An interview with Pietro Teofilatto, Long Term Rental Director at ANIASA
What is the current health status of long term rentals and what are the prospects for 2017?
A fleet of about 800,000 vehicles, a 20% consolidated impact on the overall automotive market (two new cars out of ten are rentals), 21 billion kilometres each year, and above all 2.1 billion in tax revenues for the State. These are some of the main figures that provide the identity card of a sector in constant transformation.
The sector now offers a growing number of short term rental services (five million contracts each year, a total of 32.5 million days of tourism and business related rentals) and supports 65,000 businesses, 2,700 public administrations and over 15,000 private customers in their long-term mobility needs.
Looking at the first few months of 2017, the rental sector appears to be heading for a further growth, partly driven by the indirect effects generated by the "maxi-depreciation", which will allow long-term rental companies to manage these benefits with economic advantages for the consumer with a greater range of services as well as a containment of fees.
Long-term rentals are now attracting new customers: no longer just multinational corporations or large companies in general, all of which make an already extensive use of rentals. There is a growing portfolio of customers that within a few years has come to include also 15,000 private individuals. No "VAT numbers", but ordinary citizens who either for work-related purposes, to reduce costs or temporary needs, rely on long-term rental.
How are mobility rental proposals changing? What are the current market requirements?
The aim of rentals is to understand ahead of time the needs of the customers, offering a great number of solutions based on principles of transparency, flexibility and convenience. A transformation of the existing relationship between demand and mobility offer driven by the current app. economy in which rentals have taken a leading role.
Short-term rentals, on the other hand, have long since introduced new methods related to vehicle booking and use, and have invested considerable amount of resources, reorganized and improved their services. Being part of a major international circuit facilitates the adoption of innovations aimed at promoting simplicity and immediacy in meeting the needs of customers now accustomed to exploring, choosing and deciding in real time.
Long-term rentals have likewise enlarged their service portfolio with the aim of quickly and effectively addressing the multifaceted mobility needs of both companies and individuals. Flexible and modular services, for example, allow customers to change the type of car according to their requirements, or to increase, or even temporarily suspend, the lease period chosen at first; All thanks to dedicated apps, allowing special and immediate services.
In addition we find, not only traditional corporate car sharing schemes, but even dedicated services for employees not normally included in business plans, for them to have access to a vehicle for private needs, such as weekends or summer vacations.
From rentals we are moving towards Integrated Multi Modal Mobility. What does it mean?
Urban mobility, and not only, is rapidly changing before our very eyes, favoured by great technological innovations. The car rental industry is in full swing and is aiming to develop its offer, offering modern services, capable of meeting the diverse needs of every customer segment.
In the near future, a range of additional services will be added to the already innovative products and services currently available, services that will help to meet the needs of customer mobility on a global scale.
In this sense, it is possible to clearly see how the sector is evolving, from car rental to Integrated Multi Modal Mobility, where the object of the offer will not only be the car, but mobility as a whole, including parking or reserving other related services.
We are also observing how rentals are rapidly evolving towards a full-fledged competition between every actor in the mobility sector, overcoming the traditional differences between long-term, short term and car sharing. New extra-sectorial players are now joining the game leading to an aggregation of different entities: all this will lead to a rise in services, expanding the customer base, both corporate and private. A further demonstration of how a healthy competition is always present and generates benefits for the whole community.
What changes can we expect from the car-sharing revolution?
In Italy, after the initial phase at the turn of the century, car sharing has been undergoing a major transformation since the summer of 2013; in almost four years this phenomenon boomed and fleet started to diversify their offer, which today includes various types of cars (including electric and hybrid) and scooters, and is becoming a concrete alternative to urban mobility in different Italian cities such as Rome, Milan, Florence and Turin.
By the end of 2016, the shared-mobility exceeded the one million users mark, reaching a total of 1,080,000 subscribers.
The steady growth of the rental sector, coupled with new forms of shared mobility, confirms the automobile’s central role in the national transport system, linked to the growing interest in a pay-per-use culture, free from ownership, which combines well with new technologies. On the contrary, it conflicts with bureaucracy and the absence of clear and homogeneous national legislation.
What are the challenges facing the Association at the moment?
We have long been asking for a fiscal balance with the rest of Europe. The maxi-depreciation scheme was appreciated because it boosted the purchase of new vehicles with 35,000 new registrations only for long-term rentals, which has generated an additional 170 million euro for the inland revenue. Making it permanent would enhance the life cycle of any type of good.
The other side of taxation concerns corporate customers of any size and VAT numbers, which are still considerably penalized in comparison with other European countries due to reduced cost deductions and a lower deductibility of VAT. Just to give an idea, on a 30 thousand euro corporate car, fiscal support is 100% in Germany and Spain, 80% in France and the UK, while Italy trails with a dismal 19%.
And finally, transport regulations: the framework of our Highway Code dates back to the eighties. Something has recently moved thanks to late April’s Decree on urgent financial provisions and development measures: we hope this will soon become Law making it possible to lease also passenger transport vehicles such as buses. No time to waste, we need a modern Highway Code up to date with the new transport and mobility needs.
© L’Imprenditore– Piccola Industria Confindustria
Associazione Nazionale Industria dell'Autonoleggio e Servizi Automobilistici (National Rental Industry Association and Automotive Services)
ANIASA, created in 1965, represents, within Confindustria, businesses running leasing activities and mobility-related services. Associated companies carry out activities such as:
- Short-term rentals,
- Long-term rentals;
- Corporate fleet management;
- Industrial Vehicle Leasing;
- road-side assistance, mobility related services, car parks.