Table of Contents
Executive Summary
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- The market
- Private sector short-term hire delivering subdued growth
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- Figure 1: UK private short-term car and van rental, by value, 2014-24
- Figure 2: UK private short-term car and van rental, by volume, 2014-24
- Corporate market is larger than private market
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- Figure 3: UK short-term car and van rental, by volume (private and corporate), 2014-19
- Most hirers prefer to deal direct
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- Figure 4: How hire was arranged, September 2019
- Vehicle hire and car clubs both record increased interest
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- Figure 5: Alternatives to ownership, 2015 and 2017
- Companies and brands
- Car and LCV fleets are expanding
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- Figure 6: Short-term vehicle fleet, 2014-18
- Market is responding to threats posed by rivals
- Advertising and promotional expenditure reached £27.66 million in 2018
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- Figure 7: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, 2015-18
- The consumer
- Two thirds of adults have not hired in the UK in the last two years
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- Figure 8: Activity in the market, September 2019
- Online leads as the preferred way of accessing vehicle hire
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- Figure 9: How hire was arranged, September 2019
- Moving home is the single most important reason for vehicle hire
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- Figure 10: Reasons for hiring, September 2019
- Factors related to convenience and cost are the most significant
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- Figure 11: Importance of factors when hiring, September 2019
- Alternatives to car hire are a niche market
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- Figure 12: Alternatives to car hire, September 2019
- What we think
Issues and Insights
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- Converting non-users remains a major opportunity
- The facts
- The implications
- Young men are an important market for the industry
- The facts
- The implications
- Alternatives are disrupting and blurring the market for personal transport
- The facts
- The implications
The Market – What You Need to Know
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- Unspectacular performance from private sector revenues as volumes stagnate
- Corporate market is proving more buoyant than the private sector
- Dealing direct and use of online are popular channels
- Market prospects remain good although subject to external pressures
Market Size and Forecast
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- Short-term private rental market suffering as revenues stagnate
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- Figure 13: UK private short-term car and van rental, by value, 2014-24
- Figure 14: UK private short-term car and van rental, by value, at current and constant prices, 2014-24
- Rental volumes fall 5% between 2014 and 2018
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- Figure 15: UK private short-term car and van rental, by volume, 2014-24
- Figure 16: UK private short-term car and van rental, by volume, 2014-24
- Forecast methodology
Market Segmentation
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- Interest in short-term hire increasingly coming from the corporate sector
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- Figure 17: UK short-term car and van rental, by volume (private and corporate), 2014-19
- LCV hire represents a buoyant market
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- Figure 18: UK short-term car and van rental, by volume (car and LCV), 2014-19
- Cars are the best-performing segment of the private segment
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- Figure 19: UK private short-term car and van rental, by volume (car and LCV), 2014-19
- Cars are likely to be hired for longer and driven further
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- Figure 20: UK private short-term car and van rental, average days and miles per hire (car and LCV), 2014-18
- Average rental exceeds £230
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- Figure 21: UK private short-term car and van rental, average expenditure, 2014-19
Channels to Market
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- Customers prefer to deal direct with hire companies
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- Figure 22: How hire was arranged, September 2019
- Online is the most popular way of engagement
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- Figure 23: How hire was arranged, September 2019
- Outlets continue to expand as hire sector diversifies
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- Figure 24: UK short-term car and van rental outlets, 2014-19
Market Drivers
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- Consumer confidence remains robust…
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- Figure 25: Mintel financial confidence tracker, January 2017-August 2019
- …with planned financial activity at a new high
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- Figure 26: Mintel financial activity index, January 2015-August 2019
- Cars are most likely to be used on trips of more than five miles
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- Figure 27: Mode share of trips, by main mode (different trip lengths), England, 2018
- Personal car ownership is becoming more expensive
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- Figure 28: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2014-18
- Number of trips taken is growing despite little change in distance travelled
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- Figure 29: Trips, distance travelled and time taken, England, 2008-18
- Alternatives to car and van hire are a growing threat
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- Figure 30: Alternatives to ownership, 2015 and 2017
- Interest in car sharing is growing rapidly
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- Figure 31: Car club vehicle and membership growth, 2009-19
- Peer-to-peer vehicle rental also seeing increased interest from suppliers…
- …as is ride sharing
- Bicycle hire expands although scooter hire is restricted by legislation
- Taxi share is another emerging model
- Public transport is another challenger to car ownership
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- Figure 32: Public transport passenger journeys (Great Britain), 2006/07-2016/17
- Specific opportunities appear favourable for vehicle hire
- Number of UK holidays taken is growing
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- Figure 33: Trends in total number of holiday visits, abroad versus domestic, 2014-18
- Inbound visits from foreign tourists represent an emerging market
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- Figure 34: Inbound visits to the UK, 2014-18
- Housing market remains buoyant
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- Figure 35: UK housing transactions, 2014/15-2018/19
- Student market is another opportunity
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- Figure 36: Number of full-time undergraduates in UK, 2013/14-2017/18
- Self-storage sector records strong growth
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- Figure 37: Self-storage sites and capacity, 2014-18
Companies and Brands – What You Need to Know
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- Fleets are growing but suppliers are also broadening their offer
- Innovations reflect changing demands from the market
- Rising investment suggests willingness to engage with the market
Competitive Strategies
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- Hire sector is taking a positive approach towards expansion…
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- Figure 38: Short-term fleet size, 2014-18
- …with all of the leading hire companies active outside of the hire sector
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- Figure 39: Short-term transport solutions offered by major hire companies, 2019
- Different ways of reaching customers continue
- Franchising
- Licensee marketing
- Affiliate marketing
- Intermediaries remain a key channel
Launch Activity and Innovation
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- Sixt mobility club pilot looks at multi-modal access to transport
- New entrant Virtuo enters market with mobile approach to rental
- Pay-by-use approach offered by Avis Budget Group
- Green Motion looking at simplifying customer choice
- Enterprise strengthens commercial presence through acquisition
Advertising and Marketing Activity
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- Expenditure peaks in 2018
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- Figure 40: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, 2015-19
- Television is the preferred channel for investment
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- Figure 41: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, by media type, 2015-19
- Wide fluctuations in investment by company
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, by advertiser, 2015-18
- Car hire dominates investment
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- Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure on self-drive vehicle hire, by advertiser and campaign, 2018
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Not all adults have interest in the vehicle hire market
- Online is the main way of arranging vehicle hire
- Moving home is the most important reason for hire
- Convenience and cost are key factors when hiring
- Alternatives to car hire appeal to only a minority
Activity in the Market
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- Hire vehicles are used by only a minority of adults
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- Figure 44: Activity in the market, September 2019
- Men and women exhibit different levels of activity
- Wealthier adults have a greater propensity of hire
- Families are an important group…
- …as are those in urban areas
How Hire Was Arranged
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- Over half of vehicle hire is arranged online
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- Figure 45: How hire was arranged, September 2019
- Women and men have different views towards direct booking
- Older adults shun the use of intermediaries
- Online is much more important for young adults
- Arranging hire online is popular with those using hire services the most
Reasons for Hiring
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- Moving home is the most important reason for hiring
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- Figure 46: Reasons for hiring, September 2019
- Young adults have the widest demands
- City dwellers represent another important market
- Increased use of hire companies is typified by broader needs
Importance of Factors When Hiring
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- Convenience and costs dominate as important factors
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- Figure 47: Importance of factors when hiring, September 2019
- Older women some of the most demanding
- Offering electric vehicles has limited appeal
- Hirers and non-hirers seek different things
- Opportunities for promoting specific service features exist
- Importance of factors when hiring – CHAID analysis
- Older homeowners who work part-time or not at all record strong interest in no additional insurance charges
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- Figure 48: Car and van hire – CHAID – Tree output, September 2019
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- Figure 49: Car and van hire – CHAID – Table output, September 2019
Alternatives to Car Hire
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- Majority show little interest in alternatives to car hire
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- Figure 50: Alternatives to car hire, September 2019
- Alternatives are popular with under-35s and males in particular
- Households with children are also interested in alternatives
- Urban areas and London are a natural market for alternatives
- Bike and scooter hire – a market ripe for premiumisation
- Regular hirers are most attracted to alternatives
- Those hiring for university travel show strong interest in alternatives to vehicle hire
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
- Forecast data
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- Figure 51: UK private short-term car and van rental, by value – Best- and worst-case scenarios, 2019-24
- Figure 52: UK private short-term car and van rental, by volume – Best- and worst-case scenarios, 2019-24
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