Despite all the talk about the potential of countries such as China and India, Europe remains the key global market so far as vehicle leasing is concerned. So says LeasePlan International managing director, Jose Luis Criado.

With its headquarters based in Almere in the Netherlands, LeasePlan manages over 1.4m vehicles worldwide, is active in 32 countries and employs over 6,500 people.

‘The BRIC countries plus Mexico and Turkey all have potential for growth and Brazil, Mexico and Turkey in particular are without doubt maturing rapidly,’ he observes. ‘However it should not be forgotten that although we talk about them a lot, the total leasing market across all six of these countries adds up to less than half a million vehicles.

‘Europe on the other hand totals 8m to 10m with the USA adding perhaps 4m to 5m on top of that,’ continues Criado, who began working for LeasePlan 25 years ago. ‘So if that half-million doubles over the next three to five years, while the growth figure may look flashy the reality is that it will still be a long way behind what Europe and the USA have already achieved.’

Last January LeasePlan Canada started operations through a licensing agreement with a partner, and along with its existing operations in the USA and Mexico, LeasePlan can now offer complete North American coverage.

Surely China is bound to generate huge growth given its size? ‘I think significant expansion in China is still a little way away,’ he replies.

‘Remember that leasing is a sophisticated type of service and requires an infrastructure to support it,’ he adds. What he means by that is that it needs everything from comprehensive dealer networks to an appropriate taxation structure.

‘Once you get outside China’s big cities then the infrastructure we are used to in the West simply isn’t there,’ Criado continues. As a consequence he believes that if leasing does begin to expand significantly, it will be in the country’s urban areas in the first instance.

How about India?

‘We’ve been there for over 15 years and demand has not grown in the way that we thought it would,’ he observes. ‘India has certainly come a long way from the viewpoints of legislation and taxation, but it has not created a middle class as rapidly as China has.’ And it is of course the middle classes that tend to end up driving leased cars.

But what sort of cars are they likely to be driving in the foreseeable future? Electric cars produce zero exhaust emissions but still suffer from a limited range between recharges, he points out, and require state subsidies to make them economically viable.

‘At present we’re fuelling them with our taxes, and if we generate the electricity they require by burning fossil fuels then the environmental argument starts to look a bit hollow,’ Criado comments. ‘If anything pushes their adoption then it is more likely to be regulations (denying cars entry to inner city areas unless they are zero emission – SB) than economics but I believe that their technological limitations mean that it will be at least ten years before they have a major impact.’

Plug-in hybrids make rather more sense because they help address the range issue. ‘They certainly have a role to play when it comes to urban and suburban use,’ he believes.

Their provision may form part of what is increasingly being referred to as Mobility as a Service; a transport package for employees which may involve everything from car sharing to the provision of passes to make it easy to use public transport.

Such packages have a role to play, Criado believes, but are not a universal panacea. It comes back to the infrastructure required to support them; some global cities have it, but many do not.

‘I do not think they will result in the leased company car disappearing,’ he comments. ‘But driver mobility will become more important.

‘The vehicle leasing industry will undergo a shift of focus from services built around the vehicle to services built around the individual driver.

‘We’ve been offering a mobility package in the Netherlands for about ten years, but until recently demand for it hasn’t been all that strong,’ Criado continues. ‘However we have seen a growth of 300% over the last half-year with 100,000 business mobility cards being issued.’

Something that is having a massive impact is telematics; and it is going to have an even greater impact in future, he believes. ‘It is changing our industry more quickly and more radically than anything else,’ he contends.

Clearly it gives fleet operators the ability to track vehicles, download a huge amount of information from them remotely and route them more efficiently. ‘What it can also do though is make it easier for governments to impose a tax on usage,’ he comments.

While Europe may boast the world’s largest leasing market, many of its countries took a hammering during the recession and remain in the doldrums. Far from being disheartened by this situation, paradoxically Criado is encouraged by it.

‘The countries in southern Europe suffered a lot more during the recession than those in the north and are less mature markets so far as leasing is concerned,’ he says. ‘Spain has 500,000 leased cars compared with 1.5m in France. However, this leaves those countries with a lot more room for creativity and growth.

‘Furthermore, their businesses can improve their efficiency; and car leasing is an efficiency-driven product which firms can use to find savings.’

To do so however they will need the help of lessors who can offer their experience and advice says Criado, especially when it comes to helping a fleet shrink its carbon footprint.

‘Leasing has got to be much more than an offer that says ‘I park a car at your door and you pay me a fee’,’ he observes.

‘In effect we’ve got to act more and more as consultants, especially so far as our global clients are concerned, although if the industry heads in that direction then leasing companies have got to appreciate that clients want transparency,’ he says. ‘They want to see exactly how the figures break down and LeasePlan has been offering open calculation for this reason for many years.

‘If a fleet wants a partnership of this type though it has got to be with a single leasing company,’ he concludes. ‘It simply will not work if it is trying to deal with 25 different suppliers.’