BMW Wins Record Share Of UK Contract Hire Market

Brand kudos, company car tax efficiency, class-leading residual values and competitive whole life costs have resulted in BMW winning a record share of the UK contract hire and leasing market.

New figures from the British Vehicle Rental and Leasing Association reveal that BMW is the fastest growing premium brand manufacturer in terms of long term leasing vehicle acquisitions by contract hire companies.

According to the newly published 2002 BVRLA Industry Review, BMW's share of the leasing market has reached an all-time high of 8.8% - 2.7 percentage points up on the previous study results.

BMW's share of the UK contract hire market has increased from 5.7% in 1999 due to a combination of company car driver demand and the increasing popularity of leasing as a fleet funding mechanism at the expense of outright purchase among businesses, according to BVRLA leasing company members.

Bernard Bradley, BMW General Manager - Corporate Sales, said: "Excellent residual values and competitive whole life costs have been the hallmarks of BMW for many years and have contributed to our record share of the leasing market.

"However, BMW has also benefited from April's introduction of a company car tax system based on vehicle carbon dioxide emissions. Not only are our vehicles CO2 efficient, but the new tax regime has made company car drivers more aware than ever of their benefit-in-kind tax bills.

"With many fleets offering employees a wider choice of company car, drivers are looking to obtain as much car as they can for their money and that is playing to BMW's strengths."

BMW now accounts for almost 10% of contract hire and leasing company VELO's 14,000-strong fleet and it is anticipated that this figure will grow over the coming years, both as a result of organic growth and incremental business.

Mike McRae, VELO's Operations Director, said: "Traditionally, BMW has maintained a strong presence amongst VELO's long-standing City-based clients. VELO is finding a new market of user-chooser drivers who are opting for the premium brand, whilst before they may have had to settle for a vehicle from another manufacturer.

"Indeed, from a recruitment and retention perspective, many more of our clients are beginning to recognise the benefits of having BMW on the car list. There is a powerful image associated with the BMW brand and whilst this remains and residual values stay strong, BMW will continue to be a firm favourite with fleet and private purchasers."

While the 3 Series, due to its extensive range of almost 50 models available in five different body styles - Saloon, Touring, Compact, Coupe and Convertible - remains the best-seller in the BMW line-up HSBC Vehicle Finance says the 5 Series has also proved very popular.

Peter Hollinshead, head of purchasing and vehicle management, said: "Year-on-year we have seen a 26% increase in the number of BMWs on our fleet. The majority of the increase has been with diesel vehicles but, uniquely, we have also seen an increase in petrol-engine models.

"The popularity of the 3 Series is across all body styles and it is that variation of body styles which is helping keep residual values strong. There is also strong used car market demand for BMWs across the range, which is also helping to keep residuals high. But, above all a BMW is a car employees aspire to, so lead-in models are high in number on our fleet."

Lex Vehicle Leasing operates more than 5,000 BMWs with the 3-Series constantly proving to be one of its most requested cars over recent years mainly because it has proven to be the best driving car in its class.

Brian Farrell, pricing risk manager at Lex Vehicle Leasing, said: "The fleet sales success of the 3 Series has been sustained through its low whole life costs, buoyed by its strong residual values. Its residual value strength together with the kudos associated with the badge helps it beat other premium upper medium sector models in terms of popularity.

"Despite the changes in company car taxation Lex Vehicle Leasing is receiving orders from right across the 3 Series range, indicating its popularity across a broad spectrum of society."

Published 27 November 2002 Melanie Carter
 

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