As growth falters, APAC looks to Europe for answers
For 2023, S&P predicts 3.5% growth for APAC. To Europeans, that seems fabulous. But Asians have been used to 6-9%, so they must shrink their expectations, also in fleet terms.
Economic trouble hasn’t spared APAC. Car prices, fuel prices, interest rates: they’re all up. That’s having a peculiar effect in the region, which hasn’t experienced anything on this scale since the sharp, short Asian Financial Crisis of 1997. “People across the region had been used to the fact that next year was always going to be better. That has now changed. With it, there has been a shift in key attitudes to spending, in particular on fleets,” says Yves Helven, APAC Expert at GlobalFleet.
Seemingly endless growth encourages lending and spending. You’re simply ‘borrowing’ from future, higher income. Predictably, everyone is more prudent now – corporates and consumers. Helven adds: “The key term is ‘risk awareness’. In fleet management, that means a more careful assessment of procurement policies, tougher conditions when tendering, and stricter attitudes towards suppliers. In many respects, this means learning from European practices.”
Ironically, this is where Europe’s familiarity with economic sluggishness turns into an advantage for fleet and mobility managers in APAC. The European example shows that operational leasing is a good way to limit risk for corporate fleets. And that constant attention to optimization, innovation and mobility alternatives will keep costs down. It’s new terrain for APAC. But others have shown the way.
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This article is extracted from the E-Book "Your Fleet in Asia Pacific" that can by downloaded from our Knowledge Center by clicking on this link
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