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Fleet Services - UK - January 2015

"With technology driving innovation in vehicle manufacture and fleet management tools, leasing companies are having to move quickly to keep pace. Fleet managers are armed with more data and information than ever before, so the demands on leasing operators are expected to increase."

– Ben Harris, Industrial Analyst

The UK fleet services market is a significant component of the broader automotive industry, with fleet and business cars accounting for more than half of new car registrations in the UK.

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

The fleet services market is undergoing a period of change, linked to trends in the wider automotive industry. With technology driving innovation in vehicle manufacture and fleet management tools, leasing companies are having to move quickly to keep pace. Underlying demand conditions are expected to remain strong in 2015, with employment levels expected to rise. Business confidence is currently strong and economic growth is forecast to continue on track. However, as fleet managers are armed with more data and information than ever before, the demands on leasing operators are expected to increase alongside an even greater focus on vehicle efficiency. Those who can best integrate mobile device technology into fleet management solutions and provide more flexible leasing solutions are expected to perform best in the coming years.

For the purposes of this report, the definition of the market encompasses only fleet services provided for passenger cars used either wholly or in part for business purposes. These can be funded and expensed by a company or supported through mileage allowances, soft loans and other forms of payment from the company to the employee.

The two categories included in this report are fleet cars – vehicles used by companies operating a fleet of 25 or more cars, including dealer demonstrators and Motability sales (a government-sponsored leasing operation for disabled people) – and business cars – vehicles operated by small businesses operating between one and 24 cars.

With such a high level of industry fragmentation it is not possible to review all fleet service providers in a report of this type. This report is not a directory of industry participants. The company profiles include a selection of operators rather than necessarily all of the largest industry participants.

 

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Table of contents

  1. Executive Summary

      • The market
        • Operator revenue growth shifts up a gear in 2014
          • Figure 1: UK market for fleet services, 2010-14
        • Business car registrations up sharply in past year
          • Figure 2: Segmentation of UK new car registrations, by volume, 2010-14
        • Fleet market projected to drive ahead
          • Figure 3: Forecast UK market for fleet services, 2015-19
        • Market factors
          • Tax burden rising for company cars
            • Figure 4: BIK taxation rate across vehicle carbon emission bands, 2013-16
          • Temporary fall in fuel costs provides fleets with light relief
            • Figure 5: Typical retail cost of fuel and fuel duty level in the UK, 2010-14
          • Companies
            • Hitachi Capital continues rapid expansion
              • HG Capital merges operators to create top ten leasing business
                • What we think
                • Introduction

                  • Definitions
                    • Methodology
                      • Abbreviations
                        • Market positioning
                          • The customer
                            • The supplier
                            • UK Economy

                              • Overview
                                • Inflation
                                  • Interest rates
                                    • House prices
                                      • Consumer spending
                                        • Manufacturing
                                          • Business investment
                                            • Imports
                                              • Exports
                                              • Market Factors

                                                • Key points
                                                  • Business investment rising and fleets expanding
                                                    • Figure 6: Business investment in the UK, 2012-14
                                                  • Employment growth driving company vehicle demand
                                                    • Figure 7: Employment level in the UK, 2010-14
                                                  • Company car tax changes push fleets towards low emission vehicles
                                                    • Figure 8: BIK taxation rate across vehicle carbon emission bands, 2013-16
                                                  • Falling fuel price temporarily eases pressure on fleet costs
                                                    • Figure 9: Typical retail cost of fuel and fuel duty level in the UK, 2010-14
                                                  • Annual business mileage is going down
                                                    • Figure 10: Annual business mileage of four-wheeled cars, in England, 2009-13
                                                  • Demographic and geographic changes increasing the need for cars
                                                    • Figure 11: Licensed cars in the UK, 2010-14
                                                  • Lease accounting changes may alter contract hire model
                                                  • Market Size

                                                    • Key points
                                                      • Economic recovery reflected in rising fleet service revenues
                                                        • Figure 12: UK market for fleet services, 2010-14
                                                      • Fleets match steady growth in UK car parc
                                                        • Figure 13: The UK fleet & business car parc, 2010-14
                                                      • Slow decline in company car benefit recipients bottoms out
                                                        • Figure 14: Taxable company car benefit in kind recipients, in the UK, 2008-13
                                                    • Market Segmentation

                                                      • Key points
                                                        • Sharp growth in business car registrations continues
                                                            • Figure 15: Segmentation of UK new car registrations, by volume, 2010-14
                                                        • Market Trends

                                                          • Key points
                                                            • Used fleet values continue to climb
                                                              • Final quarter sales boost impacts seasonal registration variation
                                                                • Figure 16: Seasonal variation in sales of new fleet & business cars, 2010-14
                                                                • Figure 17: Monthly sales of new fleet & business cars, January to December 2014
                                                              • Online fleet management tools prominent among new products
                                                                • Electric vehicle uptake shoots up in 2014
                                                                  • Figure 18: Hybrid and plug-in electric vehicle registrations, by volume, 2010-14
                                                                • Connected cars to alter fleet landscape
                                                                • Industry Structure

                                                                  • Key points
                                                                    • Rising number of operators indicates improved trading conditions
                                                                      • Figure 19: Analysis of the changes in the UK automobile renting & leasing industry, 2010-14
                                                                    • Structure by turnover
                                                                      • Figure 20: Analysis of the financial structure of the automobile renting & leasing sector, 2013 and 2014
                                                                    • Structure by employment
                                                                      • Figure 21: Analysis of the employment structure of the automobile renting & leasing sector, 2013 and 2014
                                                                  • ALD Automotive

                                                                      • Recent company activity
                                                                        • Figure 22: Financial analysis of ALD Automotive, 2009-13
                                                                    • Alphabet (GB)

                                                                        • Recent company activity
                                                                          • Figure 23: Financial analysis of Alphabet (GB), 2009-13
                                                                      • Arval UK

                                                                          • Recent company activity
                                                                            • Figure 24: Financial analysis of Arval UK, 2009-13
                                                                        • GE Commercial Finance Fleet Services

                                                                            • Recent company activity
                                                                              • Figure 25: Financial analysis of GE Commercial Finance Fleet Services, 2009-13
                                                                          • Hitachi Capital Vehicle Solutions

                                                                              • Recent company activity
                                                                                • Figure 26: Financial analysis of Hitachi Capital Vehicle Solutions, 2010-14
                                                                            • Inchcape Fleet Solutions

                                                                                • Recent company activity
                                                                                  • Figure 27: Financial analysis of Inchcape Fleet Solutions, 2009-13
                                                                              • Leaseplan UK

                                                                                  • Recent company activity
                                                                                    • Figure 28: Financial analysis of LeasePlan UK, 2009-13
                                                                                • Lex Autolease

                                                                                    • Recent company activity
                                                                                      • Figure 29: Financial analysis of Lex Autolease, 2009-13
                                                                                  • Mercedes-Benz Financial Services

                                                                                      • Recent company activity
                                                                                        • Figure 30: Financial analysis of Mercedes-Benz Financial Services UK, 2009-13
                                                                                    • Ogilvie Fleet

                                                                                        • Recent company activity
                                                                                          • Figure 31: Financial analysis of Ogilvie Fleet, 2010-14
                                                                                      • Zenith Leasedrive

                                                                                          • Recent company activity
                                                                                            • Figure 32: Financial analysis of Leasedrive Group, 2009-13
                                                                                            • Figure 33: Financial analysis of Zenith Vehicle Contracts, 2010-14
                                                                                        • Forecast

                                                                                          • Key points
                                                                                            • Rising leasing rates not projected to halt fleet industry revenue growth
                                                                                              • Figure 34: Forecast UK market for fleet services, 2015-19
                                                                                            • Rapid growth in new registrations forecast to slow in 2015
                                                                                              • Figure 35: Forecast segmentation of UK new fleet and business car registrations, 2015-19
                                                                                            • Smaller fleets, new lease products and greater pooling expected
                                                                                            • 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 - UK - January 2015

                                                                                                US $1,288.43 (Excl.Tax)