In Leasing Life’s monthly investigation into
the performance of leasing economies, Antonio Fabrizio examines how the
Austrian and Swiss markets might be worth investing in once the
recession ends
With an increase in arrears and a substantial drop in new
business, commercial vehicle leasing seems to be the most badly
affected segment in the Austrian and Swiss markets this year.
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It is not all bad news, though, because local
leasing experts believe that contra-cyclical effects and a general
positive tendency towards leasing could trigger a “renaissance” for
the sector once the credit crisis is over.
According to the Austrian Leasing Association,
during the first six months of 2009, leasing of trucks and buses
had one of its worst performances ever.
A spokesperson said that business for lessors
in the transport sector has decreased dramatically and the quality
of the payment behaviour has also been negatively affected, with
arrears growing month-on-month.
Alexander Schmidecker, CEO of Austrian lessor
BAWAG Leasing, confirmed this trend, saying that new business went
down generally, but that new business for trucks and trailers has
so far decreased by around two-thirds compared with one year
ago.
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By GlobalData“This is especially because there are already
many used trucks on the market which are not being used by the
companies,” he said.
Companies must ‘act
proactively’
Schmidecker said that, as arrears in
the transportation and logistics segment have reached almost 20
percent at his company, it has become necessary to “act
proactively” and place clients facing difficulties on new payment
calendars.
“In such cases, the best thing to do is to
smooth the monthly payment for the client and postpone the residual
amount for a better time,” he said.
Similarly, BAWAG Leasing has seen a drop in
car leasing total volumes, which, according to Schmidecker, reflect
the decrease in new car registrations.
“For cars, we saw that the number of leases
tended to increase, but, for small cars, it was clearly down in the
upper segments,” he added.
BAWAG’s fleet business, however, has done
better than expected.
“We were worried about how the residual values
on the market would develop if we got back the fleet cars, but we
have almost no vehicles on stock,” Schmidecker said.
In general, as a UniCredit Leasing spokesman
pointed out, the overall vehicle leasing business in Austria has
decreased by 19.7 percent, to €677 million, in the first quarter of
2009, which has affected all local
players.
It also pointed to carriers and conveyers as
being two sectors hard hit by the recession in Austria.
IT leasing has not been spared either. Mehmet
Aslan, general manager for microticket specialist Grenkeleasing,
said that the number of its customers in arrears has reached
between 10 and 15 percent.
“Because of the crisis, small businesses are
feeling most of the effects of the crisis and many SMEs [most of
Grenkeleasing’s customers are SMEs, with the majority of contracts
between €3,000 and €10,000] are closing or facing difficult trading
conditions,” Aslan explained.
Grenkeleasing, however, has been lucky enough
not to report a decrease a new business.
“We are at around 0 percent growth, but at
least there is not a decrease, because we have recently opened our
second office in Austria, which helped us make new business,” Aslan
said.
Some sectors holding
up
Equipment leasing seems to be
holding up at BAWAG Leasing, although Schmidecker explained that
clients’ investment decisions are often postponed or, at least,
redesigned on smaller sizes.
Schmidecker has also seen an increased
tendency to syndication for big-ticket deals.
He said: “Syndication is seen as a solution to
finance and also to mitigate risks on a single leasing project or a
single leasing company, and we invite and are invited by
competitors on the market for structuring big ticket deals on the
real estate and equipment side.”
In general, though, it’s not all gloom and
doom in the Alpine markets.
For Schmidecker, leasing is being seen more
and more often by clients as a good financing instrument for mid
and long-term financing, which could lead to what he calls a sort
of “renaissance” for the Austrian leasing business.
Margins have increased in Austria – and
customers are reported to be “respecting this”.
In some cases, as with BAWAG Leasing, they
went up by 50 percent, but from a very low basis – they were below
100 bps and are now, for good corporate clients, at around 200 or
220 bps.
