SANJAY GUPTA is MD at KeyLeasing
Corporate car leasing is a better option for any corporate enterprise rather than purchasing a convoy of vehicles, as it provides an opportunity to corporate enterprises to solely invest money in the core business rather than spending money on buying a depreciating asset. Leasing is a well-accepted product among corporates and now self-employed individuals & professionals have started taking more interest and want to know more about car leasing, which is slowly gaining traction among business owners and professionals. In India after owning a house, car (Family Car) is the second biggest asset purchased by people. Buying a car is a decision that involves many factors as it is an expensive affair. Many of us spend half of our life thinking “How should we save to meet our financial goal”, but the leasing option has widened the scope and horizon for people. The idea of leasing is not best limited to houses and homes now, but with the advent of MNCs and startup agencies, this idea is gaining popularity and not just been limited to fixtures, motors, electronic devices, etc.
With time, India has grown into a peel of global carmakers and a few indigenous players, but with the impact of coronavirus on the car market, they are facing severe contractions and doubts over the ongoing coronavirus syndrome. This cloud of uncertainty are hovering over the Indian automotive industry and the coming months are expected to unleash a host of challenges to this sunshine sector staring at shrinking sales and fast-evolving consumer preferences.
To move ahead, some car manufacturers had brainstormed the situation and have started considered offering their cars on lease, to bring the sales back up to normal. This revolutionary idea will not only support car manufacturers to increase the sales, but also support their channel partners (Car dealer) ensuring the sale & business for the workshop, moreover at the end when the lease contract gets maturated ensuring the used car business as well.
With these changes, the Indian car market has started looking more mature, wherein customers will prefer to lease over a traditional method of procuring the depreciated asset. It can be foreseen that the day is not far when car lease in India will behave like the European and Western market, and Indian customers will change the existing car every 3 to 5 years to a new car on a lease.
SMEs in China, Indonesia, Australia, and Japan prefer the option of car leasing and now it is evident in the Indian market too. It has been observed that personal/company car leasing has not emerged as much as the fleet car leasing and commercial customers will be contributing much more to the expected growth than non-commercial customers. With more mobility demands and high-end fleet management solutions, car leasing companies all over the world have increased the demand for leasing. Intending to diversify the market, governments all over the globe have also started offering tax reforms and highly favourable schemes.
The new trends dominating the global markets are the introduction of electric vehicle leasing and environment-friendly cars that lead to sustainable development in car manufacturing industries as well in the overall environmental situation. Such facilities encourage people to be more socially responsible and to do their bit towards the betterment of society and also getting the leasing benefit out of it.
Governments across the world are offering subsidies and tax benefits to encourage the penetration of electric vehicles in their fleet. They have also introduced the concept of leasing old cars, which helps reduce wastage as well as optimum usage. It is offered at a highly considerate premium and is attractive for low-income customers. The global leasing market is fast-moving with efficient strategies that ensure further growth too.