As we pass the midpoint of 2026, Director Spencer Blake summarises how the unprecedented volatility we witnessed in the first quarter has evolved into a structural rewriting of the UK automotive landscape.
Embracing brand diversification
We're in a unique position as a leading UK leasing engine, serving customers directly, through corporate accounts, via our Appointed Representatives (ARs), and through major white-label partners like The AA, all giving us a front-row seat to this transformation.
The wagon wheel of brands is spinning faster than ever. The days of relying almost entirely on traditional giants like Stellantis are behind us. Diversification is no longer a strategic choice; it's our operational reality. We're actively widening our net to insulate our business and provide our diverse channels with the exact vehicles the market is demanding.
The Chinese influx
The seismic shift in market share from legacy European manufacturers to new powerhouses has accelerated. Crucially, client behaviour has fundamentally shifted: demand is no longer purely deal- or price-led. Customers across both our direct and indirect channels are now specifically requesting these new brands by name.
White-label dominance
Vehicles from massive Chinese conglomerates are arriving as highly competitive, white-label Arval product lines. They are perfectly matching current market appetite.
The Jaecoo and Chery effect
Building on the excellent run we enjoyed with the Chery 7 last quarter, March closed with the Jaecoo 7 securing its spot as the biggest selling car in the UK.
The incremental mandate
One of our imperatives moving forward is driving strict incremental business to these new entrants. These vehicles must serve as volume expansion tools that unlock new market segments, rather than simply cannibalising or replacing our existing legacy brand sales.
We're continuously working to formalise direct lines of communication with emerging Chinese manufacturers to secure pipeline stability and exclusive terms for our networks.
Phenomenal momentum in the AR channel
Our Appointed Representative (AR) network continues to be a standout success story of 2026. Following a record-breaking Q1, the momentum hasn't stalled, it's intensified.
Our AR channels have hit the ground running this quarter. By the 5th of June, they'd already locked in 44 deals for the month. This rapid order take comprehensively validates our ongoing investment in this partnership framework. Combining localised broker expertise with robust central infrastructure, diverse funding panels, and compliance support, is successfully capturing massive volume in a highly fluid market.
UK leasing macro trends
The broader leasing sector continues to wrestle with deep macroeconomic headwinds, which we are navigating via our multi-channel agility:
The ZEV Mandate and pricing pressure
The statutory 33% Zero Emission Vehicle (ZEV) target for 2026 is putting immense compliance pressure on traditional manufacturers. Conversely, unencumbered by legacy Internal Combustion Engine (ICE) production, new Chinese brands are utilising aggressive pricing structures to capture immediate market share, fundamentally altering monthly lease rate expectations.
Interest rates and geopolitics
Lease rates across the sector face upward pressure due to rising cost of funds. Additionally, protracted conflict in the Gulf region has spilled over into global supply chains, feeding into inflated manufacturing and shipping costs for the vehicles themselves, but the effect has been somewhat tempered; highly competitive Chinese brand entry level pricing has insulated the UK leasing market against traditional European supply-chain inflation.
Residual value (RV) and inventory strategies
While traditional brands struggle with fluctuating supply and lease companies remain highly cautious regarding European ICE residual values, brands like Geely and BYD maintain healthy, immediate-delivery inventories. This zero-lead-time reality provides an immense tactical advantage for our retail and corporate customers who need keys in hands quickly.
Channel outlook and next steps
Our multi-channel ecosystem allows us to pivot rapidly where opportunities emerge. Over the next 3 months, our focus is clear:
- Capitalise on AR momentum: Keep feeding our AR network with the competitive lines and infrastructure they need to maintain their record-breaking trajectory.
- Solidify the AA strategy: Deepen our brand-specific leasing engine integration within the AA channel.
- Balance direct channels: Continue identifying targeted, volume-driving, price leading deals for Xcite and offering fleet optimisation solutions through Wessex Fleet.
Spencer's top leasing tips for Q3 2026
By maintaining a diverse route to market and robust funding partnerships, we convert market volatility into direct cost savings and unexpected, high-value opportunities for our customers. This is reflected in some really low monthly payments on specific deals at the moment, particularly all-electric and Chinese larger vehicles, offering drivers really sizeable, feature-rich cars for their budget.