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Fleet Services (Industrial Report) - UK - January 2014

For the purposes of this report, the fleet services market is defined as including passenger cars used wholly or in part for business purposes, which are either totally funded and expensed by the business or supported through mileage allowances, soft loans or other forms of payment from the business to the employee.

The two categories included in this report are fleet cars, referring to cars sold to fleet operators of 25 or more cars, including dealer demonstrators and Motability sales (a government-sponsored leasing operation for disabled people), and business cars, referring to cars sold to small businesses operating between one and 24 cars and including self-employed, VAT-registered traders.

The fleet services market in the UK is a significant component of the broader automotive industry, accounting for over half of new car registrations in 2012.

The market is part of larger vehicle leasing and short-term rental sector in the UK, which the British Vehicle Rental & Leasing Association (BVRLA) estimates to generate approximately £15 billion in annual turnover.

The most common reason for providing a car to an employee is for use on business grounds, with the frequency of corporate travel making the provision of a vehicle a necessity in certain cases. Some companies will operate large fleets of over 1,000 vehicles while small firms may operate fewer than 25 cars.

The fleet industry is significant to the UK as part of the broader automotive ecosystem. Car and component manufacturers, as discussed above, benefit from higher output levels than would otherwise be required, due to high demand for new cars from the fleet sector. Replacement cycles for corporate cars are generally shorter than those for privately-owned cars, creating additional demand. The fleet sector also tends to be at the sharper edge of new innovations in the market, as they are buying cars en masse and with greater frequency.

Liqueurs - UK - January 2012

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Table of contents

  1. Executive Summary

    • The market
      • High car registration levels reflect a strong year for fleet services
        • Figure 1: UK market for fleet services, 2010-13
      • Taxable company car numbers continue to slide
        • Figure 2: Taxable company cars in the UK, 2007-12
      • Business car registrations boom in 2013
        • Figure 3: Segmentation of UK new fleet and business car registrations, 2009-13
      • Economic expansion to underpin growth in 2014
        • Figure 4: Forecast UK market for fleet services, 2014-18
      • Market factors
        • Reduced capital allowances makes outright purchase more costly
          • Residual values reach new highs
            • Figure 5: Average used fleet & lease car values in the UK, 2009-13
          • Fuel price escalation hits drivers’ pockets
            • Figure 6: Typical retail cost of fuel and fuel duty level in the UK, 2000-13
          • Replacement cycles reduced from 2012 onwards
            • Figure 7: Average age of used fleet & lease cars in the UK, 2009-13
          • Companies
            • Alphabet expansion doesn’t dent profitability
              • Lex’s fleet rationalised but still far out in front
                • What we think
                • Introduction

                  • Definitions
                    • Methodology
                      • Abbreviations
                        • Market positioning
                          • The customer
                            • The supplier
                              • UK economy
                                • Inflation
                                  • Interest rates
                                    • Manufacturing
                                      • Business investment
                                        • Imports
                                          • Exports
                                            • Market factors
                                              • Fleet cars and the tax system
                                                • Government use of direct legislation
                                                  • Grant schemes
                                                    • Internal market factors
                                                    • Market Size and Trends

                                                      • Chapter summary
                                                        • Market size
                                                          • Fleet market springs into second gear in 2013
                                                            • Figure 8: UK market for fleet services, 2009-13
                                                          • Fleet and business cars maintain steady share of car parc
                                                            • Figure 9: The UK fleet & business car parc, 2009-13
                                                          • Taxable company cars falling in number
                                                            • Figure 10: Taxable company cars in the UK, 2007-12
                                                          • Market segmentation
                                                            • Figure 11: Segmentation of the UK new fleet & business registrations, by volume, 2009-13
                                                          • Market trends
                                                            • Car ownership expanding as households remain committed to private transport
                                                              • Figure 12: Household car availability in Great Britain, 2002-12
                                                              • Figure 13: Licensed cars in the UK, 2003-13
                                                            • New fleet and business car registrations recovery outpaced by private purchases
                                                              • Figure 14: Fleet & business car registrations, 2009-13
                                                              • Figure 15: Car registrations, by sector, 2009-13
                                                            • Tax disc abolition to reduce burden on fleets but reclaim rates unchanged
                                                              • Blow for outright purchasers as tax allowances tighten
                                                                • Reduced used car stock buoys ever-rising residual values
                                                                  • Figure 16: Average used fleet & lease car values in the UK, 2009-13
                                                                • Replacement cycles begin to fall after increase through downturn
                                                                    • Figure 17: Average age of used fleet & lease cars in the UK, 2009-13
                                                                  • Contract hire remains most popular form of acquisition
                                                                      • Figure 18: Fleet & business car acquisition methods, 2013
                                                                    • Ever-increasing fuel prices raise cost pressures for fleet managers
                                                                      • Figure 19: Typical retail cost of fuel and fuel duty level in the UK, 2000-13
                                                                    • Rising insurance costs impose additional burden on fleets
                                                                      • Seasonal variation in sales demonstrates a slight increase
                                                                        • Figure 20: Seasonal variation in sales of new fleet & business cars, 2009-13
                                                                        • Figure 21: Monthly sales of new fleet & business cars, January to December 2013
                                                                    • Industry Structure

                                                                      • Chapter summary
                                                                        • Industry development
                                                                          • Figure 22: Analysis of the changes in the UK automobile renting & leasing industry, 2009-13
                                                                        • Car manufacturers continue to expand presence in the industry
                                                                          • Leading companies by fleet size
                                                                            • Figure 23: Changes in company fleet size, 2009 and 2013
                                                                          • Structure by turnover
                                                                            • Figure 24: Analysis of the financial structure of the automobile renting & leasing sector, 2012 and 2013
                                                                          • Structure by employment
                                                                            • Figure 25: Analysis of the employment structure of the automobile renting & leasing sector, 2012 and 2013
                                                                          • Company profiles
                                                                            • ALD Automotive
                                                                                • Figure 26: Financial analysis of ALD Automotive, 2008-12
                                                                              • Alphabet (GB)
                                                                                  • Figure 27: Financial analysis of Alphabet (GB), 2008-12
                                                                                  • Figure 28: Financial analysis of Alphabet (UK) Fleet Management, 2008-12
                                                                                • Arval UK
                                                                                    • Figure 29: Financial analysis of Arval UK, 2008-12
                                                                                  • Daimler Fleet Management UK/Mercedes-Benz Financial Services UK
                                                                                    • Figure 30: Financial analysis of Daimler Fleet Management UK, 2006-10
                                                                                    • Figure 31: Financial analysis of Mercedes-Benz Financial Services UK, 2009-12
                                                                                  • Hitachi Capital Vehicle Solutions
                                                                                      • Figure 32: Financial analysis of Hitachi Capital Vehicle Solutions, 2009-13
                                                                                    • GE Commercial Finance Fleet Services
                                                                                      • Figure 33: Financial analysis of GE Commercial Finance Fleet Services, 2008-12
                                                                                    • Hertz (UK)
                                                                                        • Figure 34: Financial analysis of Hertz (UK), 2008-12
                                                                                      • Inchcape Fleet Solutions
                                                                                          • Figure 35: Financial analysis of Inchcape Fleet Solutions, 2008-12
                                                                                        • Leasedrive Group/Masterlease
                                                                                            • Figure 36: Financial analysis of Leasedrive Group, 2008-12
                                                                                            • Figure 37: Financial analysis of Masterlease, 2006-10
                                                                                          • LeasePlan UK
                                                                                              • Figure 38: Financial analysis of LeasePlan UK, 2008-12
                                                                                            • Lex Autolease
                                                                                                • Figure 39: Financial analysis of Lex Autolease, 2008-12
                                                                                              • Lombard Vehicle Management
                                                                                                  • Figure 40: Financial analysis of Lombard Vehicle Management, 2008-12
                                                                                              • Forecast

                                                                                                • Chapter summary
                                                                                                  • Market size
                                                                                                    • The broader economic picture
                                                                                                      • Consequences for the fleet services market
                                                                                                        • Internal market drivers
                                                                                                            • Figure 41: Forecast UK market for fleet services, 2014-18
                                                                                                          • Market segmentation
                                                                                                            • Figure 42: Forecast segmentation of UK new fleet and business car registrations, 2014-18
                                                                                                          • Industry
                                                                                                            • Further industry consolidation on the horizon
                                                                                                              • Green fleets to accelerate but alternative fuels not ready to make impact
                                                                                                              • Further Sources and Contacts

                                                                                                                • Trade Associations
                                                                                                                  • Trade Magazines

                                                                                                                  Companies Covered

                                                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                                                  Fleet Services (Industrial Report) - UK - January 2014

                                                                                                                  £995.00 (Excl.Tax)