UK Fleet Services Market Report 2023
"The shortage of semi-conductor computer chips is continuing to lead to shortages of new manufactured vehicles, which is creating delays in new orders.
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Overview
- Key issues covered in this Report
- Products covered in this Report
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Executive Summary
- Five-year outlook for fleet services
- Figure 1: Five-year outlook for fleet services, 2023-28
- Market Forecast
- Challenging trading conditions expected to continue as the shortage of semi-conductor chips grows
- Inflation drives short-term trading opportunities with long-term profitable consequences
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- Figure 2: UK fleet service market forecast, 2023-27, (£ Billion)
- Market Size
- Fleet services market growth of 8% is reinforced by an uptake in alternative fuel vehicles
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- Figure 3: UK fleet service market value, 2018-22, (£ billion)
- Market Drivers and Trends
- Movement towards greater digital interaction is driven by the need for cost-effective maximisation
- Industry Structure
- Five-year outlook for fleet services
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Issues and Insights
- OEM manufacturing business models will worsen shortages in car procurement
- Salary sacrifice schemes insulated growth in EVs despite cost-of-living crisis
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Market Size
- Fleet service market grows by 8% despite a fall in fleet car registrations
- Alternative fuel vehicle uptake has also driven growths
- A digital business approach ensures customer flexibility and satisfaction
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- Figure 4: UK fleet services market value, 2018-22, (£ Billion)
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Market Forecast
- Five-year outlook for Fleet Services
- Figure 5: Five-year outlook for fleet services, 2023-28
- Learnings from the last recession
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- Figure 6: Industry performance following the last recession, 2012-16, (£ billion)
- Problems with the supply of new vehicles and components will impact growth
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- Figure 7: UK fleet services market forecast, 2023-27, (£ billion)
- The application of telematics technology will soften the impact of vehicle shortages
- Inflated business operational costs will see an additional rise in AFVs
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- Figure 8: UK car and light commercial vehicle annual new registrations and registration forecast, 2020-24, (thousands)
- Figure 9: Monthly fuel pump prices, November 2021 to November 2022, (pence per litre)
- Five-year outlook for Fleet Services
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The Impact of the Economy
- Recession fears remain as growth remains precarious
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- Figure 10: Annual GDP growth rate, 2017-22*, (annual % Change)
- Bank Rate rises for the ninth time in 12 months as inflationary pressures continue
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- Figure 11: Bank Rate, by date of adjustment, 2008-22, (%)
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Market Trends
- Demand for rental and leased AFVs remain anchored to government incentives…
- … whilst the lack of required charging point infrastructure could dampen uptake
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- Figure 12: Number of publically available charging devices by number and type, 2020-22, (number)
- Figure 13: Comparison of public and rapid charge points vs battery electric vehicle numbers, 2018-22, (number of connectors & BEVs)
- The shift towards an ‘always-on digital platform moves the industry towards a ‘TaaS’ model
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Market Drivers
- Maximisation strategies attempt to offset the impact of difficult trading conditions
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Industry Structure
- Industry development
- Staff retention remains a key priority for fleet businesses
- Changes in industry structure
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- Figure 14: Changes in Industry structure of ‘renting and leasing cars and light motor vehicles’ activities, 2018-22, (number of businesses and outlets and annual change)
- Change in employment structure
- Figure 15: Changes in the employment structure of ‘renting and leasing of cars and light motor vehicle’ activities, 2021 and 2022, (number of outlets)
- Changes in financial structure
- Figure 16: Changes in the financial structure of ‘renting and leasing of cars and light motor vehicle’ activities, 2021 and 2022, (number of businesses and £ 000)
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Competitive Strategies
- The merger between ALD Automotive and Lease Plan UK highlights further monopolisation
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Company Profiles
- ALD Automotive
- Recent company activity
- Financial information
- Figure 17: Financial analysis of ALD Automotive ltd, 2017-21, (£ million and %)
- Alphabet (GB)
- Recent company activity
- Financial information
- Figure 18: Financial analysis of Alphabet (GB) ltd, 2017-21, (£ million and %)
- Arval UK
- Recent company activity
- Financial information
- Figure 19: Financial analysis of Arval uk ltd, 2017-21, (£ million and %)
- Lex Autolease
- Recent company activity
- Financial information
- Figure 20: Financial analysis of Lex autolease ltd, 2017-21, (£million and %)
- Zenith Vehicle Contracts Limited
- Recent company activity
- Financial information
- Figure 21: Financial analysis of Zenith vehicle contract, 2016-20, (£ million and %)
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Methodology
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Further Sources and Contacts
- Trade Associations
- Trade magazines
Discover the latest UK fleet services industry trends and how they are impacting the UK fleet sector! Our UK Fleet Services Market Report 2023 is packed with valuable insights on consumer attitudes, UK fleet services market size, the impact of inflation, and UK fleet services market share. With this report, you’ll have the knowledge to stay ahead of the competition in the UK fleet management market, and keep your business growing!
UK Fleet Services Market Overview
Despite a challenging economic framework, the UK fleet services market has grown in 2022, and is expected to grow further in the years to come. However, the shortage of semiconductor chips is causing far-reaching larger shortages of vehicles in the UK vehicle manufacturing industry at the moment. Coupled with inflation this is resulting in higher vehicle costs.
According to our experts’ market research on the UK fleet sector, shortages in semiconductor chips and the UK vehicle manufacturing at large are expected to stabilise and the UK fleet services industry has started to develop innovative strategies which enable a degree of respite from these issues. These include maximisation to streamline models of acquisition from vehicle makers which promotes less excess and less wastage, providing cost-effective solutions, as well as digital solutions and telematics technology.
The UK Fleet Management Market: What Consumers Want and Why
High inflation in the wholesale cost of vehicles creates an increase in business participation within the vehicle rental and leasing sector. This participation creates a strong client base for the UK fleet services market to continue to expand in spite of turbulent economic conditions.
Moreover, an uptake in electric vehicles has become even more lucrative as businesses rush to adhere to larger environmental, social and governance concerns of consumers by acquiring relatively affordable and incentivised green assets.
UK Fleet Sector Statistics:
- UK Fleet Services Market Size: In 2022 the fleet services market grew by 8% and a further growth of 7% is expected over the next five years.
- Market Challenges: The US and China make up over 75% of all chip manufacturing. The COVID-19 pandemic caused major disruptions to the production and distribution, resulting in continued shortages of vehicles in the UK.
- UK Fleet Sector Consumer Behaviours: Suppliers of ‘flexi-rental products’ for commercial vehicles are expected to rise by 57% as businesses steer away from long-term purchases and move to acquired short-term leases that match budgetary structures.
UK Fleet Management Market Opportunities
Whilst the UK fleet services industry is operating on turbulent ground due to the increased vehicle shortages and highly inflated vehicle prices, continued electric car adoption and greater digital investment will provide vital anchors of UK fleet services market share growth going forward.
Increased self-automation of digital business integration, also through AI technology as this technology progresses, will enable the UK fleet sector to complete its shift into a ‘transport as service’ industry.
To discover more about the UK Automotive Market, read our UK Car Finance Market Report 2022, or take a look at our extensive Automotive Market Research.
Quickly Understand the UK Fleet Services Market
- The impact of COVID-19 and inflation on the UK fleet sector: How have providers reacted to new market conditions?
- UK fleet services market size and forecast.
- UK fleet management developments and trends.
- UK fleet services market growth drivers.
Covered in this Report
Products: fleet services provided for passenger cars used either wholly or in part for business purposes: fleet cars (vehicles used by companies operating a fleet of 25 or more cars, including dealer demonstrators and Motability sales), business cars (cars sold to small businesses operating between 1 and 24 cars, including self-employed, VAT-registered traders).
Brands: ALD Automotive, LeasePlan UK, Alphabet GB, Fleet Assist, Arval UK, Lex Autolease, Zenith Vehicle Contracts Limited,
Expert Insights into the UK Fleet Services Industry
This report, written by Jack Maskell, a leading B2B analyst, delivers in-depth commentary and analysis to highlight current UK fleet services industry trends, UK fleet management market developments, and adds expert context to the numbers.
The shortage of semi-conductor computer chips continues to lead to shortages of new manufactured vehicles, which is creating delays in new orders. Despite this, the UK fleet services industry has found innovative solutions to maximise growth through increased investment in digital business models, telematics technology, and electric vehicles.
Jack Maskell
B2B Analyst
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