Leaseurope brings together the main players in car rental and leasing in Europe. Originating from about thirty countries, its members cover 91% of the European market. Deputy Director-General for Leaseurope and Eurofinas Richard Knubben shares with us his vision of the European automobile rental market at the end of 2020.
As we are heading toward the end of 2020, it is now time to reflect on the year that has just gone by. Although the car rental and leasing sector has been hit by the coronavirus crisis, its current state suggests encouraging prospects for 2021.
In 2020, one Europe with several markets
Richard Knubben’s first assessment is that there is no such thing as one single market in Europe. But instead, several of them do coexist, due to deep segmentation and significant differences between countries. There are few major players with a Europe-wide rental business, yet they have to adapt to each of the national markets. Overall, “rental combined with ‘full service’ is growing, but traditional financial rental is still much more widespread and the sector is very fragmented,” explains Richard Knubben.
In France, rental is a well-known concept where “full service” lessors are well established while elsewhere in Europe, captive rental companies of manufacturers can be successful. One also notes discrepancies depending on the field of employment. In Poland, rental is growing in distribution while in Germany, the long-distance transport sector is becoming increasingly interested in renting vehicles. On the other hand, local regulations are strongly influential to the rental landscape. National restrictions may sometimes prevent truck rental. “It is not possible to rent a truck over 6 tons with all-inclusive service in Italy. There are also comparable restrictions in Spain, Greece, and Portugal. »
Automobile rental: the health crisis leads to deferred payment requests
Richard Knubben also analyzes the impact the crisis is having on this already fragmented market. First and foremost, there is a direct link between the need for truck transport and consumer purchases. During the first European lockdown episode, consumers bought more food in supermarkets than they ever did before. Paradoxically, the overall food transport volume decreased by 15%. This is due to the closure of restaurants and outdoor eateries. In the face of the pandemic, the aid provided by the European Central Bank has been harmonized at the EU level, but in detail, the aid that reaches businesses varies from country to country. As a result, the aid that companies have received is different. It is very difficult to assess whether the survival of transport firms is linked to their continued operation or government support. Richard Knubben, therefore, notes the popularity gain of some specific payment solutions. “We’ve seen a significant increase in deferred payment requests and a significant demand for contracts for light commercial vehicles.”
LEZs: towards more electric vehicles
At a time when Low Emission Zones (LEZs) are multiplying throughout Europe, pollutant emissions from commercial and heavy-duty vehicles are more and more under the microscope. A strong push for electrification will appear as a result and will impact the energy mix in corporate fleets for sure. However, to move fleets towards more electric vehicles, increased demand will also be needed.
For Richard Knubben, “the political dimension will become much more important, but at Leaseurope we consider it unrealistic to hope to electrify heavy vehicles in the short term to use them in long-distance transport across the Alps“. To meet ever more demanding environmental challenges, haulers can also organize themselves to do more with fewer trucks and to use more energy-efficient equipment.
Automobile rental will further conquer the market
Richard Knubben highlights one final trend for the end of 2020 and the beginning of 2021: the increasing number of rented vehicles in European fleets. Rental is also a means of gaining some flexibility to meet specific needs. Naturally, the recovery of the rental and leasing market for trucks will rely on the transport of goods. The very nature of these goods will as not all sectors are experiencing the crisis in the same way. Like the tourism sector, a return of activity to its 2019 level is not expected before 2022 at the earliest. “There is no sign that the market share of leasing and rental will stop its growth. In the world that will follow the health crisis, these shares will therefore be larger than before,” concludes Richard Knubben.