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Description

Description

“Short-term vehicle rental is a mature market and is facing increased pressure from new forms of access to personal transport. While hire companies are responding by adapting to these changed market conditions, our research suggests that focusing on key user groups is needed so as to maximise available opportunities.”

– Neil Mason, Category Director – Retail

This report examines the following issues:

  • Converting non-users remains a major opportunity
  • Young men are an important market for the industry
  • Alternatives are disrupting and blurring the market for personal transport

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Private sector short-term hire delivering subdued growth
              • Figure 1: UK private short-term car and van rental, by value, 2014-24
              • Figure 2: UK private short-term car and van rental, by volume, 2014-24
            • Corporate market is larger than private market
              • Figure 3: UK short-term car and van rental, by volume (private and corporate), 2014-19
            • Most hirers prefer to deal direct
              • Figure 4: How hire was arranged, September 2019
            • Vehicle hire and car clubs both record increased interest
              • Figure 5: Alternatives to ownership, 2015 and 2017
            • Companies and brands
              • Car and LCV fleets are expanding
                • Figure 6: Short-term vehicle fleet, 2014-18
              • Market is responding to threats posed by rivals
                • Advertising and promotional expenditure reached £27.66 million in 2018
                  • Figure 7: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, 2015-18
                • The consumer
                  • Two thirds of adults have not hired in the UK in the last two years
                    • Figure 8: Activity in the market, September 2019
                  • Online leads as the preferred way of accessing vehicle hire
                    • Figure 9: How hire was arranged, September 2019
                  • Moving home is the single most important reason for vehicle hire
                    • Figure 10: Reasons for hiring, September 2019
                  • Factors related to convenience and cost are the most significant
                    • Figure 11: Importance of factors when hiring, September 2019
                  • Alternatives to car hire are a niche market
                    • Figure 12: Alternatives to car hire, September 2019
                  • What we think
                  • Issues and Insights

                    • Converting non-users remains a major opportunity
                      • The facts
                        • The implications
                          • Young men are an important market for the industry
                            • The facts
                              • The implications
                                • Alternatives are disrupting and blurring the market for personal transport
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Unspectacular performance from private sector revenues as volumes stagnate
                                        • Corporate market is proving more buoyant than the private sector
                                          • Dealing direct and use of online are popular channels
                                            • Market prospects remain good although subject to external pressures
                                            • Market Size and Forecast

                                              • Short-term private rental market suffering as revenues stagnate
                                                • Figure 13: UK private short-term car and van rental, by value, 2014-24
                                                • Figure 14: UK private short-term car and van rental, by value, at current and constant prices, 2014-24
                                              • Rental volumes fall 5% between 2014 and 2018
                                                • Figure 15: UK private short-term car and van rental, by volume, 2014-24
                                                • Figure 16: UK private short-term car and van rental, by volume, 2014-24
                                              • Forecast methodology
                                              • Market Segmentation

                                                • Interest in short-term hire increasingly coming from the corporate sector
                                                  • Figure 17: UK short-term car and van rental, by volume (private and corporate), 2014-19
                                                • LCV hire represents a buoyant market
                                                  • Figure 18: UK short-term car and van rental, by volume (car and LCV), 2014-19
                                                • Cars are the best-performing segment of the private segment
                                                  • Figure 19: UK private short-term car and van rental, by volume (car and LCV), 2014-19
                                                • Cars are likely to be hired for longer and driven further
                                                  • Figure 20: UK private short-term car and van rental, average days and miles per hire (car and LCV), 2014-18
                                                • Average rental exceeds £230
                                                  • Figure 21: UK private short-term car and van rental, average expenditure, 2014-19
                                              • Channels to Market

                                                • Customers prefer to deal direct with hire companies
                                                  • Figure 22: How hire was arranged, September 2019
                                                • Online is the most popular way of engagement
                                                  • Figure 23: How hire was arranged, September 2019
                                                • Outlets continue to expand as hire sector diversifies
                                                  • Figure 24: UK short-term car and van rental outlets, 2014-19
                                              • Market Drivers

                                                • Consumer confidence remains robust…
                                                  • Figure 25: Mintel financial confidence tracker, January 2017-August 2019
                                                • …with planned financial activity at a new high
                                                  • Figure 26: Mintel financial activity index, January 2015-August 2019
                                                • Cars are most likely to be used on trips of more than five miles
                                                  • Figure 27: Mode share of trips, by main mode (different trip lengths), England, 2018
                                                • Personal car ownership is becoming more expensive
                                                  • Figure 28: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2014-18
                                                • Number of trips taken is growing despite little change in distance travelled
                                                  • Figure 29: Trips, distance travelled and time taken, England, 2008-18
                                                • Alternatives to car and van hire are a growing threat
                                                  • Figure 30: Alternatives to ownership, 2015 and 2017
                                                • Interest in car sharing is growing rapidly
                                                  • Figure 31: Car club vehicle and membership growth, 2009-19
                                                • Peer-to-peer vehicle rental also seeing increased interest from suppliers…
                                                  • …as is ride sharing
                                                    • Bicycle hire expands although scooter hire is restricted by legislation
                                                      • Taxi share is another emerging model
                                                        • Public transport is another challenger to car ownership
                                                          • Figure 32: Public transport passenger journeys (Great Britain), 2006/07-2016/17
                                                        • Specific opportunities appear favourable for vehicle hire
                                                          • Number of UK holidays taken is growing
                                                            • Figure 33: Trends in total number of holiday visits, abroad versus domestic, 2014-18
                                                          • Inbound visits from foreign tourists represent an emerging market
                                                            • Figure 34: Inbound visits to the UK, 2014-18
                                                          • Housing market remains buoyant
                                                            • Figure 35: UK housing transactions, 2014/15-2018/19
                                                          • Student market is another opportunity
                                                            • Figure 36: Number of full-time undergraduates in UK, 2013/14-2017/18
                                                          • Self-storage sector records strong growth
                                                            • Figure 37: Self-storage sites and capacity, 2014-18
                                                        • Companies and Brands – What You Need to Know

                                                          • Fleets are growing but suppliers are also broadening their offer
                                                            • Innovations reflect changing demands from the market
                                                              • Rising investment suggests willingness to engage with the market
                                                              • Competitive Strategies

                                                                • Hire sector is taking a positive approach towards expansion…
                                                                  • Figure 38: Short-term fleet size, 2014-18
                                                                • …with all of the leading hire companies active outside of the hire sector
                                                                  • Figure 39: Short-term transport solutions offered by major hire companies, 2019
                                                                • Different ways of reaching customers continue
                                                                  • Franchising
                                                                    • Licensee marketing
                                                                      • Affiliate marketing
                                                                        • Intermediaries remain a key channel
                                                                        • Launch Activity and Innovation

                                                                          • Sixt mobility club pilot looks at multi-modal access to transport
                                                                            • New entrant Virtuo enters market with mobile approach to rental
                                                                              • Pay-by-use approach offered by Avis Budget Group
                                                                                • Green Motion looking at simplifying customer choice
                                                                                  • Enterprise strengthens commercial presence through acquisition
                                                                                  • Advertising and Marketing Activity

                                                                                    • Expenditure peaks in 2018
                                                                                      • Figure 40: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, 2015-19
                                                                                    • Television is the preferred channel for investment
                                                                                      • Figure 41: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, by media type, 2015-19
                                                                                    • Wide fluctuations in investment by company
                                                                                      • Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, by advertiser, 2015-18
                                                                                    • Car hire dominates investment
                                                                                      • Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, by advertiser and campaign, 2018
                                                                                    • Nielsen Ad Intel coverage
                                                                                    • The Consumer – What You Need to Know

                                                                                      • Not all adults have interest in the vehicle hire market
                                                                                        • Online is the main way of arranging vehicle hire
                                                                                          • Moving home is the most important reason for hire
                                                                                            • Convenience and cost are key factors when hiring
                                                                                              • Alternatives to car hire appeal to only a minority
                                                                                              • Activity in the Market

                                                                                                • Hire vehicles are used by only a minority of adults
                                                                                                  • Figure 44: Activity in the market, September 2019
                                                                                                • Men and women exhibit different levels of activity
                                                                                                  • Wealthier adults have a greater propensity of hire
                                                                                                    • Families are an important group…
                                                                                                      • …as are those in urban areas
                                                                                                      • How Hire Was Arranged

                                                                                                        • Over half of vehicle hire is arranged online
                                                                                                          • Figure 45: How hire was arranged, September 2019
                                                                                                        • Women and men have different views towards direct booking
                                                                                                          • Older adults shun the use of intermediaries
                                                                                                            • Online is much more important for young adults
                                                                                                              • Arranging hire online is popular with those using hire services the most
                                                                                                              • Reasons for Hiring

                                                                                                                • Moving home is the most important reason for hiring
                                                                                                                  • Figure 46: Reasons for hiring, September 2019
                                                                                                                • Young adults have the widest demands
                                                                                                                  • City dwellers represent another important market
                                                                                                                    • Increased use of hire companies is typified by broader needs
                                                                                                                    • Importance of Factors When Hiring

                                                                                                                      • Convenience and costs dominate as important factors
                                                                                                                        • Figure 47: Importance of factors when hiring, September 2019
                                                                                                                      • Older women some of the most demanding
                                                                                                                        • Offering electric vehicles has limited appeal
                                                                                                                          • Hirers and non-hirers seek different things
                                                                                                                            • Opportunities for promoting specific service features exist
                                                                                                                              • Importance of factors when hiring – CHAID analysis
                                                                                                                                • Older homeowners who work part-time or not at all record strong interest in no additional insurance charges
                                                                                                                                  • Figure 48: Car and van hire – CHAID – Tree output, September 2019
                                                                                                                                  • Figure 49: Car and van hire – CHAID – Table output, September 2019
                                                                                                                              • Alternatives to Car Hire

                                                                                                                                • Majority show little interest in alternatives to car hire
                                                                                                                                  • Figure 50: Alternatives to car hire, September 2019
                                                                                                                                • Alternatives are popular with under-35s and males in particular
                                                                                                                                  • Households with children are also interested in alternatives
                                                                                                                                    • Urban areas and London are a natural market for alternatives
                                                                                                                                      • Bike and scooter hire – a market ripe for premiumisation
                                                                                                                                        • Regular hirers are most attracted to alternatives
                                                                                                                                          • Those hiring for university travel show strong interest in alternatives to vehicle hire
                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                              • Abbreviations
                                                                                                                                                • Consumer research methodology
                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                  • Forecast methodology
                                                                                                                                                    • Forecast data
                                                                                                                                                      • Figure 51: UK private short-term car and van rental, by value – Best- and worst-case scenarios, 2019-24
                                                                                                                                                      • Figure 52: UK private short-term car and van rental, by volume – Best- and worst-case scenarios, 2019-24

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