Commercial vehicles: still opportunities for specialist banks?

New figures from the German Association of the Automotive Industry (VDA) confirm this: The market for trucks, buses and vans is defying the crisis. German manufacturers are compensating for the lack of sales in Western Europe in other regions. Their range of commercial vehicles is diverse and innovative. But are specialist financiers also benefiting from this?

The range: more models, less consumption

Never before have there been so many new models on display at the IAA Commercial Vehicles in Berlin as at the end of September. It seems that the transportation of the future will be defined by diversity. Long trucks may soon be transporting goods economically throughout Europe, while fully electric delivery vehicles up to 3.5 tons are conquering city traffic. All these vehicles have one thing in common: they are much more efficient and environmentally friendly than their predecessors. The first haulage companies are already making their entire logistics chain CO2-friendly or even CO2-neutral. No problem, because all manufacturers - even for heavy trucks - rely on the Euro VI standard. However, development is progressing rapidly not only in terms of fuel consumption, but also in terms of safety and driver comfort. And sales?

The market: stable, but not euphoric

Major leaps in sales are currently not possible, but commercial vehicles are proving to be comparatively crisis-resistant. One example of this is the stable global market for trucks over six tons. The VDA expects new registrations in Western Europe to fall by four percent to around 250,000 vehicles in 2012. However, the decline will be offset by the USA and Russia. German manufacturers hold 30 percent of the North American market, which will grow by up to 20 percent to 350,000 vehicles in 2012. With over 160,000 commercial vehicles, the Russian market is twice as large as the German market. It is expected to grow by a quarter in 2012.

"The overall picture is mixed," says VDA President Matthias Wissmann, "but there is no comparison with the difficult situation four years ago." But how are the specialist banks positioning themselves in this environment?

Credit & leasing: making good use of opportunities?

Franz Reiner, CEO of Germany's largest commercial vehicle financier Mercedes-Benz Bank, is satisfied: "We have gained market share in the first half of the year." The bank now finances or leases every second new truck or van from Daimler. By mid-2012, it had increased its contract portfolio by nine percent to EUR 6.35 billion compared to the same period last year. New business amounted to over 1.3 million euros. The company attributes its success in part to its flexible offering, such as seasonal rates. For example, building contractors pay less for their vehicles in the weak winter months than in the high-turnover summer.

While Mercedes-Benz Bank has been able to extend its lead, Puls Marktforschung still sees potential for German specialist banks in general. The Nuremberg-based company has determined that one in five heavy trucks is not financed by captives or non-captives. In 2010, it was only one in ten. Konrad Wessner from Puls recently spoke to Automobilwoche about an "alarming trend". What customers need above all is "a quick and unbureaucratic credit check".

IT systems: limit risks, expand internationally

However, the market for commercial vehicles harbors more risks than the passenger car segment due to the high credit volumes and number of insolvencies. This is why creditworthiness risks must be determined as completely as possible using IT systems such as the afb Credit Management Solution. These solutions exchange data with third-party solutions, including credit agencies, for their automatic analyses.

Software that decides on credit and leasing and then processes the transaction is also increasingly being used internationally. It helps to quickly offset losses in domestic markets in new locations. As an international solution, the afb Credit Management Solution can be adapted for a new market within a few months - including the local business processes and products, the respective legislation, language and currency.