vehicle rental and leasing industry is “feeling positive and ready to embrace
the market opportunities it sees in the months ahead”, according to the British
Vehicle Rental and Leasing Association (BVRLA), which has unveiled its ‘2018 Industry Outlook Report’.
headline findings of the report are that:
- 2018 will be the year of the in-depth fleet review with, from a company
car perspective, a steady move to petrol and hybrid vehicles, particularly by
non-essential users, meaning that diesel is almost guaranteed to lose its
position as the most popular fuel for new fleet registrations in 2018.
- Demand for ‘grey fleet’ management will grow as personal leasing and
affinity and salary sacrifice schemes ‘nibble’ away at the ‘perk’ sector of the
company car market.
- Advanced driver assistance system (ADAS) recalibration will become a
‘headache’ for fleet operators
- Fleet operators will increasingly rely on ‘brought-in’ rather than
‘built-in’ connectivity using smartphone apps and dashcams.
- New technology, electrification and corporate demand will drive a 20%
increase in the car club fleet and there will be a rise in other new mobility
services including car sharing, ride hailing, peer2peer rental and dynamic
- 2019 and not 2018 will not be the ‘breakthrough’ year for pure electric
vehicles with next year being the year of the hybrid when it comes to growth in
electric car registrations. Rapid improvements in real world MPG and CO2 mean that the new generation of
petrol hybrids could give many of today’s diesel fleet stalwarts some serious
- Growth in the steady stream of fleet and sole operators that decide to
replace their non-core HGV fleet with vans in order to reduce driver costs and
the report suggests that there could be increases in interest rates, rises in
vehicle costs and parts prices and potentially a fall in residual values and
business and consumer confidence.
an increasingly hostile tax regime, and uncertainty surrounding Brexit, diesel
vehicles, terrorism and the regulatory environment, BVRLA members are reported
to be “upbeat” about their prospects for 2018.
Keaney, chief executive of the BVRLA, said: “Our industry sees an opportunity
to place itself at the centre of an increasingly fast-moving world of new
automotive technology and mobility services.
“Last week the government published an ‘Industrial
Strategy’ outlining its ambition to see the UK become the world’s most
innovative nation by 2030. Our industry will help deliver this by embracing new
technologies, not only relating to vehicle design and build, but also the way
we interact with customers, operate fleets and use data.
“Next year will bring a lot of change and as an
increasing number of customers move from vehicle ownership to usership, our
members will be ready to meet their needs; providing the expertise to guide
customers and businesses to the right transport solution, considering
affordability, sustainability and cost-effectiveness.
“BVRLA members know their customers, understand their
products and are experts in combining the two in the safest, most sustainable
and cost-effective way. This is why they are now collectively responsible for
almost five million vehicles - that’s one-in-eight cars, one-in-five vans and
one-in-five trucks licensed on UK roads.”
The ‘2018 Industry
Outlook Report’ provides a collective industry view on eight key subject
- Digitisation - more investment
in the customer-facing elements of leasing and rental suppliers to provide a
personal service that delivers brand loyalty. Digital services will require
ongoing investment to harness every opportunity.
- Air quality and emissions -
diesel dominance of the commercial vehicle market will not change yet.
Uncertainties around air quality measures will drive more people towards
renting and leasing. 2018 will be the year of the in-depth fleet review.
- Personal leasing - PCP will
remain under the spotlight due to poorly advised deals.
- Connected vehicles and data -
we will see ‘connected consolidation’ as companies get to grips with
forthcoming General Data Protection Regulation compliance and agree terms for
working with vehicle and driver data covering the cleansing of personal data,
driver contact and access to vehicle repair and maintenance information.
Operators will increasingly rely on ‘brought-in’ rather than ‘built-in’
connectivity using smartphone apps and dashcams.
- Mobility services -
app-delivered, dealership-based car rental is coming. Although integrated
mobility as a service won’t take off in 2018, the range of individual
pay-as-you-go mobility services on offer will grow.
- Electric vehicles - hybrids
will dominate electric vehicle registrations and improvements in real-world MPG
and CO2 will make them an attractive alternative to diesel. Electric vehicle
growth in the light commercial vehicle market is not expected with longer
ranges, larger payloads and bigger subsidies and tax incentives required to
make vehicles cost effective.
- Advanced Driver Assistance Systems -
the independent repair and maintenance market will struggle to meet the demands
of an increasingly complex range of vehicles.
- Commercial vehicles - the
commercial vehicle market will continue to polarise between firms working with
HGVs and light commercial vehicles. Rising use of safety technology will avert
the need for regulation of the light commercial vehicle market. There will be
growing concerns around the risk profile of a new generation of self-employed,
‘gig-economy’ van drivers.
The BVRLA spoke to 15 vehicle rental and leasing industry
leaders during November 2017 to canvass their opinions on key topics likely to
affect the industry in the coming year. The Association’s expertise and
knowledge combined with the views of leaders to inform the Report, which is
available at: https://www.bvrla.co.uk/advice/publication/industry-outlook-report-2018