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Car and Van Hire - UK - February 2013

“Faced with tough times, operators in the car and van hire market need to look evermore at ways in which they can broaden their market presence. With generally high levels of satisfaction for the service being delivered, success will rest increasingly with those companies that look below the surface at what customers really want when it comes to their hire experience.”
– Neil Mason, Head of Retail Research

Some questions answered in this report include:

  • How should you operate within a sluggish economy?
  • What does the future hold for the reasons for car hiring?
  • How do you compete with the big boys?
  • Is advertising required to be successful?
  • What are the future prospects?

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Table of contents

  1. Introduction

      • Definition
        • Exclusions
          • Abbreviations
          • Executive Summary

              • The market
                • Figure 1: UK short-term car and van rental, by value, at current prices, 2007-17
              • Market factors
                • Companies, brands and innovation
                  • Figure 2: Companies used last when hiring a self-drive car, van or minibus, November 2012
                • Engaging with the customer
                  • The consumer
                    • Figure 3: Main reasons for hiring a car, van or minibus in the future, 2009 and 2012
                    • Figure 4: All who have personally hired a car, November 2012
                    • Figure 5: Any level of satisfaction with companies used, or companies that consumers would consider, using by those who have hired in the last 2 years, November 2012
                    • Figure 6: Factors considered most important when hiring a self-drive car, van or minibus in the future, November 2012
                  • What we think
                  • Issues in the Market

                      • Operating within a sluggish economy
                        • What does the future hold for the reasons for car hiring?
                          • How to compete with the big boys
                            • Is advertising required to be successful?
                              • What are the future prospects?
                              • Trend Application

                                  • Trend: Patriot Games
                                    • Trend: Green Technology
                                      • Trend 2015: Access Anything, Anywhere
                                      • Internal Market Environment

                                        • Key points
                                          • Car hire hit by the economic slowdown
                                            • Figure 7: Trends in car hire in Britain in the last 12 months for personal and business use, 2006-12
                                          • Decline in car hire appears widespread
                                            • Figure 8: Frequency of hiring a car in Britain for personal or business use in the last 12 months, 2010-12
                                          • Recession brings decline in car ownership
                                            • Figure 9: Household ownership of cars in the UK, 2006-12
                                          • The popularity of UK holidays remains strong
                                            • Figure 10: Trends in total number of holiday trips taken, 2011 and 2012
                                          • Housing market goes into reverse
                                            • Figure 11: UK housing transactions and average prices, 2008-11
                                          • Growing student market
                                            • Figure 12: Numbers of full-time undergraduates in UK, 2005/06-2009/10
                                        • Broader Market Environment

                                          • Key points
                                            • UK economy remains fragile...
                                              • Figure 13: GDP, PDI, consumer expenditure and savings, at constant 2007 prices, 2007-17
                                            • ...with bumping along the bottom the order of the day
                                              • Figure 14: Trends in GDP quarterly percentage change, Q1 2007-Q3 2012
                                            • Socio-economic changes set to impact on car hire market
                                              • Figure 15: Forecast adult population trends, by socio-economic group, 2007-17
                                            • Ageing of the UK population presents opportunities
                                              • Figure 16: Trends in the age structure of the UK population, 2007-17
                                          • Competitive Context

                                            • Key points
                                              • Cars dominate consumer expenditure
                                                • Figure 17: Spending on personal transport, at current prices, 2011
                                              • Costs of running your own vehicle continue to rise...
                                                • Figure 18: Annual percentage change in transport costs, 2005-11
                                              • ...while the price of used cars has been falling
                                                • Figure 19: Price indices of new and used cars, 1996-2011
                                              • Costs of maintaining and running a vehicle continue to rise the most...
                                                • Figure 20: Indices of personal transport prices, 2005-11
                                              • ...although recent stability for fuel prices could help the market
                                                • Figure 21: Monthly UK petrol, diesel and oil price trends, 2009-13*
                                            • Strengths and Weaknesses in the Market

                                              • Strengths
                                                • Weaknesses
                                                • Who’s Innovating?

                                                  • Key points
                                                    • Going Green: Hybrid and electric vehicles
                                                      • Luxury car hire growing
                                                        • Exploiting new opportunities
                                                          • Benefiting from online developments
                                                            • Marketing and promotion
                                                              • Peer-to-peer hire market going mainstream...
                                                                • ...with car clubs also proving popular
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Mixed fortunes for car hire market...
                                                                      • Figure 22: Value of personal and business short-term car and van rental, 2007-12
                                                                    • ...with demand for rentals actually falling back
                                                                      • Figure 23: Number of rental, number of hire days and average spend per rental, 2007-12
                                                                    • Recession drives customers towards smaller vehicles...
                                                                      • ...although some want luxury
                                                                        • The future
                                                                          • Figure 24: UK short-term car and van rental, by value, at current prices, 2007-17
                                                                        • Forecast
                                                                          • Figure 25: UK short-term car and van rental, by value, at current prices, 2007-17
                                                                      • Market Share

                                                                        • Key points
                                                                          • Enterprise is the most popular amongst hirers
                                                                            • Figure 26: Companies used last when hiring a self-drive car, van or minibus, November 2012
                                                                          • Arnold Clark has the largest fleet
                                                                            • Figure 27: UK fleet size of selected car rental companies, 2012
                                                                        • Companies

                                                                          • Car and van hire companies
                                                                            • Enterprise Rent-A-Car
                                                                                • Figure 28: Key financial data for Enterprise Rent-A-Car UK Limited, 2010 and 2011
                                                                              • Alamo Rent A Car
                                                                                • National Car Rental
                                                                                  • Europcar
                                                                                      • Figure 29: Key financial data for Europcar Group, 2010 and 2011
                                                                                    • Hertz
                                                                                        • Figure 30: Key financial data for Hertz Global Holdings, Inc. 2010 and 2011
                                                                                      • Thrifty Car and Van Rental
                                                                                          • Figure 31: Key financial data for Scot Group (Thrifty), 2011and 2012
                                                                                        • Avis
                                                                                            • Figure 32: Key financial data for Avis Rent A Car Limited, 2010 and 2011
                                                                                          • Budget Rent A Car
                                                                                            • Sixt
                                                                                                • Figure 33: Key financial data for Sixt Kenning Limited, 2010 and 2011
                                                                                              • easyCar
                                                                                                • Arnold Clark
                                                                                                    • Figure 34: Key financial data for Arnold Clark Finance Limited, 2010 and 2011
                                                                                                  • Practical Car and Van Rental
                                                                                                    • Ford Car Rentals
                                                                                                      • Specialist van hire companies
                                                                                                        • Northgate Vehicle Hire
                                                                                                          • Salford Van Hire
                                                                                                            • Car share and peer-to-peer companies
                                                                                                              • Zipcar
                                                                                                                • WhipCar
                                                                                                                • Brand Communication and Promotion

                                                                                                                  • Key points
                                                                                                                    • Promotional expenditure picking up
                                                                                                                      • Figure 35: Main monitored media advertising expenditure on self-drive vehicle hire, 2008-12
                                                                                                                    • Enterprise dominates expenditure
                                                                                                                      • Figure 36: Main monitored media advertising expenditure on self-drive vehicle hire, top ten companies, 2008-12
                                                                                                                    • Enterprise dominates while other hire companies see investment fluctuate
                                                                                                                      • Peer-to-peer sector expands profile
                                                                                                                        • Media strategies vary
                                                                                                                          • Figure 37: Main monitored media advertising expenditure on self-drive vehicle hire companies, by media type, 2008-11
                                                                                                                        • Few consumers focus in on advertising
                                                                                                                          • Television and internet are key channels
                                                                                                                            • Figure 38: Main monitored media advertising expenditure on self-drive vehicle hire, by media type, 2008-12
                                                                                                                        • Channels to Market

                                                                                                                          • Key points
                                                                                                                            • Avis and Enterprise dominate rental scene
                                                                                                                              • Figure 39: Selected UK car rental companies, by number of outlets, 2012
                                                                                                                            • Leading players expand their presence
                                                                                                                              • Figure 40: Selected UK car rental companies, by number of outlets, 2010 and 2012
                                                                                                                            • Ways of operating in the hire market
                                                                                                                              • Car hire franchising
                                                                                                                                • Licensee marketing
                                                                                                                                  • Affiliate marketing
                                                                                                                                    • Brokers
                                                                                                                                    • The Consumer – Past Reasons for Hiring

                                                                                                                                      • Key points
                                                                                                                                        • UK market typified by hiring for holidays and house moves
                                                                                                                                            • Figure 41: Main reasons for hiring a car, van or minibus in the last two years, November 2012
                                                                                                                                          • Young adults are an important market
                                                                                                                                            • Urbanites important for some aspects of hire
                                                                                                                                              • Income has some impact on need to hire
                                                                                                                                                • National hire companies are popular for most situations
                                                                                                                                                  • Figure 42: Main reasons for hiring a car, van or minibus in the last two years, by companies used in the last two years for self-drive car, van or minibus hire, November 2012
                                                                                                                                                • Certain national companies are well placed for future use
                                                                                                                                                  • Figure 43: Main reasons for hiring a car, van or minibus in the last two years, by most popular companies would consider using in the future using for self-drive car, van or minibus hire, November 2012
                                                                                                                                                  • Figure 44: Main reasons for hiring a car, van or minibus in the last two years, by next most popular companies would consider using in the future using for self-drive car, van or minibus hire, November 2012
                                                                                                                                              • The Consumer – Future Reasons For Hiring

                                                                                                                                                • Key points
                                                                                                                                                  • Moving home is by far the most likely reason to hire a car or van
                                                                                                                                                      • Figure 45: Reasons you might hire a self-drive car, van or minibus in the future, November 2012
                                                                                                                                                    • Hiring when moving home has broad appeal
                                                                                                                                                      • Holiday and trip hire important for young adults
                                                                                                                                                        • Income is a major determinant for most hire situations
                                                                                                                                                          • Interest in hiring appears to be on the rise
                                                                                                                                                            • Figure 46: Main reasons for hiring a car, van or minibus in the future, 2009 and 2012
                                                                                                                                                          • Other companies strongly placed for home move market
                                                                                                                                                            • Figure 47: Reasons you might hire a self-drive car, van or minibus in the future, by companies used in the last two years for self-drive car, van or minibus hire, November 2012
                                                                                                                                                        • The Consumer – Use of Hire Companies

                                                                                                                                                          • Key points
                                                                                                                                                            • Enterprise records strong showing from recent hirers
                                                                                                                                                                • Figure 48: Companies used or would consider using for self-drive car, van or minibus hire, November 2012
                                                                                                                                                              • Key findings of those who have hired in the last two years
                                                                                                                                                                • Young adults go for major brands
                                                                                                                                                                  • Major names popular with those in London
                                                                                                                                                                    • Enterprise appeals to the mass market
                                                                                                                                                                      • Key findings of those who would consider hiring in the future
                                                                                                                                                                        • Men, middle-aged adults and higher socio-economic groups know what they want
                                                                                                                                                                          • Londoners also have specific demands
                                                                                                                                                                            • Vehicle reliability tops customer satisfaction
                                                                                                                                                                                • Figure 49: Satisfaction levels amongst those who have personally hired a car, November 2012
                                                                                                                                                                              • Women and older adults more likely to be satisfied with individual aspects of service
                                                                                                                                                                                • Higher earners also record greater satisfaction
                                                                                                                                                                                  • Around four fifths are satisfied with their hire experience
                                                                                                                                                                                      • Figure 50: Overall satisfaction levels amongst those have personally hired a car, November 2012
                                                                                                                                                                                    • Women and older adults are most satisfied
                                                                                                                                                                                      • Satisfaction levels are similar for individual companies
                                                                                                                                                                                        • Figure 51: Companies used or would consider using for self-drive car, van or minibus hire, by levels of satisfaction with the service, November 2012
                                                                                                                                                                                      • Price an advantage for some
                                                                                                                                                                                        • Figure 52: Companies used or would consider using for self-drive car, van or minibus hire, by most important factors, November 2012
                                                                                                                                                                                    • The Consumer – Factors That Are Important When Hiring

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Insurance is most important to potential hirers
                                                                                                                                                                                            • Figure 53: Factors considered most important when hiring a self-drive car, van or minibus in the future, November 2012
                                                                                                                                                                                          • Women are more demanding...
                                                                                                                                                                                            • ...as are older customers
                                                                                                                                                                                              • Wealthy look more at non-price factors
                                                                                                                                                                                                • Consumers are becoming more demanding, especially over costs
                                                                                                                                                                                                  • Figure 54: Factors considered most important when hiring a self-drive car, van or minibus in the future, 2009 and 2012
                                                                                                                                                                                                • Consumers expect different things from different companies
                                                                                                                                                                                                  • Figure 55: Factors considered most important when hiring a self-drive car, van or minibus in the future, by companies used in the last two years for self-drive car, van or minibus hire, November 2012
                                                                                                                                                                                                • Reason for hire also impacts on factors sought from a hire company
                                                                                                                                                                                                  • Figure 56: Factors considered most important when hiring a self-drive car, van or minibus in the future, by reasons you might hire a self-drive car, van or minibus in the future, November 2012
                                                                                                                                                                                              • Appendix – Internal Market Environment

                                                                                                                                                                                                  • Figure 57: Car hire in Britain in the last 12 months, by demographics, 2012
                                                                                                                                                                                                  • Figure 58: Frequency of hiring a car in Britain for personal or business use in the last 12 months, by demographics, 2012
                                                                                                                                                                                                  • Figure 59: Household ownership of cars in the UK, by demographics, 2012
                                                                                                                                                                                              • Appendix – Past Reasons for Hiring

                                                                                                                                                                                                  • Figure 60: Main reasons for hiring a car, van or minibus in the last two years, November 2012
                                                                                                                                                                                              • Appendix – Future Reasons For Hiring

                                                                                                                                                                                                  • Figure 61: Most popular reasons you might hire a self-drive car, van or minibus in the future, by demographics, November 2012
                                                                                                                                                                                                  • Figure 62: Next most popular reasons you might hire a self-drive car, van or minibus in the future, by demographics, November 2012
                                                                                                                                                                                              • Appendix – Use of Hire Companies

                                                                                                                                                                                                  • Figure 63: Companies used in the last two years for self-drive car, van or minibus hire, by demographics, November 2012
                                                                                                                                                                                                  • Figure 64: Companies used for the last car, van or minibus hire, by demographics, November 2012
                                                                                                                                                                                                  • Figure 65: Most popular companies would consider using in the future for self-drive car, van or minibus hire, by demographics, November 2012
                                                                                                                                                                                                  • Figure 66: Next most popular companies would consider using in the future for self-drive car, van or minibus hire, by demographics, November 2012
                                                                                                                                                                                                  • Figure 67: All who have personally hired a car – satisfied on booking process, by demographics, November 2012
                                                                                                                                                                                                  • Figure 68: All who have personally hired a car – satisfied on vehicle reliability, by demographics, November 2012
                                                                                                                                                                                                  • Figure 69: All who have personally hired a car – satisfied on condition of vehicle, by demographics, November 2012
                                                                                                                                                                                                  • Figure 70: All who have personally hired a car – satisfied on customer service, by demographics, November 2012
                                                                                                                                                                                                  • Figure 71: All who have personally hired a car – satisfied on convenience of location, by demographics, November 2012
                                                                                                                                                                                                  • Figure 72: All who have personally hired a car – satisfied on range of vehicles available, by demographics, November 2012
                                                                                                                                                                                                  • Figure 73: All who have personally hired a car – satisfied on price, by demographics, November 2012
                                                                                                                                                                                                  • Figure 74: All who have personally hired a car overall – satisfied on price, by demographics, November 2012
                                                                                                                                                                                              • Appendix – The Consumer – Factors That Are Important When Hiring

                                                                                                                                                                                                  • Figure 75: Most important factors when hiring a self-drive car, van or minibus in the future, by demographics, November 2012
                                                                                                                                                                                                  • Figure 76: Next most important factors when hiring a self-drive car, van or minibus in the future, by demographics, November 2012
                                                                                                                                                                                                  • Figure 77: Other factors considered important when hiring a self-drive car, van or minibus in the future, by demographics, November 2012

                                                                                                                                                                                              Companies Covered

                                                                                                                                                                                              • Alamo Rent a Car LLC
                                                                                                                                                                                              • Arnold Clark Automobiles Ltd
                                                                                                                                                                                              • Aston Martin Lagonda Limited
                                                                                                                                                                                              • Audi United Kingdom
                                                                                                                                                                                              • Avis Budget Group, Inc.
                                                                                                                                                                                              • Bank of England
                                                                                                                                                                                              • BMW (GB) Ltd
                                                                                                                                                                                              • Enterprise Rent-A-Car Company
                                                                                                                                                                                              • Etihad Airways
                                                                                                                                                                                              • Europcar International
                                                                                                                                                                                              • Facebook, Inc.
                                                                                                                                                                                              • Ford Motor Company Limited (UK)
                                                                                                                                                                                              • Kingfisher UK & Ireland
                                                                                                                                                                                              • Mercedes-Benz UK
                                                                                                                                                                                              • Renault (UK) Ltd
                                                                                                                                                                                              • Rolls-Royce Motor Cars Ltd
                                                                                                                                                                                              • Sixt AG
                                                                                                                                                                                              • The Hertz Corporation
                                                                                                                                                                                              • Toyota (GB) PLC
                                                                                                                                                                                              • Vauxhall Motors Ltd
                                                                                                                                                                                              • Volkswagen AG
                                                                                                                                                                                              • YouTube, Inc.
                                                                                                                                                                                              • Zipcar, Inc.

                                                                                                                                                                                              Car and Van Hire - UK - February 2013

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