POWER-STEERING CLASS

More than half of all cars in Britain are business-registered. For the executive, the company car is a signifier of status, but the private buyer is p aying the price. Phil Dourado reports Alloy wheels are the equivalent of the key to the executive washroom in British companies now
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The Independent Culture
YOU'RE stuck in a traffic jam. There is little to do apart from glance idly at other cars as they slide ever-so-slowly by. You observe that some things in life are certain - death, taxes, and the fact that the Cavalier cutting in front of you is driven by a salesman. Others are more difficult to explain. Why do the cars hemming you in all seem newer than yours, and why do so many of them have electric sunroofs? The answer is that they are all company cars.

Company car culture has taken over the streets and motorways of the UK. This year, over half of all cars in Britain will be business-registered (around one million new company cars). Narrow it down to particular models and the figures are even more dramatic. Of the 20,000 new Rover 600s on the road in the UK, well over 80 per cent are company cars. Although Sweden and Germany seem keen to catch up, no other country in the world comes anywhere near the UK for the volume of corporate cars pouring on to the roads each year.

Some of the direct results of this are quite unexpected. The way cars are driven in the UK has altered, for example, with more breaches in the law and more bad habits among company car drivers. The regularity with which drivers trade up for a new car hasaccelerated (by eight times or more, in some cases). The average car size is said to be 15 per cent larger than if there were no company cars. And most unexpectedly of all, given our climate, every new car on British roads seems to come with a sunroof.

The significance of sunroofs, electric aerials and those unnecessary-looking wash-wipe headlamps may seem trivial compared with the market distortions attributed to the rise of the company car. The most dramatic of these - and the most galling - is that companies pay up to a staggering 45 per cent less for a new car than do private motorists.

But the trim and extras crammed on to company cars are an indicator of the mental attitudes that have developed alongside the cars themselves. The symbolic meaning of cars - the way drivers use them to project something about themselves - has always beenas important as their automotive function. But the rise of the company car takes cars-as-sign-language to a new level. The trim is the visual manifestation of the corporate pecking order that company car culture takes out of the office to parade up and down the motorways of the UK.

In this public display of hierarchy, alloy wheels are the equivalent of the key to the executive washroom, but jangled before a much larger audience. The primary function of a headlamp wash-wipe mechanism is not to clean the headlamp, but to send a message to other road users about the importance of the driver.

Ian Shaw, assistant editor of Company Car magazine, sees the obsession with gizmos as a British disease. "Cars bound for the UK market have to come laden with more specificafions than anywhere else in the world," he says. "That's why Sierras used to comewith 17 different levels of trim; it's to do with the need for a language that other car users understand, one that denotes differences in status."

Take sunroofs, for example. They are peculiar to the UK and considered an oddity in countries that actually have sun, such as Spain. Yet they are now so common on UK roads that gradations of sunroof have emerged as indicators of status. Flip-open tinted

glass ones, once seen as top-of-the range, are now on the bottom rung of the sunroof ladder. Next up are slide-and-tilts. Electric sunroofs, once seen as luxurious, are standard on many company cars. Now, you have to have a slide-and-tilt electric metal sunroof - colour-co-ordinated to blend with the rest of the car - if you really want to show who's boss. As for slide-open sunroofs with those little fold-away hand-cranks, they have junior salesman written all over them. Executives press buttons. They do not turn handles.

Such fine distinctions would be ludicrous if they weren't imbued with so much meaning by so many people. Most memorable among the episodes of the recent BBC television series From A to B, which looked at how people use their cars and the meaning they ascribe to them, was the salesman and his company-bought Cavalier. Perhaps he was playing up to the camera just a little. But when he claimed he only gave way to another Cavalier looming in his mirror if its trim showed that its driver was higher up the pecking order, he was actively playing a coded game of status signals. And it is a game that thousands of other drivers participate in, subconsciously or otherwise.

Though company culture is largely responsible for the rise and rise of car snobbery, it cannot be blamed entirely. "It's partly the lingering effects of the class system," Ian Shaw explains. "It used to be obvious that those driving in carriages were of one class, whereas the peasants walked. Now that society is more fluid, we look for new reference points on which to peg status. Company cars reinforce that sense of hierarchy, the need for definition of status - but private car buyers use the same codes."

The difference, of course, is that private car buyers have to pay dearly if they want to speak the same language. For complex economic reasons, company car users don't pay the full cost of the extras - if they pay anything at all.

Corporate car culture was born in the 1970s, when employers hit on the wheeze of paying in cars instead of cash to get around wage restraints. Stephen Potter, research fellow with the Open University's Centre for Technology Strategy, explains why: "Historically, companies have always liked paying in cars because they benefit through corporation tax and avoiding national insurance contributions. Until recently, company cars received a larger subsidy in the form of tax breaks than British Rail."

But there are deeper psychological reasons behind it, says Potter: "I feel the growth of company car culture has fed on something in the national character." He points out that, despite changes in the tax structure that have put drivers of high-spec company cars at a financial disadvantage, they won't lose face by giving them up. "It's no longer about money," says Potter, "if it ever was. Manager and rep status aren't judged by income any more, but by the class of car allocated." Like Frankenstein's mon ster, company car culture has taken on a life of its own, independent of the tax structure it once fed on.

Potter and campaigning groups such as Transport 2000 point out that the size of cars in the UK is also distorted by the company car boom, as is the way they are driven. "The tax structure still contains anomalies," he argues, "which encourage larger carsat senior manager level. Car use is also stimulated by the existing regime." Transport 2000 submitted a pre-Budget plan to the Chancellor, Kenneth Clarke, to reform the tax structure further. It pointed out that company motorists clock up an average of 13,200 miles per annum, against 7,900 for other cars. Some of this extra mileage is generated because company drivers have to pass thresholds of 2,500 miles and 18,000 miles to cut their tax bills by up to £600 a year.

"Company cars also contribute to congestion and pollution in town centres," says Potter, "where those problems are naturally concentrated already. Around 13 per cent of cars around the country as a whole are company cars, but the figure rises to well over half those used in city centres." He attributes this largely to free parking provided by many employers.

As for the way drivers drive, research by Gallup carried out for General Accident confirms what private drivers may have assumed all along: that despite considering themselves more experienced and more skilful, Britain's company car drivers are more likely to break the law, cause accidents and exhibit a whole range of bad driving habits than other motorists. Salesmen are the worst offenders.

It's true that business drivers cover more miles, and so are exposed to more accident-causing situations, but that obvious fact was taken into consideration in the research. The figures are revealing. Twenty-two per cent of salesmen, for example, admitt e d regularly driving too close to the vehicle in front. The figure for private motorists was just eight per cent.

Those who gain most from Britain's burgeoning corporate car culture are the carmakers, for whom it is a crucial part of their overall sales strategy. The Society of Motor Manufacturers and Traders (SOMMT), which represents them, says large fleet orders guarantee that factories will be kept busy. Not surprisingly, SOMMT argues that the knock-on effect is good for the private buyer. "As with any industry," says spokesman Graham Dymot, "guaranteed high volumes of orders bring economies of scale which bringdown the overall price." Most economists would argue, though, that this applies only to fleet buyers. The private buyer has to pay more to compensate for the low or non-existent profit made on large fleet deals.

"It is imperative," says Neil Marshall, an economist and policy director with the Retail Motor Industry Federation, "for car factories to keep the production line going. It is this, plus the manufacturers' willingness to boost their market share by buying into fleets, that has led to deep discounting of up to 45 per cent for fleet cars." The scale of the distortion only became clear when the Financial Times revealed that the National Westminster Bank was operating its car fleet at a profit, with its bank managers taking delivery of a new car every three months. It managed this financial wizardry by taking Mondeos from Ford at 30 per cent below the list price, with Ford buying them back three months later at more than the NatWest paid for them.

A conspiracy theorist would say it looked as though company fleets were being used to pump more new cars on to the market than it would otherwise bear, without list prices for private buyers having to plunge. The weakness in this theory is what anyone could hope to do with the glut of nearly-new cars it creates. Sell the same car twice is the answer. Ford recently set up a "nearly new" sales outlet known as Ford Direct, through which it re-sells ex-business registered cars, most of them under a year old.

"It doesn't make economic sense," says Neil Marshall, "to trade a car in for a new one until your own car is at least two years old. So this `nearly-new' market is entirely a product of business-registered cars going through the system at an accelerated pace. Private buyers of brand new cars undoubtedly pay more to absorb the carmakers' losses on fleet sales."

Ian Shaw of Company Car magazine estimates list prices for private buyers at perhaps £l,000 higher than they would otherwise be, to help manufacturers offset the discounting offered to corporate fleets. So, if you're a private car owner stuck in a jam, there's no point puzzling over how the driver in the next lane can afford an M-registered Rover 600 GSi with all the trimmings. Cold comfort though it is, you're the one who has paid for those wash-wipe headlamps he's sporting. Why not wind the window down and tell him so?

Spot the company car Is that a company car overtaking you? If it's a new Cavalier, Mondeo or Rover 600, it probably is: The three most popular models Cavaliers Rover 600s Mondeos New cars on UK roads January-October 94

88,581

20,321

115,000

% of these that are business-registered 75% plus 80% plus 75% plus

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