2023 will bring further headwinds for the rental, leasing and fleet sector but growth prospects in areas including salary sacrifice and van rental/contract hire are strong, according to the BVRLA’s Industry Outlook Report.
Launched this week at the association’s Industry Outlook Conference, the report contains data and views from BVRLA members to explore how operating conditions may change next year.
It finds that a series of headwinds have combined to create a perfect storm in trading conditions for rental and leasing companies, with experienced executives saying the market has not been as challenging or uncertain for more than 30 years.
And next year will see rising costs and increasing energy prices provide further issues, although 84% of respondents still envisage vehicle supply to present the biggest challenge, with pre-Covid levels not expected to be reached until 2024 or beyond.
But amid this, order books are bulging and there’s steady demand for new vehicles and healthy residual values.
Flexible mobility solutions are also expected to come to the fore. More than half (57%) of respondents predict that van flexi-rental will see demand grow in 2023, while salary sacrifice and van business contract hire are the other business models that are widely expected to grow in the months ahead.
In the core market of business contract hire, 43% anticipate no change in demand over the next 12 months, while 28% expect an increase.
In fact, the most vulnerable product for 2023 is expected to be personal contract hire, with 57% of suppliers forecasting weaker demand; the result of sharp price rises for new cars allied to much higher interest rates.
BVRLA chief executive Gerry Keaney summed up: “The last 12 months have been punctuated by political chaos, huge regulatory realignment, a once-in-a-generation surge in inflation and immense supply chain challenges. Many of these challenges will continue into 2023.
“Our Industry Outlook Report portrays a sector as pragmatic, positive and professional as ever. The findings show that BVRLA members are adjusting to new market realities, focussing on their growth opportunities and addressing their compliance priorities while making major leaps forward in the use of technology.
“We go into 2023 with a great deal of optimism, ready to address these issues head on. If the last few years have shown us anything, it is how resilient and adaptable our sector can be.”
The report launched this week as part of the BVRLA’s Industry Outlook Conference, which returned after a three-year Covid-related hiatus. Hosting over 130 professionals from all corners of the sector, the conference gave delegates an overview of the economic, policy and regulatory landscapes and what impact that will have on business in the coming year.
To access the BVRLA’s 2023 Industry Outlook Report, click here.
