Significant rises in vehicle leasing numbers have stimulated industry revenue growth over the past five years.
Melbourne, Australia (PRWEB) October 29, 2014
Over the past five years, operators in the Passenger Car Rental and Hiring industry in Australia have rebounded strongly from the effects of the global financial crisis. The global financial crisis initially sapped consumer sentiment and business confidence, reducing demand for car rentals and vehicle leasing. According to IBISWorld industry analyst David Whytcross, “improving economic conditions, and pent-up demand from consumers postponing novated vehicle leasing and tourists postponing domestic holidays, have driven industry growth.” The private and government sectors have increasingly outsourced their fleet management operations over the past five years, while favourable tax arrangements have meant that consumers are generally better off purchasing vehicles through novated leases, driving strong growth in the segment. Significant growth in vehicle leasing has stimulated forecast revenue growth of a compound annual 3.1% over the five years through 2014-15, to reach $3.3 billion.
While vehicle leasing operators have grown significantly over the past five years, car rental providers have faced more difficult market conditions. The high Australian dollar made Australia a less affordable tourist destination, particularly for those from traditionally strong tourism markets in North America and Europe. “Price competition, stemming from the growing prevalence of aggregator websites that allow for easy price comparison, also stunted revenue growth,” says Whytcross. The Australian dollar is projected to depreciate in 2014-15, which will help entice international tourists to Australia and encourage local residents to take domestic rather than overseas holidays. These favourable conditions are projected to result in 4.5% revenue growth in the current year. The industry exhibits a medium level of market share concentration. Major players include LeasePlan Australia Limited, WTH Pty Limited, Fleet Aust Pty Ltd, Hertz Investment (Holdings) Pty Limited and Fleetcare Pty Ltd.
Similar trends are expected over the next five years in the Passenger Car Rental and Hiring industry. Novated vehicle leasing is projected to continue growing in popularity, particularly as the Abbott Government has reversed policy changes regarding fringe benefits tax payable on novated lease vehicles. The Australian dollar is projected to depreciate over the next five years, making Australia a less expensive and more attractive destination for a holiday for local residents and international tourists. Car sharing is expected to result in the industry's composition changing significantly as an increase in overall demand for hire cars (including car sharing) is offset by the lower prices paid.
For more information, visit IBISWorld’s Passenger Car Rental and Hiring industry in Australia report page.
Companies in this industry are involved in leasing, hiring or renting out passenger cars without drivers. Passenger cars include sedans, hatchbacks, station wagons, SUVs and minibuses.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.