Lloyds TSB HBOS Takeover Creates Super Car Lease Company

Friday, 19. September 2008

Whilst the city shakes to the after effects of the Lloyds TSB/HBOS takeover no one has yet mentioned the effect on the car leasing industry as the new company will not only result in control of the mortgage industry but it will also give domination over the car leasing industry. In May 2006 HBOS took total control of Lex Vehicle Leasing (LVL) by buying out the 50% shareholding owned by Aviva. This gave HBOS total control over the largest contract hire company in the UK. But pretty much unreported is the fact that Lloyds TSB owns Autolease that is the second largest contract hire company in the UK. This will give the new combined bank total domination over the contract hire market and not, in my opinion, a healthy situation. There are 1.46 million vehicles run by the top 50 contract hire companies in the UK with the combination of Lex’s 252,000 and Autolease’s 130,000 this gives a total fleet of 382,000 or 26% of the market. In the past the top 5 players have been courted by manufactures offering different incentives making the lease market very competitive. This combination takes away a very important level of competition and will not help businesses or consumers as this new superleasing company dictates its terms to the manufacturers and doesn’t need to pass on most of the discounts and bonuses provided as the separate companies would have done in the past using the bonuses to shore up it’s banking divisions. Let’s hope my analysis of the situation is wrong but I’ve yet to see a removal of competition as ever being healthy unless it is done for safety or quality reasons. By Graham Hill