Attendees at last month’s Leaseurope conference reported
a 36 percent drop in new business during the first half of 2009.
Jason T Hesse
reports
Lessors from across Europe gathered in Prague last month for
Leaseurope’s annual convention. The event, which was shorter than
usual this year in order to reflect the economic downturn, was a
success, with over 300 lessors from 33 countries gathering in
Prague.
Go deeper with GlobalData
Most lessors in attendance were slightly
bearish about the industry, however, with one-third saying they did
not expect the leasing market to return to pre-recession conditions
until mid-2011.
Meanwhile, 26 percent gave their vote to a
return to normal in 2012 or beyond, and only 19 percent of
attendees said they expected the market to bounce back by the end
of 2010.
Importantly, over half voted that the decline
in volumes was “a cyclical adjustment after which growth will
pick-up, although at a subdued level”. Another 24 percent said the
decrease in the market would be a new baseline for flat growth,
however.
“During the first half of 2009, we experienced
declines of an extent that many of us may never have seen before.
We really couldn’t foresee it – it was unimaginable,” commented
Rüdiger von Fölkersamb, speaking as the chairman of Leaseurope.
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 GlobalDataIndeed, figures released by Leaseurope during
the seminars were bleak.
Throughout Western Europe, new business
volumes (NBV) were seen to have decreased by 36 percent year on
year in the first half of 2009 – with Spain and Austria being hit
the hardest, seeing a fall of 57 percent each.
As previously reported by Leasing Life,
Eastern European countries were hit by the second wave of the
recession – in 2008, lessors in the CEE region recorded an average
growth of 12.2 percent.
However, half-year figures for 2009 showed not
only important falls in NBV, but also lower lease penetration rates
in CEE countries. For example, Romania – one of the hardest hit –
saw NBV fall by 74 percent year-on-year, and penetration rates fall
under 15 percent, down from around 20 percent to 25 percent in
2007.
According to Alain Vervaet, a supervisory
board member of ING Lease Holding, and who acted as chair for the
first session, the industry was being pulled back by margins and
funding issues.
“Right before the crisis, money was very
cheap,” he said. “It was abundantly available and risks costs had
been low for five years. Because of the tough competition in the
financial sector, and between lessors, we all focused – and I’d
like to say too much – on volume, market share and penetration.
Maybe we didn’t focus enough on value.”
As a result, he added, the industry has lost,
on average, 20 basis points on margin per year.
“Now is the time for us to restore our margins
– we don’t need to panic and change everything overnight, but if we
are creative, demand will come,” he said.
Leaseurope’s chairman, Rüdiger von Fölkersamb,
also sounded a positive note: “I am confident that the worse is
behind us. Of course, many challenges still lie ahead, but simply
put, European business will always need assets, and I’m deeply
convinced that our industry can continue to provide them with
extremely valuable solutions to finance their capital
expense.”
