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2021

Enterprise Asset Leasing Market

Enterprise Asset Leasing Market Size, Share, Competitive Landscape and Trend Analysis Report, by Asset Type, Leasing Type, Industry Vertical and Enterprise Size : Global Opportunity Analysis and Industry Forecast, 2020-2027

BI : Financial Services

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Author's: Pramod Borasi| Monica Chhabra | Onkar Sumant
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Enterprise Asset Leasing Market Outlook – 2027 

The global enterprise asset leasing marketsize was valued at $820.27 billion in 2019, and is projected to reach $1.76trillion by 2027, growing at a CAGR of 12.3% from 2020 to 2027. An enterprise asset lease is an agreement wherein, one party, the lessor grant rights to the other party, the lessee to use capital goods or other assets such as utility vehicle, commercial equipment, medical & IT software for professional purpose against certain periodic payments.The lessee also has the option to acquire the ownership of the asset after the lease is over.

Enterprise Asset Leasing Market

It has been witnessed that COVID-19 has also majorly disrupted the businesses and entities as much as it has affected personal lives, due to which the demand for software, capital equipment, and vehicle has slowed down. This lower demand results from liquidity crisis in economy. In that scenario, leasing has proven to be a strong financing alternative because it facilitates entities such as start- multinationals, and others to acquire the right to use property, plant and equipment without making large initial cash outlays.

Enterprise leasingoffers multiple advantages over standard mode of borrowing, whichinclude high profitability, tax benefits, and inflation friendly and secure investments. Furthermore, enterprise lease benefits companies in terms of growth by giving them an opportunity to use or acquire the movable capital equipment with less capital investment. It not only enhances the production capacity of the company but at the same time ensures companies to use the equipment without facing the risk of purchasing .All these factors reduce the operating cost of companies, improve the economic performance and enable its adoption among consumers.

Growth in global average price of utility vehicles, shiftin the risk of obsolescence, tax advantageand higher return on capital employedare the major factors that drive theglobal enterprise asset leasing market growth. However, increase in debt from various borrowers and high cost hampers the growth of the market. On the contrary, untapped potential of emerging economies and surge in government support & initiatives toward leasing servicesare expected to provide lucrative opportunity for the enterprise asset leasing market expansion during the forecast period.

By asset type, the enterprise asset leasing market was led by the commercial vehicles segment in 2019, and is projected to maintain its dominance during the forecast period. Growth in demand for commercial vehicles continues to rise in enterprise asset leasing market as auto companies provide availability of finance in the market. However, the IT equipment segment is expected to grow at the highest rate during the forecast period, owing to rise in trend among telecommunication firms to adopt IT equipment & software on lease for improving the decision-making capability of the organization and to ensure efficient working of the business resources. 

Region wise, the enterprise asset leasing marketshare was dominated by North America in 2019, and is expected to retain its position during the forecast period. The major factors that drive the growth of the enterprise asset leasing market in this region include the presence of key players in the U.S. and resulting into large-scale leasing for commercial equipment in the country in order to conduct business operations and make profit.  However, Europe is expected to witness significant growth rate during the forecast period,  because Enterprise leasing service providers in the region are focused on providing insurance, maintenance, and fleet services to major manufacturing companies, which is the basic requirement to create awareness regarding financing among consumers. 

Enterprise Asset Leasing Market
By Asset Type
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Commercial Vehicles segment will maintain the lead during the forecast period

The report focuses on the growth prospects, restraints, and trends of the global enterprise asset leasingmarket analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the global enterprise asset leasing market.

Enterprise Asset Leasing Market
By Leasing Type
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Operating Lease segment will dominate the market during 2020 - 2027

Segment Overview

The global enterprise asset leasing market is segmented intoasset type, leasing type, industry vertical, enterprise size, and region. In terms of asset type, the enterprise asset leasing market is fragmented into commercial vehicles, machinery & industrial equipment, real estate, it equipment and others. On the basis of leasing type, the market is bifurcated into operating lease and financial lease. By industry vertical, the market is segregated into transportation & logistics, manufacturing, construction, it & telecom, government & public sector and others. In terms of enterprise size, the market is divided into large enterprises and small and medium enterprises. Region wise, the enterprise asset leasing market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Enterprise Asset Leasing Market
By Industry Vertical
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IT and Telecom segment will grow at a highest CAGR of 15.8% during 2020 - 2027

Competitive Analysis

The key players profiled in the enterprise asset leasing market are BNP Paribas Leasing Solutions, Bohai Leasing Co. Ltd., Docuformas, GENERAL ELECTRIC, Hitachi Capital (UK) PLC, ICBC Leasing Co. Ltd., Lombard North Central plc, Orix Leasing & Financial Services India Limited, SocieteGenerale Equipment Finance and White Oak. These key players have adopted various strategies, such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations, to increase their market penetration and strengthen their foothold in the industry.

Enterprise Asset Leasing Market
By Enterprise Size
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SMEs segment will dominate the market with a highest CAGR of 13.0% during 2020 - 2027

 

COVID-19 Impact Analysis

The enterprise asset leasing industry has recorded continuous investments for its developments and has become a massive contributor to the economic growth. However, this industry has been largely affected by the outbreak of the COVID-19 pandemic, leading to economic instability. In addition, it has been observed that increased uncertainty with respect to income and employment influenced companies to postpone new equipment purchases. Moreover, shortage in supply of raw materials and logistics has severely disrupted the supply chain of every industry and delayed new product launches in the market. 

Enterprise Asset Leasing Market
By Region
2027
Asia-pacific 
North America
Europe
LAMEA

Asia-Pacific region would exhibit the highest CAGR of 14.9% during 2020 - 2027

Therefore, owing to these factors, the buying behavior of companies has changed, which has forced them to postpone their buying decision during the pandemic situation. All these factors positively impacted the enterprise asset leasing market and increased its demand among consumers,as owing to liquidity crunch in the economy, companies are not in a position to run effectively. Enterprise leasing gives an opportunity to SMEs and various other companies to grow substantially with the help of leasing options. Furthermore, rising propensity to finance equipment and software acquisitions, supported by the Federal Reserve while lowering interest rates also offer lucrative opportunities for the growth ofthe enterprise asset leasing market in the upcoming years.

Top Impacting Factors

Growth in Global Average Price of Asset

Rise in massive demand for new commercial models and branded equipment worldwide has become one of the major growth factors in the market. As companies trends &preferences toward commercial equipment purchases have increased tremendously, demand for utility vehicle financing & loans is expected to rise and is expected to maintain its dominance in the market. Therefore, with rise in demand for utility vehicles in manufacturing companies for carrying the goods, global average price of vehicles has increased simultaneously. 

Thus, massive rise in vehicle prices urge companies to switch from direct purchases to finance vehicles on lease in the market. For instance, in the U.S., average price of a new car purchased increased to $36,718 in 2019, from $35,742 in 2018, with interest rates hovering around 6% and 2%, respectively. As a result, these huge prices imposed over average price of vehicles are anticipated to boost the growth of the enterprise asset leasing market during the forecast period.

Untapped Potential of Emerging Economies

Customers from major emerging and developed economies prefer authorized financial institutions for enterprise leasing services to avoid any risk factor or discrepancy in the transaction process. This, as a result, is expected to offer significant opportunities for leasing providers in developing economies. In addition, countries such as China, India, Japan, and Australia, highly demand and often quote for car finance or loans, owing to increased offerings of long-duration repayment options from 12 months to 3.5 to 4 years. 

Therefore, these increased benefits in terms of repayment options while availing car loans, and another advantage of leasing allows a lessee finance up to 100% of the purchase price of an asset without the need of any additional collateral/security. Thus, these factors are expected to provide immense opportunities to key players in the upcoming years.

Key Benefits For Stakeholders: 

  • The study provides an in-depth analysis of the global enterprise asset leasing marketforecast along with the current trends and future estimations to elucidate the imminent investment pockets.
  • Information about key drivers, restraints, and opportunities and their impact analysis on the global enterprise asset leasing market trends is provided in the report.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the enterprise asset leasing industry.
  • The quantitative analysis of the market from 2019 to 2027 is provided to determine the market potential.

Enterprise Asset Leasing Market Report Highlights

Aspects Details
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By Asset Type
  • Commercial Vehicles
  • Machinery and Industrial Equipment
  • Real Estate
  • IT Equipment
  • Others
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By Leasing Type
  • Operating Lease
  • Financial Lease
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By Industry Vertical
  • Transportation & Logistics
  • Manufacturing
  • Construction
  • IT & Telecom
  • Government & Public Sector
  • Others
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By Enterprise Size
  • Large Enterprises
  • Small and Medium Enterprises
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By Region
  • North America  (U.S., Canada)
  • Europe   (UK, Germany, France, Italy, Poland, Russia, Rest of Europe)
  • Asia-Pacific   (China, India, Japan, Australia, South Korea, Taiwan, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
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Key Market Players

ICBC LEASING CO LTD, ORIX LEASING AND FINANCIAL SERVICES INDIA LIMITED, HITACHI CAPITAL PLC, BNP PARIBAS LEASING SOLUTIONS, BOHAI LEASING CO LTD, WHITE OAK, SOCIETE GENERALE EQUIPMENT FINANCE, LOMBARD NORTH CENTRAL PLC, GENERAL ELECTRIC

Analyst Review

An enterpriselease is a contract under which one party agrees to rent a property owned by another party. In addition, lessee often has an option to buy a property or asset for a determined price provided by lessor. Moreover, commercial leases are increasingly becoming popular for availing utility vehicles or other assets in the market. Furthermore, a lease buyout loan enables the buyer to make payments to the lender until the property is owned by lessee.Change in consumer preferences, alternative leasing services, and increased leasing business programs are some of the major trends in the market. Growth in FinTech firms providing online leasing services and growth in government regulations for promoting lender transparency are some of the major growth factors in the enterprise asset leasingmarket.

In accordance with several interviews that were conducted of the top level CXOs, enterprise asset leasing providers are looking forward for implementing advanced technologies such as artificial intelligence (AI) and machine learning in order to track leases and to make decisions accordingly. In addition, key players are expanding their offerings & providing customized utility car, and equipment on leases for their customers.

Moreover, consumer’s trends & preferences have changed in terms of availing enterprise asset leasing product offerings by online channels in the market. Therefore, enterprise asset leasing providers offer lucrative opportunities to innovate their existing channels and expand their product offerings in the untapped potential of emerging economies. Nevertheless, a considerable number of companies remain under the perception that they have minimum enterprise asset leasing exposure.

Author Name(s) : Pramod Borasi| Monica Chhabra | Onkar Sumant
Frequently Asked Questions?

The Enterprise Asset Leasing Market is estimated to grow at a CAGR of 12.3% from 2020 to 2027.

The Enterprise Asset Leasing Market is projected to reach $1.76 trillion by 2027.

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Growth in global average price of utility vehicles, and shift in the risk of obsolescence, etc. boost the Enterprise Asset Leasing market growth.

The key players profiled in the report include BNP Paribas Leasing Solutions, Bohai Leasing Co. Ltd., Docuformas, GENERAL ELECTRIC, and many more.

On the basis of top growing big corporations, we select top 10 players.

The Enterprise Asset Leasing Market is segmented on the basis of asset type, leasing type, industry vertical, enterprise size, and region.

The key growth strategies of Enterprise Asset Leasing market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

IT Equipment segment will grow at a highest CAGR of 15.6% during the forecast period.

Transportation & logistics segment will dominate the market during 2020 - 2027.

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Enterprise Asset Leasing Market

Global Opportunity Analysis and Industry Forecast, 2020-2027