The past 12 months have seen the leasing industry go from strength to strength as it followed up a good 2013.

According to BusinessCar’s BC50 figures, 2014 outpaced the previous year’s growth of 5.6%, with fleet sizes growing by approximately 7.5%.

The rise is in line with the Society of Motor Manufacturers and Traders’ figures for fleet car registrations, which are up 7.4% year-to-date. Some of the increase can be attributed to the UK’s growing economy, with businesses coming back into the market to replace their light commercial vehicles, with total registrations for cars up 9.1% and vans up 18.1% year-to-date, according to the SMMT.

Andrew Hogsden, senior manager in strategic fleet consultancy at market leader Lex Autolease, says the strength of growth the company has seen over the past year is positive, but brings with it new challenges.

Hogsden explains: “Increased business and consumer confidence has led to a tightening of the labour market, with employers more aware than ever of the need to offer a competitive compensation and benefits package.

“In response to this, our salary sacrifice schemes have been a major area of focus.”

Leaseplan has also seen a surge of interest in salary sacrifice schemes over the past year. Stuart Walker, the company’s ancillary sales and strategic marketing director, says:  “Large clients are now requesting [salary sacrifice], and when we introduced it in 2008 we were looking at a very different market, where the economy wasn’t as strong as it is now.

“As the economy continues to strengthen, the popularity of salary sacrifice schemes has been growing with the increase in job security.”

Benoit Dilly, Arval managing director, says the growth his company has seen in 2014 is no surprise because due to the increase in business optimism.

He says: “An increasing number of companies in the UK expect their fleet to grow, which has been reinforced in our business performance in the past 12 months.

“The economic downturn has left a legacy, as the majority of companies retain a heavy focus on cost management. For fleets, a whole-life cost approach remains the right one for any business looking to make the most cost-effective vehicle choices.”

The other significant area of growth for the major players has also come as a result of the stronger UK economy, with more businesses looking to replace their light commercial vehicles.

Lex launched its Driveaway offer for light vans this year, which offers tradesmen ready-to-go vehicles specifically fitted out for plumbers, joiners, electricians or construction workers.

Leaseplan has also seen growth from LCVs, particularly with customers using contract hire as a funding method.

Over the next year, Hogsden expects the needs of its fleet customers to become increasingly complex as the economy continues to grow.

“The industry will need to respond to this by offering a broader range of products and services that support customers in a way that is individually tailored to them,” he says.

“As ever, account management and information that enables customers to manage their fleets in the most effective way will be crucial.”

Dilly believes more businesses are focussing on ultra low-emitting vehicles as part of their fleet mix as manufacturers continue to deliver a wide range of options to suit fleets’ financial needs, as well as those of their drivers.

There’s a consensus among the top leasing players that the pace at which technology is used to monitor, manage and track drivers and fleets will continue to increase over the next 12 months.

Walker says the industry is investing heavily in digital processes for fleet management, but the challenge will be offering something unique and continuing to innovate in a crowded market.

There is now a greater need to access information remotely, with fleet managers able to manage their cars and vans on the fly with smartphone- and tablet-compatible apps. Fleets are moving away from paper-based techniques to record mileage and gain access to information on their smartphones.

Dilly says: “Some things haven’t changed though – our customers continue to expect good value, ongoing support and great service from us, and we have remained really focused in these areas through the way that we structure our business, our processes, new products and services, and most importantly through the approach of our people.”

One of the biggest challenges facing the industry next year will be the impact of continued growth from new vehicle registrations. It will mean a flood of stock on the used car market in the following years to come, which could have a negative impact on values as buyers are spoilt for choice at auction.

• Click on the next page to view the full BC50 2014 table

BC50 2014

The top 50 leasing companies and their on-risk size of fleet (no. of cars for which the lease firm carries the RV risk)

The figures explained: winners and losers in this year’s list

Looking across the table of this year’s BC50 (overleaf) shows healthy growth from a lot of the big players and some jostling for position further down the table.

Lex Autolease continues to lead the way by a significant proportion with 289,317 vehicles, a 5.6% rise on 2013. Its closest rival, Leaseplan, would have to increase the amount of vehicles on its books by 107% to be the biggest in the UK.

However, the top five leasing companies have all posted impressive growth this year with increases across the board.

The most dramatic rise has come from Volkswagen Group Leasing, which has grown by 31.6% in volumes from 70,345 to 92,601 vehicles. VW Group Leasing is intending to overtake Alphabet to become the third-largest leasing company in the UK before the end of the decade, and looking at the growth within the past year you wouldn’t bet against it. It offers all makes and models, not just those within its brand, and a push towards multi-marque and reaching more customers explains the rapid growth.

Matt Dyer topped the highest profile job move in the past
12 months, taking over from David Brennan as managing director of Leaseplan.

The big news this year was Hg Capital’s £200m acquisition of Zenith in January this year, following on from its purchase of Leasedrive in December
2013 to form a new power
player in the leasing industry within the top 10. The combined group boasts 57,464 vehicles, although it is some way off
fourth-place ALD Automotive, which now stands at 96,618.

ALD won a 1100-vehicle deal with Imtech UK earlier this year and deals such as this will help it back towards the top five again.

Arnold Clark has seen a slight decrease in volumes, by 1.7%, this year following a reduction in cars and light commercial vehicles to a total of 50,116.

Hitachi Capital has dropped by two places this year, with a fall of 7.3%, mainly from a reduction in the amount of cars on its books, down from a total of 47,745 to 44,238.

There have been small movements up and down the middle of the table this year,
but one of the biggest jumps has come from Lookers Leasing, which has seen an increase of 647 vehicles, gaining five places to settle to a position just outside of the top 30. This has meant that the likes of Fleet Financial, Agnew Corporate and GKL Leasing have been pushed further down the table.

BVRLA: The view from the man at the helm of the industry body

BVRLA chairman Gerry Keaney believes the growth the industry has seen this year has been very healthy, with increased business across the board from existing clients and new customers.

Leasing fleets have continued to grow, with the latest BVRLA quarterly survey showing that the number of cars on fleets rose by nearly 6% in Q2 2014 versus Q2 2013. The corresponding van figure was up by more than 10%.

Keaney says: “This growth is the best kind – a combination of increased business from existing clients and new customers.

“Our quarterly survey showed that members’ fleets are cleaner than ever. The average car added to members’ fleets in Q2 2014 emitted 117.8g/km – more than 6% below the SMMT’s estimated average for all new cars registered in the UK during that time.”

As the Government looks to widen its focus from CO2 emissions to air quality, Keaney will be reminding the Government that “it is the test cycles that are broken, not the tax regime”.

There is also still more work for the industry to do around the key issue of data access and security, with the DVLA moving its processes online.

Keaney says: “It remains to be seen just how the Government will legislate around developments in technology. We know we have a lot more work to do in this area.”

There have been victories for the industry in the past year, with the BVRLA working to eliminate the tax disc, which went into affect from 1 October, a move Keaney believes will save fleets millions in administrative costs.

He says: “We continue to lobby the Government to ensure fleets’ needs are recognised when the paper driving licence is abolished and the DVLA pushes forward with its online fleet portal.”