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Key Areas

Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

SUMMARY

Table 1: Vehicle Rental Fleet as Part of the Total UK Vehicle Parc (000 units), 1993-1997

Table 2: The UK Short-Term and Long-Term Rental Fleet (000 units and percent), 1994-1998

Table 3: Analysis of the UK Long-Term Rental Fleet by Type of Vehicle (000 units), 1994-1998

Table 4: Analysis of the UK Short-Term Rental Fleet by Type of Vehicle (000 units), 1994-1998

Market Size

TOTAL MARKET

LONG-TERM RENTAL

SHORT-TERM RENTAL

A EUROPEAN PERSPECTIVE

Table 5: The UK Short-Term and Long-Term Rental Fleet (000 units and percent), 1994-1998

Table 6: BVRLA Members' Long-Term Rentals by Type of Agreement (000 vehicles operated by members), 1994-1998

Table 7: BVRLA's Members' Contract Hire Agreements by Type of Vehicle (000 units and percent), 1997 and 1998

Table 8: BVRLA's Members' Finance Leases by Type of Vehicle (000 units and percent), 1997 and 1998

Table 9: BVRLA Members' Contract Purchase Agreements by Type of Vehicle (000 units and percent), 1997 and 1998

Table 10: BVRLA's Members' Vehicles under Fleet Management Agreements by Type of Vehicle (000 units and percent), 1997 and 1998

Table 11: Average Duration of Long-Term Vehicle Rental (months), 1993-1997

Table 12: BVRLA Members' Short-Term Rental Fleet by Vehicle Classification (000), 1994-1998

Table 13: Average Duration of Short-Term Car and Van Rental (days), 1993-1997

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

DISTRIBUTION

TRADE ASSOCIATIONS

Table 14: BVRLA Members by Fleet Size, 1996 and 1997

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 15: Selected Major Companies in the UK Long-Term Vehicle Leasing Market (£m), 1996/1997

Table 16: Selected Major Companies in the UK Short-Term Vehicle Rental Market (£m), 1996/1997

Table 17: Main Media Advertising Expenditure on Vehicle Leasing and Car and Truck Rental (£000), 1996-1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

SHORT-TERM RENTAL

LONG-TERM RENTAL

Buying Behaviour

CUSTOMER SEGMENTATION

CAR HIRE PENETRATION

Table 18: Estimated Customer Segmentation of the Long-Term Vehicle Rental Sector ( percent of revenue), 1998

Table 19: Estimated Customer Segmentation of the Short-Term Vehicle Rental Sector ( percent of revenue), 1998

Table 20: Overseas Visitors to the UK and Total Overseas Visitor Spending (million and £bn), 1994-1998

Table 21: Penetration of Car Hire (self-drive) Customers ( percent), 1996 and 1997

Table 22: Frequency of Self-Drive Car Hire ( percent), 1997

Outside Suppliers to the Industry

LONG-TERM RENTAL MARKET

SHORT-TERM RENTAL MARKET

Table 23: Breakdown of the Long-Term Rental Fleet by Make of Vehicle ( percent), 1997

Table 24: Breakdown of the Short-Term Rental Fleet by Make of Vehicle ( percent), 1997

Current Issues

ENVIRONMENTAL ISSUES

RESIDUAL VALUE

INFORMATION TECHNOLOGY

CORPORATE ACTIVITY

Forecasts

INTRODUCTION

LONG-TERM RENTAL MARKET

SHORT-TERM RENTAL MARKET

FORECASTS 1998 TO 2002

Table 25: Forecasts for the UK Long-Term and Short-Term Rental Fleet (000 units), 1999-2002

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

The vehicle rental and leasing market in the UK was estimated to be worth around £13bn in 1997. It has experienced several years of growth on the back of a strengthening domestic economy and the increasing popularity of outsourcing. The overwhelming majority of the market -- 87 percent -- consists of long-term rental, predominantly leasing. Cars account for 86.2 percent of the long-term rental fleet and 77.2 percent of the short-term fleet in 1998. In total, there were 2.2 million vehicles in the UK's leasing and rental fleet in 1998, an increase of 10.3 percent on 1997.

The long-term vehicle rental market is much more complex than the short-term market. Long-term vehicle hire can involve one, or a combination, of several different types of financing arrangements (possibly involving the transfer of legal ownership), whereas short-term rental is generally a standard day-by-day type agreement.

A defining characteristic of the vehicle leasing and rental industry is that it is highly fragmented. The majority of firms represented by the industry's main trade body, the British Vehicle Rental & Leasing Association (BVRLA), are small -- in 1997, 82.6 percent of the association's members had fleets of less than 100 vehicles. This plethora of small, local businesses has made the industry extremely price competitive and tended to depress margins, especially in the short-term market. Another significant weakness for the industry is that it remains heavily exposed to possible changes in the structure of both personal and corporate taxation. In this regard, the industry remains extremely concerned about the future direction of transport strategy under the Labour Government.

The outlook for the sector is uncertain. With evidence of economic recession gathering strength, falling industrial confidence and profitability will undoubtedly reduce spending on cars by the corporate sector. In the short-term rental market, activity has been hit by the strength of sterling, which has depressed visitor numbers to the UK. More positively, the exit of vehicle manufacturers from the leasing and hire market should reduce competition in the industry. Moreover, the long-term vehicle leasing sector should benefit from the continued trend towards outsourcing. Indeed, this trend may itself accelerate during a period of economic downturn as companies are forced to focus on cost-cutting. The number of vehicles in the UK rental fleet is forecast to increase to 2.9 million by the year 2002.

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