Increasing customer demand for hassle-free mobility solutions drives growth in private leasing market, finds Frost & Sullivan's Mobility team
LONDON, March 2, 2017 /PRNewswire/ -- A dynamic shift from vehicle ownership to usership has set the stage for double-digit, year-on-year growth in the European private vehicle leasing market. Growth is augmented by customer demand for hassle-free, flexible mobility solutions. Original equipment manufacturers (OEM), leasing companies, brokers, and financial firms must focus on sustainable solutions that offer customer value while driving profits and market penetration.
"Product innovation and advancement in technology, like telematics and usage based tariffs, will provide leveraging opportunities for providers and create new business opportunities for growth," said Frost & Sullivan Mobility Research Analyst Abishek Narayanan.
Europe Private Vehicle Leasing Market Strategic Analysis, part of Frost & Sullivan's Automotive & Transportation Growth Partnership Subscription, provides insight into the private vehicle leasing market for light commercial vehicles in Europe. The research focuses on the competitive landscape, lender profiles, and distribution trends.
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Strong competition is expected as smaller participants enter the market making it fragmented followed by consolidation through mergers and acquisition i.e. inorganic growth of big leasing companies in their pursuit to expand their portfolio to include private lease product line.
From a regional perspective, high growth rates are expected across Benelux, the Nordics, and France. While Germany secured the most new contracts in 2015, Spain has seen a rise in car prices, which has forced customers to look for alternative modes of vehicle possession. Switzerland is controlled by retail sales and has a high penetration of private leasing contracts.
Other growth opportunities and trends include:
- In 2015, private leasing contracts sold accounted for 10.6 percent of the total retail sales. Though private leasing is a growing segment, loan and hire purchase models dominate the retail financing market.
- Indirect distribution channels have higher flexibility in selecting their collaboration partners and can offer lease contracts at competitive prices.
- Expected softening of used car prices coupled with an increase in demand for re-marketing will give rise to new market opportunities.
- OEMs dominate the private lease offering.
"Demand from retail customers such as Gen Y, retirees, professionals and entrepreneurs in terms of cost-effective, affordable and comfortable mobility options is on the rise," notes Narayanan. "Future solutions, for instance car sharing, peer-to-peer lending and fractional leasing, will be influenced by awareness of product and usage preferences."
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