Crisis in Turkey: FleetCorp files for bankruptcy
After a long period of prosperity and stability, the Turkish economy is suffering from high inflation, rising borrowing costs and rising loan defaults. Leasing companies feel the backlash, too, but that didn't stop Alphabet from starting operations in the country.
Read our full coverage on the crisis in Turkey:
- FleetCorp files for bankruptcy
- Every cloud has a silver lining
- What's going on
- How does it affect leasing companies?
- Analysis - leasing in crisis
FleetCorp, part of the Athlon network, has filed for bankruptcy, as we reported last week. Other Turkish leasing companies are also in trouble.
FleetCorp representatives were unavailable for comments. An Athlon spokesperson said the company is investigating the implications for its local customers. Athlon is reaching out to its Turkish customers and working on providing alternative solutions. In light of this major setback, Athlon said it is rethinking its future strategy for the Turkish market.
In response to Fleetcorp's demise, car leasing association Tokkder asserts its member companies are highly sensitive to meeting the demands of FleetCorp's former customers.
It remains unclear how this bankruptcy will affect FleetCorp customers. According to Fleet Europe expert Philippe Noubel, leasing company don't usually die completely as they money-generating assets. In most cases, a failing leasing company's portfolio is taken over by one of its competitors. In this case, however, the outcome is less clear as the whole Turkish leasing industry is affected by the current crisis. The most likely scenario is that FleetCorp customers can keep their cars as long as they pay their invoices.
DRD also in trouble?
Meanwhile, a representative of DRD affirms his company is operating normally. "We are dealing with banks and will conclude in a few weeks' time."
The DRD spokesperson added: "It is vital that banks contribute to the industry. As long as banks are reluctant to lend credit, our industry will not be able to meet demand. To find a solution, leasing companies may need to focus on alternative products or solutions such as contract extensions, fleet management or re-renting cars at the end of contract. Also, new contracts are now mostly in Turkish lira."