The Krakow Post Special Business Supplement: Giant Athlon enters the leasing market

The interview with Eric van Vliet takes place at the headquarters of the Athlon Atrium building in Warsaw, where the company established itself only a few months ago.

Eric van Vliet: We made the choice to come to Poland because of the developments of the leasing market here. With only 75 thousand leased cars on the market, Poland has a huge potential for us. With these potential developments ahead, we decided to step into this market at this time because this allows us the opportunity to become a big market player.

KP: But you know that there are already quite a few competitors on the market and companies like General Electric are also considering investing in Poland.

EvV: That is why we decided to enter the market now, because the growth is booming and the amounts of suppliers at the moment are still relatively low. Compared to The Netherlands that has about 900 leasing companies, Poland still has only a few dozen and none of them has a big volume yet. The biggest one has 7,000 contracts, so by entering this market now, you can grow quickly.

KP: With most of the Polish companies still buying their cars, how do you convince them to change from buying into leasing?

EvV: What we notice is that multinational companies in Poland are experienced leasers. We don’t have to convince them to lease, they just pick out the lease company with the best deal. This is a relatively simple path. With Polish companies it is much more difficult. Many of them consider themselves an unhealthy company if they cannot buy their own cars. You have to change their perception and really convince those companies that leasing really is the best option. You have to show them the many financial benefits (e.g., the cars are not on your balance account anymore, which makes the ratios with the banks better and leaves the company more money to invest in their core business). You also have to bring the discussion out of the emotions that come with the cars, and you have to approach it from the economical side. And then many of them see that leasing is simply a better option than buying.

KP: With this huge potential on the market and still a limited amount of suppliers, it must be possible to make good profits?

EvV: No, unfortunately not, that is the strange thing about the leasing market here. The Poles are very cost-conscious, and this means we have to fight for our clients like we are in a fully saturated market. Also, what I notice is that customers are fixated on the starting price. When you make a contract you write that the company will make, for instance, 30,000 kilometres per year. But 85 percent of the cars will not drive 30,000 per year, but 25- or maybe 35- or 40,000 kilometres per year. Then you have a citation of a breach of contract. And that is where things get interesting because here it is not clear for the customer and this is important for what he finally pays. We call this “Total cost of ownership.” The Poles only look at the start price and when you offer the lowest price then you have the deal. But this is changing and you already notice that the Poles are getting more experience in that matter.

KP: With leasing operations in eight countries what can you say is typical about the car usage in Poland?

EvV: Well… Poles definitely drive differently than Dutch people. What you see is that the damage made during the lease period is higher. Compared to The Netherlands, they make double the amount of damage and compared to Germany this is even three or four times more. I think there are two factors that cause this: The damage caused by the bad state of roads in Poland along with the speed limits. Let’s be honest, in Warsaw it is normal to drive 80 in the city centre and when there is little traffic, people tend to drive 100. Even in Amsterdam when it is quiet, you simply don’t do that, but here it is different.

KP: What kind of damages do you see here in Poland?

EvV: People are much less careful with the cars, so in the city you have much more parking damages and outside the city there are more damages caused by passing; or cars simply end up running into the verge. These damages can be very costly. In Poland people are driving recklessly; they don’t want to see the danger and people are simply not careful with the cars.

KP: And what about brands? I have the feeling that Poles don’t like French cars and rather stick to German products.

EvV: That is not totally true. The Renault Laguna is doing well in Poland, even though this is a problematic car, which is what we rather want to avoid as a leasing company. Peugeot is also doing well here. The same goes for brands like Opel, Skoda and for instance Toyota. People in Poland have a different feeling to this Japanese brand than elsewhere in Europe. In other countries people often think it might be a good car; but it lacks charisma and status and that is why the car is not successful. In Poland it is the top brand. It has a status almost comparable to Mercedes. Also with Skoda, in Western European countries people think very negatively about this car, but here it is highly valued.

KP: The past few years the average value of a lease car in Poland has increased to around 20,000 euro?

EvV: What you see is a strong growth of the salaries on the market. On management level the salaries are already comparable with The Netherlands, and reach their limits. So what you now see is that the car has become an important condition for employment. And this is reflected in the models of cars that are leased. A few years ago, the Fiat Seicento was a lease car. Now you see that hardly anyone is leasing from the A-segment anymore. Much more popular are the Ford Focus from the C-segment and the Opel Vectra and the Passat from the D-segment. There is an enormous increase in the average value of the leased cars in Poland.

KP: To operate successfully as a lease company you need to lease around 1,500 cars. When does Athlon expect to have reached this amount?

EvV: Most companies need three years to break even. Athlon is a huge player in the leasing market worldwide and this means we also have a huge potential in Poland. We see that there are a lot of international companies in Poland who want to do business with us, and want to move to our company. But it is also important to invest in the market and educate the market. Instead of competing on a depleted part of the market with each other we really should aim at the underdeveloped parts of the market. Then there is room enough for everybody – also for new players on the market. There is an image problem on the market and there are many companies that have had bad experiences with leasing companies, but we have to show that we really offer a professional product that brings value for money.

Leave a Reply

Your email address will not be published. Required fields are marked *