During discussions with European leasing professionals at the moment, two things are almost guaranteed; reluctance to speculate on future changes and an exasperated groan in reference to continuing economic "situation."
It is pleasant to see, therefore, that once granted the veil of anonymity for the Leasing Life 2020 survey, the European lessors and industry service providers which took part are both willing to predict with conviction and be fairly optimistic with it.
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The online survey, set by Leasing Life in September, focussed what respondents expected the leasing industry landscape to look like in 2020 and found the majority of people expecting up to 20% growth in total business volume from the current Leaseurope figure of 232bn in 2011.
The respondents were in total agreement the industry will have grown by some degree in seven-and-a-bit years’ time with no one anticipating any level of contraction in the market.
More than half of respondents, 61%, said they expect growth of between 11 and 20% while the remaining 39% expect market growth of up to 10%.
The optimism becomes slightly tempered on the subject of penetration rate growth, however. 67% of those surveyed expected growth in the industry’s penetration of up to five percentage points, with the majority within that number anticipating growth in the higher percentile.
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By GlobalDataA more hopeful 20% of the readership predicted growth of between six and nine percentage points or more in the pan-European penetration rate which Leaseurope calculated at 13% in 2011.
Just over 10% of respondents predicted contraction in the penetration rate of up ten percentage points.
Where the Leasing Life readership expects this growth to occur is, in itself, fairly predictable: when asked to rate anticipated growth in the five mature European markets, respondents rated Germany, UK, France, Italy and Spain in that order.
When it comes to the less mature markets, the industry professionals surveyed believe the future of the leasing market lies in the East with China, Russia and Eastern Europe topping the chart in that order. The respondents were less confident of growth in the Latin American, India and sub-Saharan African markets, however.
Asked to look 29 reporting quarters into the future, it is perhaps unsurprising the lessors predicted the most growth in the IT equipment and renewable energy sectors, both identified as top-growing markets by more than 50% of those surveyed, followed closely by production machinery and manufacturing equipment which was selected by 46% of respondents.
Lessors predicted the least growth in office equipment and aircraft, ship and rail sectors, with conservative growth rates in the vehicles sector.
Given the emphasis currently applied by politicians and lenders across Europe to the SME sector, it is perhaps no surprise readers overwhelmingly identified the small business segment as the one likely to experience the most growth by 2020 with just under 75% of those surveyed choosing SME over corporations, large corporations and the public sector, with the latter collecting the second most votes.
Respondents were torn between whether the captive or vendor sales-aid model would dominate in 2020, with vendor finance narrowly besting captive 52% to 48%.
Leasing Life also asked respondents to identify the biggest challenges facing the leasing industry between now and 2020 and three issues were repeatedly highlighted.
A number of respondents pointed to the reputation of the financial services industry as inhibitive to growth with one leader of bank-owned European lessor saying there is a lack of trust in the sector.
The impending regulatory changes from Basel III and the lease accounting project also were frequently referenced by respondents from across the industry.
However, by far the biggest concern about the leasing market was a lack of funding available with more than half of those who took the survey mentioning funding and liquidity as a serious challenge to the leasing industry over the next seven years.
