Author Archives: Van Rental

New Survey Highlights Big Opportunity for Van Hire Companies

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We’ve already seen large van hire companies forecasting that they will do well out of the economic downturn. They expect businesses to shun buying and leasing vans in favour of more flexible van rental deals.

[Update: Here’s another van rental company predicting the same]

Now it’s time to examine the current reality.

A new survey of UK van owners by the Department for Transport has found that just 12% of vans are leased or hired – with almost 90% owned outright by businesses or individuals. Of these, 59% are owned by businesses and 28% owned by private individuals (presumably including sole traders).

Of the owned vehicles, 53% were purchased second hand and 46% new. That makes sense – intuitively it seems likely that most vans will have one or two secondhand owners after their new owner – but probably not more than this, on average.

What does this mean for van hire companies?

While 12% may seem like a small proportion, it is a small slice of a very large pie. In 2007, there were 3.2 million licensed light goods vehicles (vans) in the UK. 12% of 3.2m is 384,000 – enough vans to keep a lot of lease and hire companies in business.

The DfT report didn’t mention the split between short-term rental and leased vans, but it’s probably a reasonable assumption that lease or contract hire vehicles form the bulk of the 12%, with short-term rentals taking a minority share.

I believe that the van hire companies are right in predicting strong business during the downturn – especially if they can provide the cost-effective, low risk flexibility that businesses will want and need.

With credit in short supply in the UK, rental companies who are able to facilitate the removal of multi-year vehicle leases and finance deals from a company’s books by offering flexible short-term rental services should attract new customers.

Companies who are lucky enough to own their vehicles outright might also be attracted by the possibility of reducing their fleet size and overheads and benefiting from increased liquidity instead – perhaps using this to fund areas of credit shortfall.

I don’t believe anyone (me included) can really predict how the economy will pan out over the next couple of years. However,  I do believe that flexibility and the ability to cost-effectively scale operations up and down will be an essential ingredient in the tool kits of businesses that survive.

Van hire should be able to play a part in this for many UK businesses.

What do you think?

LDV In Trouble As Van Sales Plummet

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LDV Maxus Luton Van

LDV Maxus Luton Van

The West Midlands factory of van maker LDV, which produces the Maxus range of vans, has been closed since 12th December 2008. LDV employs around 900 people at its Washwood Heath, Birmingham plant and produces 13,000 vans per year.

Due to reopen on the 12th January, it remains closed today due to plummeting demand in both the UK and its eastern European and Russian markets. LDV have now arranged a meeting with the government to discuss the possibility of state support for the struggling company.

Like Ford (and most other vehicle manufacturers), LDV has been hit hard by a sudden drop in demand. According to LDV Marketing Director Guy Jones, “LDV is producing the vans of tomorrow today and we hope the UK Government recognises and supports such UK innovation”.

The latest figures show that new van registrations (of all makes) were down 26% in December and down 14% on the year as a whole. In a company statement, LDV said that it “is struggling to forecast when sustained demand for new vehicles will recommence and losses are presently being incurred due to little or no production and reduced sales.”

Renault Launch National Van Week – Special Offers

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New Renault Kangoo

New Renault Kangoo

The January Sales are bigger than ever this year and it’s good to see that van manufacturers are getting into the action, too.

Renault has just launched National Van Week, heralding a fortnight of (yes, two weeks) of special free offers on new vans. There are three free offers available:

  • AirCon+ Pack
  • 12 months’ Road Tax
  • Free TomTom ONE satellite navigation unit

The offers are available from the 16th – 31st January 2009 – so get down to your local Renault van dealer if you are interested. The AirCon+ Pack includes air conditioning, electric front windows and electric heated wing mirrors, so it is a desirable option that should help the future resale value of your van.

The three offers are available on the van model range of New Kangoo Compact, New Kangoo Van, Trafic (including panel, Crew Van and Platform Cab models, excluding Double Deck Dropside), Master (panel, Chassis Cab and Box Van models) and Passenger Vehicles (6, 9 and 16-seat versions).

These offers are available from all participating Renault dealerships, with the only conditions being that orders must be placed between the 16th and 31st January, and to vehicles registered by 31st March 2009.

Ford Cuts Transit Production In Southampton

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Ford is dramatically cutting production of its Transit van model at its Swaythling, Southampton factory.

The factory is moving from a two-shift working day to a single shift – although Ford stresses that none of the factory’s 1,100 staff will lose their jobs. Instead, working hours are being cut and all staff will remain on full basic pay, according to the company.

More than half of the Southampton factory’s output is exported to Europe and Ford says that it is simply responding to “significantly reduced medium commercial vehicle sales across Europe”.

Source: BBC News

Photocard Driving Licenses – They Expire Sooner Than You Think…

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When the current two-part photocard driving licenses were introduced in 1998, one of the little-publicised changes was that the photocard itself expires after 10 years.

Your driving license remains valid until you are 70 – as before – but the photocard itself needs renewing. Presumably this is so that the photograph keeps pace with changes to your appearance over the years!

I have to admit that I only realised this myself recently and wasn’t sure whether I would get a reminder from the DVLA nearer the time.

Thanks to this excellent post on the Avis blog, I now know the answer – reminders are being sent out.

Apparently, the DVLA have been sending out reminders since May 2008 – but although you are legally required to renew your license, there is a £17.50 fee to do so with a potential £1,000 fine for non-compliance.

Interestingly, Avis say that they will still hire to you if your photocard has expired but your license is still valid – but I am not sure whether that would be the case with all hire companies, so it is probably as well to ensure that your photocard is renewed on time.

2009 CV Show Cancelled

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The 2009 CV Show at the Birmingham NEC has been cancelled.

The decision is not entirely surprising – just a couple of days ago I reported that exhibitor numbers had slumped with virtually  all van and truck manufacturers having pulled out.

Fleet News is now reporting that the show has been cancelled due to a lack of support by exhibitors for the concept of refocusing the event to be a transport engineering show.

Better luck for 2010 – hopefully the economy will have bottomed out by then and there maybe enough positive sentiment to generate some enthusiasm (and funding) to make the show viable.

Van Manufacturers Desert 2009 CV Show

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This year’s Commercial Vehicle Show at the Birmingham NEC is likely to be a shadow of its former self, with almost every commerical vehicle manufacturer having withdrawn or declined to exhibit.

According to Fleet News, Volkswagen, Mercedes, Citroen, Isuzu and Vauxhall have all confirmed that they will not be exhibiting, as have lorry manufacturers Iveco Truck, Volvo, DAF and Scania.

There are a few companies still to confirm – by my reckoning the biggest of these in van terms are Ford and then LDV.

The CV Show’s organisers are keen to stress that they still have more than 300 exhibitors signed up and the show will be what it always has been – a transport engineering show.

With (almost) no vehicles.

To contrast this to last year’s show, take a look at my write-ups from then.

Americans Falling In Love With Great Euro Vans

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More evidence (as if evidence were needed) that the quality and flexibility of European vans is making its mark across the pond.

US car magazine Winding Road has just voted the Dodge Sprinter (a rebadged version of the Mercedes Sprinter) to be one of their ‘Dynamic Dozen’ – their reviewers’ 12 favourite vehicles of 2008.

The other eleven are a diverse mixture of cars but the Sprinter makes it into the top 12 too. Winding Road’s Steven J. Ewing says that “we’re hard pressed to think of things the Sprinter can’t do” and describes it as “easy to live with”, “quite fun to drive” and “versatile”.

Ford Transit Connect SWBFord is hoping to eclipse the success of the Sprinter when it introduces the Transit Connect to the US market later this year. To try and raise awareness of and desire for its capacious, car-sized van, Ford has given away five Connects to small business owners in the US.

The businesses selected include a CPR instructor, dog car company and a kayak company. It will be interesting to see if the Transit Connect takes off in the US – it is a great van, but it is small by American standards and unfortunately won’t benefit from the torquey, modern diesels we get in Europe (thanks to US emissions standards for diesels).

On a completely unrelated but still transatlantic note, it seems that in America, car companies get fined for not meeting fuel efficiency targets. Under CAFE (Corporate Average Fuel Efficiency) rules, financial penalties result if you sell too many gas guzzlers.

2007 saw Mercedes receive a whopping $30m fine, while Volkswagen was fined $4.5m and Porsche $1.2m. Ouch. Although I suppose it isn’t a huge amount when offset against their profits (or motorsport budgets…).

Mitsubishi i Miev To Be Sold Under PSA Brands In Europe

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A little while ago, I mentioned the possibility of the Mitsubishi i Miev electric car coming to the UK in electric van format – providing a very small van ideal for urban use.

This outcome seems a little more likely now, as news has emerged that Mitsubishi will be entering into a licensing deal with PSA to sell the i Miev under its Peugeot and Citroen brands.

Given PSA’s expertise with small vans, it would be unsurprising if it produced a van version of the i Miev that would sit neatly below the Peugeot Bipper/Citroen Nemo small van that they introduced this year.

Mitsubishi would benefit from PSA’s much greater presence in the European market – so everybody would win. Watch this space…