The future of leasing is still bright
Richard Knubben (pictured), Deputy Director-General at Leaseurope, the European association of leasing and rental companies, shed his light on the recent evolutions in the leasing market.
“Leasing companies are expanding their attention from large fleets to SME’s and smaller fleets, which is new, because today, confronted with a more mature and saturated large fleet market, every contract counts”, says Mr Knubben. “Another trend is the growing popularity of fleet management solutions, consultancy provided by leasing companies without the actual financing of the vehicles. So, we still count on a healthy growth in our sector, although more in new client segments.”
How do you see the emergence of private leasing in Europe?
“It is remarkable how private lease has rapidly gained popularity and is now offered in almost every country. Today, it’s the product that drives the success of car leasing. In Belgium, for example, the concept is growing steadily, although the product hasn’t penetrated the market yet to the same degree as we have seen in pioneering countries such as the Netherlands or Denmark. Its success in these countries is partly the result of the standards that their respective authorities put in place together with the leasing sector concerning issues such as end of contract damage, in order to position private lease as an honest consumer alternative. It’s an initiative that should be taken in other countries also, because consumer trust is an absolute condition for private lease to be successful.”
Private leasing makes leasing companies enter the B2C-market. Do you see a shift from B2B to B2C?
“Not really. The B2B-segment remains quite stable. B2C is an extra market that provides supplementary growth. Of course, political decisions can result in rapid changes, but that remains to be seen.”
What is the impact of IFRS16 on the popularity of full service leasing with multinational companies?
“Accounting changes have no impact on the real benefits of leasing solutions. Fleet lessors are providing practical support to help their customers prepare their first accounts using the new rules. So, it’s still early days, but we don’t expect any significant impact for multinational companies. It could be different if Europe's small and medium-sized companies had to follow similar rules, as the accounting could represent an unwelcome extra administrative burden, but fortunately that’s not being proposed at present.“
Is your sector prepared for the move towards mobility?
“That really depends from company to company and even more from country to country. Some of them are really innovative and develop new services and partnerships, others remain more traditional. The possibility to innovate is often driven by the existing national regulatory framework, underlining the need to have strong national sector representation. For example, in markets where company car taxation keeps on increasing, it is more difficult to sustain a healthy profit and devote more resources to launch new services.”
How will Brexit impact leasing companies?
“For leasing companies outside the UK, we do not expect a real impact, because the second hand market for European end of contract leasing vehicles does not lie in the UK. Of course, British leasing companies are facing uncertainty and are working closely with their supply chain to minimise disruption and confusion for customers. Our UK member, the BVLRA and FLA are providing guidance on these issues.”
Image: Richard Knubben, Deputy Director-General, Leaseurope.