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Residual value confidence eases after an upbeat year
Having reported a +5.3% increase in its forecasted RVs for the 12 months, Germany showed only a +0.3% rise between October and December, with the UK swinging from +4.0% for the previous year to a -4.6% drop in the last quarter. Of the 6 nations surveyed, only Italy shifted its forecasts upwards with a move from -2.0% for the year to a +0.8% rise for the quarter. The latest experteye European Leasing Index report which tracks forecasted residual values, maintenance costs and rental rates in six European countries uses data supplied by major leasing companies in each market.
Of the six countries surveyed, Portuguese leet customers have seen the largest overall hike in rental rates, rising by +4.6% during the last 12 months, with French leasing rates showing the next highest increase (+4.0%). German customers, on the other hand, have enjoyed a -3.2% reduction in their rental prices across the last year, with Spain following closely at -2.9% and Italy at -1.9%. The UK remained relatively stable with a nominal +0.7% rise. Yet rental luctuations have been minimal in the last quarter, the largest increase being France (+1.3%) and the greatest reduction in Italy (-1.4%).
Market summaries – 3 and 12 months to December 2011
FRANCE: In the last quarter French customers faced the largest increase to their monthly rentals in the experteye survey, however at just +1.3% this is a relatively small rise. Yet this reflects a continued upward trend after a 12-month period in which French lease rates have risen by +4% overall. Whilst forecasted residual values have improved by +3.9% during the year, SMR (servicing maintenance and repair) budgets have gone up by +4.6% and new car prices by +2.7% resulting in the upward trend in rental prices. This has settled since October 2011 with a small +0.5% rise in SMR budgets and a +1.6% increase in RVs.
GERMANY: German fleet customers have enjoyed a -3.2% drop in their rentals during the last 12 months; the largest reduction in lease rates of all nations surveyed. This has been aided by a +5.3% rise in forecasted residual values, placing the German market as most confident in the future used vehicle market. SMR budgets have remained stable for the 12 month period with a small -0.2% reduction. The last quarter is a picture of stability with -0.2% movement in lease rentals, a +0.3% shift in forecasted RVs and a +1.4% rise in SMR rates; albeit this is the highest SMR rise of all nations during the quarter.
ITALY: Italy is the only nation to show a reduction in its forecasted residual values across the last 12 months with a -2.0% decline. Confidence is perhaps returning though with a marginal +0.8% improvement in RVs since October 2011. Italian customers continue to see lease rates come down with a -1.4% reduction in the last quarter, delivering a -1.9% drop for the 12 months. SMR budgets rose by +4.5% during the year, but have shown a -1.5% drop in the last 3 months; the largest reduction of all nations in the experteye survey.
PORTUGAL: Portuguese customers have suffered the highest hike in rental rates in the survey, with a +4.6% increase since January 2011. With SMR budgets also showing the largest increase (+6.9%) for the year, and new car prices rising by +2.4% it is unsurprising to see lease rates increase, even with a +3.7% improvement in forecasted RVs. However the recent quarter has been relatively stable with a -0.2% movement in lease rates, a -0.9% shift in forecasted residual values and a +0.9% rise in SMR costs.
SPAIN: In the last 12 months Spanish customers have enjoyed a - 2.9% reduction in their lease rates; the 2nd largest reduction of the nations surveyed. This has been assisted by new car prices coming down by -2.1%, SMR budgets reducing by -3.1% and forecasted residual values improving by +1.2% during the course of the year. The recent quarter has settled with very little movement; lease rates (-0.1%), SMR (-0.1%) and forecasted RVs (+1.1%).
THE UK: The last 3 months have shown a marked shift in UK forecasted residual values, moving from a +4.0% improvement since January 2011 to a -4.6% reduction since October 2011. The last 12 months have shown a +5.7% rise in SMR budgets (the 2nd largest increase of all nations surveyed) although this has reduced to a +0.6% shift in the last quarter. Rental rates have remained largely stable with a +0.1% rise in the last quarter following a +0.7% increase for the year.