Vendor finance is a major part of the market in Latin
America but is different in one major respect – the sector relies
far less heavily on vehicle leasing.
Construction equipment and IT are the
major asset classes in the sector. Economic growth, infrastructure
investment and uptake of technology means these asset classes have
continued to perform well.
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CIT Vendor Finance global president
Ron Arrington says: “The vendor finance sector has performed above
average as compared to the wider leasing market in Latin
America.
“It is important to note that a major
component of the leasing market in Latin America is consumer
vehicle financing, which was more significantly impacted by the
economic crisis.”
Despite some very successful captive
leasing operations, including Caterpillar Financial in the
construction equipment sector, there are a number of high profile
leasing partnerships that have been agreed between vendors and
leasing companies.
Many of these are in the technology
industry, as high-tech manufacturers seek to capitalise on the
region’s rapid modernisation.
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By GlobalDataCIT Vendor Finance recently formally
agreed a partnership with Dell. Arrington believes the market will
continue to grow in several countries.
“We believe the entire region is
growing at an accelerated pace, with the most prominent countries
being Brazil, Chile and Peru just to name a few,” he says.
“In terms of industries or equipment
types, IT, software and construction equipment will be in high
demand for the foreseeable future.”
CSI Leasing has a high-profile
partnership with IT vendor Cisco, across the Latin American
region.
Chile sales manager Javier Pacheco
explains that despite the continued demand for construction
equipment he sees the IT market as the best opportunity for longer
term growth.
“There are a lot of mining projects
now so construction equipment is one of the biggest markets,” he
says.
“But the IT market is also very
profitable. The construction market is already well established,
but IT is growing.”
SG Equipment Finance entered the
Brazilian market almost two years ago, working with companies
including Heidelberg.
The firm works mainly in high-tech and
heavy equipment, as per its worldwide strategy. But the company has
also decided to look beyond these traditional markets, seeing
aviation as a possible boom area.
SG Equipment Finance Brazil managing
director Mohcine Busta says: “We have decided to do aviation
financing – mainly helicopters because this is very promising.
“Brazil is a large country in terms of territory. Helicopters
are becoming a need for executives.”
See also:
Brazil points way to regional
growth
