Colin Tourick looks at pricing review the global impact of Big … · In Car Wars – reconciling divergent views on manufacturer auto ﬁnance pricing (pages 3-5), Bryan Marcus,

1

Asset financepricing review

Pricing action plan for improved profits

Best practices for setting residual values

Kwik Fit’s fast fit,service excellence and

savings

sponsored by

Car WarsBryan Marcus reconciles divergentpricing perspectives between salesdirector and CFO

Volume, market share or profit. What’s your primary pricing priority?

Asset FinancePricing Review

Colin Tourick looks at the global impact of Big Data on leasing

The changing role of the fleet manager

Experteye sees residual value forecasts rise across Europe

Fleet leasing in Poland gains traction

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The pricing action plan for profitChanging your pricing policy may well be your most powerful lever forprofit. Make your action plan now!

So you want to improve your pre-taxprofits?

Well, you might decide to introduce a new ITsystem that would allow you to do morethings, introduce more products and be moreeffective than before - at a cost, of course. Oryou might introduce a new quality-management system or increase yoursalesforce or cut overheads or other costs.

These are the ‘levers of profit’, the aspects ofyour business that you can change togenerate more profit.

Generally speaking, if you pull one of theselevers it will have a modest effect on yourbottom line. You can often generate a muchbigger impact, with much less disruption tothe business, by changing your pricing policy.If you can implement a successful pricingchange you will improve your volumes andmargins simultaneously, with little disruptionand at little or no cost. Do it successfully andyou will enjoy the benefits immediately,without generating a negative response fromstaff or clients. Pricing is the most powerfullever of profit.

In previous Pricing Reviews we have looked

at the steps that asset finance companieshave taken to develop their businesses and inparticular how they have improved (or mightimprove) their pricing. In this article we willmove beyond that and set out an action planfor asset finance companies that want toimprove their pricing. The steps to follow are:diagnosis; decision; preparation; get buy-in;trial; implement and monitor.

1. Diagnosis

First, have a look at the way business ispriced at the moment. How are pricescalculated? Is it done centrally or byindividual salespeople? What insights aregained from the market to help guide pricing?Have a look at the range of prices quoted forthe same type of business to the same typeof customer; are they similar? If there is awide variation you have prima facie evidencethat something is going wrong.

Which customers get the lowest prices andwhy? What costs are incurred as a result ofdiscounting or other giveaways, e.g. givingaway costly contractual points during thenegotiation? Do the most valuable clients getthe biggest discounts? When pressed by a

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IntroductionWelcome to the latest issue of our Asset Finance Pricing Review, published in association with Asset Finance International. Our aim is to provide a vehicle for discussion and debate about automotive asset finance pricing, which continues to arouse strong views in countries across the globe.

Our lead article this time is an overview of fleet leasing in Poland. Poland continues to be one of only a handful of economies globally that have shown unremitting growth for almost 25 years. Could the vehicle sector be a lead actor in future success? Nigel Carn delves into the finance and pricing challenges facing vehicle leasing and fleet markets in the country. Paul Gogolinski, CEO of Total Fleet Solutions in Poland shares a market overview and his outlook on the importance of captive finance companies in promoting the benefits of leasing. We also hear from Slawomir Wontrucki, managing director of LeasePlan Fleet Management (Polska), about looming challenges such as a change of government in the autumn. Something everyone in the industry is struggling with right now is Big Data and this is what Professor Colin Tourick looks at in his article starting on page 3. Big Data itself is nothing new but it seems only now that the industry is starting to wake up to it, with questions as to who it belongs to and how to extract value from it high of the list of frustrations. Professor Tourick talks about the disruptors lining up to take control and gobble up any potential revenue streams from leasing companies’ data. Our very own operations director Owen Goschen talks about the changing role of the fleet manager (starting on page 7) and how technology can help support more strategic responsibilities. Starting on page 16, we follow on with a roundup of the more interesting and influential news stories of late, including the new leasing accounting rules, drivers’ response to developments in telematics, salary sacrifice car schemes, a new car sharing service from LeasePlan and the UK government’s backing of green vehicles.We end as usual with Experteye’s forecasts for residual values across Europe. We hope you’ll enjoy this issue as much as we’ve enjoyed compiling it and as ever, we welcome your feedback.

Gary JefferiesSales and Marketing Director, Bynx

Introduction

Welcome to the sixth edition of Asset Finance Pricing Review, published incollaboration with Asset Finance International and Professor Colin Tourick.

As in all previous issues, we again put forward a host of articles from industryinsiders that serve to illuminate the more challenging aspects of asset financepricing. The purpose is to bring you valuable insights, knowledge and examples.

In any company, there are different stakeholders involved in pricing policy andexpecting sales and finance to see eye-to-eye on every issue is the stuff of fantasy.This is especially true for businesses that operate internationally and have to takeinto account the cultural, political, financial and regulatory differences within thosemarkets. In Car Wars – reconciling divergent views on manufacturer auto financepricing (pages 3-5), Bryan Marcus, regional director of VWFS Latin America,Canada and Northern Europe, offers an interesting perspective on resolving pricingdisputes – and one that doesn’t involve leather gloves and a boxing ring!

There are many ‘levers to profit’ in every asset finance business but the one thatwill have the greatest impact on the bottom line is changing your pricing policy.This is the advice of Professor Colin Tourick, management consultant and editor ofAsset Finance Pricing Review, in The pricing action plan for profit (pages 6 and 7).

There’s only one topic (other than pricing policy) that can claim joint ownership ofthe most-difficult-aspect-to-get-right-in-asset-finance title and that is settingResidual Values (RVs). But it’s not just a matter for vehicle leasing and daily rentalcompanies, states Dean Bowkett, technical director and chief editor atEurotaxGlass’s. In his article Setting Residual Values (pages 8-10), he examines thepitfalls and best practices and offers a unique perspective on how it matters forOEMs too.

Page 11 presents the results of our last Pricing Survey, which posed questionsaround how to pitch pricing at a level that delivers the most new business andhighest margins. As ever, the results surprised us. They may surprise you too orperhaps confirm your prior thinking. Either way, get in touch and give us yourperspective.

Take part in our next survey

We’re very grateful to everyone who takes part in our surveys (you can do soanonymously if you like) because they always provide us with valuableunderstanding and ideas. This time we’re asking: What is the primary considerationwhen your asset finance business sets its prices/issues a quote? You can take parthere: http://bit.ly/bynxpr5.

It’s always interesting to read how suppliers work successfully with leasingcompanies and Kwik Fit GB is no exception. In an article, Kwik Fit GB fast fitsdeliver service excellence and financial savings (pages 12 and 13) Peter Lambert,fleet director, talks us through how the fast fits concept is delivering tangible resultsfor leasing companies.

We end this Pricing Review with the latest figures on changes in residual valueforecasts, SMR costs and lease rental rates across Europe (to January 2014) frombenchmarking and research specialist Experteye.

And don’t forget to share your feedback with us and tell us what you’d like to seein future Pricing Reviews.

Gary JefferiesSales and Marketing Director, Bynx

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1. Diagnosis



3

How big data is set to revolutionize vehicle leasingAdvances in technology and storage mean it is easier than ever to collect large amounts of data about car usage and performance, and as this “Big Data” starts to have a value of its own, so leasing companies have opportunities to build new business models

It is interesting to reflect that only 16 years ago we were approaching the end of the millennium, at which point it was predicted that millions of computer systems would fail because of the Y2K problem. If you are too young to remember this, the basic problem was that in previous decades when programmers wrote software they referred to the year using two digits (so 1995 = 95, for example), rather than four digits (1995). As a result, the fear was that when computers clicked past midnight on 31 December 1999 and saw that the year 00 had arrived, they would believe that “95” was 95 years in the future rather than five years behind. The underlying problem here was that storage was expensive in the early days of computing so programmers were encouraged to save a couple of digits in the date field to conserve space.One of the features of the last 20 years or so is that the price of storage has collapsed, such that we can now laugh at the Y2K problem. In fact storage has become so cheap that it now pays organizations to collect vast amounts of information of all kinds and to then try to find innovative ways to use it. This takes us into the modern world of Big Data, where organizations such as Apple, Facebook, Twitter, supermarkets and Amazon now hold huge amounts of data about us and our preferences, which they collect every time we buy something or tap into our computers or smartphones.In this new world, cars are extraordinarily good data collection units. They are covered in sensors which detect all manner of information. We are moving into the era of the “connected car”, when it will be possible for all of this data to be transmitted back to a central database in real-time, allowing it to be used for a wide range of innovative purposes. You may be familiar with the eCall system, a EU-wide initiative that will be fitted as standard on all new cars and light vans from 31 March 2018. When the in-vehicle sensor detects a serious collision that triggers the airbags, the emergency services will automatically be alerted.But this is only the tip of the iceberg. Cars already have sensors that can detect information about a range of factors, including:●● Weather: speed of windscreen wipers, temperature, barometric pressure,

whether the automatic lights have switched on because of cloud cover, and even the effort the traction control system is having to employ to stop the car skidding

●● Car faults: oil overheating, tires deflating, tires approaching minimum tread depth

Professor Colin Tourick

Forecast Car ResidualsRise as Optimism Returns

Changes in residual value (RV) forecasts, SMR costs and lease rental rates to January 2014Forecast residual values Forecast service, Current rental rates

maintenance and repair costs

3 month 12 month 3 month 12 month 3 month 12 month

change change change change change change

France +0.2% +1.7% +0.7% +2.1% +2.0% +1.9%

Germany +0.9% +0.4% +0.8% -2.7% -0.8% -2.5%

Italy +1.1% -0.9% -0.1% -8.2% +1.9% +0.6%

Portugal +0.7% -2.6% +0.2% -2.7% -1.2% -4.9%

Spain -0.1% +1.0% -1.4% -4.1% -0.9% -1.3%

UK +2.8% +7.3% -0.1% +0.4% -0.2% +4.0%

It appears that fleet lessors across Europe arebecoming increasingly optimistic about futureresidual values. To end, January we sawlessors increase their forecast RVs by 2.8% inthe UK, 1.1% in Italy, 0.9% in Germany, 0.7%in Portugal and 0.2% in France. Spain reportedthe only reduction and this was by just 0.1%).

These figures are collated by Experteye’sEuropean Leasing index survey which tracksforecasted residual values (RV), servicing,maintenance and repair (SMR) costs and rentalrates in six European countries using datasupplied by major leasing companies.

Looking over the past 12 months we can seethat at one extreme forecast RVs rose by 7.3%in the UK, and at the other extreme they fell by2.6% in Portugal.

Forecast SMR costs have also stabilisedsomewhat over the last three months, havingsuffered significant falls in Spain, Portugal, Italyand Germany in the previous nine months.

Rentals seem to have stabilised somewhat tooin the last three months, having been quitevolatile in the UK, Portugal and Germany inparticular in the previous nine months.

Professor Colin Tourick is a management consultant, former MD of Citibank's fleet leasingbusiness and a 34 year leasing industry veteran

Editor: Professor Colin Tourick Editor in Chief: Brian Rogerson© Asset Finance International, 2013. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of thenamed individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omissions or inaccuracies. No copying, whether whole or in part, transmission by any forms or means, electronic or otherwise is permitted.

• The comparisons are for vehicles with a contractduration of 36 months / 90,000 KM• Twelve month comparisons show change sinceFebruary 2013• Three month comparisons show change sinceNovember 2013. • Rental rate changes compare the rates in effect atthe time of the survey with those in effect three ortwelve months ago.

• RV and SMR changes show the change inparticipating leasing companies' forecasts of residualvalues and maintenance costs over the period.The Experteye European Leasing Index reports ontrends in leasing company forecasts, plus currentrental rate movements, covering representativeversions of up to 250 vehicles in the six markets.

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1. Diagnosis



4

●● Driving style: G forces, how aggressively the car is being accelerated and braked, speed round corners

●● Physical location: data about where the car is traveling, which can be useful when aggregated with other cars’ locations to provide information about traffic speed and density.

All of this data has a value to somebody. Rather than installing 100,000 weather stations around the country, weather forecasting services would be delighted to receive real-time weather-related data from hundreds of thousands of cars. Leasing and fleet management companies, and other organizations that run large car fleets, would be willing to pay for engine fault information, so that faults could be dealt with quickly to avoid expensive repairs and down-time later. Drivers would see a message pop up on the dashboard notifying them that the car has been provisionally booked into a local garage and giving them the opportunity to drive immediately to the garage to get the problem fixed. Retailers would be interested to know that a particular driver is in the vicinity. If it’s coming towards lunchtime and you’ve been a loyal McDonald’s customer in the past, they may well be willing to spend a few pence for the right to transmit a special offer to you to encourage you to stop off for a Big Mac. Or if it’s a Saturday and you’re parking outside a shopping mall, some retailers would be happy to advertise to you or give you special offers. All of this is fine and dandy you might think, but what does this have to do with the leasing industry? The answer is potentially a great deal, not just in the advanced western countries but globally. We are used to all types of disruptors arriving into established markets and picking up vast revenues by exploiting digital opportunities. Online movie services destroyed Blockbuster, while PayPal has taken core business away from the established banks, and Uber is turning the taxi industry on its head. In much the same way it is very likely that in the near future we will see the arrival of disruptors who will start to explore the value of the data coming out of the cars we are financing. Picture the scene. Someone goes into a car showroom and chooses a car. The list price is £24,000. The salesperson then says: “And I can give you a discount for the various packages of data your car will produce. We can give you £250 for the weather package [the right to receive all of the weather-related data from your car throughout its life], £400 for your location data [which will be used by traffic-monitoring companies and retailers], £80 for your tire data, £170 for your engine fault data, and £100 for your front and rear camera and distance sensor data [used by insurance companies and the police in the event of an accident and to detect bad driving by other road users].”The pitch will conclude with the salesperson saying: “That’s a £1,000 discount for all these data packages. Are you prepared to sell these to me?”It’s clear to see that these data packages would have a value to some organizations and that many customers would be happy to sell their data to get a discount.

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1. Diagnosis



5

Source: Dollar Photo

Leasing and fleet management companies would want to retain the right to use collision, engine fault, driving style and some other data as part of the service they provide to their clients. This opens up the opportunity to sell a range of value-added services to clients, including proactive tire repair or immediate vehicle exchange if the fault needs to be repaired in a garage. Leasing companies might build an app which alerts the driver with a message saying: “Your tread of your front nearside tire just fell below 2mm. We see you’re en route to the office. A mobile tire repair service has provisionally been booked to meet you there and swap the tire. Please confirm this is OK”.In time we may well see the emergence of a market in these data packages, with a range of organizations being willing to pay different prices. It might be, for example, that the data emanating from larger and more expensive cars would be more valuable to some organizations (retailers or garages) than the data produced by smaller cars. Perhaps in future years we will have websites with names such as www.comparethedatapackagebuyer.com, providing a channel through which members of the public can sell their data packages to the highest bidders.There is an opportunity for the vehicle leasing companies to get involved in this market right now. In fact, if they don’t, there’s a good chance they will be left behind. Leasing companies could become buyers and traders of data, which would allow them to offer their clients a range of rentals on each individual vehicle, depending on which package of data the client wanted to relinquish and which they wanted to keep (for data privacy reasons or perhaps because they wish to use the data themselves).

http://www.comparethedatapackagebuyer.com

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1. Diagnosis



6

If leasing companies don’t get to work on this soon, the disruptors will arrive, offering data-rich services to the industry’s clients. Whoever owns the data owns the client, which holds out the prospect of leasing companies losing control of client relationships and being reduced to the status of commodity suppliers of finance, leaving the disruptors to deliver the real value to the client.

Professor Colin TourickGrant Thornton Professor of Automotive Management, University of Buckingham Business SchoolColin Tourick, Grant Thornton Professor of Automotive Management at the University of Buckingham. Colin is a management consultant, 35-year leasing industry veteran and the former MD of Citibank’s fleet leasing business.

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1. Diagnosis



7

The changing role of the fleet managerOwen Goschen, operations director Bynx, looks at how technology can support fleet managers as they take on more strategic responsibilities Fleet managers have always understood cars. They know what’s available, what’s best for their fleet, how much they cost and how to utilize and maintain vehicles in the best condition. But their role is evolving, morphing into a multi-faceted, strategic function, central to the organization as a whole. It’s a thumping change from a largely technical and operational position to one that has a direct bearing on the bottom line - whether running a fleet is a core business activity for the organization or not. The fleet landscape has undergone considerable transformation in recent years with acquisitions by finance providers and other changes in activity. There are now far fewer traditional fleet managers, as companies have outsourced fleet functions to leasing providers or fleet management companies.

A break from traditionPerhaps for this reason fleet managers are not a happy bunch right now. According to research from the Freight Transport Association, over a third (34%) are planning on leaving the transport industry over the next five years. What this means is that experienced employees (with valuable knowledge about the day-to-day operations of fleets and fleet productivity) are going to be in short supply. If that experience is allowed to disappear, what will happen to fleets? Within organizations there are now various teams of professionals with responsibility for fleets, including procurement, finance, operations, human resources and contracts management. This reflects the new and complex demands of modern employment, transport needs, mobility and managing fleets.

The need for a new approachNowadays, the technical implications of managing vehicles matter less than understanding and being aware of the risks and legal implications of running vehicles. Cars are much more reliable these days so managing relationships within the organization (with suppliers, drivers and employees) is often a more critical skill than understanding the more technical aspects of keeping vehicles on the road. The new-age fleet manager requires strategic knowledge of HR and negotiating skills. These are talents traditional fleet managers did not need. Recently, 43% of fleet managers surveyed by the British Vehicle Rental and Leasing Association (BVRLA) reported that company cars are becoming more important in the recruitment and retention of staff, and that trend calls for a whole new approach to the procurement and purchase of products and services from fleet suppliers.

Owen Goschen

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1. Diagnosis



8

50 shades of greyDuty of care and legal compliance are now considered the most important factors of fleet management, but they are also particularly challenging when it comes to the grey fleet (cars used for business but owned by employees). There are estimated to be some 14 million grey fleet vehicles in the UK alone and fleet managers are responsible for checking the insurance of these drivers and vehicles alongside licenses and MOT certificates. Ensuring their roadworthiness is difficult enough without the added pressure from new laws around corporate manslaughter.Fleet managers these days have to be as knowledgeable in supply chain issues and procurement as they are in managing vehicles. Procurement, or supply chain specialists, are being given responsibility for many of the things fleet managers used to do - such as controlling leasing costs, reducing fuel costs, maintaining vehicles, ensuring cars and drivers are legal at all times, managing duty of care and the grey fleet. Similarly, fleet decision makers are now being recruited from different roles, such as procurement, finance and human resources. On top of that, they are being tasked with adopting greener fleet policies alongside managing travel, transport, mobility and insurance.

A new hybrid problemNew types of vehicles, such as hybrids, electric, battery and hydrogen fuel cell cars are being introduced into fleets as viable greener, less expensive options. They need to be managed and deployed in the right place, where they will have the greatest impact, and this is all new to fleet management. According to research from the BVRLA, 43% of fleet managers view hybrids as a viable option for company cars, but feel this choice is introducing new complexity into their role.Managing drivers is an issue too - assessing what they are doing, analyzing journey cycles and checking vehicle utilization - and this means deploying the right technology in the right place. Is this the sort of thing HR, finance or administrative managers can handle? With a lack of dedicated and experienced fleet managers at the helm, someone has to fulfil this role. Without expertise in legislation, vehicle maintenance protocol and vehicle selection, fleet operational costs can quickly escalate.But fleet managers now need a strategic focus so they are working in the interests of the business, rather than just managing cars. Working with procurement experts is not something the fleet industry is good at, and nor is managing change.

The role of technologyTechnology is providing the answer in many cases by delivering more management information when and where it is needed - often in real-time.But technology also entails fleet managers having to learn new skills in terms of using software platforms, understanding management information and “Big Data” and working out how it can help them with better decision-making. Cutting edge technology, such as vehicle tracking and telematics, gives fleet operators the chance to make improvements in utilization, route optimization, traffic updates and driver performance.

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1. Diagnosis



9

The monitoring of fuel consumption and mileage is now commonplace, particularly through vehicle telematics, but driver monitoring through in-car systems is also becoming increasingly common and driver acceptance of this is growing. In terms of driver behavior, research indicates that a high number of accidents happen as a result of distraction, which is a considerable risk for fleet managers. Driver training is imperative for employees who drive as part of their job and fleet managers have to provide this. Many already mandate driver training in accident avoidance, safer and more economical driving. New technology has considerably improved the availability and quality of management information. It is also allowing drivers and other stakeholders to manage their own vehicles and information through having access to online services. This saves the time and costs associated with fleet administration, particularly for large fleets. Fleet management software platforms are greatly improving the vehicle procurement process, simplifying contracts management, cutting costs and making the day-to-day operation of fleets far more efficient and automated. The point of technology is not to deskill the job of the fleet manager but to make it easier, quicker, less costly and reduce the administrative burden. If anything, technology is up-skilling the role by making it easier for fleet managers to acquire new expertise and take on these evolved and more strategic responsibilities.

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1. Diagnosis



10

Fleet leasing in Poland – a bright futureNigel Carn, author of Asset Finance International’s country reports, takes a look at the finance and pricing challenges facing the vehicle leasing and fleet markets in Poland

The vehicle sector plays an important role in the Polish economy. The economy has gained momentum over the last two years, with investment and consumption both rising and GDP growth expected to be around 3.5% in 2015 and continuing at this rate in 2016. Growth rates in the vehicle sector have been particularly strong, especially for passenger cars. The Polish Automotive Industry Association (Polski Związek Przemysłu Motoryzacyjnego – PZPM) represents Polish automotive industry employers. According to its figures, the number of new passenger car (PC) registrations totalled 327,709 in 2014, an increase of 13% on the year before. In the first three quarters of 2015, the total number of new PC registrations had reached 258,200 − up by over 5% on the same period in 2014. Of the full-year total in 2014, more than 200,000 cars (61%) were registered by companies, up 19% on the previous year. Company car registrations have been rising for some years compared to those by individual customers – in 2010, registrations by individuals represented over half the market but now, although the number is still growing, they represent less than 40%. It should be noted that the term “companies” in this context covers everything from one-vehicle operations to companies with portfolios of many thousands.

Passenger car registrations, 2012−Q3 2015

Source: PZPM

2012 2013 2014 Q1–Q3 2015

350,000

300,000

250,000

200,000

150,000

100,000

50,000

Business Other

119,619

153,100

121,247

168,666

126,470

201,239

92,400

165,800

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1. Diagnosis



11

Positive vehicle leasing sector performanceAccording to the Polish Leasing Association (PLA, or ZPL − Związek Polskiego Leasingu), whose members represent 90% of the total national leasing market, vehicle leasing makes up more than 60% of the overall leasing market, and PC and light commercial vehicle (LCV) leasing makes up nearly 60% of total vehicle leasing. This market has also performed well. PLA figures for the first three quarters of 2015 show the overall value of vehicle leasing at PLN22.2 billion (€5.3 billion) – a healthy increase of 15.8% over the same period the year before. In this period, PC and LCV leasing rose 17.4% to PLN13.2 billion (€3.2 billion), mainly due to a hefty 43% increase in PC leasing. The reason for this substantial growth in volume was exceptional performance in the company car segment, boosted by the impact of a 50% VAT deduction on fuel for business cars which came into effect in July, while car leasing by individual customers was stagnant. Meanwhile, LCV leasing volume actually contracted by one third during the first three quarters of 2015 compared to the year before.The total number of vehicles leased at end-Q3 2015 was just under 175,000. Compared with the first three quarters of 2014, changes within segments of units leased showed similar trends to changes in value, with the number of leased PCs (109,400) increasing by an impressive 34% but LCVs (25,100) declining by 23%.

Passenger car and LCV leasing, number of units

Source: Asset Finance International, PLA, PZPM

PCs LCVs

250,000

200,000

150,000

100,000

50,000

0

Q1–Q3 2014 Q1–Q3 2015 Change Y-O-Y (%)

40,0%

30,0%

20,0%

10,0%

0,0%

-10,0%

-20,0%

-30,0%

109,400

81,900 32,400-22.5%

25,100

33.6%

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12

Leading vehicle leasing companies, at end Q3 2015

Passenger cars Total portfolio

Net asset value (PLN million)

Number of units

Net asset value (PLN million)

Number of units

Getin Leasing 1,454.4 19,674 2,483.0 31,818

Raiffeisen-Leasing Polska 1,220.2 13,159 1,894.8 18,491

Europejski Fundusz Leasingowy (owner of Carefleet) 964.6 11,268 2,033.4 20,734

Volkswagen Leasing 950.6 9,656 999.7 10,276

mLeasing (formerly BRE Leasing) 818.7 8,576 1,459.0 12,657

PKO Leasing 723.6 7,396 1,410.6 10,895

BZWBK Leasing 549.3 6,717 1,109.5 10,491

Source: PLA

PLA projections for the full year 2015 are for PC and LCV leasing to grow 15.4% year-on-year to PLN18 billion (€4.3 billion), with strong performance forecast for leasing in the premium car segment. Truck leasing is projected to grow 14.6% year-on-year to PLN12.1 billion (€2.9 billion). Continued economic growth in Poland and recovery in the eurozone − especially in Germany, Poland’s main trading partner – are important factors in these forecasts. An increase in domestic demand will remain of particular importance to the LCV segment in the coming year. Challenges to growth include protectionist measures introduced by other countries, most obviously in neighbouring Russia but also in France and Norway, as well as the controversial adoption by Germany of a minimum wage law (MiLog) which has ramifications for international carriers.Although the current strained relations with Russia present a constraint, particularly on trucks, Poland is at the centre of a hugely important axis for international goods transport and this sector will pick up in time.Growth in the second half of 2015 and early 2016 may be adversely affected by the slowdown in disbursal of EU funds. Poland has been the biggest recipient of EU Structural Funds, much of which has been provided for infrastructure improvement such as motorway and road development, and the current funding period is closing. However, Poland is again a major beneficiary in the next EU funding programme, and these funds will again be distributed in areas likely to support asset finance concerns and having the additional effect of increasing the need for vehicles.

Strong growth in fleet managementThe 2015 PZPM Annual Report shows that lease and car fleet management (CFM) companies purchased 115,600 passenger cars in 2014, an increase of 21.7% on the previous year.Fleet vehicles managed by members of the Polish Vehicle Rental and Leasing Association (PVRLA, or PZWLP − Polski Związek Wynajmu I Leasingu Pojazdow) totalled 125,900 at end-2014, an annual increase of 10.3%. The PVRLA commented: “Long-term rental, which 10 years ago was a very rare type of service in Poland, is now one of the most popular ways of financing and managing car fleets,” noting that

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13

by the end of 2014 long-term rental accounted for one-third of the total number of leased cars and more than one-fifth of new company car registrations.The total number of units in the portfolio of PVRLA members has grown significantly in recent years. Part of this is a result of new members joining although there has also been some consolidation. The following chart shows the growth of the six member companies with the largest portfolios of funded FSL units. All have made steady progress, with LeasePlan dominant overall. While Alphabet (formerly ING Car Lease), Carefleet and ALD have performed strongly recently, Arval’s portfolio has flatlined somewhat. Masterlease, which is not a member of the PVRLA, also has in the region of 14–15,000 units.

Leading long-term rental (FSL) providers – portfolio units

Source: PVRLA, Total Fleet Solutions

According to data from Keralla Research, the number of vehicles managed by CFM companies rose to 173,865 in 2014 − a year-on-year increase of 9.1%. Nearly three-quarters of these were managed under full service lease (FSL) agreements.At end-2014 25,189 companies outsourced their fleet management, a year-on-year increase of 25.6%. This was the highest annual rate of growth since before the global financial crisis, and the combined annual growth rate (CAGR) since 2010 has been over 16%.

2009 2010 2011 2012 2013 2014 Oct 2015

25,000

20,000

15,000

10,000

5,000

0

10,654

9,723

7,330

22,103

4,394

5,0685,063

16,019

Leaseplan Arval Alphabet Carefleet mLeasing ALD Automotive

12,706

9,999

6,666

10,661

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14

Car fleet management, end-2014

No. vehicles % of totalFull service lease 127,802 73.51%Leasing and service 24,427 14.05%Fleet management 14,501 8.34%Lease 7,135 4.10%Total 173,865 100.00%

Source: Keralla Research (www.keralla.pl)

Growth in the CFM market

2010 2011 2012 2013 20142014

vs 2013 CAGR

Number of units (000) 132.8 144.9 151.5 159.3 173.9 9.17% 6.97%

Number of clients (000) 13.9 16.7 17.3 20.1 25.2 25.64% 16.04%

Source: Asset Finance International, PZPM, Keralla Research

Market overview and outlookFrom the figures given above, it is plain that the company car market in Poland is important and growing. Looking at market trends, Paul Gogolinski, CEO of Total Fleet Solutions Poland and previously co-founder and inaugural president of the PVRLA, explained to Asset Finance International, “The statistics covering vehicle registrations, leasing and full service leasing confirm that Poland is experiencing tremendous growth in the company car market. Business registrations have played the greatest part in the surge of registrations that everyone had been expecting for years.”

He continued: “Many companies have in the past tended to prefer ownership of vehicles but this has changed rapidly, combining with economic growth and falling interest rates to result in more new cars being financed via leasing or FSL packages,” adding: “A further key to growth has been the government’s move to create more clarity in respect of the taxation for company cars and this has certainly encouraged more SMEs to go that route.”Gogolinski also pointed to the vital role played by captive finance companies in raising awareness among SMEs of the benefits of leasing combined with service and insurance packages, commenting: “One only has to enter a franchised dealer to see how cars are sold

on affordable monthly rental packages instead of sticker price as was usual until recently.”The buoyant state of the market was also stressed by Sławomir Wontrucki, managing director of LeasePlan Fleet Management (Polska), who stated: “Ten years ago new company car sales accounted for a bit less than 40% of the total; today they represent more like 70%.” In addition, he said: “Bear in mind that the projection of slightly above 350,000 new car sales per annum includes approximately 20−25% of re-exports. On the top of this we expect at least 750,000 remarketed cars from the EU.”

Paul Gogolinski, CEO of Total Fleet Solutions Poland

http://www.keralla.pl

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Regarding the outlook for the coming year, the consensus is that the markets should continue to enjoy growth, although perhaps not quite at the same level as in 2015. If there are any looming challenges, they are likely to be down to the current political situation in Poland. A change of government in the autumn has led to populist economic initiatives that are worrying the markets. According to Wontrucki: “Public deficit and debt may cause problems for the local currency, leading to higher import prices. There are also concerns about a bank/financial institution tax that may be imposed soon by the new administration. This will influence the cost of funding related to loans as well.”There is also some friction growing between Poland and its EU partners, a downside of which was described by

Gogolinski: “Poland is a major beneficiary of EU funds up until 2020 and in extreme circumstances, some of that may be questioned.” However, looking to the near term he said, “I am an optimist and believe that we will experience another good year.”

Mobility solutionsLooking at developments in mobility and in what areas to expect innovation, the local view is that the potential here is yet to be realised. “I expect them to come,” says Wontrucki, noting that car-sharing programmes are planned in certain larger municipalities such as Warsaw, and that long-distance car-sharing service BlaBlaCar and innovative taxi firm Uber are already operating in Poland. Gogolinski commented: “Poland is still quite traditional in its approach to mobility. It is clear that international players will implement their solutions in Poland eventually. However, I do not see so many so-called mobility solutions currently operating here.” There is a similar feeling concerning the as yet untapped potential for collaboration between finance providers and technology developers, with Gogolinski observing “there are plenty of technology innovations or applications which, when integrated, will support mobility solutions.” However, he concluded: “What I can state with every certainty is that Poles are highly creative. It’s a young business population and I am confident that we will see locally developed mobility solutions pretty soon.”

Sławomir Wontrucki, managing director of LeasePlan Fleet Management (Polska)

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What’s driving fleet car pricing?A round up of some of the key auto finance industry stories in recent weeks

New lease accounting rules The announcement from the International Accounting Standards Board (IASB) at the start of 2016 that it has published new lease accounting regulations has aroused concern in some quarters of the auto leasing industry. Scheduled to come into effect for accounting periods from January 1 2019, IFRS 16 adopts a new approach, the “right of use” model, which differs substantially from the current standard, which does not require operating leases to be reported in company accounts.Under the new model, a lessee would identify the right to use a leased asset on their balance sheet and incur a corresponding liability for future rental payments. For companies leasing car fleets, for example, this could mean additional liabilities will need to appear on the balance sheet.Simon Goldie, head of asset finance at the UK’s Finance & Leasing Association (FLA), said: “We remain concerned that the standard could put an additional burden on lessees and potentially deter some of them from using leases. The next step in the process is for the new standard to be considered by the relevant European and national adopting authorities. We will continue to make our concerns clear to the European Financial Reporting Advisory Group (EFRAG), the European Commission and Parliament, and the UK Financial Reporting Council.”The FLA’s concerns continue despite the fact the final version of the standard includes some major simplifications which mean that short term hire vehicles, informal vehicle extensions and ancillary leasing services (e.g. maintenance) do not have to be reported. It also gives fleets the option to report leases on a portfolio level rather than individually.Initially, the new standard will only apply to public sector organisations and firms that report to IFRS. The FLA says most UK firms report to the UK’s GAAP and will be unaffected until such time these converge with IFRS standard, although they will need to be prepared.The British Vehicle Rental and Leasing Association (BVRLA) is more positive in its response, saying it is confident that its members will be able to adapt their business processes to help customers with financial reporting as required under IFRS 16 Leases. BVRLA chief executive Gerry Keaney says bringing leased vehicles onto the balance sheet will not erode the key benefits of leasing for the sector. “Vehicle leasing continues to grow in popularity and this has very little to do with any balance sheet advantages,” he said. “Its main value comes elsewhere, sheltering companies from the risk of fluctuating vehicle values, providing them with extra flexibility and purchasing power and freeing-up precious working capital that would otherwise have been spent buying an asset.

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“Our members already advise customers on how to reduce fleet costs and emissions and I am confident they can add even more value by helping them with their reporting requirements,” Keaney said. Leaseurope, the trade body for European leasing companies, said a critical question was how straightforward it was for businesses to distinguish between leases and services. The association said in a statement: “A clearer and more meaningful solution to this problem will be essential to the success of the standard.”Leaseurope said it plans to review the new standard in detail to see if the IASB has delivered rules that will work in practice for European businesses, and will focus on analysis to ensure it properly reflects the extra costs for businesses that invest using leasing and does not overstate the benefits to users of accounts, including investors.Enrico Duranti, chair of Leaseurope, said: “Leasing delivers very significant real economic benefits to millions of European businesses and changing the accounting treatment should have no impact on this. “However, it has been three years since businesses have had a chance to review the new rules and they have changed a great deal in that time. Leaseurope will be reviewing the new standard and the cost/benefit analysis in detail and providing our feedback to EFRAG, but it’s important that European companies that lease property, equipment or vehicles also alert EFRAG and the European Commission if they see any problems.The US standards body, the Financial Accounting Standards Board (FASB), which is responsible for the US Generally Accepted Accounting Principles (GAAP), is also due to announce its revised lease accounting standard in early 2016. Again, this standard will bring leases on balance sheet, but will diverge from IFRS 16 by retaining elements of the existing “dual model” approach.

Drivers positive about telematicsCorporate car drivers are warming to the idea of having a telematics device installed in their vehicle and are also becoming more enthusiastic about car sharing, according to a study of some 4,000 drivers in 17 countries worldwide.The annual global LeasePlan MobilityMonitor found that 50% of respondents said they would feel comfortable driving with a telematics device in their car, while 39% (up from 35% in 2014) reported the technology would change their driving behavior. “Telematics can drive a company’s fleet efficiency,” said Nick Salkeld, chief commercial officer at LeasePlan, “Not only from an economic point of view, as increased safety and higher recovery rates of stolen cars will lead to reduced insurance claims, but also with respect to environmental compliance by means of a reduction of fuel consumption and car usage.”The study figures back this up, showing that the number of drivers who say telematics encourages them to drive more cautiously has risen from 9% in 2014 to 15% currently, along with paying more attention to fuel consumption (12%) and/or driving slower (9%).

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The research also shows that interest in car sharing solutions among lease drivers is continuing to grow. One out of eight (13%) drivers is interested in corporate car sharing, preferring flexibility over having a dedicated lease car. This compares with less than 10% a year ago. The highest interest (16%) is noticed among young males between the ages of 18-34.“We see increased interest in the concept of ‘usage’, which means that assets are shared rather than owned, and a tendency towards subscription-based products and services,” says Salkeld. “There is an increasing demand for sharing solutions especially among younger working professionals in large cities where parking costs and living expenses are high.”Finally, the MobilityMonitor identified that 50% of drivers have an interest in private leasing as an additional employment benefit, meaning they would like to lease a private vehicle and pay it out of their salary. Three out of 10 (29%) say they are interested in private leasing for a second car.

Simplified salary sacrifice car scheme Leading salary sacrifice car provider Tusker has launched a new scheme designed to appeal to millions of employees working in medium sized businesses, as it offers a shortened and simplified implementation process.David Hosking, chief executive officer for Tusker, commented: “Up until now there hasn’t been a salary sacrifice product that is suitable for mid-sized businesses. The demands of tailoring schemes properly for large employers and the detailed implementation process has meant that they are not usually viable for employers with fewer than 1,000 eligible employees.“The new off-the-shelf salary sacrifice product, called Accelerate, is designed for companies employing between 250 and 1,000 people. It works in the same way as Tusker’s existing Salary Sacrifice for Cars (SS4C) Scheme, where employees are provided with all their motoring needs, including insurance, maintenance and early termination protection for a fixed monthly reduction to their salary, meaning all they need to do is add fuel.Larger companies can also sign up for Accelerate, providing them an “express option” to introduce salary sacrifice very quickly because of the streamlined implementation process.“With Accelerate we have designed a scheme that works ‘out of the box’. It’s ready to go immediately, giving employees instant access to information, videos, case studies, quotes and orders,” Hosking explained.Watford-based Tusker launched its first online salary sacrifice scheme in 2008 and now counts the NHS, National Grid and Gucci among its clients.

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Leading fleet management and driver mobility company LeasePlan has launched SwopCar, a new service for car sharing which is designed to help companies better meet their employees’ mobility needs, optimised their spend on corporate and private vehicle mobility and improve their sustainability performance.

LeasePlan launches car sharing service

Driver-oriented

Benefits

• Maximise vehicle utilisation • Optimising company's spend • Better & sustainable performance • Improved efficiencies for fleetmanagers

Swopcar: meeting the mobility needs of employees

How it works

From vehicle-oriented services to individual driver-oriented services

Easy to book a car online or on a smartphone

Easy to access a SwopCar without the use of a key.

By tracking every SwopCar, it’s easy to keep each vehicle maintained, fueled and cleaned.

The SwopCar service has a dedicated SwopCar team, for inquiries or support.

SwopCar has a usage reporting system for results and insights.

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SwopCar allows companies to share vehicles among employees on-demand, and aims to relieve fleet and mobility managers of the operational and administrative overheads associated with managing a fleet without dedicated drivers. The new service is based on LeasePlan’s extensive experience in corporate car sharing, initially piloted in the Netherlands and Luxembourg. SwopCar will be deployed globally within the coming months.Nick Salkeld, chief commercial officer at LeasePlan, explained: “We developed the SwopCar service in order to meet the growing demand for driver mobility solutions beyond the traditional lease product. As a result of trends such as urbanization, sharing, eco-awareness, mobile devices and connectivity, we foresee a shift from vehicle-oriented services to individual driver-oriented services.”Leaseplan, which operates a fleet of 1.5 million vehicles worldwide, says the new service offers a number of benefits, including maximising vehicle utilization by allowing a company’s employees to take and share a SwopCar when needed, reducing carbon emissions and considerably diminishes the need for parking spaces. It addresses several challenges faced by fleet managers: the inefficiencies of finding out which car is available when, for how long and who will be or has been the user. The technology behind the service gives eligible employees access to an online reservation platform and smartphone app, so they can check vehicle availability and plan their trip accordingly. The entire reservation and vehicle access process is self-service and requires no assistance, enabling on-demand car sharing and better fleet utilization. The cleaning, refuelling and maintenance are taken care of by LeasePlan’s extensive network of service providers, which the company says relieves many of the fleet manager’s concerns around car sharing. By tracking every SwopCar, it is easy to keep each car maintained, refuelled and clean. Furthermore, fleet managers have no operational and administrative overheads relating to reservations, key management, vehicle status check and mileage reimbursements. The usage reporting system provides reports and car insights on CO emissions, helping address the growing need for increased corporate sustainability. In addition, it can add to a company’s employee satisfaction.In addition, the SwopCar service reduces mobility costs and offers fleet managers an accurate and transparent overview of vehicle usage, providing insights into how and when employees need and utilize a SwopCar. This data can be used to calculate and pass on costs to the department or employee concerned.

UK government backs green vehiclesNottingham, Bristol, Milton Keynes and London have been awarded significant funds to promote green vehicle technology after successfully bidding for a share of a multi-million pound pot created to support the take-up of plug-in electric cars across the UK.The winning cities will deliver a rollout of cutting edge technology, such as rapid-charging hubs and street lighting that doubles as charge points, along with a range of innovative proposals that will give plug-in car owners extra local privileges such as access to bus lanes in city centres. Around 25,000 parking spaces will also be opened up for plug-in car owners saving commuters as much as £1,300 a year.

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The UK transport secretary, Patrick McLoughlin, said: “The UK is a world leader in the uptake of low emission vehicles and our long-term economic plan is investing £600 million by 2020 to improve air quality, create jobs and achieve our goal of every new car and van in the UK being ultra-low emission by 2040.”As part of the Go Ultra Low Cities initiative, London is awarded £13 million to create “Neighbourhoods of the future” prioritizing ultra-low emission vehicles (ULEVs) in several boroughs across the capitalMilton Keynes will receive £9 million to open a city centre Electric Vehicle Experience Centre – a “one stop shop” providing consumer advice and short-term vehicles loans. Bristol gets £7 million to offer residents free residential parking for ULEVs, access to three carpool lanes in the city, over 80 rapid and fast chargers across the city and a scheme encouraging people to lease a plug-in car for up to four weeks to help them better understand the range of benefits that electric vehicles bring.Nottinghamshire and Derby will use £6 million of funding to install 230 chargepoints and offer ULEV owners discount parking and access to over 13 miles of bus lanes along key routes across the city. The investment will also pay for a new business support programme letting local companies “try before they buy”.

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Forecast Car ResidualsRise as Optimism Returns

Changes in residual value (RV) forecasts, SMR costs and lease rental rates to January 2014Forecast residual values Forecast service, Current rental rates

maintenance and repair costs

3 month 12 month 3 month 12 month 3 month 12 month

change change change change change change

France +0.2% +1.7% +0.7% +2.1% +2.0% +1.9%

Germany +0.9% +0.4% +0.8% -2.7% -0.8% -2.5%

Italy +1.1% -0.9% -0.1% -8.2% +1.9% +0.6%

Portugal +0.7% -2.6% +0.2% -2.7% -1.2% -4.9%

Spain -0.1% +1.0% -1.4% -4.1% -0.9% -1.3%

UK +2.8% +7.3% -0.1% +0.4% -0.2% +4.0%

It appears that fleet lessors across Europe arebecoming increasingly optimistic about futureresidual values. To end, January we sawlessors increase their forecast RVs by 2.8% inthe UK, 1.1% in Italy, 0.9% in Germany, 0.7%in Portugal and 0.2% in France. Spain reportedthe only reduction and this was by just 0.1%).

These figures are collated by Experteye’sEuropean Leasing index survey which tracksforecasted residual values (RV), servicing,maintenance and repair (SMR) costs and rentalrates in six European countries using datasupplied by major leasing companies.

Looking over the past 12 months we can seethat at one extreme forecast RVs rose by 7.3%in the UK, and at the other extreme they fell by2.6% in Portugal.

Forecast SMR costs have also stabilisedsomewhat over the last three months, havingsuffered significant falls in Spain, Portugal, Italyand Germany in the previous nine months.

Rentals seem to have stabilised somewhat tooin the last three months, having been quitevolatile in the UK, Portugal and Germany inparticular in the previous nine months.

Professor Colin Tourick is a management consultant, former MD of Citibank's fleet leasingbusiness and a 34 year leasing industry veteran

Editor: Professor Colin Tourick Editor in Chief: Brian Rogerson© Asset Finance International, 2013. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of thenamed individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omissions or inaccuracies. No copying, whether whole or in part, transmission by any forms or means, electronic or otherwise is permitted.

• The comparisons are for vehicles with a contractduration of 36 months / 90,000 KM• Twelve month comparisons show change sinceFebruary 2013• Three month comparisons show change sinceNovember 2013. • Rental rate changes compare the rates in effect atthe time of the survey with those in effect three ortwelve months ago.

• RV and SMR changes show the change inparticipating leasing companies' forecasts of residualvalues and maintenance costs over the period.The Experteye European Leasing Index reports ontrends in leasing company forecasts, plus currentrental rate movements, covering representativeversions of up to 250 vehicles in the six markets.

Forecasts for residual values show leasing confidence back across EuropeProspects for the Spanish leasing sector are on the up, according to the latest Experteye European Leasing index survey, which tracks forecasted residual values (RV), servicing, maintenance and repair (SMR) costs and rental rates in six European countries using data supplied by major leasing companies. The data shows that rising forecasted RVs and reduced SMR budgets have resulted in a better deal for fleet operators in the Spanish leasing sector, in line with much of mainland Europe.Since the end of 2013, Spain’s rental rates have fallen steadily, with the monthly cost for leasing a car now 3.3% less than it was two years ago, and 1.9% lower for light commercial vehicles.Even though new car prices have risen on average by 3.2% over the last 12 months, rentals remain lower thanks to a 9.3% improvement in forecasted car RVs over the last two years, and a substantial 19.8% rise in anticipated future LCV values.A drop in SMR costs has also helped. The SMR budgets on cars have fallen by 1.3% in the last two years and by 5.4% since November 2014. For LCVs, they have dropped by 4.6% over the last 24 months and by 5.3% last year.Rick Yarrow, managing director of Experteye says: “The Spanish leasing sector is enjoying some positive trends. The improvement in forecasted RVs signals confidence in the future used vehicle market and economy as a whole.“The reduction in the SMR budgets built into contract rentals means leasing companies are passing on the savings they are enjoying, which is good news for customers. As a result, rentals are coming down as new car prices rise.”Back in 2009, when the global recession was taking grip, Experteye gave monthly rentals, forecasted RVs and SMR budgets a nominal index of 100 and have been tracking their movements ever since. Six years on and average forecasted RVs, as a percentage of new car prices, are stronger than they were back then; however SMR budgets and monthly rentals have still not risen to pre-recessionary levels.“The indexing is a vital exercise,” continues Yarrow, “as it shows that fleet operators are still getting a better deal than before the economic downturn, and the leasing sector’s overall confidence in future markets is continuing to improve.”

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Changes in RV Forecasts, SMR costs, and lease rental rates to November 2015

Forecast residual valuesForecast service,

maintenance, and repair costs Current rental rates

3-month change

12-month change

3-month change

12-month change

3-month change

12-month change

Germany 1.0% 2.1% 3.7% 2.9% 3.4% 7.8%Spain 1.1% 2.9% 2.5% 5.4% 3.5% 2.2%France 2.2% 6.1% 1.5% 5.5% 0.3% 4.7%UK 0.3% 1.7% 1.2% 3.5% 0.1% 3.9%Italy 1.7% 8.7% 0.5% 2.6% 0.6% 4 .3%Portugal 4.7% 0.2% 0.6% 3.9% 3.5% 3.0%

Market summaries across Europe for three and 12 months to November 2015

Germany: Fleet operators in Germany have seen a 7.8% fall in rental rates over the last 12 months, with prices continuing to come down by 3.4% in the latest quarter. Forecasted RVs are up by 2.1% for the year and 1% since September 2015, and SMR budgets have come down by 2.9% for the year and 3.7% for the quarter.Spain: Rental prices are coming down in Spain, with a 3.5% reduction in the last three months and a drop of 2.2% since last October. RV forecasts are up by 2.9% for the year and 1.1% for the quarter. SMR budgets have seen quite a strong reduction, coming down by 5.4% since October 2014 and by 2.5% in the last 3 months.France: French confidence in the future used vehicle market is reflected in a 6.1% improvement in RV forecasts over the last 12 months, and 2.2% uplift for the quarter. SMR budgets are down by 5.5% for the year but have climbed by 1.5% since September. As a result, French fleet operators have enjoyed a 4.7% reduction in their rentals since October 2014 but these have crept up by 0.3% in the last three months.The UK: During the last 12 months the UK is the only nation in the Experteye survey to have seen a fall in its RV forecasts (a drop of 1.7%). This trend continues with a 0.3% reduction in the last quarter. The UK has also reported the largest increase in SMR budgets, with a 3.5% rise for the year and 1.2% for the quarter. This is not good news for fleet operators who have seen rental costs rise by 3.9% since October 2014, albeit they fell by a fractional 0.1% in the last quarter.Italy: Forecasted RVs have risen more steeply in Italy than any other nation surveyed, with an 8.7% annual improvement, although this has calmed to 1.7% for the quarter. SMR budgets have risen by 0.5% during the last three months after a year that saw them come down by 2.6%. Rentals are up by 0.6% for the quarter after falling by 4.3% over the 12 months.Portugal: Portuguese RV forecasts rose by 4.7% during the last quarter, the highest three month rise of all the nations surveyed. This follows a year in which they climbed by just 0.2%. SMR budgets were up by 0.6% for the quarter, after falling by 3.9% for the year. Monthly rentals came down by 3.5% during the last three months with a 3% reduction for the year.

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Editor: Pat Sweet Editor in Chief: Brian Rogerson

© Asset Finance International, 2016. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of the named individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omissions or inaccuracies. No copying or transmission, whether whole or in part, in any form or by any means, electronic or otherwise, is permitted.

Notes ●● The comparisons are for vehicles with a contract duration of 36 months /

90,000 KM●● Twelve month comparisons show change since October 2014●● Three month comparisons show change since September 2015 ●● 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.

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