The fleet services sector continued to grow in 2019. However, the rate of annual growth fell for the third consecutive year. This was driven by a combination of uncertainty regarding Brexit and regulatory changes to diesel engines following a number of emissions scandals.

The sector’s crucial role as financial intermediary and dealer puts it in a unique position, which has supported growth and minimised the effects of these headwinds. Furthermore, consolidation in the industry has helped keep costs low for fleet service providers, which have passed on savings to customers through comprehensive packages that bundle a number of services made cheaper by their purchasing power.

The sector faces challenges from Brexit, which could hinder the sector’s transition to electric vehicles if the negotiated deal affects the UK’s ability to import vehicles and parts from Europe through trade barriers, such as tariffs.

If a deal is agreed that minimises or prevents trade barriers, the sector is set to continue growing, with growth improving as more businesses seek to electrify their fleets. Additional revenue is likely to come from the gradual disposal of traditionally-fuelled engines as charging infrastructure improves.