The vehicle rental and leasing industry contributes around £25bn per year to the UK economy, supporting over 317,000 jobs, according to a new report.
Commissioned by the BVRLA from research organisation Oxford Economics, the study provides some robust, independent data on the size, scope and importance of the vehicle rental and leasing industry.
The £24.9bn is equivalent to the combined local economies of Edinburgh and Leicester. This figure takes into account 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. In the process, the sector generates around £5.2 billion of tax revenue per year, or £81 for every UK resident.
The industry employs 53,600 people directly and a further 263,400 people through wider supply chain and consumer spending effects. Total employment supported by the industry is equivalent to 1 in every 88 workers in the UK. For every 100 people employed in the sector, a further 270 are employed elsewhere in the economy.
The automotive sector is one of the UK’s few manufacturing success stories, and vehicle rental and leasing companies are among its largest customers, purchasing an estimated 308,000 UK-made vehicles in 2013.
This is 20% of total output and means that rental and leasing companies purchased more than 80% of UK vehicles sold in the UK. This expenditure is estimated to have supported a £4.3 billion gross value added contribution to GDP, as well as nearly 90,000 jobs and £1.4 billion in tax receipts.
In the same year, the vehicle rental and leasing industry’s expenditure on foreign-made vehicles containing UK-made engines is estimated to have generated a £600 million contribution to GDP, supporting 13,000 jobs and raising £200 million in tax receipts.
The vast majority of this business is conducted through motor dealers. In 2013, the sector purchased £15.9 billion of foreign-made vehicles from UK dealerships. This activity supported a £124 million contribution to GDP, 2,500 jobs and £40 million in tax receipts.
There is also a positive environmental angle to this activity. The industry can rightfully claim to play a leading role in driving down emissions. At 119g/km, the CO2 emissions of the average newly registered lease car at the end of 2013 were 7% cleaner than the average newly registered car in the UK. Meanwhile, the average rental car on UK roads in 2013 emitted 132g/km – 17% lower than the average car on UK roads.
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