According to the Hungarian Leasing
Association, January and February of 2009 saw construction
equipment finance down by a crippling 82 percent compared to the
same months in 2008, with the machinery sector taking a similar 62
percent hit.
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Showing slightly more resilience, the
financing of IT, office and telecoms equipment saw only a 13
percent slump year-on-year.
Meanwhile it is estimated that up to 40,000
leased cars and vans may have been repossessed by lessors over the
last year, as more and more lessees failed to pay instalments. In
desperation, many lessors are now negotiating longer lease terms
with their remaining solvent customers, rather than having to buy
back yet more vehicles.
The repossessions have occurred on such a
scale that a new company, EU Licit Zrt, has been set up to auction
off the reclaimed vehicles, which it is selling at a rate of around
80 per week. Company head Tamás Vadas estimates the vehicles will
sell for 10 percent to 20 percent less than market value. In fact,
so great is the oversupply of vehicles, that German consumers are
said to be flooding over the Hungarian border to make car
purchases, thanks to the forint’s fall in value against the
euro.
Hungary’s weakening currency has driven up
leasing rates universally, said Regina Rent-a-Car’s Hungarian head,
Jeno Bánki, in a recent interview with the Budapest Times.
He went on to claim that the slump of the
Forint was costing his business around €36,000 a month.
Despite the harsh market, leasing remains
Hungary’s second most important form of lending, said Leasing
Association secretary Gabor Levai. He was quoted by Hungarian
business news site Realdeal.hu as estimating that 47 percent of
Hungarian SMEs have used leasing in recent months.
Fred Crawley
