Fleet consultancy Colin Tourick & Associates Ltd has carried
out a ‘vox pop’ of leading contract hire companies to find out how
their businesses have been affected by the ongoing credit
crunch.
In all, 23 of the 50 largest fleet operators in the UK responded
to an emailed questionnaire, and the overwhelming weight of opinion
– 96 per cent – said ‘yes’ to the question of whether they think
the credit crunch is having a significant impact on the contract
hire industry.
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When asked whether they as a company were affected by the
crunch, 87 per cent agreed that the turbulence in financial markets
has had an impact on their business – although whether the impact
was positive or negative in nature was not noted.
In fact, said Colin Tourick, “[it] is clear that different
companies are being affected in different ways.” For some, rising
interest rates have “resulted in higher rentals” which are not
welcomed by customers who “are feeling the effects of the economic
slowdown”, he said; others reported that their own funders were
less willing to lend, with new business activity curtailed as a
result, and activity centred on “the most creditworthy of
customers”. Falling residual values were also mentioned as a
concern.
However, the contract hire providers which still have unimpeded
access to funds reportedly “see the credit crunch as a good
opportunity for them to grow their fleets at a time when others
might have to reduce theirs because of funding constraints,” the
survey found. Of these opportunity-hungry respondents, Tourick
said, the only quality they have in common is that their parents
are all “totally committed to this market.”
Conversely, smaller lessors may be most at risk. “If there is a
credit crunch and a rush to quality, the baseline level for
acceptable creditworthiness rises, bringing smaller lessors’
balance sheets under ever-greater scrutiny,” Tourick pointed
out.
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By GlobalData
Motor Finance Issue: 44 – June 08
by Jo Tacon ,
Published for the web: June 26 08 16:12
