Asia's other tigers
China and India aren't Asia's only fleet markets to watch.
Yes, China and India together represent almost half of all humanity on Earth. But that doesn't mean there aren't any other countries in Asia – and in fact, some of those other fleet markets may grow sooner, or easier than in those two giant, but sometimes very immobile markets.
ALD International is keeping its eye on India and China, but the lease company realises its customers venture further into the region, and it must be present there too. “We are lookingat other markets in Southeast Asia, especially where our international key accounts have significant fleet requirements”, says Tim Albertsen, Group Deputy CEO at ALD. But many of those markets are interesting in and of themselves. Just consider the production volume in Indonesia (1.2 million units in 2016), Thailand (1.3 million units), Malaysia (650,000 units) and the Philippines (200,000 units).
But starting up would not be easy. “Typically, full-service leasing is treated as car rental in these countries, and as such as part of the tourism sector. As that is a strategic industry in most of those countries, we would need a local partner and some sort of joint venture to get started. So: implementation may take a little while longer than usual, but we will get there”. On this front, Albertsen predicts 'significant progress' some time this year.
The thing to keep in mind when casing the fleet markets of Asia-Pacific is that the region remains very fragmented in terms of market conditions, practices and prospects. Take, for instance, Singapore: a small market, making a name for itself as the proving ground for driverless mobility – and more specifically, taxi services. But the Singaporean market is not just tiny, but also highly-priced, virtually pricing out any possibility of a profitable fleet industry.
Thailand and Vietnam are two more appealing members of the ASEAN trading bloc, which has been moving towards European Union-style unification of trade and tariff conditions. Both lack Singapore's stifling prices, with Thailand's open and sophisticated economy enhanced by low taxes designed to attract business. And what Vietnam lacks in maturity it makes up in sheer economic energy.
Indonesia, the region's most populous nation after China and India, is an often overlooked global economic powerhouse, with a steadliy growing lease industry, benefiting from its interaction with domestic automotive production – especially by Toyota.
But, and it's a good point made by Yves Helven, Assistant VP for Fleet Management in Asia-Pacific for Fleet Logistics International: “The biggest markets may indeed be China and India, but let's not forget about Japan, with its one-million-plus fleet of company cars”.
Of added interest is the Japanese industry's own foray into the its wider region. Orix and Sumitomo, the two biggest players in the Land of the Rising Sun, have been investing in Indonesia, Thailand and India – in the first place to serve Japanese companies present in those countries, but by extension also to drum up extra business from other multinationals. “Usually, the pricing is higher than local suppliers, but in terms of account management and reliability, there are good reasons to pay a bit more”, says Helven. | 26/01/2017 | Frank Jacobs