Asset Finance pricing review Experteye analyses European Pricing … · 2019-04-26 · Starting on page 21, we take a close look at how to integrate new innovations with legacy systems,

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Asset financepricing review

Pricing action plan for improved profits

Best practices for setting residual values

Kwik Fit’s fast fit,service excellence and

savings

sponsored by

Car WarsBryan Marcus reconciles divergentpricing perspectives between salesdirector and CFO

Volume, market share or profit. What’s your primary pricing priority?

GULF STATES: leasing desert set to bloom

Colin Tourick on getting

pricing right

Asset FinancePricing Review Experteye

analyses European buying trends

Moving to mobility – updating legacy systems

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The pricing action plan for profitChanging your pricing policy may well be your most powerful lever forprofit. Make your action plan now!

So you want to improve your pre-taxprofits?

Well, you might decide to introduce a new ITsystem that would allow you to do morethings, introduce more products and be moreeffective than before - at a cost, of course. Oryou might introduce a new quality-management system or increase yoursalesforce or cut overheads or other costs.

These are the ‘levers of profit’, the aspects ofyour business that you can change togenerate more profit.

Generally speaking, if you pull one of theselevers it will have a modest effect on yourbottom line. You can often generate a muchbigger impact, with much less disruption tothe business, by changing your pricing policy.If you can implement a successful pricingchange you will improve your volumes andmargins simultaneously, with little disruptionand at little or no cost. Do it successfully andyou will enjoy the benefits immediately,without generating a negative response fromstaff or clients. Pricing is the most powerfullever of profit.

In previous Pricing Reviews we have looked

at the steps that asset finance companieshave taken to develop their businesses and inparticular how they have improved (or mightimprove) their pricing. In this article we willmove beyond that and set out an action planfor asset finance companies that want toimprove their pricing. The steps to follow are:diagnosis; decision; preparation; get buy-in;trial; implement and monitor.

1. Diagnosis

First, have a look at the way business ispriced at the moment. How are pricescalculated? Is it done centrally or byindividual salespeople? What insights aregained from the market to help guide pricing?Have a look at the range of prices quoted forthe same type of business to the same typeof customer; are they similar? If there is awide variation you have prima facie evidencethat something is going wrong.

Which customers get the lowest prices andwhy? What costs are incurred as a result ofdiscounting or other giveaways, e.g. givingaway costly contractual points during thenegotiation? Do the most valuable clients getthe biggest discounts? When pressed by a

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The price is rightI have always written these articles in the third person but this time I will break with tradition and write from my personal experience. I discovered the science of pricing almost by accident and think that my story may resonate with you, dear reader, particularly if you are involved in the running of an asset finance company.

My first involvement with pricing was as a member of the credit committee of an asset finance company in the 1980s. Our salespeople would bring in deals for approval – perhaps an HP deal to fund some trucks or a finance lease deal on some coaches – and I would regularly say that I thought they should go back to the client and ask for a higher price. This always triggered off a debate about the difference between our need for margin versus the price the market would bear, and I always felt frustrated at the outcome. In truth, I had no idea what the market price should be, but I harboured suspicions that our salespeople were doing a better job persuading me and my colleagues to accept low prices than persuading clients to accept the prices we really needed to be charging.Twenty years later I was appointed MD of a fleet leasing business, and I made my way round the organisation learning how everything worked. Eventually I looked at our pricing. When I asked how we priced our leases I was told “That’s easy. Our plan calls for us to make an average margin of x% over cost of funds and to fund £y of new cars. If we succeed we’ll generate the gross profit we need to cover our overheads, hit our planned profit, the parent will be happy and we’ll all get our bonuses.”I said that surely our pricing must be more sophisticated than that, and was told that for large clients we would deduct 2% from average margin and for small clients we would add 2%.And what if the client pushed back on price? “That’s all down to the sales director. He has lots of market knowledge and experience and he’ll decide whether to offer a discount to win a deal”.So I asked the sales director how he determined prices. He repeated verbatim what I’d already been told, including the bit about market knowledge and experience. And, when pressed him about how he responded to price pressure he said that if he liked the client he’d knock £5 off the rental to keep them happy.I found this unsatisfactory but frankly had no idea of how to improve the situation. My accountancy training had taught me about costing and breakeven analysis but nothing about how to determine the optimum price to quote - the highest price consistent with maximising the probability of winning the deal.A year later I was out having dinner with the fleet manager of our largest client. Late that evening he leant forward and said “Colin mate, you are one of four suppliers. You’ve won 75% of our business for the last 18 months, all on price, but some of your rentals are ridiculously low, £20 per car per month in some cases. And I’m worried for you, mate, because if it carries on like this you might lose your job”.

Data drivenHe was drunk, I wasn’t. In the morning I asked our team to show me how they’d calculated that client’s rentals. Thirty minutes later I was convinced they had followed our standard pricing methodology and done nothing wrong, but equally convinced that as far as the market was concerned we were getting everything wrong.

Professor Colin Tourick

IntroductionWelcome to the latest edition of our Asset Finance Pricing Review, published in association with Asset Finance International

The automotive sector is on the brink of entering a brave new world – one where mobility services, which encompass a range of options for travel, are assuming a much greater significance than ownership of a single asset, the car. Like every major shift in the industry, this change provides both challenges and opportunities for the major leasing and auto finance businesses. So far, the focus has largely been on mobility for individuals, as evidenced by the sharp rise in popularity of ride-hailing services such as Uber and car-sharing and car subscription offerings.However, there is no doubt that the winds of change are also blowing through the fleet management sector, where the old principle of “one car, one driver” is giving way to the development of a mobility ecosystem, available at the touch of a button from the screen of a smartphone. New powertrains, self-driving vehicles, the trend towards a sharing economy and environmental concerns all have their part to play in this, but the really big differentiator is the use of technology.Of course, for fleet managers working with IT systems which may be years or even decades old, the switch to mobility services can look daunting. Indeed, many will be reminded of the old joke about the tourist who asks a local for directions, only to be told, “Well, if I were you, I wouldn’t start from here”.Starting on page 21, we take a close look at how to integrate new innovations with legacy systems, with tips on how to get the best out of both. Vehicle asset management is becoming more important than ever, and fleet managers have a range of tools at their disposal to ensure timely and effective responses to users’ needs.And although the market is undergoing a transformation, a lot of the old principles do still hold good. In his article on page 3 Professor Colin Tourick, who is Professor of Automotive Management at the University of Buckingham and a 35-year industry veteran, investigates how improved data from new technologies can be used to refine established pricing models. Our star article (starting on page 6) is an examination of the leasing markets in the Gulf States. While there are significant differences between the countries of the region, all have felt the impact of the fall in oil prices and this change is encouraging a reassessment of options such as leasing. As ever, we also have ExpertEye�s report on residual forecasts and market summaries, which you can read on page 17. Do enjoy and your comments and opinions are always welcome.

Gary JefferiesSales and Marketing Director, Bynx

Introduction

Welcome to the sixth edition of Asset Finance Pricing Review, published incollaboration with Asset Finance International and Professor Colin Tourick.

As in all previous issues, we again put forward a host of articles from industryinsiders that serve to illuminate the more challenging aspects of asset financepricing. The purpose is to bring you valuable insights, knowledge and examples.

In any company, there are different stakeholders involved in pricing policy andexpecting sales and finance to see eye-to-eye on every issue is the stuff of fantasy.This is especially true for businesses that operate internationally and have to takeinto account the cultural, political, financial and regulatory differences within thosemarkets. In Car Wars – reconciling divergent views on manufacturer auto financepricing (pages 3-5), Bryan Marcus, regional director of VWFS Latin America,Canada and Northern Europe, offers an interesting perspective on resolving pricingdisputes – and one that doesn’t involve leather gloves and a boxing ring!

There are many ‘levers to profit’ in every asset finance business but the one thatwill have the greatest impact on the bottom line is changing your pricing policy.This is the advice of Professor Colin Tourick, management consultant and editor ofAsset Finance Pricing Review, in The pricing action plan for profit (pages 6 and 7).

There’s only one topic (other than pricing policy) that can claim joint ownership ofthe most-difficult-aspect-to-get-right-in-asset-finance title and that is settingResidual Values (RVs). But it’s not just a matter for vehicle leasing and daily rentalcompanies, states Dean Bowkett, technical director and chief editor atEurotaxGlass’s. In his article Setting Residual Values (pages 8-10), he examines thepitfalls and best practices and offers a unique perspective on how it matters forOEMs too.

Page 11 presents the results of our last Pricing Survey, which posed questionsaround how to pitch pricing at a level that delivers the most new business andhighest margins. As ever, the results surprised us. They may surprise you too orperhaps confirm your prior thinking. Either way, get in touch and give us yourperspective.

Take part in our next survey

We’re very grateful to everyone who takes part in our surveys (you can do soanonymously if you like) because they always provide us with valuableunderstanding and ideas. This time we’re asking: What is the primary considerationwhen your asset finance business sets its prices/issues a quote? You can take parthere: http://bit.ly/bynxpr5.

It’s always interesting to read how suppliers work successfully with leasingcompanies and Kwik Fit GB is no exception. In an article, Kwik Fit GB fast fitsdeliver service excellence and financial savings (pages 12 and 13) Peter Lambert,fleet director, talks us through how the fast fits concept is delivering tangible resultsfor leasing companies.

We end this Pricing Review with the latest figures on changes in residual valueforecasts, SMR costs and lease rental rates across Europe (to January 2014) frombenchmarking and research specialist Experteye.

And don’t forget to share your feedback with us and tell us what you’d like to seein future Pricing Reviews.

Gary JefferiesSales and Marketing Director, Bynx

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With 24 hours to play with, these are the sorts of things we would be discussing. But in 2018 no client will wait 24 hours for a quote. So you need to work out how to collate and use your data to automate this process: to deliver the optimum market-sensitive price in the millisecond it takes for the client to press enter on your online quoting system.If you are offering full service operating leases into the market and set one fixed margin (say 2.5% over cost of funds plus Є15 per month admin charge) for a particular client, and don’t modify this to make it market-sensitive, your pricing system is not serving you well. If you change your RVs (or, if you offer PCP, your Guaranteed Minimum Future Values) once a quarter, and simply unplug the old RVs/GMFVs and plug-in the new ones without looking at how this will change your competitiveness, you’re making a mistake. On some deals you’d be pitching too low and leaving money on the table. On others you might be losing deals because you are quoting just a few cents or pence above the optimum price.Leasing companies need to be devising and implementing intelligent, market-sensitive pricing systems, whichever country they operate in and whichever financial product they are offering. A number have started down this road and some software companies have gone down this route too, but so far I have yet to see any fully-fledged automated system that takes the guesswork out of pricing and makes it totally scientific and data-driven. The potential gains are enormous. This is a prize worth reaching for.

Professor Colin TourickUniversity of Buckingham

So I started assembling all of the data that might help us understand our pricing in the market. We had some competitor data - feedback from clients and brokers - but this was patchy and unreliable. We also knew how our residual values (RVs) and our service, maintenance and repair (SME) budgets compared with RVs and SMR budgets from our major competitors; roughly how our cost of funds compared with theirs; who we were competing with, by client, and we also had data showing the percentage of our quotes that were being accepted for each make and model of vehicle, for each lease period and mileage, each financial product and each client.We assembled this data and, unsurprisingly, it revealed previously hidden truths.Where our RVs were higher than market average and our SMR budgets lower, a higher proportion of our quotes were converting into orders. And where our RVs were lower and our SMR budgets higher, a lower proportion of our quotes were converting into orders.Where we were competing with a large bank-owned lessor, we discovered, unsurprisingly, that we were winning a smaller proportion of deals, though on closer analysis we discovered that we were rather better placed with these clients on cars where our RVs and SMR budgets were making us more competitive.All of these discoveries gave us clues about the amount by which we might modify our rentals to maximise volume and margin, so we started tinkering with our basic pricing model, adding a little to rentals here, taking away a little here, to fine tune our pricing. The results were impressive and delivered a solid improvement to the bottom line, with no increase in costs.

Digital timingIn 2010 I took two months off work to read every book, learned paper and academic treatise I could find on pricing, and have since been fortunate enough to work on pricing projects for more than a dozen asset finance companies.When trying to solve a business problem the vital first step is to be able to say, succinctly, what you are trying to achieve. I like to imagine I am working for a very old fashioned leasing company where clients would ask for a quote and be willing to wait 24 hours for a response. If we had 24 hours, what information and data would we bring together to assist us to calculate the optimum price – maximising the probability of winning the deal whilst being as high as possible? Every asset finance company has plenty of data that can be used to inform such decisions, though this is normally sitting in different parts or the organisation and is not brought together to inform pricing decisions.There can be dozens of scenarios to consider.What price would we quote today for a large client on a deal (one permutation of vehicle make, model, period, mileage and financial product) where we had issued lots of recent quotes for identical deals for similar clients and had seen high quote-to-order conversion?Let’s say the answer was Є700 per month. How would we modify that price if we had quoted the same client Є705 for the same deal last week and they’d accepted the quote?Alternatively, how would we modify the quote if we had had an RV change last week that had reduced our system rental by Є10 per month?And what if it was a sole supply client? Or one where we had undertaken to fix prices for a period?And how does the need to treat customers fairly play into this? Or the need to price for risk or never quote lower than a certain margin?

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Leasing in the Gulf – oasis of opportunity?Journalist Tom Seymour takes an in-depth look at the finance and pricing challenges facing the vehicle leasing and fleet markets across the Middle East regions

The fleet market in the Middle East covers a vast spread of nations, as well as economic and socio-political differences. The area is typically divided into three regions, led by the Gulf Cooperation Council (GCC), which is a regional intergovernmental political and economic union consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). The second region is known as the Levant and includes Syria, Lebanon, and Jordan, while the third is referred to as the “Rest of the Middle East” or ROM category designation, covering Yemen, Iraq, and Iran.Although Middle East Gulf States share many similarities, each country has its own characteristics in terms of car market.Saudi Arabia stands out as the largest country by landmass, population and car market, while the UAE is the most advanced in terms of adopting new technologies and looking at leasing as a way to fund vehicles.

While cars are widely seen as a status symbol, they are also still very much a necessity due to the severe climate and a lack of public transportation. At the same time, the economies across the Middle East are coping with the impact of lower oil prices by instituting austerity measures and investigating ways to make their economies less oil-dependent.Undoubtedly these factors will be impacting the fleet market in the Middle East, but the size of the market is difficult to quantify as vehicle registration data is not made publicly available. Although automotive business groups are forming in markets like the UAE, the region is currently lacking a leasing association.Hans Geijsen, associate at Invigors and specialist on leasing in Europe, Middle East and Africa, said: “The GGC region is still immature when it comes to most statistical information, there are some details but all bits and pieces. Even traffic registration in almost all states is not publicly shared.”However, Geijsen said that approximately 60% of cars are sold to companies, of which about 25% go to rental and leasing companies. What is not known is how many of the other 40% are bought by individuals for use in their own businesses.Most companies in the region (especially locally owned companies) pay 8%-12% of salary to each employee as a car/transportation allowance, instead of providing company cars. This is the method across all GCC states. Most employees buy outright through finance deals as per their budget and are responsible for owning, maintaining and arranging insurance for their vehicle.While there is no published data on the market, Geijsen’s own estimates put the total size of the market in Saudia Arabia at around 160,000 vehicles and UAE’s market at 350,000, while the rest of the region combined would account for around 200,000 vehicles.Geijsen said: “If we assume cars changed about every 3.5 years on average, there should be about 200,000 new cars per year in to this sector.”The relationship between leasing companies, manufacturers and fleet customers is also quite different in the Middle East. The dealership is the primary source of contact for fleet customers on leasing deals and manufacturers generally have no direct relationship with customers.It’s a market of dominant players - franchises in the GCC are generally controlled by a handful of families. For example, the Futtaim family has the Toyota franchise and they are the only players for that marque in the UAE.

Hans Geijsenassociate, Invigors

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QatarQatar is one of the fastest growing new car markets

in the Middle East, growing by 10% between 2010 to 2015 and is expected to add an additional 213,000 cars by 2020.This is down to a growing population and the government investing billions ahead of the FIFA World Cup in 2022.The country has a high urbanization rate and has an increasing number of high-net worth customers which is also boosting demand for new cars. Like much of the Middle East, Toyota has a strong presence with a huge 36.5% market share. The Japanese car manufacturer’s luxury Lexus offering is also gaining a foothold with products like the LX SUV.While there are positives for the car market, future growth is uncertain due to the diplomatic crisis that has been evolving since June 2017 which saw Saudi Arabia, the UAE, Bahrain and Egypt all sever

diplomatic relations over Qatar’s alleged support for terrorism. Qatar has been issued with ‘six principles’ asking it to address areas on fighting terrorism and extremism. The severing of relations has included withdrawing ambassadors and imposing trade and travel bans.Qatar's Foreign Minister Sheikh Mohammed bin Abdul Rahman Al Thani has called for dialogue.Qatar's stock market lost about 10%, or about $15bn (£12bn), in market value over the first four weeks of the crisis. However, the stock market has since recovered 6% of its pre-crisis value. Exports of liquefied natural gas have also so far not been affected and the emirate's finance minister says Qatar has enough resources to defend its economy and currency.As it stands, Qatar is still due to host the 2022 World Cup, but there have already been reports that the event could be moved due to the diplomatic crisis.

Around the region

The UAE The UAE has the most diversified economy in the

region, with finance and tourism playing an increasing part in the country’s future. As a result it has proved to be the most resilient in the face of fluctuations in oil prices.Beyond the prestige supercars lining the streets of Dubai and Abu Dhabi, Japanese volume manufacturers are the most popular in the UAE, with Toyota and Nissan in particular having a reputation for providing indestructible SUVs.Many car manufacturers have their regional HQ in the UAE, as do many importers, with dedicated fleet managers.Dubai is often used as a financial base for financing lease operations throughout other Middle-Eastern countries. LeasePlan has a presence through a joint-venture in Abu Dhabi and Bukkehae Middle East, a specialised fleet

management company, which offers trucks and is oriented towards emerging economies.Geijsen said: “The UAE naturally has a more developed leasing market because a lot of Western and foreign companies operate there and they come with company car policies for employees.”Sales, marketing, pharmaceutical, oil and gas companies based in UAE are offering company car schemes and in most cases they are offering lease deals with three to five year contracts.Geijsen said: “Paying monthly allowances for cars has one significant advantage from managing company financial books; companies are not carrying large amounts of assets on their balance sheets. The allowances are paid out under salary, which goes under expenses directly as operational expense.”

KuwaitA partial recovery in oil prices over the last 12 months has helped

ease Kuwait’s economic pressures. The government is continuing to support growth with new infrastructure projects which should boost fleet sales. The car rental market is dominated by Al-Mullah with a 25.2% share, followed by Al Sayer at 14.3% and Safeena at 8.4%. However, international brands also operate including Hertz, Sixt, Europcar and Avis. The car rental fleets in the country recorded an annual growth rate of 5.7% and passenger car sales in Kuwait have grown by 5.6% between 2010-2015. This is down to increased government investment in tourism and increasing competition among vehicle rental companies to drive business.Kuwait’s rental market should see a boost due to the expansion of construction contracts of Kuwait National Petroleum Company (KNPC). This will see oil production operations just 90km south of Kuwait City, which in turn will boost rental sales as an increased workforce will need to commute from the capital to the new site.As a result, the car rental market in Kuwait is predicted to reach $292.2 million (£207.3m) by 2020.

Saudi Arabia The drop in oil prices had a big impact on Saudi Arabia’s

economy as it accounts for 90% of the kingdom’s exports. Like the UAE, Toyota is a dominant player in the car market, but Korean manufacturer Hyundai is also popular and Nissan is also increasing sales in the country.The fleet market in Saudi Arabia is large due to the size of the public sector but is rental dominated. Rental companies generally offer medium- and long-term options as a financial arrangement with a purchase option, similar to personal contract purchase (PCP) balloon financing.The absence of European-style operational leasing is linked to the absence of an operational structure for the resale of three-year-old vehicles in-country, as well as the absence of a diversified remarketing structure, organised by the rental and leasing companies themselves.While it’s unlikely to have an immediate impact on the leasing industry in the country overnight, the fact women will be able to apply to get a driving licence from June is a significant development. Following a royal decree from King Salman, women will no longer need permission from a legal male guardian to get a licence and will not need a male guardian in the car when they drive.The Saudi government’s “Vision 2030” plans are targeting increases in women in employment from 22% to 30% by 2030. Giving women more freedom to drive is expected to improve their chances of getting jobs and help reduce the female unemployment rate of 33%.The website for Saudi Arabia’s first driving school for women attracted 165,000 applications within three days. Toyota is already planning to dedicate areas of its showrooms to all-female staff and has set up call centres run by women to handle inquiries and financing details.General Motors, which sells the Chevrolet and GMC brands in the country, has promoted a Saudi-born female advertising executive to be the region’s chief copywriter, to help the group craft adverts and campaigns that are sensitive to the local culture and avoid offending potential customers.

OmanThe biggest leasing development in Oman came from

the country’s National Finance Company merging with Orix Oman Leasing at the end of March this year to create what is believed to be the largest leasing company in the Sultanate.The Central Bank of Oman (CBO) gave its final approval for the merger in August last year to create a combined group of 23 branches.Oman Orix offers financing for new and used cars and commercial vehicles to nationals and expats and has its head office in the capital Muscast, along with branches at Sohar and Salalah.The merger is against a backdrop of a big fall in demand cars in Oman, with 2017 showing an 18.3% drop in sales to 73,798

units during the first 11 months of the year, according to data from Oman’s National Centre for Statistics and Information.The economic slowdown across the Middle East has been cited as the reason for the decline, with customers unwilling to pay out, particularly for luxury cars.Fleet plays an important part of the automotive market in Oman, with a share of around 40%. This is why the the automotive rental market and demand from the public sector actually bucked the downward trend in 2017, showing 18.4% and 2% growth respectively. This has been due to a successful boost in tourism with rental companies needing to boost their fleet sizes to to cope, and with the government continuing to invest in its vehicle fleet.

BahrainBahrain is the most economically vulnerable country

in the GCC due to low oil and aluminium mineral prices, mixed with high debt levels. Economic growth declined in 2017 and auto sales fell 23.2%. Real GDP growth projections have been revised

downward to 1.9% in 2017 and 2018, as continuing low oil prices depress private and government consumption.Some infrastructure investments are also likely to be put on hold, which will impact fleet sales to the local construction industry.

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What’s driving leasing growth?

OilThe price of a barrel of oil is intrinsically linked to the economies of Iran, Iraq, Kuwait, Libya, Qatar, Saudi Arabia and the UAE. All are members of OPEC and since 2014, a massive oversupply of oil has sent prices tumbling down to what is expected to be a new normal of around $50 a barrel. OPEC’s oil prices went from a high of £140 a barrel before falling off a cliff during the recession in 2009 to $40. However, this low pales in comparison to the lows of early 2016 when it fell to almost $20 a barrel.Despite political obstacles, OPEC members agreed to trim oil production by approximately 1 million barrels per day as of September 2016. Prices have since recovered to around $60, but the fluctuations in the market have led to a steep decline in growth across the region, notably in the Gulf countries, where growth has declined from between 15% and 20% to about 2% to 3% today.This has in turn led OPEC economies to evaluate the dependence on oil production and could even spark a change in attitudes toward car finance. It has also forced companies and countries to consider alternatives for the future, which could help them to embrace new concepts like leasing.Geijsen said: “The crunch on cash across the region because of the oil price fluctuations has meant more and more companies are moving towards renting and leasing as an option.”

Leasing lacks tractionEven in markets like the UAE where leasing is more advanced, it’s still very much in its infancy across the region. Cars are seen as a status symbol and there is a sense of pride when it comes to ownership, so leasing goes completely against this mindset.Geijsen said: “It’s going to have to be a psychological change for people to accept leasing across the Middle East, but I think it could happen.“The main reasons behind leasing not picking up as it should have yet is because the region is a cash rich society. This could be changing as economic uncertainty hits due to the drop in oil prices.“Income tax either doesn’t exist or is between 2% and 5%. Only companies pay tax; however governments are planning to introduce personal taxation soon.”

Bob Farrow, director of BFC, a Dubai-based consultancy with specialist knowledge of the leasing market, said that while companies like LeasePlan have been operating in the UAE for the last 10-12 years, they have struggled to gain much traction.He said: “LeasePlan has established around 3,000 units in the UAE, but the problem boils down to how restrictive Western contract hire terms are seen to be.”Short term rental plays a much bigger role due to the nature of 90% of customers being expatriates on fixed-term work contracts.Farrow said: “Customers in this market want something

less onerous than being locked into a long term deal where they would end up with expensive early termination contracts.“Many companies don’t want to be stuck with a car for an employee that has left the business and paying termination fees as a result. A lot of the rental deals here make it very easy if you have to hand a car back a bit earlier than you thought.”BMW and Mini Leasing is currently only available in the UAE through BMW Albatha Leasing, a joint venture between BMW Group Financial Services Middle East and AGMC, the official BMW Group importer for Dubai, Sharjah and the Northern Emirates.The leasing division has been operating since the start of 2017 and a representative from BMW Group Financial Services Middle East is confident the company is making inroads: “Leasing is offering many benefits since it is an ‘all inclusive’ risk free mobility package that can match the employment contract term and can offer additional benefits.“These include things like unemployment cover that can fully protect the employee in case of any unforeseen event during his leasing contract period. These are the reasons why we see that leasing is becoming popular among salary employed customers.”

Bob Farrowdirector, BFC

Sharia lawBanks operating across the Middle East must

offer Sharia-compliant finance products and this includes automotive finance.Under Sharia law, interest is forbidden as it is deemed as money gained by the lender for no effort. To comply with these rules, interest is not paid on Islamic savings or current accounts or applied to Islamic mortgages.However, there are several ways banks can structure leasing offers to remain compliant. The most relevant is called “ijara” and it’s the closest equivalent to a lease to finance something like a car.

Different forms of leasing are permissible, including those where part of the installment payment goes toward the final purchase. There are also Sharia-compliant equivalents to an operating lease, hire purchase and personal contract purchase.In contrast with most conventional finance leases, the responsibility for major maintenance and insurance of the leased item under ijara remains that of the lessor throughout. With an ijara scheme, the bank makes money by charging the customer rent.

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“So in terms of selling your price guide subscription into multiple dealer groups and independents, there just aren’t that many to deal with. There are very few used car supermarkets and auction houses too, so it’s difficult for the pricing guides to make money and become a viable business here.”

Future trends

Emissions and incentivesThere are currently no tax incentives or exemptions across the region to address emissions output or other environmental issues, although there will be in the near future.Saudi Arabia started new import restrictions in 2017 on high fuel consumption vehicles. This means all manufacturers must meet an annual average MPG based on the cars that they import to Saudi, and should they fail, they face restrictions on import numbers.Geijsen said: “This is pushing most manufacturers to sell or introduce more fuel efficient vehicles. UAE is going to introduce a similar system next year based on emission control rather than fuel efficiencies.”Other Gulf states are currently waiting to see the results of the Saudi and UAE initiative to see whether they may introduce similar schemes in the future. Meanwhile, in the last two years, the fuel price at the pump has increased significantly, almost doubling. This trend is expected to continue.The economic impact of oil prices and increasing cost of fuel is expected to drive customers away from large capacity engine SUVs and towards more efficient vehicles.

Electric vehicles and the connected carFor a region with economies so intrinsically linked to oil, making a push towards electric vehicles (EV) may seem counterintuitive.However, like with leasing, the UAE is becoming something of a regional leader for the adoption of new drivetrain technology. The Dubai government is also leading by example with the target of having 10% of all newly-purchased cars on its fleet to be electric or hybrid by 2030.This fits in with Dubai’s wider Clean Energy Strategy to have the lowest carbon footprint of any city in the world by 2050. Dubai also wants 25% of transport in the city to be autonomous by 2030, too.

VATChanges to VAT could provide a stimulus to the leasing industry this year across the GCC as buyers look to avoid higher costs.As the GCC has historically generally been a tax free environment, the leasing industry has not been able to leverage the advantage of offering tax benefits for drivers who fund vehicles through that route.However, in the GCC, the UAE and Saudi Arabia were the first two countries to launch VAT from January 1, 2018, while other countries will follow in the coming years. Cars, vehicle rental and fuel are all included within what will attract this new 5% rate.Leasing could act as a way for businesses and drivers to avoid paying VAT upfront on a car purchase. For a Dh100,000 (£19,500) car, a leasing contract means monthly payments of Dh1,500 (£293) and a VAT component of Dh80 (£15.60).Geijsen said: “The introduction of VAT is not yet quantifiable and was not implemented simultaneously as expected across the GCC.“However, it may help the leasing industry since paying VAT upfront is quite a significant amount.“If you’re buying outright it’s going to be between £1,500 to £3,500 and for high-end vehicles it may consumer purchasing power and buying decisions even further.”BMW Group Financial Services is also confident VAT could help leasing adoption. A spokesperson for the company said: “Leasing packages are offering a risk free approach and the changes in VAT will increase its attractiveness. Customers avoid net of VAT and there is only a VAT charge on the monthly invoice.”

The used car market and residual valuesThe used car market in UAE has gone through some big changes in the last few years.While the appetite for dealerships to sell used cars at retail is low, residual values had been kept relatively strong, with companies based in the UAE able to export the vast majority of around 200,000 vehicles to other markets like Africa and other areas in the Middle East.Farrow said: “When the oil price drops hit, that had a knock on effect when the bottom fell out of the used car export market. Demand for these cars was dented. “There was suddenly a massive oversupply of thousands of used vehicles and that really started to hit profits for rental companies as the residual values dropped.”This may lead to some rental businesses closing in the UAE this year as a result of the impact on profits. However, Farrow believes this may clear the decks to make way for larger, more sophisticated and established leasing companies to enter the market for the first time.Farrow said: “There is a very simplified view of residual values in the UAE. Companies look at a straight depreciation over the years for a vehicle and there is no level of sophistication.”The UAE is only just starting to get used car price guides from Red Book and an offering from an ex-Glass’s director called Autodata. However, pricing experts may find it difficult to get a foothold.Farrow said: “The problem with establishing a price guide is that the dealerships control the new car sales and big families control the majority of the same franchises.

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The Dubai Electricity and Water Authority (DEWA) revealed plans in September 2017 to double its EV charging stations to 200 across Dubai. While Renault was the first to market in Dubai in 2015, Tesla’s flashy profile truly kickstarted the market for EVs in September last year, opening its first showroom. Tesla has also signed a deal to provide 200 cars to Dubai’s city’s taxi and government fleet. EVs’ profile was also raised at the start of this year with a 2,000km road trip across the Middle East from the UAE to Oman over nine days with a fleet of eight EVs. The event was organised by Global EVRT, a company that aims to accelerate EV adoption in the Middle East and the event opened 18 new charging points across the trip.Incentives for EVs currently include free charging at DEWA’s charging stations until 2020; exemption from Roads and Transport Authority (RTA) registration and renewal fees; free assigned parking and exemption from Dubai’s Salik toll road fees.In May 2017 the UAE Ministry of Energy launched a new incentive programme to encourage motorists to opt for EVs through easy bank loans.Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy, said: “Electric vehicles are an efficient solution of high relevance to the country’s efforts to diversify sources of energy and reduce its carbon footprint. We have the ultimate goal of enhancing economic competitiveness and ensuring sustainable development.”However, while the UAE is making progress, Geijsen is cautious about the rate of growth for EVs. “Plug-in vehicle infrastructure for alternative vehicles is very nascent and the lack of charging points at this stage is going to slow any uptake of EVs,” he said.While EV adoption may face difficulty in reaching a mass market across the Middle East, Geijsen is more confident of progress with connected cars.He said: “Innovation is coming to the UAE particularly and this is an area of the market to watch. The population is quite tech savvy so I think driverless and connected cars would be embraced.”Dubai is currently working on a Dh50 billion (£10bn) Mohammed Bin Rashid Al Maktoum Solar Park to test driverless cars. The UAE is also likely to be the first country in the world to feature an operational Hyperloop with plans to introduce the technology as soon as 2020. The Hyperloop is from the same company behind Tesla’s EVs and offers a method of travel using carriages passing through a frictionless tube to allow pods to travel free of air resistance, at speeds of up to 760mph.The UAE government is already drawing up a feasibility plan to introduce a Hyperloop connection between Dubai and Abu Dhabi, to cut the 85 mile journey time down from 1 hour 30 mins to just 12 minutes.

Telematics and fleet softwareThe telematics and fleet software market is very limited in the Middle East. According to Geijsen, most companies want to avoid additional extras like telematics packages and because the leasing industry is not advanced, fleet management has not become a priority. The majority of companies are not using telematics to track drivers and find efficiencies for the fleet.

Geijsen said: “Initial investment costs for telematics and fleet management are still high and drivers are sceptical about being monitored.”A BMW spokesperson said that leasing customers are looking for more direct and immediate communication and digitiation will help to provide more of a hassle free process.The spokesperson said: “Digitalization is a trend in the marketplace and definitely is affecting leasing and fleet services.“With the fast speed of connectivity and digitalisation expanding into car technology as standard, we are hoping added value services that go along with leasing and other mobility concepts will give us a strong foothold for future growth.”Farrow is confident that telematics will start to take off as a growth market in the next two to three years, as police forces encourage fitting a tracker to fight crime and more manufacturers start fitting the technology as standard.He said: “There are fleet managers working in businesses in the UAE, but the role is focused on getting the best deal possible on rental cars. It’s not yet got to the point where people are looking at improving efficiencies or total cost of ownership.“A business I have been working recently has put telematics in around 9,000 vehicles. This is just being used to track vehicles, rather than anything more sophisticated, but that will come in time.”

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Poland more than halved the gap between it and Europe’s sixth largest country, Belgium, in 2017 as sales have seen double digit growth for the last two years and this is expected to continue through 2018. With falling unemployment and strong economic growth it now looks likely to overtake Belgium in the next 12-24 months.

Europe goes for bust?The Middle East has the oil that powers the cars, but currently has a weak appetite for leasing finance. In contrast, the European market has a long tradition of leasing, but the model is under challenge from a range of pressures including residual value (RV) trends, the “war on diesel” and falling new car sales.

According to the latest ExpertEye analysis, the big loser across Europe in 2017 has been diesel powered cars which saw its share of the market drop 7.9% to 43.7%, a level last seen in Western Europe in 2003, as petrol saw its share increase to 50% of the total new car market. At the start of this century petrol was seen as the “bad guy” due to the higher levels of greenhouse gases like CO2 it produced. Poor government thinking and changes to taxation saw diesel market share increase from 32% to 50.8% from 2000 to 2006. How sustainable the switch back to petrol will be is going to be heavily influenced by legislators and the most vocal lobbyists. For example, CO2 emissions rose by 1g/km in the UK in 2017 which is the first time that has happened since 2002 and expectations are for this to happen again in 2018. The challenge legislators across Europe need to get to grips with is that this is not a single issue with a one size fits all solution. Even EVs create environmental issues, whether it is the potential for increases in greenhouses gases in countries like Germany and the UK, which rely heavily on fossil fuel electricity generation, or the drain on rare minerals like cobalt and lithium. Any government or European wide strategy needs to listen to all sides and not follow the loudest voices to avoid yet another knee-jerk reaction. At the end of Q2 2017 we predicted new car sales growth of 3.6%, however a slightly more negative back end of the year resulted in new car sales rising 3.3%. Going into 2018 the UK is certainly facing a tough year which is expected to see sales down 6.1% but with sales in Spain and Germany expected to see growth in the range of 4%-6% this year, with Italy and France also expected to see rising new car sales, the region as a whole should be able to counter the falls in the UK and a couple of other markets and end 2018 up a more modest 2.7%, continuing the slowdown in growth we have seen since the heady 9.2% rise seen in 2015.

Big five losing market share to smaller marketsDespite the fall in the UK, strong growth year-on-year growth in Italy and Spain, 7.9% and 7.7% respectively and moderate growth in France and Germany, 4.7% and 2.7% respectively, saw the big five markets recover a little of their dominance of the EU28 and EFTA3, increasing to 72.3% for the full year compared to just 72% for the first half of 2017. However that is still lower than the average of 73% between 2012 and 2016. Whilst four of the big five markets are all expected to see growth this year we expect the other markets to rally more which is expected to see the big five share of Europe fall below 72% in 2018 and potentially drop to 71% in 2019. The biggest risk to this forecast is whether domestic manufacturers decide it is easier to incentivise sales in their home countries rather than in other parts of Europe.

Forecast Car ResidualsRise as Optimism Returns

Changes in residual value (RV) forecasts, SMR costs and lease rental rates to January 2014Forecast residual values Forecast service, Current rental rates

maintenance and repair costs

3 month 12 month 3 month 12 month 3 month 12 month

change change change change change change

France +0.2% +1.7% +0.7% +2.1% +2.0% +1.9%

Germany +0.9% +0.4% +0.8% -2.7% -0.8% -2.5%

Italy +1.1% -0.9% -0.1% -8.2% +1.9% +0.6%

Portugal +0.7% -2.6% +0.2% -2.7% -1.2% -4.9%

Spain -0.1% +1.0% -1.4% -4.1% -0.9% -1.3%

UK +2.8% +7.3% -0.1% +0.4% -0.2% +4.0%

It appears that fleet lessors across Europe arebecoming increasingly optimistic about futureresidual values. To end, January we sawlessors increase their forecast RVs by 2.8% inthe UK, 1.1% in Italy, 0.9% in Germany, 0.7%in Portugal and 0.2% in France. Spain reportedthe only reduction and this was by just 0.1%).

These figures are collated by Experteye’sEuropean Leasing index survey which tracksforecasted residual values (RV), servicing,maintenance and repair (SMR) costs and rentalrates in six European countries using datasupplied by major leasing companies.

Looking over the past 12 months we can seethat at one extreme forecast RVs rose by 7.3%in the UK, and at the other extreme they fell by2.6% in Portugal.

Forecast SMR costs have also stabilisedsomewhat over the last three months, havingsuffered significant falls in Spain, Portugal, Italyand Germany in the previous nine months.

Rentals seem to have stabilised somewhat tooin the last three months, having been quitevolatile in the UK, Portugal and Germany inparticular in the previous nine months.

Professor Colin Tourick is a management consultant, former MD of Citibank's fleet leasingbusiness and a 34 year leasing industry veteran

Editor: Professor Colin Tourick Editor in Chief: Brian Rogerson© Asset Finance International, 2013. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of thenamed individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omissions or inaccuracies. No copying, whether whole or in part, transmission by any forms or means, electronic or otherwise is permitted.

• The comparisons are for vehicles with a contractduration of 36 months / 90,000 KM• Twelve month comparisons show change sinceFebruary 2013• Three month comparisons show change sinceNovember 2013. • Rental rate changes compare the rates in effect atthe time of the survey with those in effect three ortwelve months ago.

• RV and SMR changes show the change inparticipating leasing companies' forecasts of residualvalues and maintenance costs over the period.The Experteye European Leasing Index reports ontrends in leasing company forecasts, plus currentrental rate movements, covering representativeversions of up to 250 vehicles in the six markets.

Total EU28 & EFTA3 Passenger Car Sales 2017

Germany

UK

France

Italy

Spain

Portugal

ROE

22.0%

16.3%

13.5%12.6%

7.9%

26.2%

1.4%

2010

01

2010

03

2010

05

2010

07

2010

09

2010

11

2011

01

2011

03

2011

05

2011

07

2011

09

2011

11

2012

01

2012

03

2012

05

2012

07

2012

09

2012

11

2013

01

2013

03

2013

05

2013

07

2013

09

2013

11

2014

01

2014

03

2014

05

2014

07

2014

09

2014

11

2015

01

2015

03

2015

05

2015

07

2015

09

2015

11

2016

01

2016

03

2016

05

2016

07

2016

09

2016

11

2017

01

2017

03

2017

05

2017

07

2017

09

2017

11

125

120

115

110

105

100

95

90

Average France Germany Italy Spain Portugal UK

RV Index: 36 months / 90,000 kms

Inde

x 10

0 =

Jan

2010

Source: ExpertEye AG

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MPV and SUV RV Trends The smaller MPV and SUV segments are also starting to reflect a change in RV setters’ approach as the industry moves away from incentivised diesel to a wider mix of powertrains, as concerns grow about future demand for used diesels in the market place given the sharp decline seen in new diesel sales.With the Italian banks now starting to recover and some of the economic uncertainty disappearing we are seeing RV setters becoming more optimistic with their values. Whilst there are falls in a number of SUV segments in different countries some of this is normal seasonality as the RVs being set are now for vehicles being delivered in Q1. This means they may well be returned and sold during the spring/summer period in 2021-2022, depending on the contract length.

Light Commercial Vehicle RV Trends With the European economy moving from recovery to growth it is only to be expected that LCV RVs are also performing well. The medium panel van remains the most popular of all LCV segments and diesel remains by a long way the most common fuel choice.

As predicted in our last report, the Italian market has seen a significant uplift in RVs across all segments as businesses feel more confident in the recovering economy and RV setters are more willing to rely on that confidence remaining in the medium term. This has seen RVs in Italy now reach a par with those seen in Spain, which has now seen RV patterns return to a more seasonal pattern.The UK has seen record LCV used values going through trade sales and this is starting to be reflected in the RVs being set, however caution remains regarding the potential impact of Brexit.

For a full copy of the latest ExpertEye European Automotive Industry report and more details of the research go to https://experteye.com/.Data and analysis for the ExpertEye report is compiled by Dean Bowkett, managing director, Bowkett Auto Consulting.

Despite the forecast fall in the UK, the one-five year-old used car parc for right-hand drive and left-hand drive cars across Europe remains sufficiently robust to meet most demands. The issue from a remarketing perspective across the entire region is meeting the demand for good quality SUVs whilst also trying to avoid having excessive quantities of diesel vehicles.After a weakening in the ExpertEye RV index in Q2 2017 most mainland European markets have now stabilised.Used car values are generally doing well across all markets. The overall trend is upwards but the gap between average petrol and diesel values are widening quite sharply. For example, in the UK the gap between a 3-year-old average petrol car and a diesel car can be as much as 5 percentage points or more of the new list price. Whilst some commentators are reporting diesel values falling, our experience indicates that diesel used values are rising although not as fast as used petrol values. Used car portals like AutoTrader.co.uk and auction houses such as Aston Barclay are reporting similar findings amongst retail and trade buyers, with the latter saying diesel values “have hit a two-year high”. However, that situation may change over the next 12 months. Used car portals have said that searches for diesel vehicles are falling with AutoTrader reporting that diesel searches reduced from 71% in November 2016 to a low of just 54% in December 2017. This means there will be increasing downward pressure on prices to attract the reducing demand.Autoscout24, are also noting a change in opinions, particularly with an increasing desire in mainland Europe for taxation parity between petrol and diesel, saying as many as one out of every two drivers are supporting this change in some countries. Given the “war on diesel” it does seem illogical that countries like France and Germany, which have cities introducing bans or tariffs on diesel on the one hand, are then subsidising diesel fuel through lower taxation on the other. Taking this all into account we don’t expect major changes in RV trends in most countries, but the petrol diesel divergence is expected to continue through 2018 and even into 2019.

Passenger Car RV Trends RVs across Europe remain relatively stable with most RV setters choosing a status quo approach. However, as you start to drill down you see there are some clear trends emerging.With some of the tax benefits being removed and new charges coming in, the decision about diesel has once again started to have more to do with function and need. This may cause a problem for the leasing industry as they defleet diesel vehicles from the smaller segments and find a reduced demand. With that in mind it is unsurprising to see the RV setters generally continuing to reduce RVs on smaller diesels like the C segment. RV setters concern about the UK used car market over the next three to four years can also be seen with falling RVs in most segments.

As predicted in our last report, the Italian market has seen a significant uplift in RVs across all segments as businesses feel more confident in the recovering economy and RV setters are more willing to rely on that confidence remaining in the medium term

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“The app can plan and book your whole journey from door-to-door in the most efficient way possible, using real-time service data across all the transport modes in the city.”In its evidence to the committee ACFO, which represents fleet decision makers, suggested employees should be provided with individual mobility cards that could be used to access all forms of travel, via an app that could plan and charge costs accordingly.The organization said the mobility cards would enable employees to select the most appropriate mode of travel and way to pay for the journey to meet personal and business circumstances. The data collected from the app would also allow a new “corporate mobility manager” to analyse how transport is being utilized and costs per mile, in order to plan company vehicle allocations and assess demand for other travel services. In its submission, ACFO said: “MaaS should be at the forefront of how businesses should be looking at travel to ensure they are using the best options for the journey, for environment, cost, safety and employee reasons.”ACFO also stated: “Businesses are starting to understand the power and advantages that integrated technology can supply.”

Integration is keyMost fleet managers will not be starting the move towards MaaS with a completely fresh approach and a “blank sheet” for adopting new technologies – their company will have a myriad of legacy systems already installed. One of the biggest challenges, therefore, is in migrating from the current standalone system to the new, app-based and mobile technologies like MaaS. That means finding ways of integrating existing systems and infrastructure with an online, smartphone-based approach.To do this, organizations need to:●● Audit existing systems, to make sure they are aware of current functionality●● Take a strategic view of how they will bring in new systems●● Have a plan for maintaining legacy systems as the new roll out begins●● Work with their technology supplier on incremental change

Foundations for future mobilityInnovations such as smartphone apps and mobility services have a lot to offer fleet operators – but combining existing and new ways of operating requires careful planning

The traditional concept of “one driver, one vehicle” is changing fast. Ride hailing apps like Uber, car-sharing initiatives and a new focus on making travel as efficient, environmentally friendly and convenient as possible are all combining to change how private drivers and fleets operate.Research from Deloitte sums up the current situation: “The way people and goods move about is on the cusp of a fundamental transformation. Advances in powertrains and materials, increasing vehicle connectivity, shifting consumer preferences, and the emergence and adoption of self-driving vehicles will ultimately give rise to a new mobility ecosystem.”The Global Smart City Performance Index 2017, produced for Intel by Juniper Research, ranks Singapore as its number 1 Smart City. The index aims to measure how technology improves residents’ quality of life in four areas: mobility, health, safety and productivity. Singapore led the index in all four categories.In the area of mobility, the report notes that Singapore has applied "smart, connected traffic solutions" and strong policies for decreasing car ownership in an effort to reduce the number of vehicles on its roads.San Francisco and London were also noted to be world-leading cities in addressing urban transportation challenges. Both cities have long-term plans for a transportation paradigm shift toward MaaS (Mobility as a Service) and autonomous vehicles.

Fleet changesSo far, the most obvious impact has been at the individual level, as people start to use apps like Zipcar and Uber. But there is no doubt that the trend to focus on “usage” rather than “ownership” is also making waves in the fleet sector.Mark Binks, group managing director of Bynx, describes it thus: “Mobility is changing the future landscape of vehicle leasing and rental and making vehicle asset management more important than ever. The success of MaaS will depend on vehicles being better utilized, managed more efficiently and complying with ever changing legislation.”In the UK, the Transport Committee has launched an inquiry into the transformative potential of an integrated, multi-mode Mobility as a Service (MaaS) app, and overcoming barriers to implementation in UK cities and regions. MaaS is defined as an end-to-end solution where the customer (passenger or freight) travels seamlessly from A to B. This involves using several different modes, without making separate payments to different transport providers; without owning the assets of travel (i.e. a car); and without planning journeys based on the mode of travel (i.e. is “mode neutral”). MaaS is typically accessed via a mobile app, with the aim of providing users with a tailored travel experience.Lilian Greenwood, chairman of the Transport Select Committee, said: “An integrated MaaS app can create a single, seamless journey, cutting out the hassle of separate ticketing for different legs of a journey.

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Binks adds: “The vehicle lifecycle – from purchase to disposal – still has to be managed. In-life services, such as tyres, licencing, servicing and maintenance are more critical than ever to ensure vehicles remain compliant and in good shape. This is all traditional, standard fleet management but what makes the job more complex in the face of mobility is bringing in new technologies to manage the financial elements of these products and services.”“Technologies of the future need to be more adaptable, lighter, and quicker to implement. Cloud offerings are more flexible and negate the burden of resourcing in-house. Self-service apps for customers hugely diminishes the workload for the end fleet operator.” Bynx supports mobility in many ways: by enabling the thorough management of vehicle assets throughout their lifecycle and supporting connections and interactions from its customers to their customers with vehicle and mobility services, such as car pooling, car sharing, taxis, buses, trains, planes, bike services and the like.“This has been our core business for over 30 years,” says Binks. “Fleet operators need the back, middle and front office elements of our system to provide and manage those services for their customers.”“We’re focusing on continually redeveloping our system to support new engineering that’s happening in the motor industry, such as the invention of new powertrains. These new developments will drive new taxation issues. Perhaps in the future governments will tax vehicles on a usage basis as opposed to today’s flat rate. We need to make sure our system is bringing in the right data in to manage all this.”

Travel on a “Whim”

Finnish firm MaaS Global, based in Helsinki, is a leading innovator with its Whim app that combines options from different transport providers into a single mobile service and automatically works out the best option for every journey – whether that is a taxi, public transport, a car service or a bike share.

Users can pay-per-ride, or opt for a monthly subscription. Following the launch of upgraded subscription packages in December 2007, Maas Global reported more than 20,000 Whim downloads in the first three weeks. Most of those who downloaded the app went on to use it on a ‘pay-as-you-go’ basis, with substantial numbers also opting for the €49/month urban package and some for the €499/month unlimited service.

Whim has launched the service in the West Midlands area of the UK, offering subscribers

National Express bus and metro tickets, routes and timetables as well as Gett taxi services, Enterprise Rent-A-Car, nextbike and other transport providers’ offerings through the app.

Chris Lane, Head of Transport Innovation at Transport for West Midlands said: “Public transport is at the heart of Whim in providing seamless mobility that is easy to use.

“The benefits this will bring to both consumers and businesses are huge – companies can grow, people can get better access to jobs, and the region will attract more visitors and investment.”

Whim has reported interest from several other cities including Vienna, Copenhagen, Toronto and Singapore.

Editor: Pat Sweet Editor in Chief: Brian Rogerson

© Asset Finance International, 2018. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of the named individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omissions or inaccuracies. No copying or transmission, whether whole or in part, in any form or by any means, electronic or otherwise, is permitted.

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Asset Finance pricing review Experteye analyses European Pricing … · 2019-04-26 · Starting on page 21, we take a close look at how to integrate new innovations with legacy systems,