European Leasing Markets Enjoy a Stable Quarter

24-Nov-2011

The vehicle leasing sector reported a period of stability between August and October 2011. 

Forecasted residual values remained consistent across the 6 nations surveyed in the latest experteye European Leasing Index. Portugal reported the highest rise, albeit at only +2.8%. This was followed by France (+2%), Spain (+1.8%), UK (+1.8%), Italy (+0.6%) and Germany (0.3%) all showing very marginal increments.

Budgeted servicing, maintenance and repair (SMR) costs showed slightly more movement, with Italy reporting a +4.9% hike. The UK followed with a +3.8% increase with France close behind at 3.5%. Spain however showed little movement with a marginal 1.8% increase in its SMR budgets, with Germany (-0.8%) and Portugal (-2%) reducing their costs.

The latest experteye European Leasing Index report which tracks forecasted residual values, maintenance costs and rental rates in six European countries uses data supplied by major leasing companies in each market.

Of the six countries surveyed, it is French fleet customers that continue to see the largest increases in rental costs. Last quarter (May to July 2011) saw a +3.6% price rise and in this quarter (August to October) France tops the league table once again with a +2.4% increase.

Otherwise, the market remained relatively flat with very small changes to rentals. Italy and Spain both showing a +1.3% rise, Spain +0.2%, the UK no change at all, and Germany a -0.4% drop.

Market summaries – 3 and 12 months to October 2011

France: France is continuing to report the biggest hikes in rental costs of all nations surveyed. Between May and July French fleet operators suffered a +4.1% rise in rental rates, and between August and October costs have risen again by +2.4%. Since November 2010 there has been a 12 month rise of +5.5%. SMR budgets have risen by +4.8% across the 12 months, the second highest increase of all nations surveyed, but optimism is improving in the future used vehicle market with a +5.1% rise in forecasted residual values for the year.

Germany: German optimism in the future used vehicle market has calmed in the last quarter with a +0.3% rise; the lowest increase of all nations surveyed. Across the 12 months, however, Germany has remained the 2^nd most optimistic market with a +5.7% rise in forecasted RVs, second only to the UK. SMR budgets have seen very little change in Germany with a +0.3% rise across the last 12 months and a small -0.8% drop in the last quarter.  Rental rates have reduced by -2.1% since November 2010, with a very minor -0.4% reduction in the last quarter.

Italy: After being the only nation to report a fall in forecasted RVs across both 3 and 12 month periods in the last Experteye survey, Italy has now shown a very small increase in optimism with predicted RV’s climbing by +0.6% in the last quarter. Across the 12 month period, however, they are still down by -1.6%.  Italy tops the league table for increases to SMR budgets with a +4.9% hike in the last quarter and a +7.7% rise for the year. Yet, for fleet operators, costs remain extremely stable with almost no change to rental costs (-0.1%) in the last year and a small +1.3% rise in the last quarter.

Portugal: Of the 6 nations surveyed, Portugal has shown the most optimism in the future used vehicle market of late with a +2.8% improvement in forecasted residual values in the last quarter. Across the year, however, it is a stable picture with a nominal +0.5% rise in RVs. Portugal has also cut its SMR budgets the most with a -2% reduction in the last quarter although, even with improving RVs and lower SMR budgets, rentals have continued to rise with a +1.3% increase for the quarter, and +1.6% for the year.

Spain: Spanish customers continue to enjoy the largest drop in rental rates across the 12 months, with  a -5% reduction, continuing the trend from the last Experteye survey which also saw Spain topping the league table for rental rate decreases. Otherwise, Spain shows a stable picture with forecasted residual values increasing by +2.6% for the year, and +1.8% for the last quarter. SMR budgets have come down by -2% since November 2010 but back up slightly (+1.8%) in the last quarter.

The UK: Optimism in the future used vehicle market has remained high over the last year in the UK, with a +9.2% rise in predicted RV’s; the highest of all nations surveyed. This has calmed in the last quarter with a smaller +1.8% increase. The good news for UK fleet operators is that there has been no increase to rental rates in the last quarter, albeit a small +0.3% rise across the year.  Budgeted SMR is rising though with a +3.8% increase in the last quarter, and a +4.6% rise across the year.

Notes.

• The comparisons are for vehicles with a contract duration of 36 months / 90,000 KM with the exception of Portugal (48 Months / 120,000 KM)
• Twelve month comparisons show change since November 2010.
• Three month comparisons show change since August 2011.
• Rental rate changes compare the rates in effect at the time of the survey with those in effect three or twelve months ago.
• RV and smr changes show the change in participating leasing companies' forecasts of residual values and maintenance costs over the period.

For more information, contact:

Rick Yarrow, Experteye

ry@experteye.com                      

01844 296504

---