New leasing business up by 5 percent in first half year

Machine leasing booming | IT leasing returns to growth

Berlin, 7th August 2018In the first half of the current year, the leasing sector increased its financing of new equipment by 5 percent compared with the same period last year. “Following record performances in 2016 and 2017, the sector’s new leasing and hire-purchase business continued to grow in the first six months of the current year,” says Horst Fittler, managing director of the Bundesverband Deutscher Leasing-Unternehmen (BDL – the German Leasing Association).

“Leasing has become more attractive for companies than ever,” is Horst Fittler’s explanation for the current strong demand for the sector’s financing products. Leasing companies have always promoted the introduction and dissemination of new technologies in the markets they serve. And leasing provides solutions particularly well suited to current challenges and demands: “Shorter innovation cycles, energy-efficiency measures, environmentally friendly transport solutions, and the ongoing digital revolution are all necessitating massive investment. Leasing companies are particularly well placed to help their customers realise their investment ambitions”. He identified unrivalled competence in the assessment of investment objects and marketplace expertise as key factors in the success of the German leasing industry. With all their know-how, leasing companies are developing new financing, utilization and service packages that are a perfect fit for the business models being evolved in the wake of the ongoing digitalization process.

Machinery leasing booming

The surge in demand for production machinery has been particularly impressive: compared with the same period last year, this segment grew by 13 percent. New car-leasing, which has always been the leasing industry’s strongest suit, increased by 4 percent in the first six months of 2018. In terms of car numbers, there was a good two-percent increase in leasing compared with the same period in 2017. However, according to the Federal German Motor Transport Authority, there was a two-percent fall in new commercial registrations in the first half of this year. “So if companies have invested in new vehicles,” explains Fittler, “they have increasingly been using leasing to finance these investments.” He sees the supplementary services being offered by leasing companies (maintenance and inspection packages, damage management etc.) as key advantages that are prompting companies to opt for leasing. The upturn in IT leasing, which for a long time had either been in the doldrums or a loss maker, is also welcome news. Compared with the same period in 2017, new business acquired through the leasing of office equipment, PCs, servers and IT equipment in the first half of 2018 increased by 4 percent. “That’s a good result, given the current state of the IT sector. For as well as the constant erosion of hardware prices, the migration to cloud computing remains ongoing.”