NFDA Truck and Van Update

July 2014

‘We represent, you benefit’

Dear Colleague,

You should by now have received a letter informing you of the upcoming NFDA commercial vehicle type approval meeting, taking place on Tuesday 12 August at the Hilton Hotel, Warwick. We still have limited spaces available so please get in touch to secure your spot. Full details in today’s newsletter.

It was positive to see an overall improvement in the CV market last month. Figures released show registrations rose 25.5% in June to 33,941, rolling year up 16.4% to 344,762.

We hope you enjoy this latest update.

Sue Robinson, Director NFDA Truck and VanTel: 0207 307 3599Mob: 07774 107763Email: suerobinson@rmif.co.ukTwitter: @NFDASueRobinson

Steve Latham, Senior Operations Manager Truck and VanEmail:stephenlatham@rmif.co.uk

IN THIS ISSUE:

COMMERCIAL VEHICLE VOLUMES GROW MIDWAY THROUGH 2014

NFDA COMMERCIAL VEHICLE TYPE APPROVAL MEETING – **12 AUGUST 2014** EU TRUCK REGISTRATIONS NEW DVLA WEBSITES TO HELP YOU AFTER SCRAPPING THE TAX-DISC WOULD YOU LIKE TO HOST DRIVING TESTS FROM YOUR PREMISES? NEXT GENERATION TESTING UPDATE HEAVY VEHICLE TEST TIME CHANGES AN OPEN LETTER TO THE MOTOR INDUSTRY ATTENTION VAN & TRUCK DEALER MEMBERS!

COMMERCIAL VEHICLE VOLUMES GROW MIDWAY THROUGH 2014

“June has been a good turning point in the year for the commercial vehicle market, and we have seen a modest improvement in overall sales figures”, said Stephan Latham.

Total commercial vehicle figures released show registrations rose 25.5% in June to 33,941, rolling year up 16.4% to 344,762.

Van demand in June excelled 33.3%. The rise in sales was significant in the heavy van sector where almost 5,000 more 3.5t were registered than this time last year. This was fuelled by second quarter dealer targets which concluded at the end of June.

It was a subdued month yet again for the truck market which continued its downward trend by -19.2%. The year-to-date change was -22.9%. The market indicates a progressive wash-through of pre-registered euro 5 stock.

Latham continued, “Looking ahead into the second half of the year, dealers are optimistic that the van market will remain healthy with a return to a more normal replacement cycle for HGV trucks sustaining the market.”

NFDA COMMERCIAL VEHICLE TYPE APPROVAL MEETING – **12 AUGUST 2014**

From October this year all completed/bodied trucks will need either full type approval, small series approval or time consuming and costly 'IVA' individual vehicle approval. Prior to being able to tax and register vehicles for your customers, these approvals need to be carried out at a limited number of VOSA/DVSA test stations. This could cause serious cash-flow issues and technical difficulties, in addition to customers being dissatisfied due to delayed deliveries.

To facilitate a better understanding of these type approval issues facing truck dealers selling new vehicles, we are holding a meeting, at no cost to members, where the VBRA (Vehicle Builders & Repairers Association) will present solutions derived from its Type Approval section (WVTA). We recommend that the half day event is attended by either dealer principals/owners and/or their sales managers, who will be most involved in the issue of full type approval from October 2014.

The meeting will be held on Tuesday 12 August 2014 at the Hilton Hotel, A429 Stratford Road, Warwick CV34 6RE (Junction 15/M40).

The agenda will be as follows:

10.00 am: Coffee and registration10.30 am: Meeting/presentation to discuss all aspects of Type Approval and the methods of

obtaining approvals on completed trucks prior to registration.11.30 am: Presentation from ****** on handling type approval dealer issues12.00 am: Question and answer session12.30pm: Buffet Lunch and meeting closes

Spaces are still available so if you would like to attend this important meeting please email louisewoods@rmif.co.uk with your company name and the names of those attending, alternatively telephone 01788 538332.

EU TRUCK REGISTRATIONS

In May, new vehicle registrations continued the positive trend commenced nine months ago, increasing by 10.8% with a total of 151,484 units. The truck segment slightly declined, while registrations of vans, as well as of buses and coaches increased. The French market remained stable (-0.1%), while all other significant ones recorded double-digit growths ranging from 12.0% in the UK to 13.5% in Italy, 16.1% in Germany and 41.6% in Spain. From January to May, results in France slipped by 0.3%, while the UK (+8.0%) and Germany (+8.7%) performed similarly. Italy (+14.6%) and Spain (+42.9%) saw their markets considerably expand. Overall, new registrations in the EU increased by 9.1% compared to the first five months of 2013. In total, the region counted 746,678 new vehicles.

New Light Commercial Vehicles up to 3.5t – 'vans'

In May, demand for vans was up 13.8% in the EU* which counted 126,456 new registrations. All major markets expanded, from 3.9% in France to 15.3% in Italy, 17.3% in Germany, 18.4% in the UK and 45.1% in Spain. Five months into the year, a total of 620,951 new vans was registered or 10.4% more than in the same period a year earlier. Results were contrasted across markets as the French remained stable (+0.4%), the German grew by 7.7% and the UK (+13.3%) and Italy (+16.1%) also performed better than last year. Spain recorded a considerable 44.7% growth.

New Commercial Vehicles over 3.5t (excluding buses and coaches) – 'trucks'

Results showed a 3.6% decrease in new truck registrations, totalling 22,258 units. Looking at the major markets, Italy (-3.0%), the UK (-23.8%) and France (-30.3%) saw their market decline, while demand was up in Germany (+13.0) and Spain (+15.9%). Five months into the year, the truck segment expanded by 2.9%. Italy (+6.0%), Germany (+11.0) and Spain (+36.8%) positively contributed to the upturn. France (-6.8%) and the UK (-27.6%) fared less well. Overall, the EU counted 112,624 new trucks.

NEW DVLA WEBSITES TO HELP YOU AFTER SCRAPPING THE TAX-DISC

Following the abolition of the tax disc from October this year, the DVLA now have an on-line system for checking a vehicle is taxed and MOT’d. This is particularly important if members are taking vehicles out on demonstration or test driving customer’s cars. The website can be found at https://www.vehicleenquiry.service.gov.uk.

The information you need to activate your enquiry is; REGISTRATION No. MAKE of Vehicle

In addition, with the driver licence counter-part being discontinued from April 2015, members will need to know that employees and drivers of demonstration or loan vehicles have a valid licence and are not disqualified through penalty points. The DVLA have set up a trial on-line checking system that is likely to be confirmed after further trialling, this can be found at https://www.viewdrivingrecord.service.gov.uk.

You will require the following information to activate your enquiry - Driving licence no. National insurance no. Postcode on licence

WOULD YOU LIKE TO HOST DRIVING TESTS FROM YOUR PREMISES?

Following on from our successful programme to move vehicle testing closer to the customer, we are now hoping to build on that achievement and are looking at new opportunities for the delivery of vocational (lorry, bus and car trailer) driving tests.

As part of the success story, we would like you to consider the possibility of hosting these tests from your premises. The key site requirements for the delivery of vocational tests are:

• A hard-standing area measuring a minimum of 66m x 11m which could be marked out for the off-road exercises and could be kept clear of traffic and people whilst the exercises take place

• A quiet area where examiners can complete their paperwork

• Somewhere for trainers and instructors to wait whilst candidates are out on test

• Suitable routes nearby so that a meaningful test can be conducted within the timescales allowed

At present, we are looking to prove the concept of vocational testing at ATFs, so any arrangement would be a trial in the first instance.

We are particularly interested in sites in and around the following locations:

Stoke Swansea Pontypool Cardiff Leicester Gillingham Kirkham Wolverhampton Southampton Wrexham Edinburgh Canterbury

If you think that your site meets these requirements and would be interested in taking part in the trial, we would love to hear from you.

To find out more, or arrange an initial assessment of your site, please e-mail ian.taylor1@dsa.gsi.gov.uk.

NEXT GENERATION TESTING UPDATE

The Next Generation Testing (NGT) pilot has been running for three months in South Wales, Hereford and parts of the Midlands. As a reminder, the concepts being tested include: • Flexible working between 6am and 10pm Monday to Friday and 6am until 8pm on Saturdays • An automated scheduling system to deploy our staff in the most effective and efficient way • Technical support for our testing staff, irrespective of what time of day they are undertaking vehicle examinations.

There are 25 ATFs in the pilot with testing being carried out by 19 Vehicle Standards Assessors (VSAs) assisted by 5 Specialist Vehicle Standards Assessors (SVSAs). Further support is provided by a dedicated planning and scheduling team and the pilot network management team.

“I’d like to thank all of the ATFs in the pilot network for their support,” says Steve Jordan, NGT Chief Operating Officer. “Like any pilot, we are testing concepts and new ways of working. The feedback from our customers in the pilot network has been invaluable in helping us do just that.

“NGT will deliver a flexible, customer-focused service designed around the needs of ATFs and the wider industry. ATFs in the pilot have been utilising extended testing periods and earlier start and later finish times to help deliver a better service to customers.

“We are confident that we have the basis for a modern service that can deliver not only what ATFs need now but one that will be able to respond to changing future demands.”

The pilot is already gaining useful input from ATFs, customers and staff and a full evaluation will take place in October. CONTRACTS REVIEW

With the launch of NGT, the enhanced service provision and other benefits, the Authorised Testing Facility (ATF) Contract needs to be amended to incorporate the changes. Therefore, DVSA will be undertaking a review and contacting our ATF providers and the recognised trade associations regarding the amendments to the ATF Contract. Further details of the review and the ATF Contracts amendments will be sent to you shortly. This will be your opportunity to provide DVSA with your thoughts and opinions and help to shape the ATF Contract. CESSATION OF TESTING CONTINUES

DVSA is committed to reducing service provision through our stations and we have recently announced a further round of cessation of testing. The stations affected are:

1. South Molton 2. Canterbury3. Exeter 4. Peterborough5. Royston 6. Nottingham 7. Plymouth 8. Darlington 9. Norwich 10. Haverfordwest

With the programme of cessation of testing at our sites, there will be a continuing need for ATF growth. As a government agency, DVSA cannot prescribe the number ATFs that will be required; this will be determined by the market.

The DVSA is committed to supporting its ATF partners with initiatives such as cessation of testing and NGT. As new ATFs open, we will ensure that their business model is sustainable and that the flexibility that is offered for a short period to new ATFs is not used for commercial advantage. DVSA will continue to scrutinise the business plans of provisional ATFs to understand where their trade is coming from and that their operating model is sustainable.

HEAVY VEHICLE TEST TIME CHANGES

Average test guide times for the annual testing of heavy vehicles will be changing from 1 July 2014, as a result of the findings of a thorough, independently verified re-timing exercise of heavy vehicle annual testing. The work was carried out to understand the impact on test times of changing

technology, test requirements and the migration of testing to an ATF-based delivery model. Nearly 80% of tests are now carried out at ATFs and, with the cessation of testing at DVSA sites continuing, we needed to be sure that the average test guide times remained fair and reasonable. A total of 1,716 tests were timed at GVTSs and ATFs throughout the country with the sample selected to include a variety of layouts: drive through, drive in/reverse out and so on. A representative sample of heavy vehicle tests, including trucks, trailers and passenger carrying vehicles of various configurations, were timed during a full test.

The findings showed that testing took no longer at ATFs than at DVSA sites and that average timings for all motor vehicles and the majority of trailers remained unchanged. For 3-axle trailers the average test time increased by 5 minutes and for all PSVs there is a reduction in the average test time of between 5 and 20 minutes dependant on sub class.

The new timings are as follows:

Vehicle group Current New Difference

Motor vehicle 2 axle 40 40 0 Motor vehicle 3 axle 45 45 0 Motor vehicle 4 axle 55 55 0 Trailer 1 axle 20 20 0 Trailer 2 axle 25 25 0 Trailer 3 axle 25 30 5 PSV small <23 seats 50 45 -5 PSV medium 24-49 seats

70 50 -20

PSV medium 24-49 seats with seatbelts

70 55 -15

PSV large 50+ seats 70 55 -15

AN OPEN LETTER TO THE MOTOR INDUSTRY

July 2014

You may recall that last year Mercedes-Benz and five of its commercial vehicle dealers were fined for engaging in unlawful cartel activity.

WHAT YOU NEED TO KNOW

Cartelists deprive consumers and other businesses of the benefits of fair competition. In the long run, cartels also undermine competitiveness in the wider economy. With the help of industry bodies including the SMMT, the Competition and Markets Authority (CMA)1 is keen to work with the British motor industry to ensure it remains vigilant against cartel activity, and that everyone in the industry understands what they need to do to comply with the law.

In this particular case, businesses sought to limit competition for the sale of vans or trucks. For example, in one instance two dealers agreed that they would include a ‘substantial’ margin in quotations to customers based in each other’s area. In another, two dealers agreed that they would not prospect customers from each other’s area.

I would like to highlight three important points from this case:

•It can be easy to cross the line between legitimate and illegitimate contacts. Particular risks of cartel conduct arise where there are informal relationships and contacts between staff from competing companies. Competition law requires competing businesses - including franchisees of the same manufacturer - to set their business strategies independently. Discussing future pricing intentions is particularly problematic.

•You can fall foul of the law even if your involvement in the conspiracy is relatively limited. Onecompany was found guilty largely because an employee had attended - and was involved in organising – a single meeting where the anti- competitive arrangement was reached.

•Smaller businesses do not get a ‘free pass’ on competition law. The CMA will take firm action against cartels, irrespective of the size of the companies involved or the geographic scope of the case.

The consequences for involvement in cartel activity can be severe. Businesses can incur fines of up to 10% of global turnover. Individuals can be imprisoned for up to 5 years and risk unlimited fines; directors may face disqualification from managing a company for up to 15 years. In this particular case, the penalties totalled £2.8 million and wiped out up to 18 months’ profit after tax of the dealers involved. 1On 1 April 2014, the CMA took over the Competition Commission and the competition functions of the Office of Fair Trading.

WHAT YOU NEED TO DO

Of course, we know that most businesses want to abide by the law. Not only because it is the right thing to do, but also because it is in their commercial interests to do so. That is why it is so important to ensure that everyone in your company understands what they need to do to stay on the right side of the law. The CMA has published a range of guidance, and a brief case summary. Trade associations such as the SMMT can also assist you with education and training.

Also, if you have information about a cartel, please let us know.

If you think you have been involved in a cartel - the CMA runs a leniency programme, and businesses and individuals that come forward to report their own involvement in a cartel may have their financial penalty reduced or avoid a penalty altogether. Provided they co-operate, the applicant’s directors may also avoid disqualification and its employees and officers may be granted immunity from prosecution.

In the Mercedes-Benz commercial vehicles case one of the companies avoided a penalty altogether by being the first to apply for leniency and subsequently assisting us. However, it is important to bear in mind that this case was not triggered by one company blowing the whistle – it was the result of our own intelligence work. The CMA’s commitment to cartel enforcement means that the risk of getting caught is greater than ever.

If you have information about a cartel (which you are not involved in) - contact the CMA cartels hotline on 020 3738 6888 or cartelshotline@cma.gsi.gov.uk. The CMA also operates an informant rewards programme and individuals coming forward with information about cartel behaviour may qualify for a reward of up to £100,000.

The message from this case is clear and unequivocal: make sure that you comply with the law and that you instil a culture of compliance within your business. And if you believe your company is already involved in any form of cartel activity, make sure you tell the CMA about it – before someone else does.

Yours faithfully,

Stephen BlakeSenior Director – Cartels and Criminal Enforcement

ATTENTION VAN AND TRUCK DEALER MEMBERS!

We are often asked by our members why our newsletter is not distributed more widely to their staff. The reason is that we do not been given their email addresses for our database.

If any of your staff members would like to keep up-to-date with all the latest news from the NFDA Commercial Vehicle Division, then please let us have email addresses by sending them to rupal.rawal@rmif.co.uk