36% growth in PCH highlights resilience of car leasing industry
The resilience of Personal Contract Hire (PCH) has been highlighted yet again, as the sector grew by 36% year-on-year during Q2, according to the British Vehicle Rental and Leasing Association’s (BVRLA) latest survey.
Overall, the entire leasing sector was up 8% and, while not as strong as PCH’s growth, business fleets also grew by 2.4% to 979,000 year-on-year, while the light commercial vehicle sector grew by an impressive 14.9% over the same period too.
There were no notable changes when it came to rental profiles, with the mean contract duration for cars remaining at 36 months, while 7/10 fleet vehicles have a mileage allowance of under 20,000 p/a, while mean car contract mileage stood at 15,000 p/a.
Growth slowing but still strong
Growth rates in all sectors slowed compared to Q2 in 2016, with business fleet leasing actually shrinking by 1%, but it’s worth bearing in mind that 2016 was a record-breaking year for new car registrations, and the leasing sector remains buoyant compared to the wider new car market as a whole.
New car registrations have seen consecutive monthly declines since VED changes in April, while on-going concerns including Brexit uncertainty and the future of diesel cars have also prompted the Society for Motor Manufacturers and Traders (SMMT) to call for government clarity.
Average CO2 figures for newly registered lease cars grew to 111.8g/km in Q2 2017, up from 110.8g/km (+0.9%) from the previous quarter and up 0.7% compared to the same period in 2016. This situation was reflected by the wider market too, as average emissions rose to 121.3g/km – mirroring the 0.7% rise.
BVRLA chief executive Gerry Keaney said: “PCH continues to drive growth in the car leasing market and this is having a clear impact on the automotive industry’s long-term goal of reducing CO2 emissions.”
Diesel downer, petrol and hybrids on the up
The proportion of diesels across the BVRLA’s entire fleet remained static at 74.9% in Q2, although the number of brand-new diesel fleet registrations is not down to 68% – inline with the wider industry following the fuel’s new-found negative image.
While decline in new diesel registrations is mostly made up for by petrol, hybrid registrations continue to enjoy strong growth, and rose 5% year-on year. It seems pure-electric cars still have some way to go however, with EVs making up just 0.2% of the BVRLA fleet in Q2.
Keaney commented: “Company cars are cleaner than the average privately procured car, and the government should be supporting this market with a progressive company car tax regime that doesn’t encourage people to do their own thing.”