1. The Fleet Leasing Industry: International Practices
17 September 2018
The Fleet Leasing Industry:
International Practices by
LeasePlan India

2. Agenda LeasePlan: a brief introduction
Subject
17 September 2018
Agenda
LeasePlan: a brief introduction
International practices in Leasing
Accounting treatment of Leases
Key issues in the Indian market

3. LeasePlan Corporation N.V.
Subject
17 September 2018
LeasePlan Corporation N.V.
A Dutch multinational company
No. 1 in vehicle and fleet management solutions world-wide
7,200 people
Operates in 27 countries around the world
Total fleet of almost 1.25 million
Consolidated contract portfolio with a value of Euro 9.7 billion.
Has a full scale bank status

4. LeasePlan Corporation manages 1.25 million vehicles in 27 countries
Subject
17 September 2018
LeasePlan Corporation
manages 1.25 million vehicles in 27 countries
Finland
Netherlands
Norway
Sweden
United Kingdom
Germany
Ireland
Denmark
Belgium
Poland
France
Luxemburg
United States
Switzerland
Portugal
Spain
Greece
Austria
Italy
Hungary
Czech Republic
Slovakia
Brazil
India
New Zealand
South Africa
Australia

5. LeasePlan India LPC’s first foray into the Asian market
Subject
17 September 2018
LeasePlan India
LPC’s first foray into the Asian market
Launched in October ’99, now operational in New Delhi, Mumbai, Bangalore, Chennai and Kolkata
Fleet of nearly 7000 vehicles and growing
No.1 in Fleet Management in India

6. International practices
Subject
17 September 2018
International practices
Europe
Growth in the company car market has slowed down from
Operational leasing has been the big success story amongst European lessors in the last few years
Manufacturers look upon it as a key source of sales growth in the corporate market
Companies are looking to cut costs by outsourcing their fleet requirements to lessors with package solutions rather than utilising 3rd party management suppliers and maintaining their own outright purchased fleets

7. European company car market
Subject
17 September 2018
European company car market

8. International practices: Products
Subject
17 September 2018
International practices: Products
Operational Lease
The growth of the operational leasing market in general has reduced the volume of finance leasing fleets
In general OL services are targeted at companies with fleets of more than 50 vehicles
OL is the only finance method expected to gain market share over the next few years, growing from 2,7% in 2002 to 3,4% by 2008.
By 2008 OL purchases will account for 13,6% of all new car purchases in the top 7 European markets

9. Operational leasing market by country
Subject
17 September 2018
Operational leasing market by country

10. International practices: Products
Subject
17 September 2018
International practices: Products
Finance Lease
Finance lease, where the lessee retains the overall financial risk for the vehicle has slipped as the favoured method of leasing in the recent years
The finance leasing sector is generally concentrated almost exclusively on small fleets and self employed individuals requiring single vehicles
Outright Purchase
Outright purchase has decreased in popularity due to the significant cost of maintenance, management and depreciation.

11. International practices: Services
Subject
17 September 2018
International practices: Services
Operational lease services
Maintenance
Insurance management
Fuel management
Reporting
Damage handling
Replacement cars
Lead-in cars
Tyre management

12. International practices: Trends
Subject
17 September 2018
International practices: Trends
The growth in the OL market is not through market expansion but conversion of finance lease to OL contracts, gaining more involvement and more revenues from their existing customer base
Customers benefit by getting service retention bonuses, loyalty benefits and increased value additions
For the past few years many large players are leveraging their international market presence in order to bring services to clients across borders
The EU is moving towards unifying company car taxation and regulations throughout its member states
International players are moving towards single powerful brands across all markets

13. Accounting treatment of leases – IFRS
Subject
17 September 2018
Accounting treatment of leases – IFRS
IFRS 17 prescribes classification, accounting treatment and disclosure requirements for leases
The classification is based on the extent to which risks and rewards incident to ownership of the leased asset lie with the lessor or with the lessee
The lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership of the asset to the lessee.
Depends on the substance of the transaction rather than the form of the contract

14. Key Issues in the Indian Market
Subject
17 September 2018
Key Issues in the Indian Market
Leasing is not seen and supported as an industry
Regulations covering NBFCs
Self defeating lease classification
Multiple taxation
Registration in the name of the lessor?

15. Subject
17 September 2018
Conclusion
India has huge potential, but to exploit the potential we need to use the best practises from mature markets to develop the leasing industry into a main contributor to the development and growth of the Indian market
Leasing can be a major contributor to the development of road infrastructure, transportation, agriculture and the industry in general.