This year the focus for fleet managers will be on using new technology and data to gain fleet efficiencies.

Whereas last year mobility was the key theme, this year's Institute of Public Works Engineering Australasia's fleet conference (IPWEA) will be about doing more with less.

Rob Wilson, principal consultant at 4C Management Solutions, works with many IPWEA members to help them understand the new paradigm.

"The demand for increased efficiency will see many organisations review their fleet policy in specific ways," says Wilson.

"One way is to reduce the size of the in-house salary-packaged fleet. Organisations will seek to reduce their fleet and the associated operating and administration costs by encouraging employees to take up alternate benefits to a motor vehicle. Given the Australian passion for the company car this isn't easy but there is strong evidence of this already happening. For example, some companies are providing cash incentives instead of the car.

"This reduces the fleet size and can reduce risk while at the same time providing flexibility and an attractive package to employees. In other cases, the transition is more a compromise by encouraging increased pooling or sharing of benefit cars in return for reduced employee contributions. Of course, novated lease vehicles provide a good compromise between recruitment and retention incentives and fleet-related expenses and liabilities."

Wilson suggests the cost of capital and the availability of funds will be important for local government and not-for-profit (NFP) organisations, so the decision to lease or buy will not be a simple financial calculation. The efficiencies of outsourcing non-core tasks by spending the operational budget may outweigh the financial and tax benefits of owning the assets using capital budget.

Guy Steel, chief financial officer at WEX Australia, believes suppliers will be under pressure as fleets continue to drive costs down.

"The economic outlook locally remains relatively positive, however we expect earnings pressure to continue within the fleet and packaging segment through a mixture of factors including regulatory changes. This will no doubt flow into continued consolidation within the industry and pressure on suppliers into the segment," says Steel.

The debate to buy or lease does get complicated by the third option – novated leasing.

When it was announced several years ago that local manufacturing was to stop, it created a catalyst for many organisations to ask if they needed the same number of company cars as they did historically.

The almost simultaneous decision by Ford, Toyota and Holden signalled an opportunity to review fleet management programs and find new ways to meet the needs of their organisation while satisfying the needs of employees for work, family and lifestyle.

Andrew Kerr, director – sales and marketing, INSIDE EDGE Novated Know How, believes 2017 has all the hallmarks of a strong year for car sales in the novated lease and fleet market.

"With prevailing low interest rates and stable employment, the temptation to purchase new cars has never been greater for both companies and employees, " states Kerr.

"Over recent times the percentages of business use of the traditional company car has reduced due to communication improvements and technological alternatives as well as the expanding of employees' geographical areas of responsibility, as a result generally the car is left at the airport rather than parked at a client or a customer.

"The result is more and more companies are moving away from company cars and operating leases and moving to novated leases and car allowances, this provides tax-effective outcomes for the employee and cost reduction for the company."

It is as if all the good and bad news for fleet managers has already been factored into the market and the outlook for 2017 will be stable.

Nick Adamidis, marketing and sales manager at Glass's Information Services, says 2017 should be a sound year for fleets and used car values even with the closure of local manufacturing.

"The domestic economy remains tepid, as does domestic inflation, which means interest rates in Australia should remain at their current low levels. Since over 90 per cent of new vehicle sales are financed in some way, the demand for new vehicles is expected to remain healthy in this low-interest-rate environment," says Adamidis.

"As such, used car prices are expected to depreciate at a stable and constant rate during the course of the year overall. There may be accelerated or decelerated depreciation at the vehicle model level, which occurs constantly in the Australian used car market. This depends on dynamic changes within each particular model's market.

"Overall, for resale values to depreciate at an accelerated level, we would need an external economic shock. Either a trade war, higher tariffs lifting inflation, forcing central banks to start raising interest rates which would weaken consumer and business sentiment. If sentiment begins to fall, demand for new vehicles will also fall. As we saw during the GFC period between 2008 to 2009 as demand for new vehicles fell, then heavy discounting occurred which had a negative impact on used car prices in Australia and around the world.

"At this point in time, we expect resale values to continue to depreciate at a constant, stable rate overall, but we are keeping a close eye on both global political and economic events that could change these current circumstances during the course of 2017."

Safety will continue to be on the agenda and with a rising national road toll, governments may start to place more pressure on businesses to make their workers safe on the road.

Matthew Prestney, executive director at TR Fleet Australia, helps fleets manage risk. He saw the level of enquiry grow last year driven by not-for-profits and large corporates scrambling to measure and manage their level of exposure. 

"We expect to see a continuation of the trend of organisations recognising, and responding to, their duty of care as it relates to all employees and volunteers who drive for work purposes," says Prestney.

"The issues surrounding the management of grey fleet vehicles are now more widely recognised and many organisations have taken steps to implement more robust policies and on-line systems in response." Grey fleets are where vehicles are used for business purposes but may be privately owned.     

"Organisations are also tracking and reporting grey fleet and driver compliance performance to their executive teams on a regular basis. We are also experiencing an increase in demand for fleet-management-style services for grey fleet drivers".

Jerome Carslake, manager at the National Road Safety Partnership Program, sees a big shift is in organisations really beginning to understand that when their workers are on the road the vehicle is a workplace and beginning to treat it as such.

"There are still examples where organisations simply don't get it," says Carslake. "A recent research project into workplace road safety found one large organisation had the view that asking a worker who drives for them for a living for their licence is a breach of  the worker's privacy and therefore they do not check.

"Another trend is the shift towards reducing traditional fleets into grey fleet. An organisation has the same responsibility to provide a safe work environment, be it a traditional fleet vehicle, grey or novated. The issue with the grey is many organisations have no idea how to manage that risk."