Usually this
space would be occupied by a discussion of the state of play in
retail motor finance, but there are some large stories gathering
speed in the world of fleet which demand a mention.
Just before Motor Finance
magazine went to print, it emerged that Dutch banking giant ING is
exploring the potential sale of its fleet leasing arm, ING Car
Lease.
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The deal, reportedly worth €4bn
(£3.5bn), would involve over €3bn in debt, as well as the need for
any buyer to inject up to €750m in capital to the company as a
balance sheet buffer.
In practice, it would mean the UK’s
eighth-largest fleet provider falling into the hands of another
major player like Arval, Alphabet, Athlon or GE Capital, all of
which have been named as being in negotiations with ING at
present.
For Athlon this would be an entry to
the UK market for Rabobank via acquisition, and for Arval it would
mean achieving a fleet size topped only by Lex – or indeed by a
fleet formed by the sale of Lombard Vehicle Management to GE
Capital.
For either Alphabet or GE Capital, the
purchase of ING Car Lease would mean a doubling in scale by
acquiring a competitor of near identical book size.
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By GlobalData
Or it may not
happen at all. After all, ING Car Lease was not on a list of assets
marked for disposal as a European Commission condition of the €10bn
state bailout package that ING received in 2008, and it will
require a committed buyer indeed if the €4bn price tag being
discussed is accurate.
Either way, the fact that negotiations
are currently underway regarding the sale of two of the UK’s top 10
fleet companies, following the successful purchase of Masterlease
by Leasedrive Velo at the end of last year, suggests one of two
trends: either that scale is highly in demand at present, or that
there are a lot of businesses out there trying harder than ever to
shed capital-intensive fleet businesses.
Motor Finance’s sister
publication Leasing Life, which covers the fleet leasing
market in UK and Europe, will be taking a much deeper look at the
potential sales of ING Car Lease and Lombard Vehicle Management in
its July edition.
Speaking of leasing, however, it may
not be too long before the product finally makes a name for itself
outside the world of business users.
Latest dealer finance statistics from
the FLA show that volumes of new car leasing sold to consumers on
the forecourt in were up 41% year-on-year in April – an encouraging
leap, but from a very low base.
Even at this current high, consumer
lease deals only amounted to around £31m during the month, compared
to around £307m for market-leading PCP.
And in any case, there is nothing to
suggest personal leasing will maintain growth rates – the product
spiked to make up around 6% of the dealer finance market for new
cars a couple of years ago, before rapidly fading in popularity
again.
Nevertheless, as PCP has proved, the
product will only be as popular as the deals that are used to sell
it – to see a dedicated upturn in consumer sales, there will need
to be a strong marketing push from its providers.
Who knows, perhaps this is even
something that could come from the fleet market?
Fred Crawley
fred.crawley@vrlfinancialnews.com
