Leasing on a global scale

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With profits up to €372m, return on equity hitting 13.8% and total assets up to €19.7bn, LeasePlan enjoyed a healthy 2014. The prospects for this year in global markets are proving to be healthy too, says chief commercial officer Nick Salkeld.

With LeasePlan for over 20 years, he became chief commercial officer last August. A member of the company's four-strong managing board, he is leading its drive for growth.

Based in Almere in the Netherlands, LeasePlan manages over 1.4m vehicles worldwide, is active in 32 countries and employs over 6,800 people.

Last year saw LeasePlan open LeasePlan Canada through its Canadian partner Foss National Leasing while February of this year saw the global automotive leasing giant become the 100% owner of LeasePlan Turkey. “We enjoyed a 30% growth level in Turkey in 2014 and we believe that double-digit growth is a possibility this year too,” Salkeld says.


Operational leasing potential

European countries with potential for further growth include Denmark, Poland and the Czech Republic, “We expect to expand in line with and possibly ahead of the market in all these countries and it is worth noting that the level of penetration of operational leasing in Poland is still less than 10%,” he says.

Some of the more-mature European markets offer surprising levels of potential too. “The uptake of operational leasing in Italy and France for example is still quite low,“ comments Salkeld.

Looking further afield, Mexico, India and the UAE have market growth of more than 10% and should generate healthy levels of business too. So should Russia, despite its well-documented problems.


How about China?

“China has huge market potential but is not yet mature so far as operational leasing is concerned – there is still a strong preference for ownership – but it’s developing slowly,” Salkeld replies. “Furthermore, there are certain cultural challenges in China that have to be respected and that we have to work within.”

LeasePlan is not yet present in China and is hoping to target small fleets there over the next two years, along with international clients with whom it already has a relationship and who have established a Chinese operation.

Its fleet management expertise should aid businesses that prefer to continue to own their assets.

“Once they’ve experienced our approach to fleet management we can go on to talk to them about operational leasing and its ability to reduce their exposure to risk,” Salkeld observes. “Our aim must be to get in front of customers and explain operational leasing's benefits.”


Infrastructure challenges?

Despite its complexities, India offers good long-term prospects for operational leasing too, Salkeld believes, although finance leases remain popular.

“We’ve been in India for more than 10 years, grew by 9% during the past 12 months and we’ve now got just over 10,000 vehicles there,” he says. “We’re doing well with small fleets.”

Outside the big cities India, China, and other emerging markets do not enjoy the support infrastructure (comprehensive dealer networks for example) that benefits leasing companies in Western Europe. That should not be viewed as a barrier to entry however, says Salkeld.

“You have to adjust to any limitations and work with them while being aware that things are bound to improve,” he says. “You have to think in terms of a long-term plan.”

In some countries, that plan is likely to include a focus on delivering mobility by whatever means appropriate (train, bus, bicycle, car-sharing and so on) rather than the traditional provision of a company vehicle. “Younger drivers especially are expressing growing interest in mobility budgets, particularly in Western Europe,” he concludes.

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