BVRLA predicts fleet rebound in 2022 despite supply challenges and business leasing decline
04 November 2021
Author: Sean Keywood
The leasing and rental industry is set to operate an increased number of vehicles next year, according to the BVRLA.
The organisation has forecast the combined size of its members' car fleets to grow by 3% in 2022, despite having seen a 3.3% year-on-year decline in its latest figures, and with continuing fears over the global semiconductor crisis which has severely hampered vehicle production in recent months.
However, a continuing fall in the number of business contract hire cars on fleet is predicted.
The forecasts are among the insights included in the BVRLA's latest Leasing Outlook Report.
Citing data from a survey of members, it found that industry confidence, already up by 108 points year-on-year, is expected to improve further next year, as order banks remain strong despite extended lead times.
Commenting on the findings, BVRLA chief executive Gerry Keaney said: "The resilience of the leasing sector is creating greater levels of confidence within the industry, giving us many reasons to be optimistic going into 2022.
"Despite ongoing difficulties sourcing new vehicles, members have still been able to make progress in electrifying their fleets to improve the sector's sustainability credentials."
The report attributes the decline in the total BVRLA car fleet to lower corporate demand, with the total size of members' business car fleet falling by nearly 8% year-on-year to below the one million mark, at 976,727, and business contract hire - the most popular form of business car finance - seeing a 6.3% decline, with 743,154 such vehicles on fleet. The BVRLA is also forecasting a further 4% fall in business contract hire in a year's time.
The report does however have good news regarding the green credentials of members' fleets, highlighting how these have been reshaped by a soaring uptake of zero-emission vehicles, with battery EVs and plug-in hybrids accounting for over a third of new orders over the last year, and currently having more than double the demand seen for new diesel cars, orders for which have dropped by 56% year-on-year. Diesels currently account for around 39% of the overall fleet, but this proportion is expected to drop rapidly as drivers commonly switch to either alternative fuels or petrol when contracts expire.
The increase in plug-in car adoption has contributed to the BVRLA's average car fleet CO2 emissions figures returning its lowest ever level, at 110.1g/km, a level previously seen before the introduction of the WLTP testing regime caused widespread increases in official new vehicle emissions figures.
In addition, the average emissions figures for new cars registered to members fleets fell to 92.2g/km, compared with 109g/km a year earlier.
The organisation has forecast that its fleet will be 25% plug-in by Q2 next year.
Keaney said: "To see the green credentials of the BVRLA fleet improve to achieve record-low emissions is incredibly encouraging.
"As well as the supply issues, uncertainty remains regarding residual values and long-term tax rates.
"That said, the sector is in a healthy position and continues to drive the industry towards meeting ambitious government targets."