Industry Analysis & Industry Trends
The Renting and Leasing of Cars and Light Motor Vehicles industry struggled as the UK economy floundered in the years through 2009-10, but responded with a surge in subsequent years. The industry has been forced to deal with declining international tourist numbers and weaker corporate leasing demand in some years. These factors contributed to lower vehicle leasing and rental levels, exerting downward pressure on industry revenue and profitability. However, strong demand from businesses for vehicle leasing and growing demand from tourists in 2010-11 and subsequent years drove revenue back above pre-recessionary levels. Revenue is expected to grow by a further 0.9% in 2013-14.
Industry revenue is estimated to increase at a compound annual rate of 5.5%... purchase to read more
Industry Report - Industry Investment Chapter
Due to the large number of cars and light vehicles required by firms operating in this industry, high capital requirements are a significant factor for the industry's cost structure. For every pound they spend on capital, it is estimated that industry operators spend 23p on labour. This indicates that the industry is heavily reliant on capital and makes it highly susceptible to adverse economic conditions.
Successful renting and leasing companies need to have a fleet of vehicles that are relatively new and have travelled only a low number of kilometres. Therefore, vehicles need to be replaced fairly frequently, usually after three years. The residual value of rental cars is relatively low, which hinders industry profitability... purchase to read more