VEHICLE RENTING AND LEASING: HOW TO CAPITALISE ON MARKET CHANGES

The 2016 budget retrospectively taxed company car drivers to the tune of £627 each, through the combined effect of 1) U-turning on a promise (O-turn?) to scrap the 3% surcharge on diesel and 2) moving the car tax bandings.

The Chancellor pulled those levers in the hope that it would increase the take-up of electric cars (as well as boost the exchequer’s coffers), but the industry was way ahead of him. In Q4 2015, 20% of all new leased cars were electric – far more than across all new registrations – and newly registered vehicles were already returning the lowest ever level of emissions by the time the budget arrived (BVRLA).

But how do I get in?

In this webinar on the effects of the budget on the industry, Chris Chandler, Principal Consultant on fleets at Lex Autolease, makes the point that the early adopters of electric vehicles are set to benefit most, but there are a few barriers; not least the need for more education in order to mitigate the uncertainties – perceived or otherwise – around plug-in cars.

The question then is, for companies such as Lex Autolease, Northgate and VW Group Leasing, where and who are those likely early adopters? Whoever finds them first stands to gain the most.

If consultancy is your main offering, then it might be that you should target companies with widely dispersed office locations, as they’re likely to a) be aware of the shift towards electric cars but, given the long distances their drivers have to travel, b) be concerned about the mileage capabilities of electric vehicles. Or the reverse – with low emissions zones set to become increasingly common, there will be some pre-existing urban fleets that will have no choice but to change their vehicles or be prevented from operating.

If you mostly lease commercial vehicles, the options on the electric side are few and far between when compared to the car market. Your prospects will be aware of the Chancellor’s moves to incentivise electric vehicle take-up but possibly concerned at how few options they have for doing so. They’re likely looking for consultancy or an alternative way to reduce costs, such as fleet management/vehicle monitoring software. Their defining characteristics, which we can use to identify them, could include their main economic activity, i.e. one which involves the moving around of large items; job adverts for van drivers; and any text in their website source code indicative of the use of commercial vehicles.

If you provide finance as well as the vehicles themselves, you could target SMEs who are likely to want to be early adopters. Complex, modern websites that make use of analytics plugins are one way of identifying tech-savvy/early-adopter companies. If you also include signals such as large numbers of job adverts for field sales reps and/or directors (company cars likely), office leases expiring in the near future and large growth evidenced by P&L accounts, taken together, you have a the beginnings of a predictive model that will help you target the companies not just in segment, but currently most likely to buy from you.

The rental and leasing industry is changing. The shift towards electric fleets is only one of several current trends. Despite this, leasing fleets are still growing, so the industry’s annual contribution to the UK economy of £25bn is only going to increase. The greatest beneficiaries of these changes will be companies that use the right marketing technology to know where, when and what that money is going to be spent on.