ABM Q4 - Flipbook - Page 60
Q&A
American Express
Milly Standing speaks with Josh Collier, global business
consulting at American Express Global Business Travel,
about the future of the UK rental sector
How does the current UK
market look from Amex
GBT's perspective?
Following several years of disruption,
vehicle supply has largely recovered,
and rental fleets have been rebuilt,
helping to bring the market back into
better balance. As a result, we expect
UK rental rates to rise by between 0.6%
and 1.3% over the next two years. That
is among the most moderate increases
in Europe, and reflects a combination of
recovering vehicle availability and healthy
competition between rental providers.
For businesses, this is creating a far
more favourable sourcing environment
than we’ve seen in recent years,
with greater choice and stronger
negotiating leverage.
However, this doesn't mean there are
no pressures in the market.
Fleet operators are continuing to
manage higher repair costs and lingering
uncertainty which could affect vehicle
supply chains.
We are also continuing to monitor the
UK Zero Emission Vehicle (ZEV) Mandate
outcome, which is currently under review
with the UK Government. If the mandate
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that 80% of all new vehicles procured
must be zero emission by 2030 still
stands, this will have a significant impact
on rental rates in the UK in the mediumterm as rental companies are forced to
upgrade rental stations to handle much
higher volumes of electric fleets than
they do today.
How will those predicted car
price increases affect the
market?
While these rental prices themselves
are relatively stable, the underlying
economics of operating a vehicle fleet
are changing, which can affect the
average buyer.
Rental providers are facing rising
repair costs as vehicles become more
technologically sophisticated, while
weaker used vehicle resale values are
reducing a key source of revenue for
rental providers.
These can be mitigated partly through
simply having more visibility into what is
actually being booked.
Auditing vehicle usage and monitoring
upgrades can often unlock greater
