Following is a press release from independent market analysis firm, Datamonitor for immediate release.
Hyderabad, Tuesday, January 05, 2010 - As a result of the collapse of the banking sector in 2008, credit, even for well-established companies, became dearer, which curtailed the growth of the fleet industry. The rise in the cost of re-financing caused lessors to extend their leasing contracts, and the decline in business activities caused many companies to lay off their workforce and downsize their fleet requirements to cut costs. This all contributed to the reduction in demand for new company cars, and caused a significant decline in new purchases. Datamonitor estimates that new company car purchases in 2009 will register a fall of about 26% in the 25 European markets covered in Datamonitor's "The Impact of the Credit Crunch on the European Fleet Market".
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DATAMONITOR PRESS RELEASE
INDEPENDENT ANALYST COMMENT
Tarun Bisht, Fleet Analyst, Datamonitor
European fleet market set to recover by 2011
As a result of the collapse of the banking sector in 2008, credit, even for well-established companies, became dearer, which curtailed the growth of the fleet industry. The rise in the cost of re-financing caused lessors to extend their leasing contracts, and the decline in business activities caused many companies to lay off their workforce and downsize their fleet requirements to cut costs. This all contributed to the reduction in demand for new company cars, and caused a significant decline in new purchases. Datamonitor estimates that new company car purchases in 2009 will register a fall of about 26% in the 25 European markets covered in Datamonitor's "The Impact of the Credit Crunch on the European Fleet Market".
Nevertheless, the downturn in the fleet market provided the impetus for leasing companies to streamline their business processes and chart out new business strategies in an attempt to minimize the impact of the credit crunch. For example, these firms are now focusing on consolidating their market position and portfolio rather than geographic expansion. In addition, to improve residual values, leasing companies are looking to diversify their remarketing efforts into channels such as direct sales to retail and drivers, auctions, and the exportation of end-of-contract cars. Both they and their customers are attempting to extend leasing contracts to mitigate the impact of the fall in the residual values of end-of-contract cars. Furthermore, customers are demanding fuel-efficient cars to save themselves from the burden of governmental emissions-based taxes, which are likely to alter the portfolio of many lessors in favor of more environmentally-
Of late, the European economy has begun to show some signs of recovery. Government intervention and stimulus packages have improved the financial and banking sectors, thus giving hope of a revival in the fleet sector. Datamonitor expects the market's recovery to commence in early 2010, with sizeable growth not expected until the end of that year. However, some sectors will recover faster than others. New company car purchases are expected to show a modest growth of 4.6% in 2010, with an expected annual growth rate of 8.5% between 2009 and 2014.
Notes for editors:
This release uses research highlighted in Datamonitor's new report: "The Impact of the Credit Crunch on the European Fleet Market" (BFAU0367), published on December 24 2009.
For further information:
Tarun Bisht, Fleet Analyst with Datamonitor’
More information is available from the Datamonitor Group Media Team. Please contact:
India & MENA
Aartee Sundheep
t: +91 40 6672 9586
e: asundheep@datamonitor.com
Europe
Michael Youda
t: +44 (0)161 238 4081
e: myouds@datamonitor.com
APAC
Tanisha Kaul
t: +61 3 9601 6723
e: Tanisha.kaul@
US
Alan Sott
t: +1 570 687 9315
e: asott@datamonitor.com
