Smart Transport

Mycardirect expands services with Avalon Vehicle Rental acquisition

Mycardirect offices

Flexible car subscription provider Mycardirect is forecasting its fleet will grow tenfold this year after acquiring Avalon Vehicle Rental.

The acquisition, for an undisclosed sum, adds 400 vehicles to Mycardirect’s existing fleet of 100 cars and Mycardirect CEO Duncan Chumley anticipates the total fleet size will increase to more than 1,000 vehicles this year, largely driven by growth in the subscription market.

Following the acquisition, Avalon has been rebranded as Mycardirect Rental and Myvandirect Rental.

The acquisition sees Mycardirect move to a larger head office in Hemel Hempstead and gives it a site in Birmingham from which to valet and deliver vehicles in-house rather than having to use an external provider. Click and Collect is available, if requested, with the latest Covid-19 guidelines in place with the Mycardirect team.

Chumley, who founded the business last year, described the move into rental as a “natural fit”, which “significantly strengthens our customer proposition”.

It is designed to complement the subscription service by giving customers access to a wider variety of vehicles, and the option to hire a larger vehicle when required (for example, for a family holiday). Vehicles not needed by subscribers will be available for traditional rental. 

Chumley believes there will be further growth on the van rental side due to the increase in online shopping, which has been accelerated by the Covid-19 pandemic.

However, the subscription element will be responsible for the majorty of growth, Chumley said. He is looking to have additional regional sites in Scotland, the north east, north west, south east and south west/Wales within the next three years.

“There are a number of studies that predict that by 2025 subscriptions might be worth 10% to 20% of the total car market,” he said. “I think it will accelerate but it’s a case of consumers knowing what a subscription is, what the benefits are and how the manufacturers view the market.

“But we’ve already seen quite a supportive attitude (from the manufacturers) and several are looking at their own subscription offering as well.”

Manufacturers offering car subscriptions, or set to enter the market, include Jaguar Land Rover with Carpe and Pivotal, Volvo with Care By Volvo, FCA through its funding operation Leasys and PSA through Free2Move, while rental provider Sixt launched Sixt+ last year.

Last month, online motor retailer Cazoo announced it was acquiring Drover, the UK's best-known car subscription platform.

Currently, Mycardirect’s car subscription customer base has a 60/40 retail/corporate split (rental is 80% corporate) but Chumley says there is growing interest from company car drivers.

“We've got customers that have opted out of their company car and taken the cash option because their car has been sat on the drive (due to the Covid-19 lockdowns) and they’re paying tax on it,” he said.

Company car drivers and businesses are also turning to car subscriptions as a way to test electric vehicles, according to Chumley.

A fifth of Mycardirect’s car subscriptions are electric or hybrid vehicles, with the majority in the London market, with an average subscription length of 12 to 14 months.

Chumley expects the proportion of EVs and hybrids on the fleet to rise to 30%-35% this year with manufacturers set to bring more than 35 plug-in vehicles to market.

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