Seven percent more company cars registered in Belgium
Last year, companies in Belgium registered a record number of 315.557 new cars. That is almost 22.000, or 7 % more than in 2018. The Belgian company car market exceeded the 300.000-mark for the first time.
The share of company cars in Belgian car sales rose from 53% to 57% last year. This is the fifth increase in a row. In 2019, one-third more new company cars were registered than five years ago.
There is no unique explanation for the continuous growth in the popularity of the company car. The automotive sector points to the favorable economic climate. More and more companies are offering their employees a cafeteria plan or mobility budget. A company car is often part of the package.
“The economy is still going well,” says Karl Schuybroek, the Renault spokesman in the Flemish business newspaper, De Tijd. “Companies are constantly renewing their fleet. They buy differently, but no less.”
The leasing companies also point to the impact of the European emission test WLTP. The introduction of that test led to delays in the homologation of many models. As a result, many company cars ordered in 2018 were not delivered and registered in Belgium until 2019. Also, importers and garages had to register pre-WLTP cars themselves last summer and then sell them as second-hand cars.
Company vs. salary car
The category of company cars includes cars leased or purchased by companies or the self-employed. The exact number of pure ‘salary cars’, which are not actually needed for carrying out a job, is not clear.
The company car is no longer the exclusive privilege of the top management. Since 2017, the ‘Poetsbureau’ has been offering its cleaning assistants company cars. ArcelorMittal has been doing the same for its Ghent workers since 2015. Many companies followed them, also in 2019.
“A lot of companies offer cafeteria plans,” says Tony Peetermans of the leasing company Arval in the newspaper De Standaard. That means: employees give up wages or a thirteenth month in exchange for a fiscally friendly company car.
“The company car is democratized,” says Michel Martens of the automotive importers’ Febiac. “The lower management and the workers are now also entitled to it.”
The trend toward more commercial vehicles goes against legislative proposals. Before the elections, several political parties launched ideas to tackle the fiscally advantageous regime. Or to speed up the greening of the Belgian car fleet by encouraging the purchase of low-emission company cars. For the time being, these plans do not influence the popularity of company cars.
The Michel government already made the company car less attractive by limiting its deductibility. But that lower deduction has not encouraged companies to offer fewer company cars.
“They opt for other types, such as smaller cars or a different type of motorization,” says Peetermans. The possibilities to convert a company car fiscally advantageous into wages or alternatives have also had limited success.
The environmental impact of company cars is an issue under ongoing debate. Opinions are divided about whether more private kilometers are driven by company car or not. Last year, the Federal Planning Bureau stated that abolishing the salary car would reduce CO2 and NOx emissions by 2,7 percent.
A company car registered in 2019 emits an average of 119,3 grams of CO2 per kilometer. For a private vehicle, this is 123,9 grams. 2,3 percent of the company cars registered in 2019 is electric; for private vehicles, this is only 0,7 percent.
However, the average CO2 emission of a new car is on the rise. According to Febiac, the company car can be an asset in the greening process. “They can help absorb the higher cost price of electric cars,” says Martens.
Belgian car market stagnates
It is noteworthy that car sales in Belgium stagnated at 550.000 despite the increase in the number of company cars. While the fleet market is running at full speed, selling to private individuals in particular decreased.
This was mainly due to the high uncertainty among car buyers. Due to the introduction of low-emission zones and the imminent ban on diesel in cities, many private individuals have doubts about the choice of a new car.