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Company car weathered the recession better than expected, according to Corporate Vehicle Observatory report

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The international company car market is well along the road to recovery, recording a sharp increase in business confidence, according to a new report from the Corporate Vehicle Observatory (CVO).

The annual fleet barometer, supported by fleet and fuel management company Arval, looked at the state of the market across 14 countries - including Turkey and Brazil for the first time - and discovered a new spirit of optimism from almost 3,500 interviews conducted with fleet decision-makers between February and March this year, compared with the same time last year.

The research shows only 18% of businesses have actually reduced their fleet size as a response to the financial crisis and 26% have reduced their overall fleet budget. 

The 2010 CVO survey reveals that the company car hasn't been hit as hard as expected by the global recession, with experts concluding this reflects the vital role that the company car plays as a benefit for UK employees and a recruitment and retention tool for businesses. 

The CVO report shows a significant turnaround in businesses' expectation for the growth of their company car fleet over the next three years, with this view now particularly strong among larger companies. In the UK survey in 2009 a significant percentage of fleets were expecting their fleet size to decline over the coming period. Now almost half of large businesses expect their fleet to grow and this is a sentiment that can be seen across the fleet size spectrum although not with the same intensity.

As well as the UK, senior directors of companies ranging in size from 10 to 1,000 employees were surveyed in Belgium, Brazil, the Czech Republic, France, Germany, Greece, India, Italy, Poland, Portugal, Spain, Switzerland and Turkey.

Interestingly, UK companies are now more optimistic about fleet growth than their European counterparts, again a significant turnaround from the position seen in 2009.

Commenting on the research, Mike Waters, director of market insight at Arval, said: "Over half of the respondents from the UK said total cost of usage was more important than monthly bills or purchase price.  Therefore taking a holistic view of the vehicle life cycle and strategies to cut fuel consumption were the main drivers to control costs employed by company directors, which reinforces the key role effective management of fuel spend now plays in the overall fleet cost mix."

However, the survey, now in its third year, revealed a wide discrepancy between the attitudes of large and smaller businesses - particularly when it came to green fleet policies.

Only 8% of smaller enterprises (SMEs) had at least one green vehicle compared with 74% of larger businesses. A tiny 1% of SMEs had hybrid vehicles compared to 40% of businesses with between 100 and 1,000 employees.

Waters added: "There is a marked divide in attitudes between the larger and smaller companies, particularly when it came to the green agenda. The bigger businesses are more geared up for a lower-carbon future, but despite the fact that only 3% of smaller companies have fuel-efficient labels at the moment, 43% plan to introduce them in the future. This reveals a genuine green appetite but that SMEs need greater support and advice on how to make the necessary environmental changes."