1. THE EUROPEAN FLEET LEASING: Key trends and challenges,
and what they teach us for the development of the CEE markets
Presented by Vincent Rupied,
Prague, February 3rd, 2012

2. Leaseurope, the Leasing & Rental Federation
Leaseurope brings together 43 associations in 31 countries throughout Europe
Leaseurope represents the leasing industry, from hire purchases and finance leases to operating leases of all asset types, as well as short term rental, for cars, vans and trucks.

3. The Corporate Vehicle Observatory
An expert-platform for all fleet professionals:
fleet managers, procurement specialists, manufacturers, fleet leasing companies, advisers, insurers, press, public authorities, researchers etc.
Created by Arval in 2002
Focus: professional Mobility
Neutral & International
16 Countries
incl: Czech Republic, Russia, Poland
Free Access Studies
Annual Fleet Barometer in collaboration with

4. Agenda Automotive fleets in the European Leasing Market
Full Service Operating Leasing in Europe
Trends & Challenges

5. Leaseurope in the automotive market (2010)
Real estate
Cars
40%
Machines & equip
ICT
CVs
16%
Big/other

6. Leasing & Car Rental penetrations
70%
60%
50%
40%
30%
25.4%
20%
10% 0% SE CH EE DK FI LV NL UK BG HU SI IT SK AT PT CZ FR NO DE BE RO PL ES GR
Note that we have not included BVRLA data here as there is quite an important overlap between their membership and the FLA’s membership and we don’t have precise data to be able to show figures on a country level.
Leasing members
Leasing & ST rental members
Leaseurope passenger cars as % of total car registrations
Source: Leaseurope estimates based on data collected in its 2009 Annual Survey and
ACEA new registration figures
The total fleet above is different from what we show in slide 7 due to rounding

7. European Leasing & Rental Volumes
Leaseurope Annual Survey

8. Business vs. Total Registrations
2011*
Size of bubbles =
Business registrations
* For all countries, best estimate to date.
Sources: Arval, National Associations, ACEA.

9. Fleet growth potential in the next three years
Decrease
Increase
Balance 2011
2010
2009
2008
+ 14%
+ 13% % %
+ 62%
+ 46%
+ 68%
+ 52%
Base: companies > 100 employees

10. Agenda Automotive fleets in the European Leasing Market
Full Service Operating Leasing in Europe
Trends & Challenges

11. with less than 10 employees
Note : CVO Barometer Methodology
Target: Fleet managers in companies of all industries using corporate vehicles
Fieldwork period: H1 2011
Sample: interviews including
3 313 in Europe : Belgium, Switzerland, Czech Rep., Germany, Spain, France, Greece, Italy, Poland, Portugal, UK
1 205 in “BRIT” : Brazil, Russia, India, Turkey
Companies
with less than 10 employees
with 10 to 99 employees
with 100 to 249 / 499 / 999 employees
With 250 / 500 /
1 000 employees and +

12. Fleet financing in European Large Corporates**
Self purchase*
Car credit
Finance leasing
Operating leasing RU
*Self-purchase = outright purchase + credit (other than car credit) ** Large Corporate = over 1000 or 500 employees

13. Fleet financing: intentions per size
Finance
leasing
Operating
leasing
Self purchase*
Car credit
Intention to develop – Intention to reduce
*Self-purchase = outright purchase + credit (other than car credit)

14. The Motivations for Full Service Fleet Leasing
Don’t know
Outsourcing of services and administration
Transfer of risk on maintenance and Residual Value
Budget control
Besides the cost, what is the main added value of your experience with your leasing supplier?
Base: companies using Operating Leasing

15. % of businesses interested in the following services
A Market driven by Service Outsourcing
% of businesses interested in the following services

16. Towards Service Integration
Don’t know
Best specific provider for each service
Integrated provider of services only
Integrated provider of both services and leasing
% who cover service needs with…
Base: companies with 100 employees and more

17. Agenda Automotive fleets in the European Leasing Market
Full Service Operating Leasing in Europe
Trends & Challenges
Leasing in crisis time
The funding challenge
Remarketing and residuals
Accounting treatment

18. Leasing in crisis time: back ground

19. Leasing in crisis time: Cost pressure
% who think that this year, cost pressure on the fleet will…
Balance 2011
Decrease
Increase
31%
36%
37%
39%

20. The funding challenge (1/2)
CDS 5Y €
RCI SG
BNPP VW
BMW

21. The funding challenge (2/2)
Feb 1st
FIAT S.P.A.
PSA
RENAULT SG
BNPP VW
DAIMLER
BMW

22. The Remarketing Challenge (1/4)

23. The Remarketing Challenge (2/4)
France : LT Used car market index (100 = average Jan Mar. 2008)

24. Used cars market: size per country
The Remarketing Challenge (3/4)
Used cars market: size per country
Sources: Arval, National associations, ublic statistics.

25. Used cars sales vs new cars sales
The Remarketing Challenge (4/4)
Used cars sales vs new cars sales
Sources: Arval, National associations, ublic statistics.

26. The Lease accounting challenge (1/4)
A difficult conception
Rediscussions

27. The Lease accounting challenge (2/4)
At stake for Leasing Customers
Overall complexity, low preparation
Will the leasing charge be
degressive (as proposed)
or constant (as today)?
Feasibility of recontracting
Qualification of the Right of Use for Basel II and III (for banks)
Tangible,
Intangible
or a new class of assets (« financial intangible ») as proposed by Leaseurope?
Transition : possible option
Full Retrospective: FTA, impact on equity, comprehensive recalculation
Prospective: frontloading of charges with contacts regarded as new

28. The Lease accounting challenge (3/4)
At stake for Fleet Lessors
Substantial system adjustments to produce required reports
Major uncertainty of the RV reassessment under the new standard
The Lessors would carry receivables – not vehicles – on the balance sheet
The current gradual prospective depreciation (IAS 16) does not apply to financial assets
The only possible reassessment would be the impairement of the receivable (IAS 39) and of the residual asset (IAS 36) : more brutal and procyclical

29. The Lease accounting challenge (4/4)
Why Operating Leasing remains by far the best funding for fleets
Only full service product
Only mode providing RV risk coverage
Far lighter on balance sheet than Finance Lease and Purchase

30. Thank You