2012 should be another
year of growth, but challenges remain, says Jens-Uwe Berg from JATO
Dynamics.

 

There have been a number of
interesting developments in the European leasing market during 2011
which will no doubt continue into 2012 and beyond.

Most notably the
international players are back to pre-crisis profit levels which
enables them to invest into their future. We are seeing more
activity to re-design internal processes to maximise efficiency and
improve cost-per-contract in order to remain
competitive.

Not only has the tighter
portfolio management had a positive impact on the bottom line, but
the residual value of fleet vehicles has also risen from the lows
experienced over the past few years to boost remarketing revenue
for leasing companies.

In any event operational
leasing share is growing in most markets irrespective of their
maturity and despite potential threats from new accounting
rules.

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The availability of funding
is stabilising (except in some Central and Eastern European markets
and countries hit by the debt crisis) and this year has seen some
very interesting mergers and acquisitions in the sector. In Spain,
for example, Arval bought the operational leasing activities of La
Caixa forming the number one provider in Iberia.

More recently Alphabet, the
international multi–brand fleet management division of BMW Group,
announced it will further strengthen its European market position
through the acquisition of ING Car Lease, a division of Dutch ING
Group.

With the interest rate still
very low in the eurozone (even with changes expected in 2012) some
cash-rich companies are tempted to buy rather than lease vehicles
and outsource the operation of their fleet to a specialist fleet
manager.

Others use the different
approach of ‘cherry-picking’ models on offer to optimise
operational lease costs while enjoying the benefits of consolidated
reporting and fleet management consulting to optimise ownership
cost.

Most European lessors now
also offer fleet management-only solutions and in that sector we
can see investment and growth in 2012 as well.

‘Green fleet’ initiatives
will increase in 2012. However, only if governments, manufacturers
and leasing companies jointly promote them (and potentially share
risks as well), will the operation of these vehicles become
financially viable.

In recent studies the most
optimistic forecasts suggest that in 2025, 10% of all cars sold
will be electric, 40% will be hybrid, with the remaining 50% still
using diesel or petrol internal combustion engines. This shows it
will remain difficult for some time to accurately predict residual
values and SMR-cost for electric vehicles.

All in all it appears 2012
will be another year of growth for the European leasing and fleet
management industry, but, as ever, challenges in the market
remain.

Jens-Uwe Berg is market
development manager for global leasing at JATO
Dynamics