A Mercer study finds factors such as prevalence of company cars, purchase price, annual allowance paid in lieu of a car or to subsidize care-related expenses, eligibility and frequency of additional benefits such as fuel, maintenance and insurance are benefits that vary from country to country.
In the Americas, more than half of companies provide car benefits to their employees across all countries except Honduras and Paraguay. Additionally, most companies cover fuel for both business and personal use. The prevalence of car benefits in the region varies from 37% in Honduras to 81% in Brazil.
Car benefits are also popular in Mexico and Argentina (74%, respectively) while in the United States, car benefits are prevalent for heads of organizations (71%). In Canada, 70% of organizations provide company cars most often to the heads of the organization and executives, as status and seniority are the key factors in providing cars.
The typical purchase price of cars provided to employees in the Americas varies by employee level. For example, in Brazil, heads of organizations receive a company car worth $102,890 USD compared to heads of organizations in Honduras who receive $33,549 USD towards a car. In Venezuela, executives receive $74,699 USD versus executives in Mexico who get $26,993 USD.
Additionally, many countries in the Americas do not provide an annual car allowance (the cash amount paid in lieu of a car or to subsidize car-related expenses). Countries that do provide a car allowance include Brazil, Canada, Chile, Mexico and the United States. For heads of organizations, the car allowance is the highest in Brazil at $35,000 USD. In Canada, Chile, Mexico and the United States, the car allowance for heads of organizations is $13,087, $13,097, $6,693 and $14,400 USD, respectively. Moreover, most organizations cover maintenance, tax and insurance costs for company cars.
According to a Mercer news release, among the countries that provide car benefits in Asia Pacific, Pakistan has the highest prevalence at 90% followed by South Korea (81%), New Zealand (77%) and Thailand (72%). Status and seniority remain the top criteria for determining whether executives and managers get company cars, while business need is the main criteria for lower level positions.
Similar to the Americas, the purchase price of cars provided to employees in Asia Pacific varies by employee level. For example, in Singapore the purchase price of cars for heads of organizations is $107,583 USD compared to heads of organizations in South Korea who receive $24,448 USD. Interestingly though, in Singapore and South Korea executives receive the same amount towards a car as heads of organizations.
Car allowances are typical throughout Asia Pacific, but are not as common for heads of organizations as they are in other regions. In Malaysia, more companies provide car allowances in lieu of the car and in Australia more than half (55%) of companies provide the option of cash instead of a car. Executives in Singapore receive the highest car allowance at $21,445 USD. By contrast, executives receiving the lowest allowance for cars are in South Korea and Bangladesh at $4,896 USD and $4,510 USD, respectively.Typically, company cars are provided to heads of organizations, executives, managers and professional sales employees throughout Asia Pacific. In general employers cover fuel costs for executives and most managers for both business and personal use, while they cover only business-related fuel costs for professionals. Additionally, in some countries employers cover additional car-related benefits. In Hong Kong, for example, employers generally cover all maintenance, insurance and tax related expenses while in the Philippines, the majority of companies cover maintenance, insurance and fuel.
Europe, Africa and the Middle East
The Mercer study finds car benefits are prevalent in most countries in Europe, Africa and the Middle East. Among the countries that provide cars, Slovenia has the highest rate at 100%, followed closely by Belgium and Hungary at 99%, respectively. Other countries where car benefits are popular include France, Greece, Czech Republic, Finland, Germany and Poland.
Whether company cars are available for business and personal use varies by job level. Cars are available for the use of both for the heads of organisations and senior managers, but as the job level decreases, cars are restricted to business use, especially at the sales force level.
The purchase price of cars in Europe, Africa and the Middle East are similar to that of the Americas and Asia Pacific in that they vary among employee level. Heads of organisations in Denmark and Russia receive the highest car purchase price at $114,363 USD and $92,265, respectively, while Bulgaria and Romania receive the lowest amounts at $45,423 USD and $49,795 USD, respectively. In contrast, executives in Romania receive $33,508 USD toward a car while executives in Denmark receive $94,473 USD.
Car allowances are common in Europe, Africa and the Middle East and vary by employee level as in other countries. For heads of organizations, Germany provides the highest allowance at $58,386 USD, followed by Romania at $44,262 USD. Sweden and the Ukraine provide the lowest at $8,628 USD and $2,874 USD, respectively. In Greece, executives receive an allowance of $31,983 USD compared to heads of organisations who receive a slightly lower allowance at $30,207 US.
Employers in Europe, Africa and the Middle East voluntarily pay for tax, maintenance and insurance expenses for company cars except in a few countries where the company bases the coverage on position levels and may not cover any of these expenses completely.More information is at http://www.mercer.com.