Operator demand for rented and leased commercial vehicles is on the rise driven by a “perfect storm” of factors including Brexit uncertainty, air quality legislation and the decline in traditional retail.
According to a major report, published by the British Vehicle Rental and Leasing Association (BVRLA) this week, these pressures are undermining operator confidence in how and when to invest in their fleets, resulting in a shift to short-term solutions.
The BVRLA’s 2020 Industry Outlook: Commercial Vehicles report – compiled in collaboration with ten leading leasing and rental executives and Motor Transport Magazine - found that operators are looking for greater flexibility from their vehicle providers with many switching to short-term rental deals and sweating assets more intensely.
The report found that SMEs were particularly prone to re-fleeting delays. Willie Paterson, chief executive of Asset Alliance, who contributed to the report, states: “The days of the family-owned operator buying trucks either in cash or via a five-year hire purchase scheme have changed dramatically.
He adds: “That would have been 70% of the market 10 years ago or older. It’s now the minority.”
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Meanwhile large operators are increasingly cutting tougher deals, the report notes, pointing to an increasing tendency for larger operators to demand their leasing and rental provider assume all the risk for price increases.
However the report warns that operators and suppliers need to work together if the leasing market is to remain competitive.
Pointing to the demise of leasing companies T.O.M and Gulliver’s in 2018 and Axis in 2019, the report says: “Operators continue to pass on the price pressure that they feel to their suppliers, and the challenge for the leasing and rental sector is to remind operators that they are offering a service not a commodity - there are those in the sector that hope operators will realise that if they want a stable vehicle partner, they must contribute to that stability.”
Launching the report, BVRLA chief executive Gerry Keaney said: “Commercial vehicles are the lifeblood of the UK economy and which means operators are looking for flexible and adaptable support with their fleets. Many truck and van operators are delaying re-fleeting decisions, largely due to a lack of confidence in their ability to forecast as a result of continuing uncertainties.
“Cost remains a major concern for operators, as knowing what a vehicle will cost post-Brexit is still an unknown.
When you combine this with the confusing array of local air quality initiatives, the landscape becomes even more uncertain,” he said, adding that “renting and leasing is becoming an increasingly attractive option for commercial vehicle operators.”
