Operational leasing picks up speed in times of crisis

In spite of a 60% drop in the auto market and of a 75% drop of the financial leasing market, operational leasing will grow over 20% this year, to 23,000 vehicles under management, according to "LeasePlan" officials.

"Operational leasing is the optimal solution in times of crisis, with its main benefit being the significant reduction of car fleet management costs, by outsourcing the process to a specialized company", said Bogdan Apahidean, general manager of "LeasePlan" Romania.

The subsidiary of the Dutch based operational leasing company "LeasePlan Corporation" estimates it will manage 2,500 vehicles by the end of the year, nearly double over the end of 2008, when it had 1,350 vehicles under management.

"We currently have a fleet of around 2,400 vehicles under management and by the end of the year we expect to reach 2,500 vehicles", said the manager of the company.

Despite the fact that by the end of the year the company"s turnover could reach EUR 10 million (a fourfold increase over 2008), Bogdan Apahidean estimates that the company will post a loss of EUR 750,000, 25% less than 2009 estimates, due to cost cutting and sales recorded in advance. He added that he expects the company to return to profitability at the end of 2010 at the earliest.

"I think we will have an annual profit at the end of 2011, when we expect to have around 5,000 vehicles under management", said Mr. Apahidean.

For next year, "LeasePlan" expects to double its 2009 turnover to 20 million Euros, and to increase its assets to EUR 37 million, up 85% over their estimated value for this year.

The leasing company entered the Romanian market in March 2007 and began operations in September 2007, by means of an initial investment of 1.3 million Euros. LeasePlan currently has 118 customers in its portfolio, including CEZ, BCR, Bancpost, Coca Cola, IBM, Metro and Actavis.

"Volkswagen Group" is the company"s main shareholder, with a 50% stake, with "Mubadala Development of Abu Dhabi" and Olayan Group each hold 25%.

The largest players on the domestic leasing market are "Sixt New Kopel", which acquired second hand car dealer AAA Auto, which estimates a turnover of EUR 18 million for this year and a fleet of 8,500 vehicles under management, and "ALD Automotive", the operational leasing division of French group "Societe Generale", which has 209 customers and 5,000 cars under management.