Car Leasing in Algeria: A fleet market in the making
The long term rental market in Algeria is still in an embryonic stage within an environment which is far from encouraging it to flourish. Nevertheless as an international fleet manager you can rely on partners with international and local experience to finance and manage your vehicle fleet in Algeria.
With a shrinking offering, companies and private individuals alike are facing a real scarcity in passenger cars, utility vehicles and heavy goods vehicles. This situation, brought about by the implementation of the official quota policy in 2015, allied to sociological considerations, make of financing a system which is not yet ready to take its place among the habits and customs of the Algerian consumer market, and makes it easy to understand why the company market is still far from producing the expected results.
Supplier choice increases…
This situation results in most of the clients which are ready to take to this formula, being foreign companies. This at least is what emerges from what was told to us by Patrice Reveille, Director General of ALD Automotive in Algeria. Considered as leader on this market, ALD Automotive has seen regular growth of around 10% per year since it arrived in Algeria in 2007. This growth is, however, relative when the volumes achieved are taken into account, as these remain modest in comparison to the market potential. But despite the many factors which restrain flourishing growth of the car leasing market, several competitors have made an appearance and are seeking their slice of the pie with the means they have available. Cevital, Sovac, Maghreb Leasing, Renault and soon Peugeot Credit, are all polishing their weapons in order to convince as many clients as possible, despite the extremely constraining environment.
…in embryonic leasing market
A look at the overall market makes it possible to confirm that it has plummeted substantially, to the point where the ability of many leasing companies to survive may be called into question. The disruptions which were first seen in 2014 became worse in 2015 and then again in 2016. In figures, the Algerian vehicle market dropped in terms of registrations from 310,317 units in 2014 to 221,655 in 2015, a plunge of 40%.
Even at the height of its growth in 2012 and 2013, with volumes of respectively 512,552 and 452,287 vehicles registered, the long term rental market did not even represent 1%. Today, while the scarcity is in full flow, leasing and rental companies are suffering. And indeed at the end of November 2016, with regard to the results which were sent to us by dealers and businesses still operating, the
Algerian market has recorded a total volume of new vehicle registration of 94,399 in 2016. This represents again a fall of no less than 63% compared to 2015. Taking into account the contingent of 83,000 units decreed by the public authorities for the year 2016, and the fact that the ‘smartest’ dealers began to import vehicles just before the official publication of the overall quota and the fact that companies can register vehicles for proper use, with an estimated amount of around 30,000 units, this gives a total of 105,000 new vehicle registrations at the end of November 2016. Of this volume, and according to the figures we have been able to gather, the car leasing companies claim some 1,400 units, which means there is a long way to go if they are to become a major force on the market. | 22/12/2016 | Mourad Saadi