The plummeting sales of new cars and companies' frozen investment projects brought leasing firms turnover declines by as much as 35% in January, from a year earlier, and February could be even worse.
On the segment of car financing, some companies posted slumps by as much as 70%, on a par with the new car market.
"In January, for the overall portfolio we had a 15% drop. The car segment brought the steepest decline, as we achieved 30-40% of the January 2008 volume. Instead, we saw an increase on the corporate market, on equipment financing. There are also several real estate projects for which we are in talks now and which we may finance in the following period," states Dan Constantinescu, managing director of UniCredit Leasing Corporation, in charge of sales. UniCredit is the biggest leasing firm on the market, with financing worth above 500m euros in the first 11 months of 2008.
In the case of Impuls Leasing, a top ten firm, with 205m-euro financing granted in 2008, turnover dropped by 33% in January from January 2008. "(...) This was mainly because of the new car sales, which shrank by almost 70%," says Razvan Diaconescu, Impuls Leasing CEO.
Car financing dropped by 42% from January 2008, to 7.5m euros. "February will be disastrous, worse than January. Our target for 2009 is to post results similar to 2008 ones," says Diaconescu.
TBI Leasing, a medium-sized firm, also reported falling financing in January. Florentina Mircea, the company's CEO, says January is generally a slower month and also a month when budgets for the current year are discussed.
Dan Constantinescu says this market correction will push leasing firms to switch to more productive segments, such as equipment and real estate. As a result of the exchange rate increase, leasing market players expect a rise in the number of customers falling behind with their payments
