THE EUROPEAN FLEET LEASING:
Key trends and challenges,
and what they teach us for the
development of the CEE markets
Presented by Vincent Rupied,
Prague, February 3rd, 2012
1
Leaseurope,
the Leasing & Rental Federation
Leaseurope brings together 43 associations in 31 countries
throughout Europe
Leaseurope represents the leasing industry, from hire purchases
and finance leases to operating leases of all asset types, as well
as short term rental, for cars, vans and trucks.
2
The Corporate Vehicle
Observatory

An expert-platform for all fleet professionals:
fleet managers, procurement specialists, manufacturers, fleet
leasing companies, advisers, insurers, press, public
authorities, researchers etc.

Created by Arval in 2002

Focus: professional Mobility

Neutral & International
16 Countries
incl: Czech Republic, Russia, Poland

Free Access Studies

Annual Fleet Barometer in collaboration with
3
Agenda
1. Automotive fleets in the European Leasing Market
2. Full Service Operating Leasing in Europe
3. Trends & Challenges
4
Leaseurope
in the automotive market (2010)
Cars
Real estate
40%
Machines & equip
CVs
ICT
16%
Big/other
5
Leasing & Car Rental penetrations
70%
60%
50%
40%
30%
25.4%
20%
Leasing members
GR
IT
ES
PL
RO
BE
DE
NO
FR
CZ
PT
AT
SK
SI
HU
BG
UK
NL
LV
FI
DK
EE
CH
0%
SE
10%
Leasing & ST rental members
Leaseurope passenger cars as % of total car registrations
Source: Leaseurope estimates based on data collected in its 2009 Annual Survey and
ACEA new registration figures
6
European Leasing & Rental Volumes
Leaseurope Annual Survey
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Business vs. Total Registrations
1 350
2011*
BUSINESS REGISTRATIONS
Thousands of units
Germany
France
1 200
United Kingdom
Brazil
1 050
Italy
Spain
India
900
Belgium
Turkey
Russia
750
Netherlands
Poland
600
Austria
Switzerland
Portugal
450
Czech Republic
Romania
Slovakia
300
Greece
Hungary
150
Luxembourg
TOTAL REGISTRATIONS
Thousands of units
0
0
300
600
900
1 200
1 500
1 800
2 100
* For all countries, best estimate to date.
2 400
2 700
3 000
3 300
3 600
3 900
Morocco
Size of bubbles =
Business registrations
Sources: Arval, National Associations, ACEA.
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Fleet growth potential
in the next three years
Balance 2011
Decrease Increase
EU
BR
RU
10%
24%
+ 14%
6%
3%
IN
5%
TU
4%
68%
2009
2008
+ 13%
- 2%
+ 21%
+ 62%
+ 46%
49%
73%
56%
2010
+ 68%
+ 52%
Base: companies > 100 employees
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Agenda
1. Automotive fleets in the European Leasing Market
2. Full Service Operating Leasing in Europe
3. Trends & Challenges
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Note : CVO Barometer Methodology

Target: Fleet managers in companies of all industries using corporate vehicle

Fieldwork period: H1 2011

Sample: 4 518 interviews including


3 313 in Europe : Belgium, Switzerland, Czech Rep., Germany, Spain,
France, Greece, Italy, Poland, Portugal, UK
1 205 in “BRIT” : Brazil, Russia, India, Turkey
Companies
with less than 10
employees
Companies
with 10 to 99
employees
Companies
with 100 to 249 /
499 / 999
employees
Companies
With 250 / 500 /
1 000 employees
and +
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Fleet financing in European
Large Corporates**
Self purchase*
Car credit
Finance leasing
Operating leasing
RU
*Self-purchase = outright purchase + credit (other than car credit)
** Large Corporate = over 1000 or 500 employees
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Fleet financing: intentions per size
Self purchase*
Car credit
Finance
leasing
Operating
leasing
Intention to develop – Intention to reduce
*Self-purchase = outright purchase + credit (other than car credit)
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The Motivations for
Full Service Fleet Leasing
Don’t know
Outsourcing of
services and
administration
Transfer of risk on
maintenance and
Residual Value
Budget control
Besides the cost, what is the main added value of your experience with your leasing supplier?
Base: companies using Operating Leasing
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A Market driven by
Service Outsourcing
% of businesses interested in the following services
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Towards Service Integration
Don’t know
Best specific provider for
each service
Integrated provider
of services only
Integrated provider of both
services and leasing
% who cover service needs with…
Base: companies with 100 employees and more 16
Agenda
1. Automotive fleets in the European Leasing Market
2. Full Service Operating Leasing in Europe
3. Trends & Challenges
■ Leasing in crisis time
■ The funding challenge
■ Remarketing and residuals
■ Accounting treatment
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Leasing in crisis time:
back ground
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Leasing in crisis time:
Cost pressure
% who think that this year, cost pressure on the fleet will…
Decrease
Balance
2011
Increase
31%
36%
37%
39%
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The funding challenge (1/2)
CDS 5Y €
RCI
SG
BNPP
VW
BMW
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The funding challenge (2/2)
Feb 1st
FIAT S.P.A.
PSA
RENAULT
SG
BNPP
VW
DAIMLER
BMW
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The Remarketing Challenge (1/4)
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The Remarketing Challenge (2/4)
120.0
115.0
110.0
105.0
100.0
95.0
90.0
85.0
80.0
Used cars
Linear (Used cars)
France : LT Used car market index (100 = average Jan. 2007 - Mar. 2008)
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The Remarketing Challenge (3/4)
Used cars market: size per country
Sources: Arval, National associations, ublic statistics.
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The Remarketing Challenge (4/4)
Used cars sales vs new cars sales
Sources: Arval, National associations, ublic statistics.
25
The Lease accounting challenge (1/4)
A difficult conception
Rediscussions
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The Lease accounting challenge (2/4)
At stake for Leasing Customers
•
Overall complexity, low preparation
•
Will the leasing charge be
 degressive (as proposed)
 or constant (as today)?
•
Feasibility of recontracting
•
Qualification of the Right of Use for Basel II and III (for banks)
 Tangible,
 Intangible
 or a new class of assets (« financial intangible ») as proposed by Leaseurope?
•
Transition : possible option
 Full Retrospective: FTA, impact on equity, comprehensive recalculation
 Prospective: frontloading of charges with contacts regarded as new
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The Lease accounting challenge (3/4)
At stake for Fleet Lessors
• Substantial system adjustments to produce required reports
• Major uncertainty of the RV reassessment under the new standard

The Lessors would carry receivables – not vehicles – on the balance sheet

The current gradual prospective depreciation (IAS 16) does not apply to
financial assets

The only possible reassessment would be the impairement of the receivable
(IAS 39) and of the residual asset (IAS 36) : more brutal and procyclical
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The Lease accounting challenge (4/4)
Why Operating Leasing remains by far the best
funding for fleets
• Only full service product
• Only mode providing RV risk coverage
• Far lighter on balance sheet than Finance Lease and Purchase
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Thank You
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