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Fitch Anticipates a Solid Growth in Truck Leasing Industry

With its latest report, Fitch Ratings has instilled more confidence in the robust truck and commercial fleet leasing sectors. The industry is projected to progress in same numbers as it was in the year 2017. In a recent review of the five-star rated leasing companies, the rating agency witnessed a strong sustenance amidst low losses due to the effective asset performance and solid franchise growth of these companies.

The Main Highlights of The Report:

Despite the falling values of used vehicles in this category, the earnings are expected to improve over next few months as well. Fitch reports that any potential pressure on the earnings will be alleviated by the lessors through the disposal gains earned at the expiry of a contract.

Further, the report indicates pressures in demands and values of Class 8 trucks due to their surplus availability. As per ACT Research, these trucks had an overcapacity of 125% when compared to their demands in North America during the last year. In fact, the demands for commercial truck leasing was also partially weakened due to the falling movement of freight carried by the transportation companies.

But, this sector is expected to have a lesser cyclical nature in contrast with the equipment leasing industry. The fleet leasing companies in the USA are thriving due to the open-end leasing contracts in which residual values are passed on to the lessees.

What the Future Entails?

From a long-term perspective, the leasing companies are advised to track the progress in the field of technology. The disruptive tech developments and innovations like driverless cars can pose severe challenges in the future. To stay ahead on this curve, they should invest in the new technologies. It will help them to reduce pressure on the demands for commercial fleet and truck leasing.

As of now, there is no discerning impact on this industry.

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