After three years of rebuilding its leasing capabilities, Xerox
Financial Services is making a comeback. July 3 will mark the
launch of its new German operation – its 20th leasing subsidiary –
and will also be the time when all of its activities will finally
be brought in-house.
“July 3 signals the end of the beginning. We have rebuilt and
changed the structure from being back-office to a commercial
organisation. We are now ready to compete on the market and win,”
Gabriele D’uva, communications manager at Xerox Financial Services,
said.
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This process involved rebuilding the internal infrastructure,
including IT systems, staff and management structure, legal
entities, and pricing and credit policies across each of its
subsidiaries.
The business, it appears, has come a long way since the decision
was made in 2001 to sell its leasing portfolio because of financial
problems in the parent bank.
Xerox had been charged with accounting irregularities under US
GAAP by the Securities and Exchange Commission (SEC), which gave
rise to a restatement of Xerox’s financials as well as heavy
fines.
“The cash injection that came from the sale of the leasing
companies saved the group,” Derek Soper, chairman of The Alta
Group, the lease consultancy, said.
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By GlobalData“In fact the real savior was the fact that they did have leasing
companies that they could sell off to GE and DLL in the US, Europe
and Far East.”
Since the fourth quarter of 2004 when Xerox felt it was strong
enough to undertake the revamp of its leasing capabilities, it has
been highly active and aggressive in re-establishing its captive
arm – adding two to three new leasing companies in different
European jurisdictions each month.
“It has been an aggressive timeline for rebuilding. Now we are
way over half-way and are almost complete, the only part that isn’t
is getting all those slick contemporary based systems in place. And
those sorts of things we need to do in order to be world class,”
Bret Thomas, head of global leasing at Xerox Financial Services,
said.
Xerox is also committed to doing bundled leasing, a potentially
lucrative business strategy that many captives do and involves
combining the lease structure, equipment financing and maintenance
services in one solution.
The fact that Xerox Financial Services now bundles all Xerox
owned services, leases equipment direct, and does not rely on third
parties, means it has more control over the bundle.
