Feature Leasing World

being suffered by our US competitors, gives us a strong opportunity to build market share”.
  The Asia-Pacific capability is being seen by some as a factor that polarises the competition among lessors. If you don’t have it already you can’t get it so easily, seems to be the thinking. Rees “guesstimates” that the competitor landscape in Asia-Pacific will not be much different in one year’s time. “I do not foresee a lot more players,” he says. “The entry costs are high and there are no significant new vendors on the horizon. On the other hand, we have been able to lead with our big vendor relationships.”
  How does he stay in touch with the Asia-Pacific region from Europe? “Day to day we operate by telephone and teleconferencing contact. Over the course of a year, different managers from head office will, for example, travel four times to China, twice to Australia, and so on.” Rees is candid about the problems of getting the right local staff. “We have the right people now, but we have been through several iterations of local management in the process.”
  CIT has hired large numbers of staff in the Asia-Pacific, to deal with business volumes there. Booking and administration for the region is centralised in Shanghai but CIT has a unique operations model. “We do not focus on local country P & Ls, rather profit centres are presented globally for vendors and other areas of business. We use one IT system, the core of which is Infolease, with various applications surrounding it.” The power of a centralised system becomes apparent in areas such as asset management. “We can tell our vendors exactly how many ‘Model As’ they have and where they are. When there is a major technological sea-change, for example changing from analogue to digital, our systems give the vendor all the details.”
  This facility is clearly valuable to CIT’s large global vendors such as Dell and Microsoft. With Dell supported by CIT across Europe and Asia-Pacific, the volumes of sales finance at Dell are growing faster than the volumes of equipment sales. Microsoft sales finance is starting to take off also, right across the globe. In the UK there has been a strong cross-pollination from the purchase of the Barclays technology portfolio, and as Kelleher says: “It’s been a good buy.”

 “Is there a significant value to first-mover advantage in vendor finance?”

 		      The centralised system approach does sound a winner, but most other lessors say it is impossible to achieve. Schneck of De Lage Landen feels that for the present a centralised system is feasible across Europe, but not across the globe. It would be easier if more could be standardised, but he says: “In my experience, every single country, be it large or small, has been different.”
  Rees is open about the SGEF systems. ”At the last count we had 19 different systems in 22 countries. We are not convinced that there is one global system available, we see it as a series of local systems feeding a central database system so we can provide consolidated information to our vendor partners and management groups alike.” In essence this may not be so different from CIT’s ‘Infolease plus surrounding applications’ solution. Rees sees more focus on systems and operational efficiency going forward: “Yes, we are ready to respond to big vendors’ RFPs, but in practise how often does a big vendor change providers? So we see the focus of our efforts in the coming year chanelled into maximising efficiency in existing programmes.”
  And what about the competition? Kelleher feels that the competition does not seem as focused as before. He feels that most vendor funders are buying paper and simply running a treasury operation. In the process the sales side is being given over to independent brokers, who are taking more and more of the margin.
  This may be beggaring the question, though; KBC, Fortis, GE, ING are all industriously building infrastructure, adding new countries, dominating new sales channels, and surely they will inevitably catch up on the Asia-Pacific side? Roger Pullen of KBC Lease says: “At KBC Lease we opened in Italy last year, and Spain and Romania this year. This expansion is driven purely by our recognition of the needs of our vendors and the territories they need to operate in.”
  Is there a significant value to first-mover advantage in vendor finance? Based on past experience one would say that there definitely is; for the period of time they are in front. But first-movers do not necessarily continue to stay in front throughout the market cycle; they can stumble, they can end up being bought and sold in the marketplace, and sometimes it seems that all it takes is some “bright sparks” in an investment bank somewhere to unwittingly throw a spanner in the works, such as with the liquidity crisis we face today.
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