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.
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