MOST people in Slovakia use leasing to buy a car but they are waking up to other options.
photo: Zuzana Habšudová
Items available on the leasing market include production equipment; manipulating mach-ines such as fork-lift trucks; printing and polygraph machines; building machines like excavators, loaders, and bulldozers; farm and timber machine tools; boats; airplanes; railway engines; carriages; and equipment in the human and veterinary fields of medicine.
According to the figures recently released by the Association of Leasing Companies in the Slovak Republic, passenger and small commercial cars accounted in 2003 for 58.1 percent of the total volume of leasing contracts, which was Sk43.2 billion (€1 billion).
The share of machines and industrial equipment constituted 20.3 percent while trucks and trailers made up 19.1 percent of the volume of 2003 leasing contracts.
Last year, industrial buildings, retail trade buildings, and supermarkets were the most-leased types of real estate, sharing 0.9 percent of the Slovak leasing market.
Comparable leasing sector figures for the European Union are available only for the year 2002. The most sought-after leasing objects that year were personal and small commercial vehicles (33 percent), followed by machines and industrial equipment (24.3 percent), and trucks and buses (18.6 percent).
A comparison of the Slovak and European leasing markets shows significant differences in two commodities: computers and personal and small commercial vehicles.
The high share of the Slovak market taken by vehicles mainly has to do with the underdevelopment of other leasing segments, said Jan Kovalčík, the chief analyst of the company Trend Analyses.
"However, other commodities are gradually awakening. Along with trucks and trailers, recent years have seen growth in the leasing of machines and industrial equipment and now real estate's turn is coming, as financing through leasing faced legislative barriers until 2002," explained Kovalčík.
Kovalčík attributes the almost non-existent share held by computers and office technology to ordinary users' gradual purchase of information technology over time, instead of in a single, large investment.
"Apart from that, IT prices for ordinary users allow their inclusion in tax costs and it is not necessary to write them off for several years. Another reason could be the fact that IT prices fall quite quickly due to the fast development in this field.
"In most cases when businessmen cannot pay the leasing instalments for their IT equipment, leasing companies have no chance to re-lease the equipment and are forced to sell it at a loss," added Kovalčík.
With an increase of 50 percent in 2001, 17 percent in 2002, and 8 percent in the last year, the Slovak leasing sector belongs to the fastest growing in central and eastern Europe. Apart from the Slovak Republic, in recent years leasing markets have also registered substantial growth in Hungary and the Czech Republic.
In 2002 the total leasing volume in the Czech Republic was 15 percent higher than the year before. In the same period, in Hungary, the total volume of the leasing market grew by 16 percent. However, the leasing industry in Poland registered only 0.5 percent year-on-year growth in 2002.
In terms of growth, Slovakia's leasing industry and those of other countries in the region are far outperforming their counterparts in the EU, where the sector's usual year-on-year increase is 1 to 2 percent. However, Kovalčík attributes this to the decline preceding the current boom as well as to the relative underdevelopment of the Slovak leasing sector.
A Europe-wide comparison of total leasing volume is, of course, less favourable for Slovakia. But in 2002 the relatively small republic took 18th place on the European leasing volume chart with a total volume of €1 billion.
According to the figures of the European Leasing Association, in that period leasing was the most popular in Germany (€44 billion), Italy (€38 billion), the United Kingdom (€35 billion), and France (€27 billion).
|Leased movable assets in Slovakia, 2003|
|Assets||Value in billions Sk (€) *||Share in %|
|Computers and office equipment||0.619 (0.01)||1.4|
|Trucks, buses and tractors||8.258 (0.20)||19.1|
|Commercial vehicles||5.324 (0.13)||12.4|
|Ships, airplanes, railway vehicles||0.091 (0.002)||0.2|
|Movable assets - total||43.206 (1.04)||100.0|
* Purchase prices excluding value added tax
|Leasing in selected countries of central and eastern Europe|
|Country / Year||Volume in millions €||Year-on-year change in %|
* Purchase prices excluding value added tax
|Leased movable assets in the EU, 2002|
|Assets||Share in %|
|Machines and industrial equipment||24.3|
|Computers and office equipment||12|
|Trucks and buses||18.6|
|Cars and commercial vehicles||33|
|Ships, airplanes, railway vehicles||3.8|
15. Mar 2004 at 0:00 | Robert Valjent