Leasing market in 2008
Total value of the leasing market for this year depends heavily upon the final quarter, which is expected to be worse, due to the global economic crisis, said Jean Claude Boloux (photo), chairman of ALB Romania.
Until mid 2008, the evolution of the leasing market met all forecasts, whereas in the second half, Boloux said, there were signals of a slowing demand, making all objectives impossible to be acquired by yearend.
“Real estate market is now blocked, thus, there was no demand for construction equipment coupled with the absence of infrastructure projects started by the authorities”, said Boloux who is also the managing director of BRD Sogelease.
For 2008, the prior forecasts set forth a 6 billion euros value, while Boloux sees a merely 5.5 billion euros threshold, up 5% from a year ago, in the context of financial crisis.
“Now we are less optimistic than we were six months ago. I think the best way is to keep the 6 billion euros target for next year. A 10-15% growth would be reasonable in 2009, but it will depend upon the decision of the Government who has all the required instruments to shore up the market”, Boloux added.
There are surely many things that need to be done, but the most important is the public infrastructure projects. “Romania has to be ready for future. The effects of the crisis will be visible in 2009, but there will be markets to raise the bid”, ALB head added.
Boloux believes that not all the 250 leasing firms registered at National Bank of Romania are active, as ALB association, which stands for 93% of the market has only 35 companies registered within. “The other companies are very small and the current crisis may take its toll on them. There will be a cleansing and resettlement process in the Romanian leasing market, as a consequence of the economic downturn.”
Stagnation in 2009?
The leasing market will most likely record a break-even point with this year’s results, in the best case scenario. However, it is not excluded a slowdown of the industry, said Dan Constantinescu, managing director at UniCredit Leasing, NewsIn informs.
“Constructions, transports and car industry will surely feel a full-blown crisis, as segments of leasing market”, Constantinescu added.
He mentioned that in a slight growth-rate market, the way to make profit or to keep profit is to cut costs.
“Leasing firms will also have to be very prudent when investing” Unicredit representative stated.
“Everything requires an in-depth expertise. Leasing companies must take into account an error margin, and to draw a prudent cost planning for 2009”, Unicredit director said.
Constantinescu mentioned that in these gloomy times, refunding was a ‘hotspot’ for leasing firms, as it is problem for the entire market.
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