Description of the Report
The worldwide enterprise asset lease market was worth $820.27 billion in 2019 and is expected to grow to $1.76trillion by 2027. It is expected to grow by a CAGR of 12.3 percent between 2020 and 2027. An enterprise asset lease is an agreement that lets one of the parties, the lessor, grant rights to the other and the lessee to utilize capital goods and other assets such as utility vehicles, commercial equipment, medical equipment, and I.T. software for professional use in exchange for regular payments. The lessee can also take ownership of the asset once the lease expires.
It has been observed that COVID-19 has significantly disrupted the business and organizations and affected people’s lives because of which demand for capital equipment, software, and vehicles has slowed down. The lower demand is due to the economic liquidity issues. In this situation, leasing has proved to be a reliable alternative to financing as it allows companies like start-up multinationals and others to get the rights to use the equipment, property, and plant without having to make large initial cash expenditures.
Enterprise leasing has numerous advantages over traditional methods of borrowing. These include higher profitability, tax advantages, and inflation-friendly and safe investment options. In addition, the enterprise lease helps businesses in terms of expansion by providing them with the possibility to utilize or purchase capital equipment that is movable with lower capital investment. It does not just increase the production capabilities of the business but also allows companies to utilize the equipment without the possibility of buying. All these elements lower the operating costs of businesses, boost the efficiency of their business and allow the adoption of enterprise leases by the public.
The growth in the global average price of utility vehicles, a shift in the risk of obsolescence, the tax benefit, and higher return on capital employed are among the key elements driving the global business asset leasing market growth. However, the increase in borrowing from different lenders and the high cost hinder the development of this market. In contrast, the untapped resource of emerging economies and a surge in government assistance and initiatives toward leasing services are expected to create lucrative opportunities for the corporate expanding the market for asset leases in the coming years.
According to asset type, the enterprise asset leasing market was driven by the commercial vehicles segment in 2019 and is predicted to keep its position throughout the forecast time. Demand for commercial vehicles is expected to continue to increase in the market for enterprise asset leases since auto manufacturers provide access to financing on the market. But the I.T. equipment sector is anticipated to expand at the fastest rate in the coming forecast due to the rising trend for telecommunication companies to use I.T. equipment and software for lease to enhance the capacity of decision-making within the company and to facilitate the efficient use of enterprise resources.
Regionally in terms of geography, the enterprise asset lease market share was led by North America in 2019 and is anticipated to keep its position over the forecast time. The primary factor driving the development of the business assets leasing industry in the region is the presence of significant players from the U.S., resulting in large-scale leasing of commercial equipment within the nation to run business operations and generate profits. Yet, Europe is expected to experience significant growth during the forecast time frame due to Enterprise leasing providers within Europe focusing on providing maintenance, insurance, and fleet service to large manufacturing firms, which is the primary need to raise awareness about financing among the consumers.
The report focuses on future growth opportunities and the restraints and trends in globally-based enterprise asset lease market analysis. The report provides Porter’s Five Forces Analysis to analyze the effect of different factors like the bargaining power of suppliers and competitors’ competitive intensity, as well as the risk of new competitors and the threat of substitutes, and the bargaining ability of buyers in an international enterprise-level asset lease market.
The worldwide enterprise asset leasing market is divided into asset types, lease types, business size, industry vertical, and region. When it comes to the kind of asset, the enterprise asset lease market is split into commercial vehicles, machine and industrial equipment, real estate equipment, and others. Based on the leasing type, the market is divided into financial and operating leases. The vertical industry market is divided into transportation and logistics manufacturing, construction, it and telecom, government and public sector, and many more. When it comes to the size of the enterprise, the market is divided into large companies and smaller and medium-sized companies. In terms of geography, the enterprise’s asset leasing market is examined throughout North America, Europe, Asia-Pacific, and LAMEA.
The main players that are profiled in the market for enterprise assets lending market include BNP Paribas Leasing Solutions, Bohai Leasing Co. Ltd., Docuformas, GENERAL ELECTRIC, Hitachi Capital (U.K.) PLC, ICBC Leasing Co. Ltd., Lombard North Central plc, Orix Leasing & Financial Services India Limited, SocieteGenerale Equipment Finance, and White Oak. These major players have employed different strategies, like expanding their portfolio of products, mergers and acquisitions agreements, geographic expansion, and collaborations to boost their market share and increase their presence in the sector.
The COVID-19 Impact Analysis
The industry of enterprise asset leasing has seen continuous investment for its development and has grown to become an enormous contributor to economic expansion. However, the industry is largely affected by the COVID-19 pandemic, which has led to instability in the economy. It has also been discovered that an increase in uncertainty regarding earnings and employment has prompted companies to put off the purchase of new equipment. In addition, the shortage of raw materials and logistical services has interrupted the supply chain in every industry and has caused delays in the launch of new products on the market.
The Asia-Pacific region will show the most impressive CAGR of 14.9 percent from 2020 to 2027.
In light of these causes, the buying habits of businesses have changed, causing companies to delay their purchasing decision in the event of a pandemic. These factors have positively affected the market for enterprise asset leasing and increased the demand for it by consumers. This is because of the financial stress businesses aren’t being able to operate efficiently. Enterprise leasing provides a chance for SMEs and other businesses to expand significantly by utilizing leasing options. In addition, the increasing tendency to finance software and equipment acquisitions, backed through the Federal Reserve while lowering interest rates, also provides huge opportunities for expansion of the enterprise asset leasing market in the next few years.
Top Factors Impacting HTML0
Global Average Growth Price of Assets
A surge in demand for commercial vehicles and equipment worldwide has become one of the most significant driving factors for growth within the industry. With the trend of businesses and their preferences towards purchasing commercial equipment have grown dramatically, the demand for financing utility vehicles and loans is predicted to increase, and it is anticipated to continue dominating the market. So, with the increase in the need for utility vehicles in manufacturing firms to transport the products, the global average cost of vehicles has risen in parallel.
The massive increase in the cost of vehicles is causing businesses to shift away from direct purchase to financing leases on vehicles in the marketplace. For example, across the U.S., the average price of a brand-new car increased to $36,718 by the end of 2019 from $35,742 in 2018. Interest rates are between 6 2% and 2%, respectively. This means that these hefty prices imposed over the median cost of automobiles are expected to increase the expansion of the business asset leasing market throughout the forecast.
The untapped potential of emerging economies
Customers from the major emerging and developed economies favor accredited financial institutions to provide corporate leasing services to prevent any risk or discrepancy in the procedure. This will provide substantial opportunities for leasing firms in emerging economies. Furthermore, countries like China, India, Japan, and Australia have a high need and frequently provide quotes for car financing or loans due to the increase in long-duration payment options ranging from 12 months to 3.5 to four years.
Thus, these benefits are greater regarding repayment options when taking out car loans. Another benefit of leasing is that it lets the lessee finance up to 100 percent of the asset’s cost without the requirement of additional collateral or security. These advantages will provide huge opportunities for key players in the coming years.
Principal Benefits for Stakeholders:
- The study offers a comprehensive review of the global forecast for the market of asset leasing as well as the latest trends and estimates to reveal future investment opportunities.
- The report provides information on the important drivers, constraints, and opportunities, as well as their impact on global trends in the market for enterprise asset lending, are provided in the report.
- The Porter Five Forces analysis demonstrates the potential of suppliers and buyers operating within the enterprise asset lease sector.
- The quantitative market analysis between 2019 and 2027 will be used to assess the market’s potential.
Enterprise Asset Leasing Market Report Scope and Segmentation
|UNIT||Value (USD Million/Billion)|
|BY REGION||North America, Europe, Asia Pacific, Latin America, Middle East and Africa|
Market Segments Key Market Segments
- Based on the type of asset
- Commercial Vehicles
- and Industrial Equipment. and Industrial Equipment
- Real Estate
- I.T. Equipment
- By Leasing Type
- Operating Lease
- Financial Lease
- Industry Vertical
- Transportation & Logistics
- IT & Telecom
- Government & Public Sector
- By Enterprise Size
- Large Enterprises
- Small and Medium Enterprises
- By Region
- North America
- The Netherlands
- Czech Republic
- Rest of Europe
- Asia Pacific
- South Korea
- Australia & New Zealand
- Rest of Asia Pacific
- South America
- Rest of South America
- The Middle East & Africa
- Saudi Arabia
- South Africa
- Northern Africa
- Rest of MEA
- North America
- Key Market Players
- BNP Paribas Leasing Solutions
- Bohai Leasing Co. Ltd.
- GENERAL Electric
- Hitachi Capital (U.K.) PLC
- ICBC Leasing Co. Ltd.
- Lombard North Central plc
- ORIX Auto Infrastructure Services Limited
- SocieteGenerale Equipment Finance
- White Oak
- CML Microcircuits