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Bogdan Nitulescu, Tremend
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Operational leasing on the road to growth

The Romanian operational leasing market went up by 7.5 per cent in the first semester of the year compared with the end of 2016, exceeding 64,350 units. During this period, over 9,200 cars were registered in operational leasing, representing a share of 17.5 per cent in the overall new cars and utility cars registrations, according to the Association of Operational Leasing Companies (ASLO), as reported by Petre Barac of The Diplomat

2017-09-25 14:25:21 - From the Print Edition

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The first semester of the year confirms the consolidation tendency of full-service operational leasing product as an unavoidable solution of companies' mobility efficiency," said Dan Boiangiu, president of ASLO. "The growth by over 30 per cent compared with 2016 of operational leasing registrations of the overall new cars is an additional proof of notoriety and attractiveness of this solution."

According to ASLO, the top five members include LeasePlan Romania, ALD Automotive, Arval Service Lease Romania, Porsche Mobility and Unicredit Leasing Fleet Management.
The members of the association represent over 96 percent of the overall market. The structure of the portfolio is composed of complete operational leasing services with a share of 76 per cent, followed by management fleets of 15 per cent, the rest representing operational leasing without administration services.

LeasePlan to reach a turnover of 45 million Euro in 2017

With an aggregate turnover of 200-250 million Euro a year, it is hard to say that the operational leasing sector has a direct influence on the economic growth, but if you take into account the amount of resources (capital and people) it unlocks on the client side, the latter may put more focus on their core businesses and create incremental value, according to Bogdan Apahidean, general manager of LeasePlan Romania. "When adding our services providers (pick-up, road side assistance and replacement car) which otherwise (i.e. not through operating lease companies) would have dealt with a lower demand, one can see the real contribution to economic growth," Apahidean told The Diplomat-Bucharest.

In his opinion, the operational leasing market is on a growing trend based on the most recent published quarterly review: "Based on ASLO estimation, we should expect an eight to ten per cent growth by the end of 2017 compared to past year. That would lead us to a market volume of 66,000 vehicles."
Apahidean added: "At LeasePlan Romania, we have achieved good results in both client retention and client acquisition. We are now around 750 vehicles "better" than the same period, last year. This year, though, will be a complex one: new brand identity, exploring new channels and strengthening our digital presence are the main strategic pillars. We are confident that our skilled people will put their efforts into surpassing our objective of 12,000 vehicles in administration. The world is evolving at a tremendously rapid pace around us and it is the one who adapts fastest who will win. Electric mobility, digitalized services for our drivers and customers and excellent services quality are the areas in which we will invest in order to generate more value. Given the most visible trends out there in the market, I think electric vehicles and multi-modal mobility will be the hot topics for the coming years."
LeasePlan closed last year with a turnover of 42 million Euro and 73 employees. Their targets for 2017 are 45 million Euro and 75 employees.

Business Lease to reach eight million Euro turnover for 2017

The Romanian market for operational leasing and fleet management increased by 7.5 per cent in the first semester and 17.5 per cent of all new registered vehicles are going via operational leasing, so more and more companies recognize the advantages of such products and services, Philip Aarsman, managing director Business Lease Romania, told The Diplomat-Bucharest.
"The latest predications of the economic growth in Romania show all time high percentages," Aarsman said. "If your company wants to benefit from this, it needs to be able to focus and concentrate fully on its core business. With operational leasing, you don't have to invest your money in cars and with both operational leasing and car fleet management your attention will not be distracted in the confidence that your fleet is taken care of by a reliable partner."

Furthermore, Business Lease's Aarsman said that an increasing number of companies are outsourcing their fleet activities, first with a partner who takes care of the operational activities (car fleet management) and gradually replacing their own cars with cars via operational leasing.
"We want to reach a similar position in Romania as we now have in other Central European countries," he added. "Our turnover in 2016 was 20 per cent bigger than 2015, while at the first semester of 2017 we registered four million Euro in turnover. The estimation for the end of this year is around eight million Euro. Business Lease's team has 40 colleagues, 37 in Bucharest and three in its regional office in Cluj.
Business Lease, an international company providing complete mobility solutions through operational leasing, car fleet management and rental in Romania, closed its first semester of 2017 with a turnover of approximately four million Euro, an increase of 20 per cent compared to the same period last year, due to an increase in number of customers and due to the opening of its first Regional Office in Cluj.
"We were expecting these results, as last year we expanded our services portfolio, we increased our customer database and we focused more on addressing small and medium-sized companies, through a very targeted consultative selling process", said Ioana Grigore, commercial director business, Business Lease Romania.

This year, new clients such as TUV Rheinland Romania, Rail Cargo Logistics - Romania Solutions, DSV Solutions, Altex Romania, GFR (Romanian Railway Group), Ortec have joined the company portfolio. Thus, the company′s representatives estimate that by the end of the year, the customer portfolio will continue to grow and the turnover will reach almost eight million Euro, which will represent a business growth of more than 20 per cent compared to 2016.

One of the major reasons for this increase is the investment made in the first half of 2017. As a result of the increase in share capital by nine million RON (two million Euro), the Dutch company made a direct investment of 70,000 Euro, with the opening of a regional office in Cluj, which aims to strengthen existing regional operations and develop new ones.

"Since the beginning of this year, all of our new vehicles have been equipped with a device that provides online information on mileage, fuel consumption and information on the technical condition of the car, comparable to what the driver normally receives via its car dashboard," said Philip Aarsman, Business Lease's Managing Director. "This information allows us to perform tasks more efficiently and proactively and directs maintenance activities to our partners, ensuring cost and quality optimization. Through our online tools, the customers and car users receive this daily updated information and insights about their vehicle's fuel consumption, to manage and reduce total mobility costs."

Hertz Romania wants to increase its revenues by at least 26 per cent by the end of 2017

The Operational Leasing market in Romania, which still has a long way to go in order to reach average European performance levels, has started to become more important among companies as they understand that it is better to shift their investments from cars to their core business, which insures an efficient business through adaptability, mobility and cost predictability, according to George Asimakis, country manager, Hertz Romania.

"It is a service that grows every day and represents a financing method that constantly grew in the past ten years, no matter of the economic crisis," Asimakis told The Diplomat-Bucharest. "According to ASLO, the first semester of the year confirms the consolidation tendency of full service operational leasing product as an unavoidable solution of companies' mobility efficiency. The growth by over 30 per cent compared with 2016 of operational leasing motor vehicle registrations of the overall new cars is an additional proof of the notoriety and attractiveness of this solution."

George Asimakis said that the positive evolution of the operational leasing and fleet management market is in line with the forecasts made at the end of last year. "The bigger share of full operational leasing services, which expanded by eight percent versus the similar period of last year, proves the maturity of the market and the higher adoption rate of the benefits of our core product," he explained. "According to ASLO, another indicator that marks a significant increase is the share of vehicle registration operational leasing in the total number of new vehicle registrations, which reached 16 per cent compared to 13.3 per cent of the whole year 2016. This share that is 20 per cent higher, reconfirms both the growth of our product popularity among local companies, including SMEs, as well as the significant contribution of our industry for increasing the renewals of company`s vehicles."
Hertz Romania registered a growth of 20 per cent in the first semester of 2017 compared to 2016 with regards to revenues and fleet expansion, and expects an increase of at least 26 per cent by the end of 2017.

"Digitalization, online web tools for fleet reporting, and car sharing are some of the new trends on our market of operational leasing, all aiming for a much more efficient and reliable customer service," said Asimakis.
Hertz Romania had a turnover of 10.5 million Euro in 2016 and a team of 42 employees. For 2017, the company has a turnover target of 13 million Euro and wants to add six new employees to its Team.

Sixt New Kopel: More and more companies are using cars as a tool and not as an asset

The level of development of the operational leasing market in a country reflects its economic development, Tal Lahav, CEO Sixt New Kopel, told The Diplomat-Bucharest. "The more the market grows and develops, the more the operational leasing segment grows," he said. "Moreover, on the Romanian market, development of the operational lease market contributes significantly to the Romanian Economy. For example, in Romania, the operational leasing market is at a low level comparing with western European countries. To be more specific, this means approximately one-fifth of the total number of new registered cars in one year, comparing with a rate of one-half to one-third registered in the western countries. One main reason for this is that there is still a market learning curve related to the benefits of Operational lease. The operational leasing services are a great product for mature markets and in the eastern European countries this is increasing year by year."

According to the quoted source, the operational leasing industry has increased every year by double digits, and more and more companies are using the cars as a tool and not as an asset. "This is leading us to the conclusion that the local business environment is developing and progressing to understand that to be efficient in operations, most of the time, it is better to have an operational leasing contract for their fleet," underlined Lahav. "In our market there is great potential for development in the operational leasing market. Above other stimulators, I enumerate our main focus, the Start-ups and the SMEs. The development of the market in understanding the benefits of the operational leasing product is another main stimulator.

Sixt New Kopel Group registered over 14 million Euro turnover in the first half of the year and estimates 30 million Euro for the end of 2017. The total investment value for this period was over 6.5 million Euro, with over ten per cent more compared to the similar period of 2016. In 2017, Sixt New Kopel Operational Leasing and Sixt Rent a Car fleet reached over 4,000 cars in administration and an estimated growth of over 15 per cent is expected by the end of the year.
"2017 is very successful year for Sixt New Kopel," said Lahav. "Our aim is to develop a synergetic proactive Group with talented and creative team of professionals. Our team was always able to offer all solutions existing in the automotive industry at once: car rental, operational leasing, second hand car sales, new car sales and auto service."

ALD Romania: operational leasing becomes a vital resource for SMEs

It is a good time for the operational leasing market, which is progressing on several directions, Frederic Banco, General Manager ALD Automotive Romania, told The Diplomat-Bucharest. "On one hand, there is the trend of mobility manifested at the European level, which is impacting multinationals in Romania more and more, and on the other hand, there is an accelerated growth of needs and interest from local SMEs for this type of service. At the European level, on the background of the technological progress and the collaborative economy, the companies are starting to perceive transportation as constantly changing, from different perspectives from one country to another and from one industry to another."
Banco added that the companies need an interconnected mix of products and mobility services instead of classical operational leasing services: "Once the local market is maturing, we anticipate the arrival of such trends in Romania as well. For this reason, ALD Automotive is seeking to identify new patterns of mobility specific for the corporate clients at the local level. In Romania, for instance, we have noticed the growing interest for the eco mobility solutions, so this year we launched ALD Electric, a product which is available only in some countries."

According to Banco, operational leasing becomes a vital resource for SMEs by significantly reducing their costs of developing a vehicle fleet. "The money saved by externalizing the financing and management of the fleet to a specialized supplier can be better invested, in this scenario, into further development of the company's core business," he explained. "The Romanian operational leasing market has constantly evolved, in the past ten years, while it has contributed significantly to the economic environment and to its development, starting with the impact it has within the auto market, to counselling the local companies over the financing instruments they have for developing and managing their auto fleets."
During the first semester of the ongoing year, the total volume newly-financed within operational leasing grew, and the market exceeded 64,350 managed vehicles, which represents an advancement of 7.5 per cent at the end of 2016, according to the Association of Operational Leasing Companies (ASLO). During this period, there have been registered over 9,200 vehicles in operational leasing, representing 17.5 per cent of the total of registered new vehicles and vans, and the product of full-service operational leasing has been constantly growing.

Banco commented: "If we are to analyze the operational leasing from the perspective of the volume of registered vehicles, the evolution is clearly positive, even if, for the time being, the growth is not as significant as it used to be during the past years. A steadier increase is a sign of maturity in this sector, which has a huge growth potential for aligning with the other European countries. Most definitely, the market is growing and companies in the industry are diversifying their range of services and facilities to provide the best mobility solutions and unique business experiences in terms of financial flexibility. There is an accelerated competition level, which is driven by the high professionalism of the players and which is put to work only for the best interest of our clients. Things are moving at a constant pace; international trends are adopted faster and operational leasing companies do everything to integrate them in their offers as quickly as possible."

In his opinion, the main growth engine of the market is represented by the appetite of SMEs for this type of financing, but also the growing interest of local and multinational companies for full-service operational leasing. "At the same time, the growth of the car market remains an important stimulator for the operating leasing sector, which will maintain a moderate upward trend, specific to a market that has already reached a maturity level," Banco underlined. "We are observing certain consumption patterns among our customers, which are frequently looking for specific mobility solutions and pay attention to the needs of car users. They benefit from new car models with modern technologies and extensive mobility benefits such as mobile applications and online reporting solutions."

The upward trend and the positive evolution of the local operational leasing market have been reflected in ALD Automotive's business for the first six months, according to their expectations and calculations.
"Compared to the same period of the previous year, we saw an increase of over ten per cent of the total fleet. It is a performance that we are proud of, especially since we have recorded this evolution on our core business, the full-service operational leasing," Banco added.

The ALD business objectives for this year include the launch of several new solutions and products dedicated to the SME and corporate segments: "ALD Electric, the first operational leasing product for electric cars and hybrid plug-ins available in Romania, and the new mobile and web solution My ALD, which includes the application dedicated to car users and the dedicated portal for the fleet managers."
Banco said the trend in the local market is to opt for full service leasing, being the best option for business efficiency and long-term business stability for a company. "Full-service operational leasing will continue to have a defining role in the development of the industry, and the increased demand for complete services is a sign of a mature market and consolidation of this funding and fleet management model," he explained. "One of the most important approaches visible lately, even locally, is related to environmental protection. Although the demand is still small compared to the international market, the popularity of electric and hybrid vehicles is on the increase, and ALD Automotive is a promoter of the concept of greening the fleet, actively promoting alternative transport modes. Analysing market trends, one of our priorities is to develop mobility solutions for both corporate clients and SMEs, to support them in the process of improving corporate mobility."

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