Biannual survey H1 2019 results

Leaseurope, the trade association representing the European leasing and automotive rental industries, has released European leasing market figures for the first semester of 2019, comparing them with the latest annual results for 2018 published earlier this year. These figures show that in 2018 the leasing market expanded in new volumes for the sixth consecutive year and while this trend continued in the first half of 2019, growth happened at a slower pace. It may be an indication that the outlook for the industry remains positive but set to weaken in 2019 as a whole compared to a year ago.

The 2018 Annual Statistical Enquiry shows that total new leasing volumes in Europe reached €386.4 billion in 2018, increasing by 7.7% compared to 2017. Most of the national markets experienced positive results with about one third enjoying double-digit growth, notably in the Netherlands, Poland, Russia, and Bulgaria.  

The automotive sector performed well in 2018, with new leasing volumes for passenger cars rising by 7.2% and for commercial vehicles by 7.9%. The machinery and industrial equipment segment also enjoyed another year of growth, expanding by 9.8%. Likewise, the leasing of computers and business machines increased by 8.4% but, contrary to the other types of equipment mentioned, it saw a performance with more pronounced differences across individual countries. Real estate leasing also experienced some improvement in new volumes, growing by 2.5% in 2018 to reach €14.5 billion.

As the results of the Leaseurope’s 2019 Biannual Statistical Survey reveal, during the first half of 2019, the upward overall market trend moderated, except for real estate. Total leasing volumes in the first half of 2019 were €183.1 billion, higher by 3.4% than the same period of 2018. Vehicle and equipment leasing expanded by 4.3% and 3.1%, respectively. Real estate leasing experienced a surge of 21.5% in new business volumes in the first half of this year, though with large geographical variations ranging from significant gains in some key markets to double digit drops in new volumes over the same period.

Commenting on the figures, Leaseurope’s Senior Adviser in Statistics and Economic Affairs, Jurgita Bucyte said, “It is encouraging that the European leasing market, especially in 2018, benefited from good performance in the major leasing sectors, including automotive, machinery and industrial equipment, as well as computers and business machines, albeit at somewhat slower rates than the previous year. This widespread growth may be explained by business investment becoming more balanced across asset classes for equipment. Total investment has reached pre-crisis long term averages, but ten years of underinvestment left a backlog in terms of capital stocks based on the EIBIS survey. On the back of improved investment, European lessors have observed increasing demand for leasing. Leasing volumes outpaced European equipment investment growth by far, which increased by 3.0% in 2018, but is expected to moderate at 1.7% in 2019, according to the European Commission.

Referring to the future outlook, Laimonas Belickas, Chair of Leaseurope’s Statistics Committee and Chief Sales Officer UniCredit Leasing Baltic region, adds “I am pleased to see that the European leasing market shows strength in new business. The positive dynamics are however somewhat tempered by the challenge for many lessors to further expand the use of leasing across Europe and to adapt to the increased cost of regulation. Moreover, it is likely that protracted manufacturing weakness, global trade tensions and elevated uncertainty continue to weigh on business investment decisions, despite an extended period of favourable financing conditions. On a positive note, evidence demonstrates that firms, especially SMEs, show an increasing demand for leasing, suggesting that they may invest in new assets, be it for replacement needs or capacity expansion activities. Therefore, lessors should be prepared to seize opportunities in view of a more cautious outlook on the strength of the economy heading into 2020.”