Europcar UK reports £43.2m loss as costs rise and demand falls

Europcar UK, a major car hire provider backed by Volkswagen, reported a loss of £43.2m for the most recent financial year. This represents a significant downturn from the £7m profit recorded in 2024. The company attributed the decline to rising operational costs and a reduction in rental demand. The firm has operated in the United Kingdom since 1974 and is now one of the largest car hire services in Europe. It underwent a major restructuring following the pandemic, receiving €500m from creditors in 2020 to manage increasing expenses. Volkswagen re-purchased the group in 2021 after it had been sold in 2006.

The company stated that rental demand fell by as much as five per cent during the period, affecting both business and leisure hire sectors. Europcar also cited government increases to the national minimum wage and employers’ National Insurance Contributions as key drivers of higher costs for vehicle repairs and refurbishment. Additionally, the firm warned that rising fuel prices, linked to the conflict in the Middle East, further pressured its finances. These factors combined to reverse the company’s fortunes, leading to the substantial loss reported in the latest accounts.

The reported loss contrasts with findings from the British Vehicle Rental and Leasing Association, which described industry demand and transactions as strong. The BVRLA Rental Outlook Report identified supply as the primary issue, noting that an over-availability of vehicles had forced price reductions to maintain competitiveness. The report also highlighted minimal demand for electric vehicles, with utilisation rates for EVs being 10 per cent lower than those for petrol and diesel cars. Holding costs for electric vehicles were noted to be twice as expensive. Despite this, Europcar increased its electric fleet by 70 per cent year-on-year, with EVs now comprising 13.9 per cent of its total fleet. Christian øien, managing director of Europcar mobility group UK, stated that the company aims to remove barriers to environmentally friendly vehicle choice. He noted that EV rentals have increased year-on-year and that net promoter scores for electric vehicles are 10 per cent higher than for conventional fuel vehicles. Europcar UK has been contacted for comment.