Leasing Life catches up with Dario Ghislandi, managing director, international business line at BNP Paribas Leasing Solutions, about the shape of Europe’s market for construction equipment finance.
Construction equipment finance is big business, involving a wide variety of
players in the industry. Captive finance companies, independent lessors and the asset finance divisions of banks operate in the market, and some manufacturers also offer vendor financing deals.
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In 2015, Japanese construction machinery manufacturer Kubota signed an agreement with French asset finance provider BNP Paribas Leasing Solutions, supporting sales financing to dealers and end-users of Kubota products throughout Europe.
BNP Paribas Leasing Solutions’ Dario Ghislandi gives Leasing Life his views on the
construction equipment finance market.
In equipment finance, which construction assets have seen the greatest popularity?
On the whole, mini excavators represent the most financed assets in units, while cranes
and excavators represent the most financed assets in value. Also telescopic handlers play a major role.
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By GlobalDataIs there a secondary market for these construction assets?
The environmental obligations and the fast technical evolution of the assets urge the European companies to renew their fleet more often. This is at the origin of a large
second-hand market.
What challenges do construction equipment finance businesses face in Europe now?
Present-day challenges are not so much on pricing as they are on added-value services that are most appreciated and in high demand by the market. For instance, insurance policies that cover financed assets or the end-user company risks have become an important level playing field, as are technical services offered in agreement with manufacturers – such as programmed maintenance, scheduled
parts supply, or warranty extensions.
Of course, challenges deal not only with the offer of products but also with technology innovation on one side and corporate social responsibility on the other.
How has the construction equipment finance market performed in recent years?
Despite the fact that the market is far from reaching the spectacular numbers of the first 10 years of the new century, we see a general recovery.
In Europe, 2015 showed an increase compared to 2014 and we had the same positive trend in 2016, with an average growth of 15% in the main European markets, with exception of the UK where the construction market remained at the same level of the previous year.
Concerning BNP Paribas Leasing Solutions, we have been really satisfied with our performance, with 25% growth in construction equipment.
What trends do you expect in 2017?
We estimate the same positive trend continuing in 2017. Our expectations were confirmed in the first two months of the year, when BNP Paribas Leasing Solutions booked 30% more deals at the end of February than in the same period of 2016.
