“Hockey stick growth” coming to APAC fleets
Yes, Asia Pacific is a fragmented, ‘difficult’ fleet market. But so was Europe, not that many years ago. And APAC is home to 60% of humanity, with a growing appetite for leasing and mobility. ‘Seizing the moment in a rising region’ was the timely title of the Fleet APAC Expert Meeting, which opened the 2023 Global Fleet Conference in Cascais, Portugal on Monday afternoon.
Setting the scene for the very first in-person Fleet APAC Expert Meeting, Nexus Communication CEO Caroline Thonnon shared the results of a Global Fleet survey identifying the main drivers for fleet growth in the region. Overall, 48% of companies surveyed expected their fleets to increase over the next three years, with particularly strong showings for Australia (60%), Japan (58%), the Philippines (52%) and Indonesia (50%).
At least 80% mentioned full service leasing as their preferred method of funding. However, finding the right lease partner was the second-biggest challenge for the companies surveyed. Finally, 68% thought there was high potential for optimizing their fleets in the near future. “Let’s do just that”, Ms. Thonnon concluded.
Next, Steven Schoefs, Head of Strategic Relations at Global Fleet, presented a state of play of the leasing market across APAC. Operational leasing has been growing with leaps and bounds across the region: volumes hitting 2 million in 2019, and projected to exceed 3 million this year. “The outlook is for hockey stick growth”, said Mr Schoefs, referring to the sharply upturned end of that sports implement.
One important driver, ironically, is lagging GDP growth across the region. This is nudging everyone to become more risk-averse, which plays into the kind of services offered by lease companies.
So things are looking up, but that’s not to say things are easy. The APAC leasing ecosystem, dominated by regional giants Orix and Sumitomo, with a strong presence of global players in a variety of alliances, acquisitions, partnerships and joint ventures, plus a wealth of local players, is diverse, fast-moving and complex. Did we mention ‘difficult’?
Mr Schoefs gave an overview of the wide range of product maturity in the region, from Bangladesh on one end to Japan on the other. Two important developments: the emergence of regional agreements. And, as the product matures, the likely adoption of western-style products, with more options for unbundling, for instance.
Next up: a panel discussion featuring four representatives of important players in APAC: Koichi Inoue (CEO of Mitsubishi Auto Leasing), Miel Horsten (Group Regional Director at ALD Automotive), Bart Beckers (CCO and Deputy CEO at Arval), and Tsuyoshi Takano (Deputy GM of Mobility at Mitsubishi HC Capital). All were bullish about their growth prospects in the region.
“The region is definitely moving towards standardization. Today, it’s still far away, but there’s a willingness to get there, both on the customer side and the supplier side”, noted Mr Horsten, who predicted that the evolution would piggyback on the push for more safety, sustainability and transparency.
EVs are an excellent tool for all of that. Is APAC on board? “We offer 360° solutions for EVs in Japan”, said Mr Inoue. “In Thailand as well, the appetite for EVs is growing”, added Mr Takano.
Yves Helven, brand-new Head of Customers Acquisition at Global Fleet, painted a picture of the regional fleet market. Despite APAC’s much-lamented fragmentation, there’s actually plenty that unites the regional market, he said. The aforementioned GDP adjustment is one. A rather un-European view on the energy transition is another:
“In Europe, the driver for electrification is environmental. In much of APAC, the incentive for going electric is to reduce the almost total dependency on importing energy (i.e. oil) from other parts of the world”.
Mr Helven beamed perhaps the most interesting slide of the meeting into the auditorium: the CO2 equivalent produced by BEVs in various APAC countries, based on the carbon footprint of the local electricity market. Turns out that in three countries – Mongolia, Iraq and Cambodia – a BEV has a larger carbon footprint than an ICE vehicle. In a bunch of other countries, an HEV (i.e. hybrid) is greener than a full-electric car. Interesting stats for global fleet managers deciding where in APAC to electrify first. (Although few will have large fleets in Iraq).
There were many more nuggets of valuable information to be sifted from the meeting – including from a panel with Jude Kourie (AVP Global Partner Business Development at Geotab) and Michael Ferreira (CCO at OCTO Telematics) on the value of connectivity in APAC.
For those wanting more, Nexus Communication announced the launch of the APAC Advisory Board, inviting any and all players in the APAC fleet ecosystem to join and get a front seat in the development of that ecosystem. A host of activities this year will culminate in a live meeting, at the start of 2024, in the APAC region itself.
Left to right: Bart Beckers (Arval), Miel Horsten (ALD), Tsuyoshi Takano (Mitsubishi HC Capital), Koichi Inoue (Mitsubishi Auto Leasing), and moderator Steven Schoefs (Global Fleet)
Image: Benjamin Brolet