The BVRLA has published its Industry Outlook report – which sets out the vehicle rental and leasing sector’s growth predictions alongside end-user fleet priorities for 2024.

The new report sets out the vehicle rental and leasing sector’s growth predictions alongside end-user fleet priorities for 2024

Issued today (6 December 2023) at the industry body’s Outlook Conference at the British Motor Museum, the report includes exclusive end-user fleet research shared by 360 Media Group and based on interviews with 200 fleet managers.

Headline findings include that 40% of fleets overall expect to increase their fleet size in the next 12 months, while battery electric cars, plug-in hybrids and hybrids are forecast to account for 40% of new orders.

The survey also explored the products and services that are top of fleet agendas for 2024, and found that as supply chain issues ease, fleets are prioritising investments in risk management, software and salary sacrifice.

Conducted in November 2023, the research echoes the importance of talent retention and technology investment, reported by BVRLA members. However, it also found that outright purchase continues to play a significant role in fleet funding decisions, especially among light commercial vehicle fleets. They forecast that more than 50% of their new van orders will be acquired via outright purchase.

The 360 Media findings chime with the broader BVRLA report, which reveals members are predicting growth across virtually all market segments and feeling more confident about business conditions.

Results from the report present a positive outlook for virtually all key business metrics compared to the same time last year. Supplies 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.

Gerry Keaney, BVRLA chief executive, said: “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.”

There are some concerns among BVRLA members though – including the levels of residual value risk, 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 continues 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 delay their EV transition by at least one cycle.

The full Industry Outlook Report is now available online.