THE company car is alive and well and faces a bright but changing future. Business requirement for employee mobility is currently paramount with the economy in a healthy state. Low unemployment, along with a shortage of specialist skills in some industries, has focused companies' attention on the remuneration package they offer staff.

According to the Tolley Swan National Survey of Company Car Schemes 1997/98, company cars are allocated according to a growing number of criteria, led by a driver's seniority which comes into play in 76% of cases, annual business mileage (49%) and mobility need (51%). The mean salary to qualify for a company car is now £26,537, while drivers have to cover a mean of 10,211 business miles a year to merit a company car. And recruitment need has certainly increased its profile as a criterion for allocating a company car, now featuring in 35% of cases.

Fleet decision-makers believe this buoyant state of affairs will continue in the near future, with more forecasting an increase rather than decrease in the number of cars they operate this year and next. However, over a five-year period the picture changes slightly, with almost half of the companies surveyed expecting to run fewer company cars by 2002, particularly in the large fleet sector, while only a quarter anticipated running a larger fleet operation in five years' time.

This pessimism is primarily due to the belief of 70% of fleet decision-makers that the cost of running company cars will rise under the Labour Government, and they identified pressure on business costs as the most significant strategic issues facing them.