'The Operational Leasing Market Evolution' by Datamonitor, says that mature fleet markets like the UK and the Netherlands, which have a high contract hire penetration, are already in 'full flow' and have set the tone for less established markets such as Germany and France.
However, the report also predicts a slow down and stabilisation of the European company car market after what it describes as five years of 'above average increases in volume'.
Operational leasing is at different stages of development across the seven major European countries of Belgium, France, Germany, Italy, Spain, The Netherlands and the UK.
'Some of these more developed European countries have reached maturity, with companies forced to gain new business through the implementation of newer, more sophisticated products,' said Datamonitor.
'As these company car markets begin to slow, growth is inevitably going to come through the introduction of products which will attract whatever new business enters the market as well as existing business from other acquisition methods.'
The report adds that the company car market in Europe is expected 'to show relatively slow growth going forward, stabilising after five years of above average increases in volume'.
However: 'The one common factor for all European markets is that operational leasing is the fastest growing acquisition method.' The study suggests that growth in the more developed countries has been relatively low 'due to the maturity of the market and the penetration this product already has in the fleet sector'.
'Southern European markets have been experiencing above average growth with countries such as Spain and Italy more than doubling their fleets over the past half a decade,' Datamonitor said.
'In the coming years, growth will be more dependent on market conditions than the growing popularity of operational leasing products, which up to now has grown regardless of market conditions, substantially penetrating the fleet sector.
'Although demand for operational leasing products is still increasing, growth is expected to be more reactive to fleet demand and market conditions.'
Operational leasing: a country-by-country breakdown
'This high penetration can be attributed to the almost non-existent role that finance leasing plays in the market, as well as the sophistication of the product and service portfolio,' it said.
However, growth to 480,000 cars in 2001 is expected to slow due to 'the maturing operational leasing fleet and the expected slowdown in the economy'. Over the 2001 to 2007 period, the Dutch operational leasing fleet is expected to record an average growth of 4.3% to reach a volume of 622,000 cars and a 56.9% share of the company car fleet.'
Operational leasing now accounts for more than 239,000 cars in Spain, increasing from a 10.6% penetration in the company car market in 1997, to a 33.4% penetration in 2001 although company car purchases only constitute 15.7% of new car registrations.
Over the next five years, Datamonitor predicts, the Spanish operational leasing market is expected to more than double and is forecast to record an average growth over the period 2001 to 2007 of 15.9% to reach a volume of more than 575,000 cars.
Between 1997 and 2001 operational leasing grew by 29.3% to account for 195,000 cars and a 13.2% penetration of the company car market, the report said.
'The Italian market had been predicted to continue growing substantially over the coming years, but has experienced a major set back in the first quarter of 2002, where the operational leasing fleet did not increase at all.
'Over the 2001 to 2007 period, the operational leasing fleet is forecast to record an average growth of 11.1% to reach a volume of 368,300 cars and a company car penetration of just 20.1%.'
'Growth moving forward is expected to slow, although it will still remain strong considering the level of market maturity and the general economic outlook in Europe. Over the 2001 to 2007 period, the operational leasing fleet is forecast to record an average growth of 9.8% to reach a volume of more than 282,000 cars and a 42.3% penetration of the company car fleet.'
'The company car market in Germany has experienced several difficulties in recent years, with an oversaturated used car market resulting in falling residual values,' said Datamonitor.
'Over the 2001 to 2007 period, the operational leasing fleet is forecast to record an average growth of 9.1% to reach a volume of more than 1.01 million cars and a 24.8% penetration of the company car market,' it said.
However, Datamonitor said: 'The French operational leasing fleet is expected to slow over the coming years, largely reflecting the maturity of the French company car market. Over the 2001 to 2007 period, the operational leasing fleet is forecast to record an average growth of 8.2% to reach a volume of 1.7 million cars and a company car market penetration of 24.2%.'
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