U.K. Study Trumpets Value of Vehicle Rental, Leasing

The car and van rental and leasing sector is worth about £14 billion ($21.7 billion) a year to the U.K. economy and supports more than 183,000 jobs, according to the research organization Oxford Economics.

The report was commissioned by the British Vehicle Rental and Leasing Assn., which says the £14 billion comprises the operations of the industry itself, the U.K.-made vehicles and engines it purchases, dealership activity in the region and its impact on the used-car market.

The sector generates about £2.8 billion ($4.3 billion) of tax revenue a year. It employs 38,000 people directly and another 145,000 through wider supply-chain and consumer-spending effects. Total employment supported by the industry is equivalent to one in every 175 workers in the U.K.

BVRLA members operate a combined fleet of about 2.75 million cars, vans and trucks.

CEO John Lewis says the study was ordered because the vehicle rental and leasing industry is not a particularly visible one.

“As a representative trade body responsible for campaigning and lobbying on behalf of our members, it can be a challenge for the BVRLA to explain just how big the industry is,” Lewis says in a statement.

“This is an issue because, when it comes to fighting the corner for your industry, size does matter.”

The report says vehicle rental and leasing companies bought an estimated 220,000 vehicles in 2011, 15% of total output and 82% of U.K. vehicles sold to domestic customers.

This is estimated to have supported a £2.4 billion ($3.7 billion) contribution to gross domestic product, 52,000 jobs and £810 million ($1.25 billion) in tax receipts.

In the same year, the industry’s spending on foreign-built vehicles containing U.K.-made engines is estimated to have generated a £349 million ($542.1 million) contribution to GDP, 7,600 jobs and £120 million ($186.4 million) in tax receipts.

The BVRLA says that in 2011, the sector purchased £11.1 billion ($17.2 billion) of foreign-made vehicles from U.K. dealerships. This activity supported a £98 million ($142.2 million) contribution to GDP, 2,000 jobs and £31 million ($48.1 million) in tax receipts.

The association also says in a statement that the sector “can rightfully claim to play a leading role in driving down emissions. At 123 g/km, the carbon-dioxide emissions of the average lease car registered in 2012 was 25% cleaner than the average car on U.K. roads.”

The Oxford Economics report shows the leasing and rental industry reaches every part of the economy, from manufacturing and construction to retail and health. Two-thirds of the industry’s business customers are small and medium-sized enterprises.

“The big picture shows that our industry really does have a big impact,” Lewis says.