In 2018, new mobility models such as electronic vehicle (EV) leasing, private vehicle leasing and used car leasing are set to transform the global fleet leasing market and create tremendous growth opportunities. Frost & Sullivan expects demand to be driven by operational leasing, which is predicted to account for 30.3% of company cars sold in 2018. Emerging countries such as Ukraine (33.6%), Russia (19.6%), Croatia (15.3%), and Hungary (12.6%) will top year-on-year growth rates in fleet leasing sales.
Frost & Sullivan’s recent analysis, Global Fleet Vehicle Leasing Market Outlook, 2018, identifies the prevalent factors contributing to market growth; challenges serving as barriers to success; top 10 trends; new mobility solutions; technology advancements and legislations; leasing providers in Europe, Africa, Americas and APAC; and distribution strategies of key providers in the market.
To be successful in a consolidating market, Narayanan recommends providers focus on offering customers full-service operational leases with added features like flexibility in duration, vehicle swapping, etc. “Additionally, they can place emphasis on expansion into emerging markets and introduction of new product line such as EV leasing and private leasing which are the next growth segments in the leasing industry,” he added.
Seven trends driving transformational change in the global fleet vehicle leasing market include:
- Strong growth in private lease market in Europe and North America due to consumers’ preference for fixed-budget and hassle-free user experience;
- Used car leasing becoming a lucrative market;
- Small-medium enterprise (SME) leasing offering enormous potential;
- Mobility as a Service solutions such as car subscription, car sharing and mobility budget are posing fierce competition to fleet leasing industry;
- Adoption of blockchain technology in fleet and leasing to enable faster paperless smart contracts;
- Leasing providers aggressively targeting companies via digital tools and white-label partnerships to attract new business and
- Leasing companies offering telematics which is transforming leasing into a sophisticated mobility solution
“With current used car leasing options limited, players should focus on building trust among customers with regards to the reliability of used cars and stress their ability to better predict/service maintenance issues,” noted Narayanan. “They should also develop strategies for customer segments looking for leases with affordable monthly payments, such as SMEs, retirees, and first car buyers.”