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BVRLA spells out importance of leasing and rental industry to UK economy
The vehicle rental and leasing industry contributes around £49bn per year to the UK economy, supports over 465,000 jobs, accounts for one in seven of all vehicles on our roads and generates £7.6bn in taxation annually, according to a new study from the British Vehicle Rental and Leasing Association (BVRLA).
The report, commissioned by the BVRLA from respected research organisation Oxford Economics, provides an insight into the size, scope and importance of the UK’s vehicle rental and leasing industry.
It also reveals that the BVRLA fleet, with 5.7 million vehicles, accounted for 15% of all vehicles on the UK’s roads in 2017, and has cut CO2 emissions to an average 114.6 g/km, 20% less than the average car in use on UK roads.
The £49bn contribution takes account of the operations of the industry itself, the UK-made vehicles and engines it purchases, the activity of UK dealerships and its impact on the used car market.
The industry employs 52,700 people directly and contributes £23.9bn from rental and leasing activities. This contribution is higher than that seen in many other sectors because of the reliance on rapidly depreciating capital goods.
Rental and leasing companies spent an estimated £30bn on buying over 1.8million vehicles in 2017, which includes £5.4bn spent on 304,000 UK-assembled cars, vans and trucks.
This represents 17% of all vehicles assembled in the UK and means that they were responsible for 83% of these vehicles sold domestically. The industry also purchased 418,900 vehicles with UK-made engines.
By purchasing so many UK-made goods, the rental and leasing sector supports an estimated 78,000 jobs at major manufacturing plants in Ellesmere Port, Sunderland, Oxford, Swindon, Bridgend and Dagenham, as well as the extended supply chain.
Most vehicle purchases are conducted through motor dealers and in 2017, this activity supported a £1.6bn million contribution to GDP, 25,400 jobs and £400m in tax receipts for the UK Government.
Similarly, the rental and leasing industry is estimated to have replenished 25% of its fleet in 2017, supporting auctioneers and dealerships and generating a £1.7bn contribution to GDP, 28,200 jobs and £469m in tax receipts.
The vehicle rental and leasing industry has an impact across the length and breadth of the UK.
At £6.7bn, the largest regional contribution to GDP comes from its activities in the South-East. Relative to the size of the economy in each of the countries and nine English regions, the industry made the largest contribution in the North East and Northern Ireland, where it supported 4.8% and 4.2% of these areas’ GDP respectively.
In terms of jobs, the industry’s biggest impact came in the West Midlands, where it supported 55,100 jobs, and the North West, where it supported 53,800.
There is also a positive environmental benefit. The Oxford Economics study estimates that CO2 emissions across the BVRLA member car fleet averaged 114.6 g/km in 2017, a fifth less than the average UK car.
Researchers at Oxford Economics also confirmed that the opportunity to rent and lease vehicles provides firms with the ability to access modern, fuel-efficient vehicles, without the strain of up-front capital outlays.
This is a major benefit for small and medium-sized enterprises and private customers, who also gain more certainty about their costs going forward.
“This report underlines the role that rental and leasing plays in the UK, economy, particularly when it comes to supporting domestic vehicle and engine makers,” said BVRLA Chief Executive, Gerry Keaney.
“With its huge spending power and expertise, the industry will play a crucial role in delivering the UK’s transition to connected, autonomous and zero-emission road transport in the years ahead.”
More details of the BVRLA Report ‘The Economic Impact of the Motor Vehicle Rental and Leasing Industry’ are available here.
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