Belgian lease market keeps on booming
In spite of calls to do something about the ‘exploding’ number of ‘salary cars’ in Belgium, the market for company cars was growing with 3,2% in 2017. And that was reflected also in the lease car market which made ‘a very good year’ with a growth of 6 to 8%.
Last year 546.558 new cars were registered in Belgium of which 54% is a company car or so-called ‘fleet car’ that is registered under a VAT number. Half of the company cars are lease cars, the other half is financed by the companies or by self-employed people. Of the total car fleet in Belgium, more than a million or one fifth is a company car.
Small new players
This booming lease market attracts even more new, rather small players like the Dutch Terberg Leasing, Leasys from FCA Bank (joint venture between Fiat-Chrysler and Crédit Agricole) and Free2Move Lease from French PSA Group (Peugeot-Citroën-Opel).
Leasys wants to build out a fleet of 8.500 cars in five years, Free2Move Lease aims to double its 7.000 vehicle fleet by 2022. Both won’t limit their offer to their own brands, but will include premium brands like Audi, BMW, Mercedes and Volvo that make out 54% of the lease fleet in Belgium.
Is there still room for new players?
Today the big six already have 83% of the lease market. Market leader ALD Automotive, owned by French bank Société Générale, has its own leasing label, but also takes care of the leasing offerings of car brands like Volvo, Renault and Toyota. Other big players are Arva (BNP Paribas) and KBC Autolease (KBC bank).
Car manufacturers themselves stepped in the lease market like Daimler (Mercedes-Benz) taking over Athlon for more than 1 billion euro in 2016 and BMW buying ING Car Lease, renaming it to Alphabet. Because lease car contracts last on average three to five years, while private car owners tend to keep it for ten or more years, car makers are sure they’ll sell enough new cars in the leasing.
Who is going to lease a car in the future?
Leasys believes in the SME market, among others with Fiat light vans. Terberg Leasing is aiming with its Justlease on the private lease market. This market is still very small in Belgium with some 10.000 cars. In the Netherlands this market is ten times bigger, which explains the interest the Dutch have for Belgium.
“The coming years there will be a fight for the private customer who wants to lease”, says Miel Horsten, CEO of ALD Automotive Belgium and President of leasing federation Renta. “But profitability is lower, because in private lease the cars usually are smaller.”
Who is going to drive diesel cars?
Last year for the first time more petrol cars were registered in Belgium than diesels. But in the lease market diesel still rules. At ALD Automotive diesel is still 89% of the fleet, although the CEO sees a turn. 80% of new clients wants a diesel today, compared to 92% two years ago.
“Lease car drivers decide every four years and often they are bound by a company car policy”, Horsten explains the slow change. “And they often drive more than 30.000 km a year, what makes diesel more interesting.”
Horsten expects diesel to make out only half of the leasing market by 2020. Problems with the residual value of diesel cars Horsten doesn’t expect on the other hand. “68% of the Belgian lease cars are exported to Eastern Europe where the diesel market stays strong.”
Who is going to drive a car in the future?
Growing traffic jams are pushing commuters towards alternatives for the car. The federal government plans to give ‘cash for cars’ for who is willing to trade in his company car. According to Horsten the uncertainty about these plans caused a difficult fourth quarter last year.
But he doesn’t expect the interest for lease cars to slow down. “In our surveys with employees we see few demand for ‘cash for car’ because people don’t have alternatives.” Some lease companies are already offering bikes as an alternative like KBC Lease with 1.600 lease bicycles. Rather meager compared to 46.000 cars in their fleet.