associate, The Alta Group
Germany is well
positioned to continue to lead both the eurozone and Europe out of
recession. The Ifo Economic Institute’s Business Climate indicator
for industry and trade is already above the level of the 2006/07
boom. Firms see the current situation and the outlook for the next
six months positively.
The economic upswing is
gathering momentum; industry is likely to remain a driving force;
and there is improving demand for capital goods.
Leasing opportunities are
favourable, and they are attracting overseas interest, as well
there being a domestic revival. International manufacturers and
lessors increasingly see Germany as a prime investment location,
with its new business potential; and they see it as the springboard
into Europe, with its excellent networks across the
This year will probably see
some restructuring of the funding world, bringing an extended range
of funding sources, including investors. The well-documented
accounting changes will continue to dominate the agenda, whilst
Basel III, with its focus on capital and funding, should become a
prominent theme throughout the year for the banking
Although there is a long
transition period (the new rules are not fully phased in for
several years), compliance with new processes and reporting must be
largely complete before the end of 2012. The Basel Committee on
Banking Supervision is expected to have delivered a Christmas gift
of the Basel III rules text, along with a summary of the results of
its comprehensive quantitative impact study.
Lessors are increasingly
being requested to provide, arrange or manage comprehensive
value-added services. The demand for these initiatives is emanating
from end users and manufacturers and is an important opportunity to
increase additional fee income. These services might be advisory,
product development or third-party.
Examples are: installation;
maintenance; insurance; asset guarantees including extension; asset
management with improved residual value calculation; performance
guarantees; online performance tracking; legal work; and project
partnering such as with public authorities or power supply
companies. The renewable energies industry is an excellent example
of this driver of change.
Germany is leading the global
renewable energy revolution, and major investments are driving
growth. Renewable technology made in Germany is a prime example of
an industry where demands are being placed on asset financiers to
orchestrate a package of services to help run the business as
vendors and customers seek innovative solutions. Germany is leading
the charge in renewable energy policy. Investment means not only a
commitment to a sustainable economy, but also a profitable capital
The leasing industry is
ideally placed to take charge of renewables projects because of its
one-stop shop expertise and service and management credentials.
Lessors undertake valuations; they request paperwork and
guarantees; they ensure that assets are well maintained; they seek
performance reports; they want legal opinions.
The drivers of change in
renewables will undoubtedly promote a more proactive vendor leasing
industry that is seeking a competitive advantage.
Other countries will look to Germany and the unfolding and
pioneering business opportunities, and leasing’s response to a
changing market will serve as a role model.