Leaseplan, Hertz see business in car leaseLeaseplan, Hertz see business in car lease
Apnaloan.com Research Bureau
12 Jun 2008
With the corporate and small and medium enterprises sectors accounting for 600,000 of the 1.2 million cars sold last year, operating leasing in the country is staring at a huge potential. Leaseplan and Hertz India are planning to ramp up capacity by spending Rs. 2,000 crore and Rs. 500 crore, respectively, over the next five years to meet the demand.
The operating lease market stands at around 18,000-20,000 cars. Leaseplan which has a fleet of 12,000 cars plans to expand it to 40,000 by 2013.
However Hertz, with a relatively smaller fleet of 2,000 cars, plans to add another 3,000 by the end of this year with an investment of Rs. 100 crore. Further, it will expand to 9,000 cars by 2010 by spending another Rs. 400 crore.
When a company buys a car for its employee it has to get into its administration and take care of its maintenance requirements. When it goes in for leasing, all the hassles are taken care of. While tax incentives are an obvious attraction, many corporates also look at leasing as an outsourcing measure to free up resources and concentrate on core activities.
Coming up next could be leasing for individuals provided the regulations allow tax incentives. Both Hertz and Leaseplan are open to it.