Vendor finance programmes with BPLG, ING Lease and CIT
remain in place
Go deeper with GlobalData
With lessors becoming more
selective about what business they will write, global print
manufacturer Toshiba Tec has taken matters into its own hands.
“We have started to take equipment
onto our own books, and lease it out to customers ourselves,” said
Steve Hewson, marketing director at Toshiba Tec in the UK.
The manufacturer hopes to make a
profit from putting the equipment onto its own balance sheet. It
will benefit from the fact that landed costs – which cover
expenditure from the time the asset is manufactured to end of lease
– are lower when third-party funders are not used.
“We do stand to make more profit,”
Hewson said. “But to do so, we will need to get a certain volume of
customers onto our own book.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“Thankfully, though, business is
starting to pick up.”
Historically, Toshiba Tec has worked
closely with lessors such as BNP Paribas Lease Group (BPLG), ING
Lease and CIT.
Hewson said that the manufacturer will
continue to work with their lessors, but will also take some of the
business onto its own book – in particular business from
long-standing customers that are in sectors that lessors are less
inclined to accept in the current climate.
Acceptance rate falls
According to Hewson, BPLG’s acceptance
rate of total business has fallen from around 80 percent a year ago
to 60 percent.
“Lessors will pretty much not have
anything to do with the construction and housing industries,” he
said, adding that Toshiba has also seen lower acceptance rates for
solicitors and the legal profession lately.
“Many of these businesses are
long-standing customers that we’ve known for a long time, but that
lessors will not touch.”
Hewson believes, as a manufacturer,
Toshiba Tec has the benefit of having an in-depth knowledge of the
equipment it makes – which in turn means it can be fairly confident
of what the residual value will be.
Even once the equipment is returned,
Toshiba has an extensive refurbishment programme which enables it
to sell or re-lease the equipment at a profit.
Indeed, across the industry, as
customers search for cheaper alternatives, demand for refurbished
equipment has risen sharply.
According to Hewson, the most
important issue that has come from the economic crisis has been
that businesses have held back from making purchase decisions.
“But in the past few weeks we have
started to see more deals being signed than before, however, which
is a really positive sign,” he said.
There has been a noticeable difference
between direct and channel sales, however.
“Despite seeing good direct business
being written, the dealer channel has been much slower,” Hewson
added.
“Having the financial backing of a
large corporation has allowed us to build up a lease book of our
own – but most dealers are not in this position.”
Toshiba Tec is, therefore, in
discussions with some of its dealers to take on some client
risk.
“Even if their internal risk
assessment is good, lessors have simply been refusing customers on
the basis of what sector they are in,” Hewson said.
However, the company is reaping the
rewards of being part of the larger Toshiba group, benefiting from
the manufacturer’s treasury, which backs Toshiba Tec’s leasing
aspirations.
Part of the Toshiba group, Toshiba
Tec specialises in the office imaging market, selling
multi-function printers and other copier-based products.
In the UK, the manufacturer uses
both a direct and indirect channel. It has a market share of around
7 percent, and competes with other international firms such as
Canon and Xerox.
In a market where around 90
percent of all sales are leased, Toshiba Tec aims to build up a
“considerable” lease book of its own, taking on customers rejected
by lessors as well as lower risk customers.
Jason T Hesse
