The vehicle rental and leasing sector is feeling positive about 2024, according to the latest BVRLA Industry Outlook report, which shows members are predicting growth across virtually all market segments, and feeling more confident about business conditions.
Gerry Keaney, BVRLA chief executive, said: “Having endured decade-high interest rates, turbulence in the used car markets, and a stagnating national economy, we have every reason to believe that 2024 will bring more positive results. In testing times, the sector has again come out on top. All indications are that our members enter next year stronger and optimistic about the growth opportunities that will emerge.
“External factors that dictate market activity are all expected to improve. Vehicles are being delivered with greater frequency and the cost of finance is much more favourable that it was. Growth is back on the agenda.”
The BVRLA’s Industry Outlook Report 2024 was launched as part of their Industry Outlook Conference on 6th December. It analyses data from across the BVRLA’s membership of over 1,000 companies working in vehicle rental and leasing, encompassing quantitative data and interviews with senior executives.
Results from the latest report present a positive outlook for virtually all key business metrics, vs the same time last year. Supply of new cars and vans are both expected to increase next year, with 43% of respondents expecting car supply to be back to pre-Covid levels by the end of 2024. Hand in hand with supply returning, BVRLA members anticipate better demand in the new year too, across consumer and business sectors.
That optimism towards demand is replicated when looking at the prospects of products and services. Personal Contract Hire (PCH), and Business Contract Hire (BCH) – for cars and vans – are both expected to be stronger in 2024 than they were in 2023. Confidence is shown across all markets, with rental, subscriptions, salary sacrifice, and car clubs expected to have a better year too.
With the overall outlook improving, there are alarm bells ringing to offset some of the confidence. The levels of residual value risk being carried by BVRLA members is a major concern, particularly on battery electric vehicles. Prices of second-hand BEVs have been in freefall for a year, tumbling by more than 30%. The report predicts improvements to BEV cost of ownership, which will go some way to strengthening used BEV demand and realign values.
The association is continuing to call for Government intervention to stimulate BEV demand among private motorists. Fears remain over how much consumer interest may soften in response to the ICE phase-out deadline being pushed to 2035.Members remain split on the potential impact of the incoming ZEV mandate. More than half of BVRLA members report no change to ZEV interest since the delay was announced, although 45% are seeing customers delaying their EV transition by at least one cycle.
The full Industry Outlook Report is now available online, featuring commentary and insights from the BVRLA and senior executives from across the industry.
