Global Leasing Report 2020 - FROM STRENGTH TO STRENGTH: NINE YEARS OF CONTINUOUS GROWTH IN LEASING - White Clarke ...
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2020 Global Leasing Report BY BRENDAN GLEESON GROUP CEO WHITE CLARKE GROUP FROM STRENGTH TO STRENGTH: NINE YEARS OF CONTINUOUS GROWTH IN LEASING
Your complimentary copy of
the Global Leasing Report 2020
I am delighted to present you with this latest edition of the
White Clarke Group Global Leasing Report 2020 (GLR).
The GLR has become the definitive analysis of country trading
environments and world trends in auto and asset leasing.
This is the 14th year that our report has featured as the keynote
commentary of the World Leasing Yearbook, and it continues
a history of tracking the worldwide market for leasing products
for more than 30 years. You will find the latest auditable data
on volume and growth by region, market penetration, GDP ratios
and market shares, complete with a ranking of the top 50 leasing
markets by size worldwide. Brendan Gleeson, Group CEO,
White Clarke Group
The report highlights the global leasing industry’s development,
whilst companies introduce new and innovative ways to finance
equipment for businesses worldwide. This year’s report sees the
top 50 countries growing new business volume by 0.33%, rising
from US$1,282.73bn in 2017 to US$1,287.01bn in 2018. Three
regions, North America, Europe and Asia, account for more than
95% of total world volume.
I hope you will enjoy reading this report and information
included. Feel free to comment or ask questions
info@whiteclarkegroup.com.
Sincerely yours,
Brendan Gleeson
Group CEO, White Clarke Group
2 © WORLD LEASING YEARBOOK
About White Clarke Group World Leasing Yearbook
White Clarke Group is the global first-class provider in The White Clarke Group Global Leasing Report is prepared
end-to-end automotive, consumer and equipment finance by White Clarke Group in association with the World
software solutions and consulting services. It is a global Leasing Yearbook. This report is an extract from the
organization employing around 600 professionals, with complete Global Leasing Report which is part of the 352
offices in the UK, US, Canada, Australia, Austria, Germany, page World Leasing Yearbook. To obtain the full report,
India and China. which contains 7 additional tables and figures, you can
purchase the book at www.world-leasing-yearbook.com
The company’s award-winning CALMS full life-cycle or call +44 (0)1206 579591.
platform provides a flexible workflow approach that
automates the entire business process from origination
through contract to portfolio management—trusted by
more than 100 customers in 30 countries around the globe.
For more information, please visit
www.whiteclarkegroup.com
3 © WORLD LEASING YEARBOOK
From strength to strength:
nine years of continuous
growth in leasing
By Brendan Gleeson, Group CEO, White Clarke Group
The White Clarke Group Global Leasing Three regions, North America, Europe and Asia, account
Report continues a history of tracking the for more than 95% of world volume. North America
worldwide market for leasing products experienced growth of 3.2%, while all other regions,
for more than 30 years. bar Africa, showed a decline in growth when expressed
in US dollars.
All values are quoted in US dollars.
It is important when analysing this data to stress that
the Global Leasing Report employs the US dollar as the
Overview common currency baseline for country comparisons, using
exchange rates prevailing at the end of the year. (For this
For this 41st edition of the World Leasing Yearbook, report the date of conversion is December 31, 2018).
we can announce that the global leasing industry has
reported the ninth year of uninterrupted growth, albeit Care should be taken when making comparisons year
at a more modest pace than in recent years. on year for individual countries and regions in this data
as currency fluctuations inevitably impact the US dollar
The international leasing industry remains an essential figures in the Report. The growth figures we specify in
contributor to global economic development and Table 2 are as actually reported by each country, before
continues to demonstrate innovation and flexibility in the conversion into US dollars, so they are unaffected by
face of regulatory change and economic turbulence. the vagaries of currency fluctuations and give a more
accurate picture of domestic performance year on year.
The top 50 countries in 2018 reported growth in new
business volume of 0.33%, rising from US$1,282.73bn North America
in 2017 to US$1,287.01bn in 2018.
The North American region consists of the US, Canada
This performance follows on from the remarkable growth and Mexico. The sector has maintained its position as
of 16.6% in 2017 and 9.4% in 2016. The Report shows that the world’s biggest market, with new business volume
the global leasing industry has grown 131% in the past of US$460.1bn, representing 35.8% of the total global
nine years (see Table 3). market share in equipment leased.
4 © WORLD LEASING YEARBOOKTable 1: Volume and growth by region (2017—2018)
Rank by Region Annual volume Growth Percentage of world Percentage of world Change in market
volume (US$bn) 2017–2018 (%) market volume 2017 market volume 2018 share 2017–2018
1 N America 460.11 3.2 34.8 35.8 1.0
2 Europe 427.03 –0.3 33.4 33.2 –0.2
3 Asia 350.65 –1.0 27.6 27.2 –0.4
4 Aus/NZ 28.51 –9.5 2.5 2.2 –0.2
5 S America 14.55 –14.5 1.3 1.1 –0.2
6 Africa 6.16 9.0 0.4 0.5 0.0
Total 1,287.01
Source: White Clarke Group Global Leasing Report
Europe
The US is the dominant player of the region, and the Europe reported a decline in growth of 0.3% in 2018
largest single market in the world by some margin. New when expressed in US dollars bringing total new
business volume for the equipment finance industry business to US$427bn and it maintains its position as
expanded by 4.4% in 2018 according to the ELFA Annual the second largest region in the world. Europe accounts
Survey of Equipment Finance. for 33.2% of total world volume.
This is down on 2017’s 6.9% growth figure but still The leading five European countries (UK, Germany, France,
impressive when compared with US GDP of 2.9% for Italy and Poland) feature in the world’s top 10 countries
2018 as reported by the US Department of Commerce. for new business, contributing 64% of the total European
New US equipment finance business volume in 2018 volume. Sweden has dropped out of the top five.
was estimated at US$428.4bn.
The United Kingdom and Germany are positioned as the
Canadian economic growth slowed in 2018 to 1.6% from third and fourth largest leasing markets in the world and
3% in 2017. Uncertainty over NAFTA negotiations between remain the dominant players in Europe. They accounted
the US, Canada and Mexico as well as fears over tariff for 39% of the European market and 13% of the world
wars has created concerns over trade and dampened market in 2018.
growth. Deteriorating confidence in the global economic
environment has led the Bank of Canada to predict slower In 2018, the UK industry captured US$92.2bn of new
economic growth and the Canadian economy is only business registering a growth rate of 5.3% (in local
expected to grow around 1.4% in 2019 and 2% in 2020. currency) as compared with previous year and locating
it third in the global rankings after the US and China. At
New business in Canada was up 0.3% in 2018 compared the time of writing (November 2019) Brexit negotiations
with 2.7% in 2017. Total new business volumes have risen continue to dominate the UK political agenda though
by an average 3.3% a year between 1990 and 2018. The the UK economy has proved to be incredibly resilient
asset-based finance sector is now estimated to account despite the prevailing economic uncertainties.
for around 39% of all spending on equipment in Canada.
The second largest European leasing market is Germany
According to data supplied by the Alta Group, Mexico which registered growth of 2.4% in 2018 in local currency
experienced a decline in new business in local currency in comparison to 2017 with new business volume of
of 6.7% in 2018. US$73.3bn.
5 © WORLD LEASING YEARBOOKWORLD LEASING YEARBOOK 2020
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Cars and estate vehicles (57%) and trailers & trucks Overall the members of Leaseurope (the European
(17%) occupying the main types of asset being leased. A federation of leasing and finance companies) recorded a
highlight in 2018 was the demand for office equipment consolidated increase in new business of 7.69%. (For an
and IT systems which grew by 12.8%. in-depth breakdown of the European data, please see
the Leaseurope report in the World Leasing Yearbook)
France remains in sixth place in the top 50 rankings,
with new business volume of US$52.2bn and reporting The overall decline in Europe shown in this GLR conflicts
growth of 9.8%. Italy ranks as the fourth largest European with the 7.69% rise in new business by Leaseurope
market with new volume at US$35.9bn and growth of members because The Global Leasing Report adopts
5.5%. Poland has moved into fifth position in European the US dollar as its base rate, as published on the last
ranking with new business of US$22.2bn, registering day of the year (2018).
growth of 21.8%. As a result of Poland’s strong performance
Sweden slips out of the top 10 as result of a decline in new Leaseurope employs the euro as its base currency,
business of 19.6%. adjusted for exchange rate fluctuations.
Other significant domestic growth performances worth
highlighting throughout the European region are: Bulgaria
20.2%, Netherlands 19.7%, Portugal 16.7%, Russia 20.7%,
and Hungary 13.3%.
6 © WORLD LEASING YEARBOOKAsia
New business volume in Asia fell by 1% to US$350.7bn US$66.3bn. It remains the second largest market in
reflecting the slowdown in the Chinese leasing market. This Asia after China and approximately 5% of private capital
follows the remarkable growth in the Asian region of 59% in investments are made through leasing.
2017. Asia occupies a 27.2% share of the world market.
The Taiwanese market is now the third largest in the
China remains the second largest leasing market in Asian region and registered growth of 16.9% in 2018
the world. New business stood at US$254.4bn in 2018. with new business volume of US$13.4bn ranking it 14th
Growth slowed dramatically in 2019 to 1.27% compared in the Top 50.
to the impressive 20.4% in 2017.
The fourth biggest leasing market in Asia is Korea which
However, it should be noted that the Chinese leasing ranks 15th in the world achieving new business volume of
market has experienced growth of 168% in new leasing US$12.2bn which is up 5.9% on 2017. In Hong Kong new
business since 2014, a remarkable feat. Leasing market business for 2018 was up 11% at US$0.4bn, Malaysia fell
penetration stands at around 7% showing that this market 10% at US$1.4bn and India was up an impressive 60% at
has tremendous potential for further development. US1.6bn. India is a market ripe for tremendous expansion.
We do not have reliable data for Thailand, Singapore,
Japan, which is the fifth largest leasing market in the Pakistan and Indonesia.
world, experienced an increase in lease transaction
volume in 2018 of 6.8% with new business volume of
7 © WORLD LEASING YEARBOOKRest of the world
Leasing in Australia is a mature product, having been in the region. In May and June 2019 Africalease led a
offered as part of a portfolio of equipment financing mission to Cote d’Ivoire, Liberia, Senegal, Togo and
techniques for over 60 years. Leasing is a proven Gabon to promote leasing. It is to be hoped that new
equipment financing technique suitable to all stages of national leasing associations will be formed in the African
the economic cycle and it is expected it will continue to region in coming years and with that reliable data which
play an important role in supporting and developing the can be used in forthcoming editions of the GLR.
Australian economy.
In South America new business volume figures
The AFIA estimates that total equipment finance in are generally not recorded by the national leasing
Australia in 2018/19 was A$40.4bn, up just 0.25% on the associations where the emphasis is on portfolio value.
previous year. Australia ranks in eighth place in the Top This makes it difficult to ascertain annual new sales
50, with new volume of US$28.5bn. volume for the region and many of the figures in this
report are therefore estimates.
We have no reliable data for New Zealand. Australia/
New Zealand represents a 2.2% share of global volume. We are most grateful to the CEO of the Alta Group –
Latin American Region, Rafael Castillo Triana, for giving
Africa accounts for 0.5% of the world market in leasing us access to his research and facilitating us with data
with four African countries achieving a placing within the used in this Report. In the absence of growth figures,
top 50 leasing threshold: South Africa, Nigeria, Morocco we have adopted the growth in portfolio value, giving at
and Egypt. The region increased volume by 9% to least some indication of the health of the industry.
US$6.2bn.
Overall new business volume for the South American
The African leasing industry is still in its infancy and region was US$14.6bn, down 14.5% in 2018. South
there is still a scarcity of quantitative information America accounts for 1.1% of total global lease volume.
available. The International Finance Corporation (IFC),
a member of the World bank, has been supporting the The largest leasing markets in South America by size
development of leasing markets for over 10 years and ranking are Colombia, Chile, Brazil, Peru, Puerto Rico
has intervened in over 20 countries. There remains, and Argentina. New business volume was up (in local
however, no definitive study of the region and estimates currency) in Brazil (22%), Chile (10%) and Puerto Rico (5%),
are challenging. but down in Columbia (20%), Peru (8%), Mexico (7%), and
Argentina (21%) (See the Alta report in the World Leasing
Under the initiative of the Moroccan Leasing Association Yearbook for further detail on the region).
and the support of the IFC, Africalease was founded in
2017 with a view to developing and promoting leasing
8 © WORLD LEASING YEARBOOKTable 2: White Clarke Group Global Leasing Report
Ranking Continent Country Annual Volume % Growth % Market Source
Code (US$bn) 2017—2018 Penetration
1 NA US 428.40 4.40 21.5 (8)
2 A China 254.42 1.27 6.9 (9)
3 E UK 92.17 5.30 32.9 (2)
4 E Germany 73.32 2.39 15.9 (2)
5 A Japan 66.34 6.80 5.2 (1)
6 E France 52.18 9.79 16.9 (2)
7 E Italy 35.90 5.47 16.1 (2)
8 ANT Australia 28.51 0.25 40.0 (1)
9 NA Canada 24.46 0.30 39.0 (1)
10 E Poland 22.20 21.80 27.0 (2)
11 E Sweden 20.88 –19.61 22.4 (2)
12 E Russia 20.59 20.71 n/a (2)
13 E Switzerland 13.49 8.01 12.5 (2)
14 A Taiwan 13.42 16.89 10.8 (1)
15 A Korea 12.18 5.94 9.0 (1)
16 E Spain 11.89 11.61 6.6 (2)
17 E Denmark 11.49 0.97 25.3 (2)
18 E Austria 9.36 10.78 14.0 (2)
19 E Netherlands 8.71 19.67 8.0 (2)
20 E Norway 8.57 5.31 12.1 (2)
21 E Belgium 7.72 4.63 10.0 (2)
22 NA Mexico 7.25 –6.77 n/a (4)
23 E Czech Republic 5.36 –1.92 12.3 (2)
24 E Turkey 5.24 -4.16 n/a (2)
25 E Finland 5.20 1.96 16.0 (8)
26 E Portugal 4.98 16.70 18.7 (2)
27 SA Colombia 4.84 –20.15 n/a (4)
28 SA Chile 4.74 9.90 n/a (4)
29 AF South Africa 3.51 12.86 n/a (8)
30 E Hungary 2.93 13.30 8.5 (2)
31 E Slovakia 2.79 –7.47 15.0 (2)
32 SA Brazil 2.69 22.90 n/a (4)
33 E Romania 2.55 2.00 n/a (8)
34 E Lithuania 2.41 7.06 31.64 (2)
35 E Slovenia 1.76 3.77 19.6 (2)
36 E Bulgaria 1.71 20.21 13.9 (2)
37 A India 1.58 60.21 0.6 (9)
38 SA Peru 1.56 –8.40 n/a (4)
39 E Estonia 1.45 4.08 29.2 (2)
40 A Malaysia 1.41 –10.48 n/a (1)
41 AF Morocco 1.27 2.20 15.0 (1)
42 E Latvia 0.99 3.74 14.9 (2)
43 A Iran 0.85 –17.00 0.5 (1)
44 E Ukraine 0.81 10.84 n/a (2)
45 AF Egypt 0.73 45.00 n/a (8)
46 AF Nigeria 0.65 11.00 n/a (9)
47 A Hong Kong 0.45 11.37 n/a (1)
48 E Greece 0.38 -36.58 2.1 (2)
49 SA Puerto Rico 0.37 5.23 n/a (4)
50 SA Argentina 0.35 –20.82 n/a (4)
TOTAL 1,287.01
Market penetration rates quoted by Leaseurope appear as those reported and defined in the Leaseurope’s 2017 Annual Survey. Country growth figures display the figure reported by
each country i.e. it is unaffected by the vagaries of currency fluctuations. It is intended to display true growth as experienced on the ground.
Key to Sources: (1) National Leasing Association (4) Alta Group (7) Central bank data
(2) Leaseurope (5) Other trade associations (8) Author’s estimate
(3) Asian Leasing Association (6) Government statistics (9) Others’ data
White Clarke Group Global Leasing Report is prepared by White Clarke Group, Milton Keynes, UK, in association with the World Leasing Yearbook.
No information may be reproduced without the prior permission of White Clarke Group and the publishers (World Leasing Yearbook).Leasing penetration The sources
For countries where reliable data has been made The White Clarke Group Global Leasing Report is
available, Table 2 includes a measure of leasing assembled from a number of disparate sources, the
penetration for the year 2018. We provide two most important primary sources being the national
measurements for leasing penetration. One shows the associations that represent leasing companies in most
percentage of investment in a given country financed by individual countries.
leasing and hire purchase. It is calculated as total new
business volume divided by total investment, excluding The chief role of the national associations is to act
real estate. For the largest countries, a back run of these as lobbying groups, with the aim of influencing the
figures for 20 years is given in Table 4. regulatory environment. These bodies almost all make
efforts to extend their membership bases as widely as
The second method of expressing penetration, introduced possible within the local leasing industry, and to measure
into the Global Leasing Report in 1999, is in relation to and publicise local leasing business activity.
gross domestic product (GDP), i.e. national output as a
whole. Table 5 gives figures and rankings for each country In several regions, including Europe, Asia and Latin
in the White Clarke Group/GDP ratio for 2018. America, continental leasing federations add substantial
value to the process of recording activity at national as
Of the two measures, the first (investment penetration) well as continental levels.
is a better indication of how leasing compares in
competition with alternative forms of financing. However, In Europe, the Leaseurope federation endeavours to
calculation of the investment penetration ratio depends standardise the measurement of equipment leasing
on identifying the correct statistic for plant investment, business for each European country, on a basis that
against which leasing should be compared. The White broadly matches the Global Leasing Report’s concept
Clarke Group/GDP ratio is a more reliable indicator in of the scope of leasing. We are particularly grateful to
that it is based on a broader denominator. Furthermore, Leaseurope for the quality and depth of their data.
information for all countries is more readily available.
As mentioned before, readers will note some differences
In measuring leasing by reference to economic activity between figures quoted for European countries by the
as a whole, this ratio highlights which countries have two organisations. This is because Leaseurope publishes
relatively mature leasing industries, or, in some cases, its data in euros, using average exchange rates over the
where leasing is being promoted strategically as a year for non-Euro countries, while the Global Leasing
source of investment funding. Report is published in US dollars, employing the last
published exchange rates for the year.
10 © WORLD LEASING YEARBOOKIdentifying the top 50
National associations also remain important sources The global and continental aggregates are compiled
of information in Europe, with many of them providing from the top 50 countries only, and estimates are not
significant information and narrative beyond that made for countries outside that group. It is estimated that
required by Leaseurope. We are grateful to the Alta all the excluded countries together would probably have
Group for their assistance in preparing much of the Latin accounted for around US$14bn of measurable leasing
American data. business in 2018.
Other important sources of information for some For the purposes of identifying regional or continental
countries include official statistics from central banks groups, Turkey is taken as the eastern extremity of
or finance ministries, and in some cases trade bodies, Europe. Africa is divided from Asia at the Suez Canal,
which have a wider remit than the leasing industry but with Egypt in Africa. The Americas are divided at the
who can make a clear differentiation between leasing Panama Canal, with Panama itself in North America.
and other financial products. Australia and New Zealand together are treated as a
separate region.
In some of the less developed countries, International
Finance Corporation (IFC), the private sector arm of Cross-border leasing is included within the national total
the World Bank, has been active in promoting leasing for the home state of the lessor, rather than that of the
activity. IFC is in a position to provide market volume lessee. Strictly speaking, the national totals represent
estimates for several developing countries, and has leasing industries rather than leasing markets.
been a very helpful source of information for the Global
Leasing Report for many years.
Deriving the figures
For a few countries, where it is clear that locally-
based sources have provided data representing only The statistics measure new business value for each
part of total leasing activity, or where reasonably year, i.e. the value of equipment newly assigned on
comprehensive information for earlier years had not lease to customers during the year. Strictly speaking,
been available, we have had to make an author’s that does not necessarily denote new equipment: it
estimate of the national leasing total. could include second-hand equipment, and sale-and-
leaseback transactions for equipment already in use by
The various sources of information for each country are the seller/lessee.
identified in the footnotes to Table 2.
11 © WORLD LEASING YEARBOOKTable 3: Leasing volume by region 2002–2018 (US$bn)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Europe 164.1 196.1 236.5 239.6 272.0 401.2 336.7 220.4 233.0 302.7 314.0 333.6 327.8 322.8 346.3 428.3 427.2
N. America 216.0 223.9 240.7 236.7 241.1 237.9 226.1 190.8 213.3 292.5 336.4 335.1 368.4 407.8 416.8 445.9 460.1
Asia 68.7 74.1 78.2 74.0 81.7 84.6 99.2 103.8 105.6 153.4 180.2 177.3 195.0 223.0 289.9 354.4 350.7
S. America 3.3 4.0 7.5 13.9 19.2 41.4 54.2 30.2 25.4 27.5 13.2 18.0 10.7 13.8 12.9 17.0 14.6
Australia/NZ 5.8 7.6 8.1 8.2 8.6 4.1 6.9 5.7 10.8 12.0 16.1 12.5 35.6 31.2 28.4 31.5 28.5
Africa 3.7 5.6 8.1 9.6 11.1 11.2 9.6 6.5 6.4 8.6 8.2 7.5 6.8 6.7 5.4 5.7 6.2
Annual totals 461.6 511.3 579.1 582.0 633.7 780.4 732.8 557.3 594.5 796.7 868.0 884.0 944.3 1,005.3 1,099.8 1,282.7 1,287.0
Sources: London Financial Group, White Clarke Group Global Leasing Report
Table 4: A comparison of the rate of equipment leasing
market penetration (%)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
US 31.7 31.0 31.1 31.1 29.9 26.9 27.7 26.0 16.4 17.1 17.1 21.0 22.0 22.0 22.0 22.0 21.5 21.6 21.5
Japan 8.3 8.8 8.9 8.8 8.8 8.6 8.4 7.5 6.9 6.5 6.0 5.9 6.2 6.2 5.4 5.7 5.7 5.3 5.2
Germany 14.8 13.5 9.8 21.7 15.7 18.6 23.6 15.5 16.2 13.9 14.3 14.7 5.8 16.6 16.4 16.7 17.0 17.2 15.9
Korea 2.4 1.6 3.9 4.4 5.6 7.7 9.4 n/a 10.5 4.4 4.8 8.7 8.5 8.1 9.8 9.4 9.1 8.9 9.0
UK 13.8 14.4 15.3 14.2 9.4 14.5 12.7 11.6 20.6 17.6 18.5 19.8 23.8 31.0 28.6 31.1 33.7 32.4 32.9
France 9.2 13.7 12.9 15.4 9.0 11.7 11.0 12.0 12.2 3.1 10.5 11.1 12.8 12.5 13.1 14.2 15.3 16.1 16.9
Italy 12.3 10.4 8.6 7.6 11.4 15.1 15.2 11.4 16.9 10.0 13.1 12.3 10.0 9.4 11.7 13.0 14.1 15.2 16.1
Brazil 11.4 7.6 3.6 3.8 7.7 13.5 16.9 19.0 23.8 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Canada 22.5 22.0 20.2 22.0 23.3 23.9 22.0 22.0 19.6 14.0 15.1 20.8 20.8 32.0 31.0 32.0 32.0 38.0 39.0
Australia 20.0 20.0 20.0 20.0 20.0 20.0 18.0 14.2 10.0 10.0 12.0 27.5 27.5 40.0 40.0 40.0 40.0 40.0 40.0
Sweden 12.9 9.2 13.0 11.6 12.7 11.8 11.8 14.3 19.4 17.5 19.2 18.2 24.6 24.4 22.7 22.9 26.0 27.1 22.4
Sources: (1) Australian Equipment Lessors Association (total leasing as a percentage (4) Leaseurope Annual Reports
of private capital investment) (5) Statistics Canada and Equipment Lessors Association of Canada
(2) US Dept. of Commerce, Economics & Statistics Administration, Bureau (lessor purchases as a percentage of total equipment acquisitions in Canada)
of Economic Analysis and Equipment Leasing Association of America (6) Korea Leasing Association
(equipment leasing as a percentage of business investment in equipment) (7) Brazilian Association of Leasing Companies
(3) Japan Economic Planning Agency and Japan Leasing Association (8) London Financial Group
(equipment leasing as a percentage of private capital investment) (9) White Clarke Group Global Leasing Report
12 © WORLD LEASING YEARBOOKThe widespread adoption of hire purchase as a financial The Global Leasing Report employs US dollar as the
instrument for equipment finance (in some countries, common currency baseline for country comparisons,
hire purchase has become the major source of revenue using exchange rates prevailing at December 31, 2018.
for leasing companies) prompted a change in our
industry reporting since 2011. Since then, all reference The outlook for 2019
to leasing and the leasing sector includes equipment
hire purchase. As a conclusion to this Report we always attempt to
forecast the climate and flavour of the leasing industry
Real estate leasing is excluded from the Report. In during the coming years. Of the Top 20 countries, only
some countries the national leasing associations Sweden failed to report growth in new business levels in
(or other information sources) are concerned with 2018. What about 2019?
the leasing of land and buildings as well as that of
equipment. Nevertheless, in most of those cases The five largest countries in the GLR ranking (US, China,
the primary data sources make a sufficiently clear UK, Germany and Japan) account for more than 70% of
distinction between the two in their own statistics. world volume and performance in these countries drives
the overall picture of global business volume and the
In other cases, some estimating is necessary within the GLR data. A focus on these regions can give us an idea
Global Leasing Report in order to strip out a portion of of where we are headed in future years.
the reported total leasing activity believed to represent
real estate leasing. At the time of compiling this report (November 2019)
information is available only for three quarters of
Likewise, consumer credit financing is excluded. 2019 therefore further adjustments might need to be
In principle, the dividing line between leasing and undertaken when reviewing this section. As we report
consumer finance is a simple functional one, i.e. below, the prospects for further growth for the leasing
whether the equipment is largely for business use, or markets in 2019 appear promising despite differing
primarily for the customer’s private non-professional economic turbulence and uncertainty in most regions.
use as an individual or householder.
United States
This still leaves some problem areas as to what types of According to the Equipment Leasing & Finance
commercial equipment financing transaction should be Foundation’s “Q4 Update”, the US equipment leasing
counted as leasing. In many countries the line between sector is expected to grow by around 3.9% during
leases and other forms of finance is reasonably clear. 2019. Credit market conditions remain healthy, says
the Foundation, despite somewhat weaker demand for
There is no obvious solution as to where to draw the business finance. Sectors which are showing signs of
line on a consistent basis for all countries. In such growth in investment include: agricultural and medical
problem areas the approach adopted by the White equipment, trucks and software. The Foundation reports
Clarke Group Global Leasing Report (within the that capital spending has been weaker in 2019 and could
overriding parameters, such as excluding both real slow further due to heightened trade uncertainty and
estate and consumer transactions) is to follow the local industrial sector weakness.
definition of leasing.
13 © WORLD LEASING YEARBOOKTable 5: White Clarke Group/GDP penetration ratio Annual leasing volume as a percentage of gross domestic product Ranking Country 2018 Ratio Ranking Country 2017 Ratio Ranking Country 2016 Ratio 1 Estonia 4.71 1 Estonia 5.58 1 Estonia 4.97 2 Lithuania 4.52 2 Lithuania 4.99 2 Sweden 3.93 3 Poland 3.79 3 Sweden 4.65 3 Lithuania 3.72 4 Sweden 3.75 4 Denmark 3.67 4 Denmark 3.40 5 Denmark 3.26 5 Poland 3.64 5 UK 3.11 6 UK 3.26 6 Slovenia 3.58 6 Slovenia 3.09 7 Slovenia 3.26 7 UK 3.52 7 Poland 2.98 8 Latvia 2.84 8 Latvia 3.30 8 Latvia 2.74 9 Bulgaria 2.62 9 Slovakia 3.29 9 Czech Republic 2.31 10 Slovakia 2.62 10 Czech Republic 2.59 10 Finland 2.27 11 Taiwan 2.27 11 Australia 2.28 11 Australia 2.25 12 Czech Republic 2.19 12 China 2.21 12 Colombia 2.20 13 US 2.08 13 Norway 2.20 13 US 2.06 14 Portugal 2.07 14 Austria 2.12 14 Taiwan 1.89 15 Austria 2.05 15 Germany 2.12 15 Austria 1.85 16 Australia 2.01 16 US 2.11 16 Germany 1.85 17 Norway 1.97 17 Taiwan 2.07 17 China 1.84 18 Switzerland 1.91 18 Bulgaria 2.05 18 Norway 1.83 19 China 1.90 19 Portugal 2.05 19 Switzerland 1.81 20 Finland 1.90 20 Colombia 2.05 20 Bulgaria 1.79 21 France 1.88 21 Finland 2.02 21 Canada 1.69 22 Germany 1.86 22 Hungary 2.01 22 Portugal 1.65 23 Hungary 1.82 23 Switzerland 2.00 23 Hungary 1.65 24 Italy 1.73 24 France 1.92 24 France 1.58 25 Chile 1.59 25 Italy 1.73 25 Slovakia 1.54 26 Colombia 1.46 26 Canada 1.60 26 Belgium 1.50 27 Belgium 1.45 27 Chile 1.58 27 Italy 1.37 28 Canada 1.43 28 Belgium 1.57 28 Romania 1.31 29 Japan 1.33 29 Morocco 1.49 29 Morocco 1.30 30 Russia 1.24 30 Russia 1.27 30 Japan 1.20 31 Morocco 1.07 31 Japan 1.24 31 Peru 1.18 32 Romania 1.06 32 Romania 1.18 32 South Africa 1.09 33 South Africa 0.95 33 Turkey 0.93 33 Serbia-Montenegro 0.85 34 Netherlands 0.95 34 Netherlands 0.93 34 Turkey 0.84 35 Spain 0.83 35 South Africa 0.89 35 Russia 0.82 36 Korea 0.71 36 Spain 0.85 36 Chile 0.81 37 Peru 0.69 37 Peru 0.79 37 Netherlands 0.79 38 Turkey 0.68 38 Mexico 0.79 38 Korea 0.76 39 Ukraine 0.62 39 Korea 0.78 39 Spain 0.70 40 Mexico 0.59 40 Malaysia 0.51 40 Mexico 0.68 41 Malaysia 0.39 41 Ukraine 0.41 41 Uzbekistan 0.45 42 Puerto Rico 0.37 42 Puerto Rico 0.35 42 Malaysia 0.36 43 Egypt 0.29 43 Greece 0.31 43 Iran 0.31 44 Iran 0.19 44 Iran 0.31 44 Ukraine 0.23 45 Greece 0.17 45 Egypt 0.17 45 Greece 0.17 46 Nigeria 0.16 46 Brazil 0.16 46 Nigeria 0.13 47 Brazil 0.14 47 Argentina 0.14 47 Hong Kong 0.12 48 Hong Kong 0.12 48 Nigeria 0.14 48 Argentina 0.11 49 Argentina 0.07 49 Hong Kong 0.12 49 Egypt 0.10 50 India 0.06 50 India 0.04 50 Brazil 0.10 Sources: White Clarke Group Global Leasing Report 14 © WORLD LEASING YEARBOOK
US economic growth decelerated to 2% in the second for the first time since 2013. The ifo Institute, the Munich-
quarter of 2019 and business investment has been weak. based research group, has found that German companies
Trade tensions with China, equity market volatility and are worried about the current economic situation and
decelerating job creation are potential risks for quarter four pessimistic of the outlook for the future. The German
says the Foundation. government is under pressure to increase spending to
boost a fragile economy.
The ongoing trade dispute with China is the most
significant risk to the US economy and although de- New business by members of the BDL was up 2.4% in
escalation is to be hoped for, political uncertainties mean 2018. And despite the economic gloom the BDL’s quarterly
trade tensions have the potential to impact the economy. trend report states that the value of new business in the
first half of 2019 was up 9.3% on the corresponding period
China in 2018. Baring major global upheavals the BDL predicts
China is experiencing an economic slowdown and trade business to up between 3% – 5% in 2019.
relations with the US remain strained.
Japan
China’s leasing industry has experienced a significant The Japanese economy, the third largest in the world
regulatory tightening and as a result the growth of leasing behind the US and China, is facing serious economic
investment slowed in 2018. This tightening will affect challenges. Japan has suffered a fallout from the US/China
general leasing growth in 2019 and 2020. There has also trade wars and the strength of the yen has weakened
been some consolidation amongst the leasing companies export demand and markets are unsettled. GDP grew at an
operating in the market. annualised pace of 1.3% in the three months through June
from the previous quarter.
However, Chinese automobile manufacturers are
increasingly turning to leasing as a sales aid to market their The Japanese Leasing Association has reported that
vehicles and auto leasing is an area which is expected to lease transaction volume in August 2019 increased by
see further growth in the Chinese market in coming years. 16.8%. For the period from April 2019 to August 2019
business was up 8.4% compared to the same period in
United Kingdom 2018, suggesting that overall 2019 will most probably be
The UK asset finance market was up by 5% in 2018 a year of growth for the Japanese leasing market despite
bringing the eighth consecutive year of growth in the UK the economic environment.
market. Brexit uncertainty does not appear to be affecting
domestic investment and the UK economy is proving to be
remarkably resilient.
The FLA has reported that total new business as at the first
Author
eight months of 2019 was up 7% on 2018. And for the 12 Brendan Gleeson is Group CEO of White Clarke Group, a
months to August 2019 business was up 6% compared to global financial services business technology company,
with offices in North America, Europe and Asia Pacific.
the same period the previous year with aircraft, ships and
Brendan joined White Clarke Group in 2001 and, under his
rolling stock up 115%, commercial vehicles up 11% and plant leadership, the group has grown to become a global force
and machinery 14%. It is reasonable to assume that growth in the auto finance and asset finance industry. With over 25
years’ experience in the financial services sector, including
for the UK leasing industry in 2019 looks promising unless
a number of board level appointments, his expertise is
there is a significant downturn in Q4. creating and delivering strategic change initiatives. Before
joining the company he was IT Director at Bank of Ireland
Asset & Motor Finance.
Germany
The German economy faced uncertainty in 2019 with low info@whiteclarkegroup.com
business confidence, deteriorating economic conditions and whiteclarkegroup.com
even the Bundesbank warning of the possibility of recession
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