The Romanian leasing market is at a crossroads: auto leasing has peaked, and, in order to build up the business and, implicitly, profits, leasing companies need to tackle more market segments, such as equipment and real estate leasing, for instance.

"The year 2004 will be crucial to many leasing companies. Fierce competition will emerge in the near future and we have to be prepared. It is obvious that banks will be the main leasing contract suppliers. On the other hand, there will still be the 'sellers', namely those companies financing their sales through their own leasing firms. Still, many of the leasing companies will go under," says Jean Paul Decrock, general manager of BRD Sogelease, the leasing company controlled by BRD Groupe Société Générale. According to Decrock, 2004 will bring a clear segmentation of leasing in Romania, depending on the specific market niches it targets. "The 'sellers' and the leasing companies affiliated with banks cannot and will not have common interests where leasing, and even economic growth are concerned," says the general manager of BRD Sogelease, which, together with another three leasing firms affiliated with banks withdrew from the Association of Romanian Leasing Companies (ASLR) last year.

ASLR officials also feel competition will become fiercer, but estimate this will most likely happen in the medium run, instead of this year.

"I believe competition will intensify as of 2007, when those leasing companies affiliated with banks will turn into distinct departments within the respective banks and will focus on financial leasing," says Cornel Coca Constantinescu, chairman of ASLR.

According to Constantinescu, the growth of equipment leasing will be mostly fuelled by the leasing firms affiliated with banks. "It is natural for this to happen, because we are talking about