The UK arm of Iveco Capital is looking to launch a contract hire
product while its finance partner, Barclays Asset & Sales
Finance, is to begin taking residual value (RV) risk on operating
lease transactions.
The move is part of a wider change of direction by the captive
lessor across all the countries it operates in, away from hire
purchase and towards an enhancement of its operating lease
capability.
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The UK is likely to be a testing ground for a contract hire
product that may be rolled out across other parts of its European
operations.
Historically, Iveco, the parent of Iveco Finance, has
taken RV risk on any operating lease products. Such deals, which
have been transacted only when they have been requested by
customers, have had limited take-up to date.
Barclays Asset & Sales Finance’s strong asset management
capability is one of the main reasons for it having agreed to take
RV risk, Simon Duston, deputy chief executive of Iveco Finance,
said.
Duston recently took over this position having replaced David
Nield, who has been promoted to number two within Barclays Asset
& Sales Finance, reporting directly to the company’s managing
director, Ian Stuart.
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By GlobalDataBarclays Asset & Sales Finance has a 51 per cent stake in
Iveco Finance, which it acquired in 2005, and the remainder is held
by Iveco Finance itself. Other management members of Iveco Finance
include Ronnie Maclachlan, credit and risk director, Franco
Augusto, chief executive, and chief financial officer, Enrico
Bretto.
Duston said that Iveco Finance is considering introducing
operating leasing in Italy, France and Germany where, at present,
hire purchase dominates. RV risk for such transactions would be
provided by Barclays Asset & Sales Finance, Duston added.
Switzerland is likely to remain a full payout market for the time
being.
Iveco Finance has no immediate plans to extend the number of
countries it operates in.
Banco Santander provides finance for Iveco’s Spanish vehicles,
and Fiat Bank for its assets in Central and Eastern Europe.
In France it is about to launch an auto-acceptance product that,
the company hopes, will result in a doubling of the number of Iveco
vehicles in France that it finances. Duston said this is part of an
“increased focus” by the company on using technology.
While in the UK sales of finance for its Stralis range, a HGV,
are showing “good strides”, the installation of auto acceptance
will particularly help develop its smaller products, not least its
Daily 4×4 and its light off-roader, the Iveco Massif.
Iveco Finance has recently signed bus deals with the German
armed forces. The British Army is reportedly said to have recently
bought Iveco Panthers.
IVECO CAPITAL OVERVIEW
Company name: Iveco Finance Holdings Limited.
Trades using the brand ‘Iveco Capital’
Countries of operation: UK, France, Germany,
Italy, Switzerland
Penetration rate: Approaching 30% across the
five countries
Value of total portfolio: More than €3bn
Q1 2008 revenue growth (year-on-year): New
business volumes for Q1 2008 are up more than
10% on same period 2007
Average deal term: Circa 48 months
Assets: Eurocargo, Trakker, Stralis, Daily 4×4,
Iveco Massif, Irisbus and the Astra articulated
dumptruck product in Italy. Dealer and customer finance is
available for the complete product
range manufactured by Iveco.
Deal terms: Typically finance periods range
from 24 to 60 months but we will go out to 72
months for the right quality of customer
Range of deal sizes: From single Iveco Daily to
multi-million Euro fleets
Downpayment: Dependent upon the credit quality
of the customer
Interest rates: The bulk of the business is
written on fixed rate contracts but variable rate
business is a customer option
