In 2023, consolidation and inflation will be the names of the game
The major change in the mobility market landscape in 2023 will be the merger of LeasePlan and ALD. This will happen before mid-year and create the largest mobility operator in the world, with more than three million cars in portfolio.
The marriage of ALD and LeasePlan is the biggest, but by no means the only significant consolidation in the industry:
- The acquisition of LeasePlan USA by Wheels-Donlen will create the third major operator in North America (together with Holman and Element).
- In 2023, Localiza & Co will manage more than half a million cars in Brazil, following its recent merger with Unidas.
- In Europe, BNP Paribas is concentrating all its mobility business in a common offer, which will include Arval, Cetelem, Cardif, and BNP Paribas Real Estate.
- And last but not least in this short list of examples: Stellantis and Renault are reorganising their financing and mobility business, with an ambitious eye on the future.
Meanwhile, there is continued great appetite among investors to support mobility startups. This means that in a quickly changing market, a lot of resources continue to be available for providers great and small to adapt their offerings to become even more sustainable and secure.
But let’s not forget that inflation also has an impact in the industry. In 2022, for example, monthly lease rates have been increasing by two digits, essentially because of rising car prices (or at least lower discounts), and rising interest rates (even if those higher market rates have not yet been fully transmitted to the end customers).
In 2023, we can expect continued strong pressure on both car prices and lease rates. Hopefully, competition will further drive up residual values and at least partially compensate for the troubles suffered in particular by the rental car sector.
Lease companies have been raking in large profits throughout 2022 thanks to large profits remarketing their vehicles (the average profit per used lease car sold works out to around €3000). It is likely these lessors will compensate their rates by adjusting residual values, as it is likely that the used-car market will remain strong for at least a few more years.
In 2023, more than ever before, it will be essential to control cost. Market benchmarks and accurate data will be the most important tools to achieve this objective.
Pascal Serres (Pictured)