Equipment Lease Finance Industry Confidence Declines in October

Washington, DC, October 21, 2013 –- The Equipment Leasing & Finance Foundation (the Foundation) releases the October 2013Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $725 billion equipment finance sector. Overall, confidence in the equipment finance market is 54.0, a decline from the September index of 61.3, demonstrating the negative impact of the federal government’s budget response on an otherwise steady industry outlook. 

When asked about the outlook for the future, MCI survey respondent Valerie Hayes Jester, President, Brandywine Capital Associates, Inc., said, “The future of the industry remains optimistic. My larger concern is for the future of our country and the inability of our government to lead.  Ultimately, the stalemate in Washington will have a negative effect on our economy in the short run.  My hope is that we can get small business back on track and investing again in equipment in 2014.” 

October 2013 Survey Results:

The overall MCI-EFI is 54.0, a decline from the September index of 61.3.

• When asked to assess their business conditions over the next four months, 11% of executives responding said they believe business conditions will improve over the next four months, down from 30.3% in September.  74% of respondents believe business conditions will remain the same over the next four months, up from 66.7% in September.  15% believe business conditions will worsen, up from 3% who believed so the previous month.

• 7.4% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 33.3% in September.  77.8% believe demand will “remain the same” during the same four-month time period, up from 63.6% the previous month.  15% believe demand will decline, up from 3% who believed so in September.

• 18.5% of executives expect more access to capital to fund equipment acquisitions over the next four months, unchanged from September. 81.8% of survey respondents indicate they expect the “same” access to capital to fund business, and no one expects “less” access to capital, both also unchanged from September.

• When asked, 33.3% of the executives reported they expect to hire more employees over the next four months, a decrease from 36.4% in September.  66.7% expect no change in headcount over the next four months, up from 60.6% last month.  No one expects fewer employees, down from 3% of respondents who expected fewer employees in September.

• 85.2% of the leadership evaluates the current U.S. economy as “fair,” down from 90.9% last month.  15% rate it as “poor,” up from 9% in September.

• None of the of survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 18.2% in September.  89% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 79% in September.  11% believe economic conditions in the U.S. will worsen over the next six months, up from 3% last month.

• In October, 33.3% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 30.3% in September.  66.7% believe there will be “no change” in business development spending, unchanged from last month.  No one believes there will be a decrease in spending, down from 3% who believed so in September.

October 2013 MCI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket

“Our industry is poised to help fuel economic expansion.  Unfortunately, the circus in the U.S. Congress is holding back, if not threatening, the recovery we have prepared for.”  Paul Menzel, President & CEO, Financial Pacific Leasing, LLC

Bank, Middle Ticket

“With the continuing dysfunction in Washington due to the lack of any effective leadership, the short-term outlook for the equipment finance industry is very clouded.  Demand for financing will likely continue with the see-saw pattern we have experienced over the last several years.” Thomas Jaschik, President, BB&T Equipment Finance

Bank, Middle Ticket

“The dysfunction in D.C. is now at a critical stage. If the government doesn’t learn how to deal with these issues in a more timely manner, we will lose the confidence gained over the last year causing further weakness in the economy.”  Kenneth Collins, CEO, Susquehanna Commercial Finance, Inc.

Why an MCI-EFI?

Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.

Who participates in the MCI-EFI?

The respondents are comprised of a wide cross section of industry executives, including large-ticket, middle-market and small-ticket banks, independents and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry's confidence.

How is the MCI-EFI designed?

The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

1. Current business conditions
2. Expected product demand over the next four months
3. Access to capital over the next four months
4. Future employment conditions
5. Evaluation of the current U.S. economy
6. U.S. economic conditions over the next six months
7. Business development spending expectations
8. Open-ended question for comment

How may I access the MCI-EFI?

Survey results are posted on the Foundation website, http://www.leasefoundation.org/IndRsrcs/MCI/, included in the Foundation Forecast newsletter and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

Madison County Transit Deploys Crosspoint Kinetics¹ Hybrid System

INDIANAPOLIS‹Crosspoint Kinetics, LLC, a newly formed subsidiary of Cummins Crosspoint, LLC, has completed the installation of forty-three second generation electric hybrid systems into Madison County Transit¹s (Granite City, IL) bus fleet.

The Crosspoint Kinetics Hybrid System improves acceleration performance, lowers fuel consumption, and reduces emissions for Madison County Transit¹s operators, riders and communities they serve by capturing regenerative braking energy from frequent stops and reusing that energy for fuel-intensive accelerations.

The systems were purchased through a contract awarded to Southern Bus and Mobility (Breese, IL) and were installed into new Turtle Top, Inc. (New Paris, Ind.) Odyssey buses.

Crosspoint Kinetics worked closely with Turtle Top, Southern Bus and Mobility, and Madison County Transit (MCT) officials to optimize the hybrid system for use in fixed-route and para-transit applications. Crosspoint Kinetics¹ new installation facility in Mishawaka, Ind. sped Madison County Transit¹s shift to ³green² with each hybrid install taking less than one day.

³Partnering on this important project has allowed us to customize and tune the hybrid experience for our customers,² said John McNichols, Crosspoint Kinetics Product Director.  ³New functionality and features such as a refined driver feedback and performance monitoring are being developed from the feedback and input we receive from our partners such as MCT.²

Madison County Transit has dispatched the forty-three hybrid buses into service and is now training bus operators on how to drive most efficiently in order to gain the most advantage from the hybrid technology.

MCT officials hope to drive substantial cost savings through better fleet fuel economy as well as better air quality for their communities.

Crosspoint Kinetics¹ hybrid is available throughout North America from select bus manufacturers and dealers such as Turtle Top and Southern Bus and Mobility. 

Need to proactively manage specialized equipment is driving fleet software sales with utilities, says Chevin

An increasing need to manage specialized equipment as closely as possible is driving fleet software sales within the utilities sector, says Chevin Fleet Solutions.

In a post-recessionary economy where cost control and compliance monitoring are under intense scrutiny, the desire to successfully manage expensive and complex equipment is strong.

Senior Vice President of North American Sales, Ron Katz, said: “Utility, telecom and industrial service companies often have a high proportion of specialized equipment that is integral to their fleet operations.

“What we’ve found over the last few years is that the impetus to implement enterprise fleet management software or improve existing fleet systems is often directly linked to an aspiration to gain control and visibility of these assets, minimizing their costs and ensuring high levels of compliance.”

Ron explained that a relatively common piece of equipment, such as the bucket truck actually represented a pretty sophisticated managerial challenge.

He said: “Of course, there is the heavy truck chassis which has its own maintenance and operational standards as well as all of electrics and hydraulics associated with the bucket to consider, as well as the driver elements.

“Utility and industrial service fleets have learned from bitter experience that it’s all too easy to let the costs of operating complex equipment get away from them; but comprehensive fleet management software provides the means to track, control and manage every aspect of a complicated and geographically dispersed fleet.

“Certainly, many of our newest clients such has Pike Electric, Bell Canada, Washington Gas, Henkels & McCoy, DC Water, NESCO Equipment and more have realized that real-time visibility as well as cost control over their equipment portfolio has proven to deliver a real competitive advantage.”

About Chevin Fleet Solutions

Chevin is a leading, global provider of dedicated fleet management software solutions. Our software is used in more than 120 countries worldwide to manage more than 700,000 vehicles with offices in the US, UK, Australia and Europe. We provide software solutions to the public sector, utility, construction and corporate sectors as well as governments and international aid operations of every size and type

2014 Audi A6 TDI® Selected as Green Car of the Year® Finalist

The 2014 Audi A6 TDI® clean diesel sedan has been selected as a finalist for the Green Car Journal 2014 Green Car of the Year® award. As a finalist, the Audi A6 TDI will be honored as Green Car Journal’s “Top 5 Green Cars for 2014” and earn the magazine’s “Green Car Product of Excellence” honors. Since 2005, the Green Car of the Year® program honors new vehicles with superior efficiency and improved environmental impact. The Green Car of the Year winner will be announced at this year’s Los Angeles Auto Show in November.

“Audi is honored to be named as a finalist for the Green Car of the Year award,” said Mark Del Rosso, Executive Vice President and Chief Operating Officer, Audi of America. “Audi has been a leader in clean diesel since the introduction of Audi TDI technology in the U.S. in 2009. With the debut of four all-new TDI models this year, Audi continues to set the bar for fuel efficiency and uncompromised luxury.” 

New for the 2014 Model Year, the Audi A6 TDI achieves an impressive EPA estimated fuel economy of 24 city/ 38 highway/ 29 combined MPG while at the same time delivering uncompromised performance, design and luxury. The A6 TDI delivers the best fuel economy among TDI competitors in its segment, with 30-percent more fuel efficiency than gasoline engines.

“Audi’s new A6 TDI underscores that improved environmental performance needn’t come at the expense of the joy of driving,” said Ron Cogan, editor and publisher of Green Car Journal and CarsOfChange.com. “This sedan seems to offer it all – comfort, luxury, style, and advanced on-board electronics, while also attending to lower CO2 emissions and surprisingly high fuel efficiency for this class of vehicle. Offering a powerful and efficient TDI clean diesel option in the A6, and other Audi models, is important. The A6 TDI is a deserving nominee for 2014 Green Car of the Year®.

The Audi A6 TDI features a 3.0-liter 6-cyclinder clean diesel engine with 8-speed tiptronic® transmission and quattro® all-wheel drive that generates a powerful 240 hp and 428 lb-ft torque, seamlessly launching from 0-60 MPH in 5.5 seconds. The A6 employs Audi ultra® lightweight technology through aluminum body panels that reduce weight and enhance efficiency. The relatively light chassis provides the A6 driver with excellent ride quality, handling and driving dynamics.

Also continuing the brand’s commitment to delivering impressive performance and improved efficiency, the A6 3.0T and A6 TDI are equipped standard with the convenient and fuel-saving start-stop efficiency system. When the driver presses the brake pedal at stoplights or in other prolonged idle situations, the engine shuts off. When the driver releases the brake pedal, the engine instantaneously starts up again.

Green Car of the Year® jurors include auto enthusiast and Tonight Show host Jay Leno, plus leaders of the nation’s major environmental organizations including Jean-Michel Cousteau, president of Ocean Futures Society; Frances Beinecke, president of the Natural Resources Defense Council; Michael Brune, executive director of the Sierra Club; and Matt Petersen, board member of Global Green USA. Green Car Journal editors round out the 2014 Green Car of the Year® jury.

September proves to be best month yet in 2013 for European new car market

According to the latest new car sales analysis from JATO Dynamics, the world’s leading provider of automotive intelligence, the European new car market made impressive progress in September with an overall increase in registrations of new cars of 5.6% for the month compared with September 2012 - the largest single monthly increase seen so far in 2013.

JATO’s headline market analysis:

§  The European new car market was just 3.9% behind 2012 performance in September, the smallest deficit seen so far in 2013

§  Three of the ‘Big Five’ markets recorded an increase in sales in September compared with 2012 figures

§  Great Britain posted the largest volume increases in both monthly and year-to-date registrations in Europe

In September, Great Britain posted increases in registrations of new vehicles of 43,524 (up 12.1%) for the month and 174,315 (up 10.8%) year-to-date, the largest volume increase in Europe.

Also making significant progress out of the ‘Big Five’ was Spain, where monthly sales increased by 30.7% from September last year. Compared with the same period in 2012, Spain now has just a 1.1% deficit in year-to-date sales.

Overall, the European new car market is now just 3.9% behind figures from this stage in 2012. France, Germany and the Netherlands all have some of the largest decreases in sales volumes in Europe, however all have either reduced the rate of reduction or, in the case of France, increased monthly sales performance during September.

Sales by Market

Country	Sept_13	Sept_12	% Change Sept	Sept YtD_13	Sept YtD_12	% Change YtD
Austria	25,301	27,094	-6.6%	248,111	266,890	-7.0%
Belgium	34,890	33,660	+3.7%	389,471	386,733	+0.7%
Croatia	1,805	1,698	+6.3%	21,920	26,381	-16.9%
Cyprus	497	692	-28.2%	4,642	8,055	-42.4%
Czech Republic	13,208	12,475	+5.9%	120,151	131,038	-8.3%
Denmark	14,578	13,914	+4.8%	135,096	128,390	+5.2%
Estonia	1,569	1,548	+1.4%	15,317	15,191	+0.8%
Finland	8,226	7,990	+3.0%	80,863	88,841	-9.0%
France	142,166	137,536	+3.4%	1,309,813	1,431,520	-8.5%
Germany	247,199	250,082	-1.2%	2,217,019	2,358,798	-6.0%
Great Britain	403,136	359,612	+12.1%	1,794,924	1,620,609	+10.8%
Greece	3,816	3,454	+10.5%	43,981	45,392	-3.1%
Hungary	4,680	3,544	+32.1%	41,260	39,650	+4.1%
Iceland	350	470	-25.5%	6,218	6,371	-2.4%
Ireland	3,175	2,481	+28.0%	71,719	76,642	-6.4%
Italy	107,186	110,601	-3.1%	1,004,711	1,096,639	-8.4%
Latvia	940	744	+26.3%	7,763	7,995	-2.9%
Lithuania	986	980	+0.6%	8,899	9,177	-3.0%
Luxembourg	3,158	3,340	-5.4%	36,026	39,090	-7.8%
Norway	12,275	11,212	+9.5%	107,438	105,538	+1.8%
Poland	21,628	18,842	+14.8%	213,120	206,317	+3.3%
Portugal*	8,235	6,359	+29.5%	80,283	74,478	+7.8%
Romania*	7,418	6,759	+9.7%	48,909	53,580	-8.7%
Serbia	1,574	1,605	-1.9%	15,507	17,105	-9.3%
Slovakia	4,935	7,201	-31.5%	46,562	52,560	-11.4%
Slovenia	3,990	3,203	+24.6%	39,821	38,707	+2.9%
Spain	45,918	35,139	+30.7%	548,783	554,921	-1.1%
Sweden	24,388	21,937	+11.2%	193,065	203,711	-5.2%
Switzerland	22,176	21,063	+5.3%	224,493	244,340	-8.1%
The Netherlands	31,627	31,945	-1.0%	303,824	427,190	-28.9%
Grand Total	1,204,102	1,137,180	+5.6%	9,379,709	9,761,849	-3.9%

NOTE: * denotes estimated volumes for September 2013

Manufacturers had a good month with Peugeot and Citroen the only two of Europe’s top 10 who did not increase sales in September, year-on-year. Also within the monthly top 10, only Mercedes and BMW have seen an increase in sales year-to-date, compared with the same period in 2012.

Renault, who finished fourth in both the monthly and year-to-date top 10, recorded the largest increase in volume, up by 10,444 (16.8%) for the month. The successful launch of the new Captur crossover and strong sales of the Clio have contributed to this result.

Market leaders Volkswagen continued to dominate European sales figures, increasing monthly performance by 1.6% on September 2012. So far this year, the manufacturer has sold 1,164,131 vehicles, down 6.8% on the same period in 2012, but still selling 64.2% more volume than the next closest brand.

Top 10 Brands

Make	Sept_13	Sept_12	% Change Sept	Sept YtD_13	Sept YtD_12	% Change YtD
VOLKSWAGEN	137,202	135,091	+1.6%	1,164,131	1,249,533	-6.8%
FORD	98,497	93,518	+5.3%	708,932	748,575	-5.3%
OPEL/VAUXHALL	88,088	83,453	+5.6%	633,769	659,324	-3.9%
RENAULT	72,757	62,313	+16.8%	593,467	630,319	-5.8%
BMW	70,604	65,488	+7.8%	486,682	481,991	+1.0%
PEUGEOT	66,855	68,279	-2.1%	561,581	621,739	-9.7%
AUDI	66,623	64,857	+2.7%	534,605	550,280	-2.8%
MERCEDES	63,387	55,920	+13.4%	478,008	454,956	+5.1%
TOYOTA	52,530	49,645	+5.8%	390,587	403,321	-3.2%
CITROEN	51,715	53,959	-4.2%	458,892	529,686	-13.4%

The Volkswagen Golf also continues to lead the monthly top 10 models table, with increases of 17.4% for the month and 2.1% year-to-date compared with 2012, securing the model’s strong lead.

Behind the Golf are three B-segment models, including the Renault Clio, finishing third year-to-date and fourth in monthly top 10. The Clio recorded the largest percentage increase* in the top 10 for both these periods.

It was also a strong September for the BMW 3 Series. Finishing the month in seventh for the month and ninth for year-to-date, it was the only model outside the volume B- and C-segments to appear in the top 10.

Gareth Hession, Vice President of Research at JATO Dynamics, commented: “September’s results should be something for the European car market to celebrate. The fact that the deficit in year-to-date figures is the smallest we’ve seen this year is encouraging. Similarly, September saw the largest single monthly increase of 2013 so far. Although it is still too early to tell whether this signals the start of long-term improvement for the industry, our latest analysis shows there are certainly grounds for optimism.”

Top 10 Models

Make & Model	Sept_13	Sept_12	% Change Sept	Sept YtD_13	Sept YtD_12	% Change YtD
VOLKSWAGEN GOLF	45,212	38,506	+17.4%	347,405	340,212	+2.1%
FORD FIESTA	33,561	31,445	+6.7%	222,184	238,440	-6.8%
OPEL/VAUXHALL CORSA	28,347	30,607	-7.4%	188,705	211,203	-10.7%
RENAULT CLIO	25,851	20,074	+28.8%	216,761	180,391	+20.2%
FORD FOCUS	24,872	24,127	+3.1%	176,507	190,350	-7.3%
PEUGEOT 208	22,398	23,424	-4.4%	189,654	98,309	-*
BMW 3 SERIES	22,054	17,875	+23.4%	155,335	129,317	+20.1%
VOLKSWAGEN POLO	21,625	20,613	+4.9%	201,929	225,119	-10.3%
OPEL/VAUXHALL ASTRA	21,055	21,996	-4.3%	153,281	179,660	-14.7%
NISSAN QASHQAI	18,993	19,061	-0.4%	161,054	161,699	-0.4%

NOTES: *Year-to-date percentage changes for the Peugeot 208 are not representative due to the new model’s introduction in 2012 and have therefore been removed from the table and excluded from the narrative.

For more information visit www.jato.com