The Romanian financial leasing market recorded new business volumes of €456m (£358.9m) in the first quarter of 2016, an increase of 30% year-on-year, according to the country’s financial companies association ALB.

Vehicle leasing, which represented 78% of total new business volumes, increased by 32% year-on-year to €1.23bn.

The passenger cars accounted for 45% of total new leasing volumes for vehicles, while light commercial vehicles accounted for 13%. The heavy commercial vehicles’ share has been consistently growing since 2012, jumping to 40% in Q1 2016.

New leasing volumes for equipment accounted for 21% of the total, increasing by 40% year-on-year.

The sectors with the highest growth in terms of equipment financing were: metal processing, furniture industry, printing and packaging segment, electrical devices and forklifts.

Important areas such as agriculture and construction equipment financing have registered increases of around 10%, below the average market growth and below potential.

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The most frequent leasing period used for leasing contracts was 4-5 years (33%), followed by 3-4 years (22%), 2-3 years (18%), 5-7 years (14%), 1-2 years (7%), 1 year (5%) and 7-15 years (1%).

The biggest market share belonged to the financial leasing companies that are subsidiaries to banks, with 82% out of the total, followed by the captive companies with 13% and by the independent financial leasing companies, with 5%.

Bogdan Speteanu, president of ALB, said: "The results of the leasing industry in the first quarter of 2016 reveal a significant increase compared to the same period last year. Although we expected that the growth rate would moderate increase for the coming quarters, the Q1 result was influenced by one-off factors (i.e. VAT decrease), we believe that the leasing market would continue to post sustainable growth rates, as in the last 2 years.

"We are pleased to see a revival of car financing after a long period of quasi-stagnation. Higher dynamics in carriers’ financing indicate that, in the current context of the Romanian economy, financial leasing is the best financing solution for this sector. Increased equipment funding in the national market, confirms the tendency to rebalance this segment,mirroring the reviving pace of economy.

"However, the increases come primarily on a base effect, given that the total volume of financing granted by leasing companies in 2015 accounts for 1% of GDP, which is below potential. Leasing for public authorities is almost non-existent, although the leasing product can be a very good financing solution for certain investment projects especially for the public transportation. Also, the freezing of infrastructure projects had a negative impact over investments in construction equipment. Not last to mention, the legislative unpredictability determines many companies to review their attitude and appetite for medium and long-term investment."