Falling new car sales challenging the leasing market
Domestic new car sales have been steadily declining since H2 2021, mainly due to the recent global chip shortage. The current situation also has a direct impact on the used cars market, and the changing interest rate environment also poses challenges for leasing companies, according to the experts of Euroleasing.
New car sales fell significantly last year: nearly 11,000 new passenger cars were registered in February 2021, and a third less in January this year, barely 8,100, according to the Association of Hungarian Insurance Companies (MABISZ) and DataHouse.
On the other hand, the used car market is booming with nearly 820,000 sales last year, breaking all records on the market. All this with constantly rising prices: average prices also increased by 43% year-on-year in 2021, with the last quarter of 2021 showing an increase of 83.5%, or more than HUF 2 million, compared to the first quarter of 2020; this means that several models aged while becoming more expensive, according to data of Hasznaltauto.hu.
These trends are clearly related to the global semiconductor shortage caused by the coronavirus epidemic and may also have a significant impact on the domestic leasing market.
“Car prices, which have been rising faster and faster over the years, could even be good for leasing companies, as rising prices increase the need for financing; however, the rising interest rate environment is working in the opposite direction. The supply is also strongly limited by the limited transport capacity of car manufacturers, which is coupled with delivery deadlines of up to one year, so it has become clear that a completely new market situation has arisen for car financiers,” said Judit Vály, CEO of Eurloeasing.
"We are thinking in the long term, and as a dominant leasing company of the market, we strive for stability and predictability in this situation as well, and our goal is to shape the future of the market responsibly," she added.
In this business environment, favorable financing programs such as the Széchenyi Leasing GO! available for businesses play a particularly important role. The state-subsidized leasing product is available in both open-ended and closed-end financial leases and offers a flexible solution for asset acquisitions.
“Our goal is to focus more and more on online developments in a challenging and changing business environment and to help our clients beyond the financing solutions. That is why we have created a leasing-related tax guide for small and medium-sized companies” – added Vály.
From January 1, 2022, MKB-Euroleasing, Budapest Leasing, Takarék Leasing and the Car Finance Division of Budapest Bank operate integrated under the Euroleasing brand.
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