Barclays signs new deal with
Iveco for ‘indefinite’ term.

 

With Fiat’s captive arm FGA Capital
having taken over the financing business of Chrysler, Jeep and
Dodge in Europe, another piece has been added to the puzzle of the
leasing activities of Italy’s largest vehicle manufacturer.

The latest move – part of Fiat’s sales network
reorganisation and integration project after teaming up with the US
carmaker – ramps up the vehicle manufacturer’s leasing activities,
which now encompass all brands and types of vehicles in the Fiat
Group.

FGA Capital, a 50-50 joint venture between Fiat
and Crédit Agricole’s Consumer Finance arm, remains at the heart of
the group’s captive finance business.

Its portfolio at the end of 2009 was €15.5bn,
almost unchanged from 2008 figures, with a split of €10.2bn in
retail business, €3.4bn in dealer financing and €2bn in rental
business – the last through operation of two different brands,
Leasys and Savarent.

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The captive said that an increase in its retail
financing portfolio last year “compensated for the reduction in the
area of dealer financing following the increased portfolio turnover
led, in turn, by the successful introduction of governmental
incentive campaigns in several European countries”.

Profit before tax for the captive remained at
the same levels as 2007 and 2008, €184m, despite cost of risk
rising from €87m to €145m in the same period – yet still remaining
below 1% of FGA Capital’s overall portfolio.

Some 571,000 cars and light commercial vehicles
were financed or rented on a long-term basis (a 10% increase on
2008) making up a combined volume of €6.7bn (6.6% up on the
equivalent figure in 2008), FGA Capital said.

 

Good performance

The other captives of the Fiat Group
have also shown resilience within a tough environment.

Iveco Capital, the captive arm of Fiat-owned
heavy commercial vehicle business Iveco, had a penetration rate of
20% in the first quarter of this year.

Franco Augusto, senior vice-president at Iveco
Capital, told Leasing Life that “within Iveco’s commercial
strategy the role of the captive remains essential to providing
financial support to our dealer network and to the end
customers”.

Following a challenging 2009 with a rise in the
cost of risk, first-quarter 2010 results showed a “constant
improvement”, Augusto said.

He added that “the main challenge in the next
months will be to re-balance portfolio profitability, taking cost
of risk back to a standard level, and supporting with financing the
recovery in commercial vehicle sales”.

Iveco’s leasing activity currently comprises a
mix of wholly-owned businesses in Eastern Europe (and, via FGA
Capital, in China and Brazil), and joint ventures.

In Spain, it has a partnership with Santander,
although its largest joint venture is with Barclays Asset &
Sales Finance (BA&SF). The joint venture with BA&SF – which
covers Italy, France, Germany, the UK and Switzerland – was signed
in 2005 and renewed indefinitely last year.

Barclays Corporate media relation manager John
McGuiness told Leasing Life that “Fiat Group is a key
partner for Barclays and we remain as committed as ever to the
organisation”.

With €2.7bn assets under management and a
penetration rate of around 20%, “the company has a clear strategy
in place to win market share”, McGuiness added.

Fiat’s agricultural and construction equipment
subsidiary CNH also has recently strengthened its leasing business
with the extension of another partnership for the group with French
lessor BNP Paribas Lease Group (BPLG). The two companies have been
partnering for 13 years in a number of EU countries.

With the latest addition only a few months ago
– Belgian and Dutch markets – the joint venture now covers all of
the major European countries where CNH Capital has a presence –
Germany, UK, Italy, France, Austria, Belgium and the
Netherlands.

According to BPLG, wide experience of those two
markets, combined with CNH Capital’s good performance last year –
€675m of originations and €1.2bn of outstanding – were behind the
Fiat-owned business’ decision to extend the partnership.

Jean Olivié, head of equipment and logistics
solutions for the international business at BPLG, said: “The
extension of this partnership will enable us to apply in Belgium
and the Netherlands a model which has already proved its
success.

“The significant presence of BNP Paribas Lease
Group in the Belgian and Dutch markets also represents an asset in
the business development of CNH in these countries.”

The two companies have said that the start of
activity of CNH Capital Europe in Belgium and the Netherlands has
resulted in hundreds of financing and leasing applications since
the beginning of the year, “thus demonstrating the attractiveness
of the offering implemented together with the manufacturer”.