Leasing companies plan for 2020 growth in a market of “entrenched uncertainty”

Callum Biggins, head of campaigns for the Confederation of British Industry, told delegates that a variety of factors made the outcome of the election uncertain; 40% of voters are prepared to change their vote and one-quarter have yet to decide who they will favour.

In addition, more than 70 MPs are standing down ahead of the election, throwing further doubt on how voters might respond.

Whatever happens, the performance of the economy since the initial Brexit vote shows it is relatively robust, as gross domestic product has continued to rise during years of uncertainty, delegates heard.

Rhys Herbert, senior economist for Lloyds Bank, said markets around the globe are operating in an atmosphere of “entrenched uncertainty” where growth and uncertainty form an uneasy partnership; the UK’s healthy economy has led to unemployment rates falling to their lowest since the 1970s while average wages are growing.

This positive environment is likely to continue next year, he said, particularly if there is a clear political resolution to Brexit negotiations, while all parties have vowed to increase spending to boost the economy if they secure power.

One key area of agreement between the political parties is the need to encourage demand for electric vehicles, as the UK moves towards its long-term goal of a zero-carbon transport system.

Jamie Hamilton, director of Deloitte, predicted that a tipping point in demand for EVs would be reached in the next two years, as zero-emission vehicles achieve total cost of ownership parity with diesel and petrol equivalents.

He said the market share of EVs would reach 30% in the UK by 2030, driven by a massive rise in demand for zero-emission-capable company cars following the introduction of reduced tax rates from next year, which provides drivers with an incentive to switch worth thousands of pounds over a three-year replacement cycle.

This demand will be fed by a significant increase in the availability of zero-emission-capable vehicles and a wider range of choice.

BVRLA chief executive Gerry Keaney (pictured) told delegates that, despite the “bumpy ride” expected in 2020, the industry “has both hands on the wheel”.

He said: “BVRLA members are providing more consultancy and advice and building stronger customer relationships and loyalty.

“They are ideally positioned to take advantage of some of today’s key megatrends. Finance remains cheap and society is becoming used to the idea of buying a service rather than owning an asset. At the same time, road transport has risen up the political and business agenda and expertise is in short supply.”

During the conference, the BVRLA revealed its new Industry Outlook 2020 report, which highlighted other key issues, including the rising use of connected cars, concerns over data access and the impact of local authority schemes to reduce pollution and congestion.

Other issues covered in the report include:

• The future of the company car
• Embracing digitalisation
• The impact of electrification
• The future of diesel
• The development of mobility services
• The impact of Clean Air Zones
• The impact of compliance
• Developing aftermarket support for connected, shared and electric vehicles

Despite the challenges, there is comfort in the fact that the BVRLA has the ear of government, the conference heard, with more than 50 MPs attending its last parliamentary reception.

Keaney said: “We can be part of the solution and the government understands the role we can play.”