Fleet industry highlights the nine challenges it faces in 2019

The vehicle rental and leasing industry is laying the groundwork for a productive and secure long-term future, according to the BVRLA’s Industry Outlook 2019 Report

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Every year the British Vehicle Rental & Leasing Association (BVRLA) produces its industry outlook report to consider what it sees as the biggest challenges for the fleet industry.

In 2017, it said that Brexit-based economic concerns, emissions-related uncertainty and a hostile tax environment would be the main preoccupation of the fleet industry.

The same issues remain, it would seem, while the sector has collected a few more challenges through the passage of this year.

“The next twelve months will be a very challenging period, but there is clear evidence that BVRLA members are seizing the initiative and not waiting for an upturn in the economy or Government support,” said the report.

BVRLA chief executive, Gerry Keaney delivered a positive spin on the strategic challenges, citing the abilities of the fleet industry to adapt.

“The vehicle rental and leasing industry… is perfectly placed to deliver the revolution in autonomous, connected and electric mobility and is already benefitting from growing demand for vehicle usership rather than ownership.

“Members are increasingly going direct, whether it is engaging with local transport policymakers, remarketing their own vehicles or talking directly with a new generation of personal and SME customers.

“They may not be able to fulfil every mobility services need right now, but they are keeping a very open mind about what is possible and spotting new ways of adding value. Whether it is electric vehicles, prognostics data, last mile logistics or car subscriptions, members are increasingly willing to explore new business models, technology platforms and partnerships.”

The main challenges for 2019:

  1. The long road to zero – Fleet industry opinion is united on seeing a future dominated by electric powertrains. The big questions now are not ‘if’ we get there, but ‘how’ and ‘when’.
  2. The last mile – The traditional ‘hub and spoke’ method of delivery is coming under pressure from cities looking to reduce the congestion, emissions and safety risks associated with large, diesel-powered vehicles. Can urban consolidation centres, inner-city micro distribution depots and e-cargo bikes and vans come to the rescue? 
  3. Used market urgency – Electric vehicles, Brexit, diesel demonization and WLTP are all contributing to an uncertain outlook for used vehicle prices through early 2019. Current market sentiment is that any price changes will be small rather than seismic. 
  4. Diving into data – Policymakers will come under increasing pressure to legislate for greater access to vehicle data. Meanwhile, prognostics is set to become the new must-have fleet management service.
  5. Brexit – Rather than just speculate over the potential for one of many ‘Deal’ or ‘No Deal’ scenario, BVRLA members are focussing on what they can do to prepare themselves and their customers for the unexpected.
  6. Car subscriptions – As the boundaries between rental and leasing continue to blur, car subscriptions are receiving a mixed response. Are they Car Rental 2.0 or just the emperor’s new clothes?
  7. Up close and personal – BVRLA members are embracing digital technology and the chance to go one-on-one with a new breed of personal and SME clients. Some companies predict that up to 50% of new business could come from these channels in the next two years. 
  8. Urban mobility – The scale of potential Clean Air Zone non-compliance will cause some local authorities to delay or adjust their plans in 2019. BVRLA members are expecting more competition from a range of urban mobility providers and a major improvement in public EV charging infrastructure. 
  9. Repairability – The number of accidents and repairs may be falling, but the costs associated with them are going in the other direction. New materials, sensors and electric powertrains are all having a massive impact on repairability.