Car & van rental/leasing worth £14bn a year, says new study
Commissioned by the BVRLA from Oxford Economics, the study provides some robust, independent data on the size, scope and importance of the vehicle rental and leasing sector.
The £14bn is equivalent to £1 in every £90 of UK GDP or the combined local economies of Bath and Bristol. This figure takes into account the operations of the industry itself, the UK-made vehicles and engines it purchases, the activity of UK dealerships and its impact on the used car market. In the process, the sector generates around £2.8 billion of tax revenue per year.
In terms of jobs, the industry employs 38,000 people directly and a further 145,000 people through wider supply chain and consumer spending effects. The total employment supported by the industry is equivalent to 1 in every 175 workers in the UK.
The automotive sector is one of the UK’s few manufacturing success stories and vehicle rental and leasing companies are among its largest customers, purchasing an estimated 220,000 vehicles in 2011. This is 15% of total output but a massive 82% of UK vehicles sold to domestic customers. This expenditure is estimated to have supported a £2.4bn contribution to GDP, 52,000 jobs and £810m in tax receipts.
In the same year, the vehicle rental and leasing industry’s expenditure on foreign-made vehicles containing UK-made engines is estimated to have generated a £349m contribution to GDP, 7,600 jobs and £120m in tax receipts.
The vast majority of this business is conducted through motor dealers. In 2011, the sector purchased £11.1 billion of foreign-made vehicles from UK dealerships. This activity supported a £98m contribution to GDP, 2,000 jobs and £31m in tax receipts.
There is also a positive environmental angle to this activity. The industry can rightfully claim to play a leading role in driving down emissions. At 123g/km, the CO2 emissions of the average lease car registered in 2012 was 25% cleaner than the average car on UK roads.
Not everything is measurable, but the researchers at Oxford Economics have established that the sector makes a major contribution to the efficiency with which the UK economy works.
As well as giving businesses access to modern, fuel-efficient vehicles, fleet management services and lower capital costs, vehicle leasing can also provide a range of ‘housekeeping’ services, including maintenance, insurance and road tax – freeing up resources and working capital for other tasks.
It reaches every sector of the economy, from manufacturing and construction to retail and health. Two-thirds of the industry’s business customers are SMEs.
The study is available here.
The BVRLA summary can be downloaded from the BVRLA website at http://www.bvrla.co.uk/