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Car and Van Hire - UK - February 2014
Introduction
 
The market has been relatively subdued in recent years as car and van hire has been negatively impacted by the recent economic slowdown. Responses from the sector to this malaise have mainly been through competitive activity with this serving to depress revenue growth. Nevertheless the car hire market is currently showing an upturn, benefiting from improvements in consumer confidence as well as the performance of the wider UK economy. 

Current market valuations put the short-term car and van hire sector at £2.09 billion in 2012 which is 6% ahead of its value in 2008. Annual rental numbers are estimated at over 11 million with the average price per rental at just under £200. Although cars form the largest segment of the market, it is the LCV (Light Commercial Vehicles) sector that represents the more buoyant area of activity. Equally it is the business hire market that is presently performing stronger than personal hire. 

The hire market is contested by a large number of companies although it is multinational names such as Enterprise, Budget, Europcar and Hertz that have the strongest presence. Competition is coming in the form of alternatives to vehicle hire with car clubs currently the most established and providing the most obvious threat. Their recent growth has led to a number of hire companies diversifying into this market to offer this type of service. 

Mintel’s exclusive research for this report suggests that vehicle hire is a relatively specialist market – around three quarters of UK adults interviewed for the report had not needed to hire a vehicle in the last two years. Of those that have hired, young adults aged 18-34 and those in urban areas are the most important market with moving home or hiring for a holiday in the UK the most popular reasons given. Cost is a critical factor for those looking at vehicle hire with direct and indirect costs both important. Indeed with a sizeable percentage of heavy car hire users also showing a strong interest in rival services such as car sharing, the market seems set to face further challenges.

Definition
This report analyses the market for self-drive private and business car and van hire. 

The market comprises cars as well as LCVs such as light goods vehicles and minibuses that can be driven without requiring a heavy goods or public service licence. 

Exclusions
The report excludes cars supplied by daily rental companies to car body repair shops as customer courtesy cars or cars supplied as accident replacement vehicles to non-fault victims of a car accident where a car is provided by a credit hire company as a replacement vehicle while their own is being repaired. 

Long-term leasing for personal or business use is specifically also excluded from the survey. This is typically offered by dealers as an alternative to the purchase of a vehicle. It has for many years been used by businesses, and increasingly in the consumer market, as a method of acquiring a vehicle without the need for a substantial upfront payment.

Abbreviations
4x4 | Four by Four (off road vehicle)
bhp | Brake horsepower
BVRLA | British Vehicle Rental and Leasing Association
CO2 | Carbon Dioxide
DECC | Department for Environment and Climate Change
DVLA | Driver and Vehicle Licensing Agency
EIA | Energy Information Administration
FOB | Free on Board
GAD | Government Actuary's Department
GBTS | Great Britain Travel Survey
GDP | Gross Domestic Product
GMI | Global Market Insite
HMRC | Her Majesty’s Revenue and Customs
LCV | Light Commercial Vehicle
MPV | Multi-Purpose Vehicle
ONS | Office for National Statistics
PCP | Personal Contract Purchase
PDI | Personal Disposable Income
POS | Point of Sale
RFID | Radio Frequency Identification Technology
SMMT | Society for Motor Manufacturers and Traders
SUV | Sports Utility Vehicle
VAT | Value Added Tax

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