Switzerland, or Confoederatio Helvetica (Swiss Confederation) as the country is also known, giving rise to its international abbreviation CH, is one of the smaller countries in the middle of Europe. It is landlocked on all sides, sharing borders with Germany to the north, Austria and Liechtenstein to the east, Italy to the south and France to the west and south.

Not surprisingly the country has a diversity of culture, demonstrated by the fact that it has four official languages: German, French, Italian and Romansh. German is the dominant language, spoken by around 65% of the population and 74% of Swiss nationals. French is spoken by 18% of the population and 20% of Swiss nationals. Italian and Romansh are spoken by far fewer, with around 12% of the population speaking Italian and 4% of Swiss nationals with Romansh spoken by just 1% of the population and Swiss nationals. The population is reckoned to be slightly less than eight million.

Famed for its mountains and lakes, this helps give rise to some fairly specific transport requirements. It also ensures that the country has a wealth of renewable energy sources, with over 60% of Switzerland’s electricity produced from hydroelectric power.

It is a wealthy country with GDP per capita among the highest in the world, according to the CIA. After recovering from the global financial crisis well with GDP growth of 3.0% in 2010, growth has slowed in subsequent years, dropping to 1.9% in 2011 and 0.8% in 2012, according to the CIA. ‘It’s definitely the strong Swiss Franc that doesn’t help,’ says Aldo Faglia, sales director at ALD Switzerland.

Financial services, particularly banking are probably among the country’s best-known businesses, as well as a highly developed manufacturing sector. CIA data shows that the service sector accounts for 72.5% of GDP, while industry takes care of 26.8% leaving agriculture to make up the 0.7% balance. The country is not part of the European Union, but is a member of the European Free Trade Area (EFTA) and the EU is an important trading partner.

Switzerland’s secretive banking practices have also come under pressure from the EU, the US and international institutions, as the CIA points out. Switzerland has agreed to conform to OECD regulations on administrative assistance in tax matters, including tax evasion. The country has renegotiated its double tax agreements with a number of countries to incorporate the OECD standard, reports the CIA, and may impose taxes on deposits held by foreigners.

German dominance

Given the dominance of German language and culture, it is not surprising that German car manufacturers also dominate car sales in Switzerland. 2013 new car registrations reached 307,885 according to data from Auto Suisse (or Auto Schweiz, depending on your preferred language), a -6.2% decline compared with 2012 when 328,139 registrations were recorded. Volkswagen claimed the largest slice of the 2013 market with 40,925 registrations, representing a 13.3% market share. The total was some -7.5% down on 2012. Audi took the second place with 21,254 registrations, -3.8% down on 2012, while BMW took the third place with 20,303 registrations, a 7.2% increase on 2012. Skoda claimed fourth place with 17,939 registrations, a -6.2% decline compared with 2012. 36% of registrations (110,820) were of 4×4 vehicles, an increase of 1.0% on 2012, while 9,331 vehicles were described as being fuelled by alternative fuels, representing 3.9% of the market and a 10% increase on 2012. Swiss buyers still prefer petrol to diesel, unusually for Europe, with diesel powered cars taking 37.1% of registrations with a total of 114,144, representing a decline of -6.0% compared with 2012.

Market decline 

The declines in the market are not simply due to the Europe-wide decline in the car market. As is often the case, statistics alone do not give a complete picture. Aldo Faglia at ALD Switzerland says that the strong Swiss Franc is encouraging Swiss car buyers to cross the border and buy a car for less than it would cost in Switzerland. ‘What we see is an increase in people going just across the border and buying the car from outside the country.’ Mr Faglia says this is definitely something that has increased, although it is difficult to find data to support the suggestion.

‘I don’t see that much of a decrease. The importers are telling us that the level is below the highest sales they ever had but it’s much higher than last year in total.’ So add in those cross-border purchases and the market may be in better shape than the Auto Suisse data suggests.

The business car sector is quite different from some of the well-developed business car markets in Europe, reckons Mr Faglia. Some 45-60% of business car use involves companies paying employees an allowance to use their own cars, he reckons. ‘It seems that companies prefer to pay money and taxes on that money as a part of their expenses to leave the risk with their employees to pay for the car and its related costs for business use.’ Around 20% of the sector involves companies buying cars for business use. Then full service leasing also plays a part. ‘We have around 17% – 22% of all business cars operated under full service leasing,’ he says. ‘The rest is finance lease, which is around 5%–10%. In numbers this translates to between 300,000–350,000 vehicles in Switzerland under full service leasing or leasing contracts.’

Altogether that would mean that there are about 1.0m to 1.2m cars in use for business, although because of the nature of the Swiss business car market, it is not easy to find the statistical support for this.

The only overall market growth appears to be from BMW and Mercedes, which says something about the Swiss car market and the comparative wealth of the country.

‘AMAG is the importer of VW Group vehicles and they have a 23/24% share of the whole market,’ which also reflects our portfolio’, says Aldo Faglia. ‘Then in second position we have Ford, which may be something ALD specific as we have a

partnership with Ford. But if you look at the total business market, I would say that it would be Volkswagen, followed by Audi, BMW, then Ford and Peugeot.’

With Volkswagen as the best selling manufacturer, it’s not surprising that the Golf was the best selling car, using the

January-November data from Auto Suisse, or that two other Volkswagen models appear in the top 10. In fact six out of the top 10 models are from the Volkswagen Group. Only models from BMW, Peugeot and Suzuki otherwise feature from outside the Volkswagen Group.

In terms of favoured vehicle types for business use, Aldo Faglia at ALD points to the popularity of 4×4 models, reflecting Rene Buzek from Autorola’s comments about the Swiss market generally (see p.29). ‘As we are living in the mountains, it’s 4×4, then it’s the Combi, or estate car. We really like the diesel engine, despite the fact that we are not running high distances, which normally makes diesel an easier choice. We have an average of 25,000 to 35,000km per year.’ The attraction appears to be high torque output for the mountainous roads.

Aldo Faglia also points to downsizing policies, which make it more attractive to choose smaller diesels to maintain good torque output.

LCV sector

Turning to the light commercial vehicle sector, overall registrations fell by -5.1% to 28,896, but Volkswagen dominated in this sector too with 5,541 registrations, up 2.1% on 2012, giving Volkswagen a market share of 19.2%. Renault took the second place with 3,879 registrations, a -14.3% decline compared with 2012. Mercedes-Benz took third place with 3,076 registrations, down -5.1% on 2012. Ford took fourth place with 2,741, up 2.9% compared with 2012, while Opel took fifth place with 2,048 registrations, -3.0% down on 2012.

ALD’s Aldo Faglia points to the French manufacturers as popular makes for their customers, which he attributes to the comprehensive range of the models that Citroën, Peugeot and Renault offer. ‘Our 3 biggest customers are all on Peugeot and Renault vans, except the Swiss Post, which is Fiat oriented.’ This must contribute towards Fiat’s improving sales in the 2013 LCV market. Mr Faglia also says that VW has recently won a contract with the Swiss Post too, so may also contribute to the company’s positive performance.

The vehicle tax regime in Switzerland is mostly in the hands of the Cantons, but there are no specific taxes applied to business cars.

So what of the future business vehicle sector in Switzerland? That will partly depend on what policy government chooses regarding future environmental sustainability. ALD’s Aldo Faglia expects city-based companies to buy fewer cars and look at broader mobility needs, shifting to pool or shared cars. This will impact on leasing companies whose business depends on providing cars. ‘Talking to our competitors, the main focus is to develop a new business model,’ he says.