VEHICLE rental and leasing industry contributes around £49bn a year to the UK economy, supports over 465,000 jobs and generates £7.6bn in taxation annually, according to a new report.
The report from research organisation Oxford Economics provides some robust, independent data on the size, scope and importance of the vehicle rental and leasing industry.
The £49bn takes account of 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.
The industry employs 52,700 people directly and contributes £23.9bn from rental and leasing activities. This contribution is higher than that seen in many other sectors because of the reliance on rapidly depreciating capital goods.
Rental and leasing companies spent an estimated £30bn on buying over 1.8 million vehicles in 2017, which includes £5.4bn spent on 304,000 UK-assembled cars, vans and trucks. This represents 17% of all vehicles assembled in the UK and means that they were responsible for 83% of these vehicles sold domestically. The industry also purchased 418,900 vehicles with UK-made engines.
By purchasing so many UK-made vehicles and engines, the rental and leasing sector supports an estimated 78,000 jobs at major manufacturing plants in Ellesmere Port, Sunderland, Oxford, Swindon, Bridgend and Dagenham, as well as the extended supply chain.
Most vehicle purchases are conducted through motor dealers and in 2017, this activity supported a £1.6bn million contribution to GDP, 25,400 jobs and £400m in tax receipts for the UK Government.
Similarly, the rental and leasing industry is estimated to have replenished 25% of its fleet in 2017, supporting auctioneers and dealerships and generating a £1.7bn contribution to GDP, 28,200 jobs and £469m in tax receipts.
The vehicle industry has an impact across the length and breadth of the UK. At £6.7bn, the largest regional contribution to GDP comes from its activities in the South-East. Relative to the size of the economy in each of the countries and nine English regions, the industry made the largest contribution in the North East and Northern Ireland, where it supported 4.8% and 4.2% of these areas’ GDP respectively.
In terms of jobs, the industry’s biggest impact came in the West Midlands, where it supported 55,100 jobs, and the North West, where it supported 53,800.
Not everything is measurable, but the researchers at Oxford Economics confirmed that the opportunity to rent and lease vehicles provides firms with the ability to access modern, fuel-efficient vehicles, without the strain of up-front capital outlays.
This is a major benefit for small and medium-sized enterprises and private customers, who also gain more certainty about their costs going forward.