For a relatively small European country, the Netherlands has a comparatively large automotive sector. According to the Dutch Automotive Industry website, the industry employs some 45,700 people across OEMs, suppliers, R&D institutions and others. Around 10,000 are employed in manufacturing, with approximately 6,500 building trucks, 2,000 building cars and 1,700 building buses. This makes the industry one of the largest in the Dutch manufacturing sector.

DAF Trucks is the Netherlands’ oldest surviving vehicle manufacturer, dating back to 1928. The company is now owned by the US PACCAR Company that produces Peterbilt and Kenworth trucks in North America. Besides Daf, Scania, the Swedish truck manufacturer, now part of the VW Group, also produces trucks in The Netherlands and there are also the specialist truck manufacturers Ginaf and Terberg.

The Nedcar plant can trace its routes back to the production of DAF cars and until recently the Mitsubishi Colt and Outlander were produced here for Europe. The VDL group, which is involved in bus and coach production, under the Berkhof and Bova brands, will be producing the Mini in the plant from 2014. In addition there are specialist car manufacturers Donkervoort and Spyker.

The manufacturing sector naturally brings a supplier base with it. Well-known names such as Philips, TomTom and Bosch are among those manufacturing in the Netherlands. Besides these, in the fleet and leasing sector, LeasePlan is a Dutch company.

The Dutch car market is having a difficult time at the moment. In 2012, the market fell by -9.6% from 555,843 in 2011 to 502,528. Since then the market decline has gathered pace, with ACEA data showing that in the first four months of 2013, the Dutch car market contracted by -29.6% to 146,063, compared with 207,468 in the same period in 2012. ALD’s general manager in the Netherlands, Carel Bal, told us that the market is expected to decline to between 400,000 and 420,000 new cars in 2013.

The problem appears to lie in a growing Dutch economic crisis. Dutch house buyers capitalised on a booming property market in the 1990s and now that property prices are falling, many buyers have been left with high levels of debt. The Dutch economy as a whole has the highest level of debt in the Eurozone. It’s no surprise that car sales have plummeted against this background.

Gauging the size of the car fleet sector is never easy as it depends on how a business car is defined and how fleet sales are defined. We asked a selection of those involved in the business vehicle sector for their views on the market.

Anne Brons is the marketing and business development director for Alphabet in the Netherlands. His estimate is that around 872,000 business cars are on the road in the Netherlands, making up 12.3% of the market. Around 70,000 business cars were added in 2012. He also suggests that there are 7,042,000 cars registered on Dutch roads. ALD’s Carel Bal estimates that there are just over 700,000 leased business cars on the road in the Netherlands and that registrations of these have dropped 37% so far in 2013. Niels Beringen at Arval in the Netherlands estimates that approximately one third of all new cars sold is leased. That figure is supported by Carel Bal at ALD who suggests that the percentage of leased cars in the Dutch market is around 32%, possibly the highest in Europe. This could be in part be due to the maturity of the leasing market in the Netherlands.

‘It started in the late 1950s,’ he says. ‘Initially, this was a way of financing the car and it has gradually evolved more into servicing the car.

‘For at least two decades in Holland we have had the full leasing concept, which means it’s much more like a service concept than a finance concept. It’s in line with the Dutch economy – outsourcing is prevalent in Holland, not only for car leasing but other activities too. So it means that the market is already densely populated with leasing companies and is quite mature.’

The Netherlands has a CO2-based car taxation system and this has had a great influence on car sales. As Niels Beringen of Arval told us: ‘10 years ago the choice for a new lease vehicle was mainly based on emotional arguments. These days it's mainly based on financial arguments. Therefore manufacturers that produce lots of vehicles with low Benefit-in-Kind taxes are the most popular right now.’

Among those he lists Renault, Ford, Mitsubishi and Toyota. For ALD customers, Volkswagen is the favourite, followed by Ford and Renault. Anne Brons at Alphabet also lists Volkswagen as the most popular brand, followed by Renault and Peugeot.

Mr Brons explains the Dutch market in some detail: ‘Dutch people buy relatively small cars. The downsizing trend, which already began several years ago, is evident from the recent BOVAG and RAI Association analysis of car sales figures for 2012.

‘The reason for this trend stems mainly from the fact that, in our country, purchasing behaviour is greatly influenced by the tax regulations concerning passenger cars. This small-car trend emerged when the basis for private car/motorcycle taxation and the maximum amount of additional tax for private use of a company car was altered from net catalogue price to CO2 emissions.

‘According to the most recent figures on the sales of passenger cars in 2012, it appears once again that Dutch people watch their pennies carefully when buying a car. If a comparison is also made between types of owners, it is clear that small and smaller vehicles are being used by both private and business drivers.

‘The top three cars purchased for private use are led by the Kia Picanto, followed by the Peugeot 107 and the Volkswagen up! For the business consumer, the Renault Megane tops the list, followed by the Volkswagen Polo and the Ford Focus. All three models are well represented in the 14% additional tariff for the private use of a company car (there are four different tariffs depending on CO2 emissions: 0%, 14%, 20% and 25%). From this, it is patently obvious that the effects of the addition (read: one gram of CO2 more or less) have a huge impact on the Dutch market. Compared to a few years ago, the “model mix” has made a clear shift to smaller cars.’

Looking at the lease car market, Carel Bal at ALD believes that the Dutch recession has had an impact on the market. In addition he says that: ‘We notice that in our fleet, the number of returned vehicles is relatively low this year. If we look at cars registered four years ago – the average contract duration is around 45 months, a bit longer than average, I think, in Europe, which means that we have relatively low returns. If there are low returns, there are fewer new registrations.’

ALD charted a rise in business car registrations of some 0.4% in 2012, but in the first quarter of 2013, the market has declined by some 0.3% compared with the 29.6% decline in the first four months of the year for the passenger car market overall. This suggests that the recession is not yet having a great impact on the business car sector.

By comparison the light CV sector is small, with around 850,000 vehicles in the parc, reckons Anne Brons at Alphabet, with a fairly even division between light and larger van models. Niels Beringen says that around 60,000 new light CVs were sold in 2012, with Volkswagen, Mercedes-Benz, Opel and Renault the most popular brands. ALD data suggests that light CVs take around 21% of the lease market.

As discussed already, there are four existing Benefit-in-Kind tax bands applicable to company cars used privately, based on 0%, 14%, 20% and 25% of the car’s value. The 0% band applies to electric vehicles and plug-in hybrids. According to Niels Beringen, an additional 7% tax band is due to be added in 2014.

Given the maturity of the leasing market, it is not surprising that Carel Bal suggests that full operational leasing is the most popular leasing method in the Netherlands. His colleague, Lonneke Van Der Horst is the marketing and strategy manager for ALD in the Netherlands and she says that full operational leasing takes around 80% of the Dutch car leasing market.

Niels Beringen sees a different model at Arval: ‘Self-purchase is the most popular, followed by financial leasing for smaller companies and operational leasing for larger companies. Sometimes businesses lease via car credit,’ he says. Anne Brons also sees purchase as the most favoured method with full operational leasing and short-term rental also popular. Favoured finance methods include banks, car manufacturers, dealers and businesses using their own capital.

Lonneke Van Der Horst says: ‘We have nearly 8,000 electric vehicles and plug-in hybrids on Dutch roads at the moment, mainly for business use – a number that is quite large compared with other countries.’ The figure is helped by the low rate of BiK tax.

Looking ahead, Carel Bal at ALD expects to see average annual distances driven falling and a shift in mobility trends.

‘We see more combinations of methods of transport coming up,’ he says, ‘We see either drivers taking a very small car and having an additional one for special purposes like holidays, or a combination with trains. In other words, the trend is moving from the possession of a car more to the use of a car, which means car sharing becomes more important.’

Lonneke Van Der Horst adds: ‘In future we think that the environment will become even more important, particularly with taxation being based on environmental factors.’

Car sharing and flexible mobility are trends that both Arval and Alphabet expect to see develop more too. Like ALD, Alphabet expects to see environmental factors growing in importance as Anne Brons explains: ‘Electric driving is currently undergoing a spectacular development. More and more car manufacturers are responding to the increasing demand for environmentally friendly cars by launching their own electric models onto the market. At Alphabet, we are convinced that a certain proportion of Business Mobility can and should be electric.

‘The use of EVs in fleets is positive for business and for the environment: increased cost-efficiency and an enhanced corporate image go hand-in-hand with a significantly reduced carbon footprint. eMobility implementation makes perfect business sense. With EVs as components of a company fleet, a mix of engine types is created, which makes the fleet more efficient and sustainable.

‘Many people have been suspicious of eMobility up to now. Is it convenient? Can I drive wherever I want to? We respond that today’s eMobility is cost-effective, convenient and ready to be implemented more extensively in the business world. Consequently, we have developed and just launched AlphaElectric, a Business eMobility solution that makes the integration of EVs into fleets easier and more convenient than ever before.

‘We believe that eMobility will prove to be a popular solution for urban Business Mobility over the coming years. Most city trips are short, so EVs are ideal. eMobility will also play an important role in car sharing, in particular, in corporate car sharing.’