Enterprise Asset Leasing Market Projected to Hit $1.76 Trillion By 2027

According to a recent report published by Allied Market Research, titled, “Enterprise Asset Leasing Market By Asset Type, Leasing Type, Industry Vertical, and Enterprise Size: Opportunity Analysis and Industry Forecast, 2020–2027,” the global enterprise asset leasing market size was valued at $820.27 billion in 2019, and is projected to reach $1.76 trillion by 2027, growing at a CAGR of 12.3% from 2020 to 2027.

The global enterprise asset leasing market is experiencing significant growth, and is anticipated to grow considerably in the next few years. Enterprise asset easing is an alternative way of financing, in which a licensed leasing company purchases an asset on behalf of its customer in exchange for a mutually agreed series of payments that is inclusive of an interest. The lessor maintains ownership of the asset while the lessee enjoys the use of the asset for the duration of the lease agreement, usually accompanied by an option to buy the asset at the end of the contract. The lessee bears all costs and risks associated with the use of the leased asset. 

Growth in global average price of vehicles, shift in the risk of obsolescence, tax advantage and higher return on capital employed have boosted the adoption of enterprise asset leasing in recent years. However, increase in debt from various borrowers and high cost are expected to hinder the enterprise asset leasing market growth. On the contrary, untapped potential of emerging economies and surge in government support & initiatives toward leasing services are expected to present major opportunities for the enterprise asset leasing market growth during the forecast period. For instance, with the recommendation of IFSCA i.e. International Financial Services Centers Authority on October 6, 2020, the Government of India declared that aircraft lease can be considered as a financial lease.

By leasing type, the enterprise asset leasing market share was led by the operating lease segment in 2019, and is projected to maintain its dominance during the forecast period. Rise in adoption of operating lease in enterprise leasing companies across the developing nations of Asia-Pacific and LAMEA region. However, the financial lease segment is expected to grow at the highest rate during the forecast period, owing to rise in adoption of financial lease among business and individuals to run their business smoothly with less capital.

Region wise, the enterprise asset leasing market trends was dominated by North America in 2019, and is expected to retain its position during the forecast period. The major factor that drives the growth of the enterprise asset leasing market in this region includes presence of major players such as BNP Paribas Leasing Solution, and General Electric. However, Asia-Pacific is expected to witness significant growth rate during the forecast period, owing to increase in disposable income of the middle-class population and penetration of fleet outsourcing and lower rate of leasing of utility vehicles for manufacturing companies.

The spread of the new coronavirus across the world is increasing at a significant speed and it has been observed that there has been an essential impact on global supply chains in many industries dependent on supplies from China. For instance, various automotive manufacturers have already suspended production due to shortage in supply of raw materials and restricted in buying new machinery and other parts related to it due to lack in money supply in the economy. It is essential to note that in these uncertain times enterprise asset leasing plays a vital role in the development of the economy and gives huge opportunity to both leasing companies and lessor to grow and make profits out of it. Furthermore, it facilitates companies to become profitable and optimize the balance sheet by giving asset or capital goods with less investment cost.

Key Findings of the Study

• By asset type, the commercial vehicles segment generated the highest revenue in 2019.
• On the basis of industry vertical, the transportation & logistics generated the highest revenue in 2019.
• Region wise, North America is anticipated to exhibit substantial growth during the forecast period.

The key players profiled in the enterprise asset leasing market analysis 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, Societe Generale Equipment Finance and White Oak. These players have adopted various strategies to increase their market penetration and strengthen their position in the enterprise asset leasing industry.