Austria is one of the smaller European countries, a member of the European Union, with a population of around 8.5m. The country is bordered by the Czech Republic and Germany to the north,

Slovenia and Italy to the south, Switzerland and Liechtenstein to the west and Hungary and Slovakia to the east. Historically, the country has had a strong

German connection. The name Austria is derived from the Germanic Österreich (eastern kingdom) and German is the majority language of the country.

Landlocked Austria is situated in the heart of the Alps and it’s not surprising that road transport is vital for the country. According to ACEA data from 2010, Austria had the sixth highest car density in the European Union at 528 cars per 1,000 inhabitants. Like the rest of Europe, the Austrian car market has been affected by the European financial crisis, but the effects have been fairly minimal.

Car registrations rose through the early years of the crisis, reaching the highest recorded figure for Austria in 2011 and it was only in 2012 that the market declined, although the decline looks set to continue in 2013. Provisional data from ACEA for the first nine months of 2013 shows that passenger car registrations in Austria are down -7.0% compared with the same period in 2012 at 266,890. If that average were maintained for the rest of the year, total passenger car registrations for Austria in 2013 would reach around 312,500.

In 2013, the business car market has accounted for around 50% of total car registrations. Berthold Spitzbart, JATO country sales manager for Austria and Switzerland, reckons the business car market is worth around 180,000 registrations a year, while Stephan Klier, managing director of Alphabet in Austria, reckons that the business car market accounted for around 171,000 cars in 2012. Martin Koessler, the regional director for ALD Automotive in Austria, reckons that in the first six months of 2013, business cars accounted for 92,561 registrations representing some 49% of the total car market.

Since Austria is a Germanic nation, it’s not surprising that German car manufacturers feature strongly in the sales charts. Volkswagen appears to be an Austrian favourite, both as a brand and as a group. According to Martin Koessler at ALD, the top eight brands in the first six months of 2013 were Volkswagen, Skoda, Hyundai, Audi, Opel, Ford, Renault and SEAT. ‘If you summarise the Volkswagen Group,’ he says, ‘You get a market share of roughly 36%, which is I think amongst the biggest worldwide. If you look at the number of models sold, the unbeaten number one is the Volkswagen Golf. If you listed the Golf as a separate manufacturer, it would be ranked ahead of Renault in the market.’ ALD’s top five best sellers continue with the VW Polo at number two, then the Volkswagen Tiguan, Renault Megane and Skoda Octavia.

Berthold Spitzbart at JATO also gives the VW Group a market share greater than 30% with Opel and Ford as second and third best sellers. Alphabet lists Volkswagen, Ford, Opel, Renault, Skoda, BMW and Audi.

Austria is not only mountainous but its Alpine setting also brings heavy snowfalls in the winter months, with drivers using winter tyres for six months of the year. When it comes to vehicles favoured for business use, it’s not surprising that SUVs feature in the list, alongside MPVs, saloons and estate cars in the mid-size segment, reckons Alphabet. Popular SUVs include the BMW X1, X3, Audi Q3 and Q5. ‘That is very much replacing saloons such as the Audi A6, BMW 5-series,’ says Martin Koessler. ‘People have been replacing station wagons with SUVs.’ Low CO2 emissions from the latest generation SUVs means that many fleet drivers are able to replace saloons and estate cars with an SUV.

‘It’s all about CO2 emissions at the moment,’ says Martin Koessler at ALD, ‘The average CO2 emissions have dropped significantly in recent years.’ The average across the Austrian new car parc is some 134g/km. Not surprisingly it’s German manufacturers who dominate in the business car sector too. ‘That has a lot to do with the reputation, good residuals and the professionalism of the aftersales network,’ says Martin Koessler. He also identifies BMW as becoming a more competitive fleet player.

As we have seen from ACEA-sourced Austrian registration data, the Austrian car market was not directly affected by the 2008 financial crisis and the market has only gone into decline since 2012. Even so, 2012 registrations are the second highest ever recorded in Austria, second only to the 2011 total. But that is not to say that the market has been completely unaffected. ‘Cost awareness has been further strengthened. To some extent, a switch to the next lowest car class or even a general overhaul of the car policy has resulted,’ comments Stephan Klier at Alphabet. ‘In 2008 and 2009, Austria was against the trend,’ says Martin Koessler at ALD, ‘In 2008 and 2009, there was probably more retail business, but after the first shock waves from 2009 to 2012, the market was definitely driven by a high number of fleet orders.

‘In Austria and Germany people are traditionally concerned about losing their money through inflation,’ he continues, ‘That was the shock after both World Wars, so was in the mind set of those generations. So one of the impacts from the financial crisis was that people took their savings and spent it on cars. That was probably in the private consumer market. People said to themselves that they were not earning interest from the banks,"‘So I’ll buy a car." There were some incentives, but they were only for one year, so you can’t attribute the market performance to incentive schemes.

‘Austria and Germany have not really suffered that much in the financial crisis. People have become a bit more cautious now and this is currently affecting the markets, so people tend to extend their contracts and wait a bit before ordering a car in the fleet segment. In the first six months of the year in the full service leasing and contract hire sector, the market is down by -13.5% compared with the first six months of 2012.’ By contrast the total number of new car registrations fell by around 8% over the same period.

At the time of our interview, Austria was approaching elections, with talk of new taxes on CO2 emissions to higher rates of VAT, as well as modest GDP growth, which all results in increased caution in the market. ‘We’re not falling back, like in southern Europe,’ says Martin Koessler. ‘2013 is probably going to be the third or fourth best-selling year in our history.’

‘Despite a stabilisation of the total economy over the past year, we noticed increased price awareness from our customers,’ comments Stephan Klier, of Alphabet, ‘It is essential therefore to continue to respond with intelligent full-service offers and close customer proximity. Particularly in fleets with many different car makes and models, we still see lots of potential for us. In future, Alphabet will focus heavily on these fleet types. In doing so, we can rely on our market presence in Salzburg and Vienna and our multi-make, comprehensive product and service offer.’

In the light CV sector, the market is running at around 10% of the size of the Austrian car market. JATO estimates this at around 35,000 vehicles a year, with small and medium vans as the best sellers. Alphabet also estimates the market at around 34,000 light CVs.

‘We don’t target too many commercial vehicle fleets because they are typically in a financial leasing or purchase scheme,’ says Martin Koessler at ALD, ‘They tend to use the vehicles for longer than we want to operate them.’

Business vehicles are not taxed differently from private cars, but they are exempt from Austria’s Nova (Normverbrauchsabgabe) one-off tax for passenger cars. Cars are taxed according to their CO2 emissions and there are concessions for cars using alternative fuels and for hybrids.

Leasing is the preferred method of acquiring business vehicles. Martin Koessler at ALD reckons around 29% of business cars are acquired this way. Berthold Spitzbart at JATO is more specific, ‘Financial leasing is dominant for tax reasons. More than half of all business vehicles are financed this way.’ Both Koessler and Spitzbart are agreed on the dominance of finance leasing: ‘There is not much appetite for transferring risk in many segments, so even in the private sector, people still prefer to have a financial lease.

‘Operational leasing is more interesting for corporates. Contract hire and leasing is well accepted amongst the multi-nationals and international companies and still not widely accepted in small and medium size businesses.’

Finance leasing accounted for 72,394 vehicles in the first six months of 2013, according to ALD data, a 0.2% increase on the same period in 2012. By contrast 10,990 cars were supplied on full service leasing in the same period, down from 12,709 in the same period of 2012. Although banks are still the source for some financing, there is a trend towards manufacturer-funded schemes, with leasing companies offering full service leasing to mainly corporate clients.

The future for the Austrian market appears to be one of low or no growth over the next few years. Martin Koessler at ALD expects to see a market of around 320,000 cars for the future. He also detects a change, a trend where cars are less welcome in big cities, which means they are less attractive to younger drivers who would almost certainly have owned a car in the past, ‘First of all it’s quite costly. Now there are new schemes coming up in the market like Car2go, which is a big success here, where people can easily live without a car but still have the freedom to choose a car at any given time.

‘Our company car market is a solid one. We get cars back with an average mileage of around 130,000km after three to three-and-a-half years, which means these cars are driven and they are needed.’

Stephan Klier at Alphabet sees similar developments, ‘Fleet management will continue to develop into comprehensive Business Mobility management. It’s no longer just about making company cars available to employees. On the one hand, this means all-around service for the driver, from insurance and tyres to fuel cards and accident management. On the other hand, it’s more and more important to think about what additional services are necessary so that employees stay mobile and flexible. Corporate Car Sharing is an interesting keyword in this respect. But also transnational fleet management will continue to play a growing role. Furthermore, eMobility has the potential to become a relevant component of the mobility mix in companies.

‘An additional trend that we have been observing for some time is ‘saving without compromising on service.’ This takes in the use of more efficient models that offer the same service and the same driving fun but with less energy consumption. We support the efforts of our customers to have an environmentally friendly vehicle fleet through intensive consultation, and also through combined safety and fuel-efficient driver training. In this way, we are also responding to the demand for an optimised analysis of the Total Cost of Ownership, which is a big priority in the fleet industry. Sustainability and efficiency are the topics of the day. Against this background, fleet management will, in general, continue to develop into comprehensive Business Mobility management.’

Remarketing

At the remarketing end of the spectrum, Kia Austria is the latest OEM to use Autorola’s Branded Sites online platform to manage its remarketing activities.

Ex-press fleet cars, management cars and company cars are being loaded onto the site for its franchised dealers to log onto and buy online. In the first year Kia anticipates selling a few hundred vehicles online to its dealer network.

Kia Austria has been following its strategy of further upgrading its remarketing activities and has combined the launch of Branded Sites with installing Autorola’s Fleet Monitor, the workflow management tool that supports fleet-owners in their de-fleet and remarketing processes.

Kia is installing all newly registered cars being used by the OEM onto its system and will be tracking the car from the time it is shipped into its Vienna import centre, through to PDI and to when it is being de-fleeted and sold. Its service partner also has a login to the system thus ensuring transparency to everybody when vehicles are added onto the system about mileages, servicing, etc.

Previously Kia Austria used Excel spread sheets to manage its OEM fleet so Fleet Monitor should help improve fleet and remarketing efficiencies.

‘The Kia brand is growing in Austria and it is upgrading its remarketing and life cycle management systems to cope with this growth,’ explained Autorola’s Austria country manager, Rene Buzek.

‘Branded Sites is helping Kia to establish a corporate online remarketing platform which has a consistent brand look and feel for its dealers to buy from.

‘With Fleet Monitor, photos of each car are being loaded onto the system at the time of the PDI and the system integrates with Kia’s SAP accounting system. All of this will ensure Kia Austria can track the entire life cycle of a vehicle,’ he added.