BVRLA chairman reflects on challenging tenure

The chairman of the British Vehicle Rental and Leasing Association (BVRLA) was in reflective mood last week when he delivered a speech at the groups’ annual dinner.

Kevin McNally spoke of the financial abyss the industry had faced in the wake of the credit crunch, before asking whether recovery was really just around the corner.

He said: “2010 saw both our industry and the wider economy pulling back from the financial abyss that we were all staring into during the dark days of the credit crunch.

“It was a year of recovery – in terms of used vehicle prices, new registrations, business confidence and economic growth.

“But I am left wondering whether we have just witnessed the first year of a slow recovery - or a temporary reprieve before the feared double-dip recession?

“The latest estimates tell us that the economy actually shrank in the final quarter of 2010, and inflation is stubbornly inching its way ever higher.

“We live, it’s clear, in uncertain times. But, at least, the coalition is taking action to address what many would say is this country’s most pressing economic issue – its huge budget deficit.

“The medicine is tough. But we all may need to get used to public spending cuts and higher taxes – not just this year but for several years to come.

“Unfortunately, as yet, the government has failed to produce an effective strategy for dealing with one of the biggest issues facing UK businesses – the lack of funding.

“Like many of you in the room, I am more and more bemused with the short-sighted approach some banks have taken in either ignoring the vehicle finance sector or treating it with an attitude that verges on contempt.

“This is despite the fact that it continues to provide an excellent return on capital with a good risk profile.

“One of the key tasks I have set the BVRLA during my time has been to challenge the misconception that our industry is too risky - or offers insufficient returns - for funders.

“Unlike some in the City, our members are not spivs or speculators..... Nor do they get paid multi-million pound bonuses each year. They provide fixed-cost and flexible access to motoring for thousands of businesses, allowing them to make a direct contribution to this country’s economic recovery.

“Organisations like the AA and the RAC are treated, perhaps rightly, as heroes because they help people who have broken down at the roadside.

“Our members get very little credit for helping to put those people on the road in the first place.

“Well – perhaps that is enough of bashing banks. I don’t want people to think that that my comments are aimed at all funders.

“Our industry of course maintains excellent relationships with a number of banks, who continue to work in partnership with us and enjoy a secure and profitable return on their investments.

“In fact there are signs of some new lenders either returning to the market or dipping their toes in for the first time. Some of them are here tonight. The BVRLA welcomes the faith you have shown in our industry and will support you in any way it can.

“Our members own or manage vehicles worth billions of pounds. But I would like to talk about some of the work the association does to protect two of our industry’s more intangible assets – its status and its credibility.

“Firstly, it has been working hard to maintain independent leasing companies’ status as end-users, with the freedom to purchase vehicles, parts and services when, where and how they see fit.

“Some vehicle manufacturers have had different ideas. But, by coming together and acting in a unified way, and with the help of the European Commission, we are winning that argument.

“Secondly, the BVRLA is challenging many of the negative perceptions of cross-border car rental. It has taken its successful UK-based conciliation service and developed a new version for Leaseurope.

“The association has also played a major role in boosting the reputation of the car rental industry with the European Commission, consumer groups and the media.

“This particular issue, I am sure will be a key focus for Neil Cunningham from Hertz, who is due to replace me as chairman in a few months time.

“My two-year term as chairman has been far more challenging and rewarding than I could ever have predicted.

“In particular I now have even greater respect for the excellent work that John Lewis and his team do from their base in Amersham. I would like to thank them for their valued support to me personally over the last two years - and of course for their support to all of us, all of the time.

“I would also like to thank the members of the committees of the BVRLA for their hard work and commitment. Neil, going forward, you are lucky to have them all.

“I would just like to make a final request to the members present here tonight – whether you work for a captive, a rental company, a broker or an independent leasing company like I do.

“This is your association. Any of you who get involved with its various committees, working groups and forums will know how much the BVRLA depends on the input and participation of its members.

“I would urge more of you to get involved. You will get a warm welcome, and it will be time very well spent.”