New Alta LAR 100 Report: Latin American Equipment Leasing Industry Expanding at 'Extraordinary' Pace
The Alta Group's LAR 100 Report Notes Positive Impact on Economy, Exceptional Growth in Brazil, Venezuela, Costa Rica
FORT LAUDERDALE, FL., August 6, 2008 — Latin America's equipment leasing industry is producing "extraordinary" growth, especially in Brazil, according to a new report by The Alta Group - Latin American Region (LAR). This is a good sign for the Latin American economy, as equipment leasing gains correlate with increased capital investment and the expansion of wealth.
However, the report does caution that Brazil's heady growth is likely to slow in 2008-2009 due to a number of factors, including the large number of motor vehicle leases that are currently among its portfolios.
The annual Alta LAR 100 report, now in its fourth year, is the only study that ranks the top equipment leasing companies operating in Latin America and estimates the size and growth of leasing industries by country. The 2007 report, just released, shows that Latin America's equipment leasing industry increased by 81 percent in U.S. dollars and 71 percent when adjusted for currency volatility, far beyond its Gross Domestic Product (GDP) growth rate of 5.6 percent.
Brazil's equipment leasing industry, which represents close to 60 percent of the total leasing portfolios in Latin America, outpaced all other countries and expanded by nearly 105 percent.
"The phenomenal growth in Brazil is particularly interesting," said Rafael Castillo-Triana, managing principal of Alta's Latin American Region and co-author of the report. "One reason for Brazil's success is the sound regulation of its leasing industry. We expect more growth in the future but predict the rate will slow starting in 2008 and 2009. A large percentage of Brazil's leasing portfolios are concentrated in motor vehicles, and that market seems to be reaching its saturation point. High prices, especially high oil prices, may also have an impact." .
"Longer term, Brazil should do fine because it has a well developed agricultural industry and the potential to increase leased assets for agricultural equipment, construction equipment for infrastructure projects, and technology."
Other countries experiencing growth beyond the regional average included:
Venezuela — Up 72 percent in 2007. Castillo-Triana attributes this to the country's high liquidity. "Despite its political reputation, the financial system in Venezuela is moving along very well," he said. Costa Rica —Up nearly 95 percent in 2007. Castillo-Triana believes Costa Rica is starting to see the benefits of the Central American Free Trade Agreement (CAFTA) and notes that large enterprises like Scotiabank have been expanding lease portfolios there.
The Alta LAR 100 report for 2007 is available for download in English and Spanish language versions.
Select this link for an English version of this article: English Version
Select this link for a Spanish version of this article: Spanish Version
Alta plans to make a detailed database of the region's leasing leaders available by Sept. 1, via a special Web site.
The report will also be among the topics covered at two upcoming conferences: The First Latin American Legal Forum on Equipment Leasing Aug. 21-22, and Alta's annual Latin American Leasing Conference held each fall.
About The Alta Group
The Alta Group is a global consultancy serving equipment leasing and finance companies, investment professionals, manufacturers, banks, and government organizations. Founded in 1992, Alta provides counsel and implementation for change, growth, and best practices to clients in North America; Latin America; Western, Central and Eastern Europe; Australia; and China. For more information, please visit http://www.thealtagroup.com.
Media Contacts:
Rafael Castillo-Triana Managing Principal, Alta LAR (954) 389-7943 rafael.castillo@thealtagrouplar.com
Ricardo Mu“oz-Medina Principal, Alta LAR (305) 931 2748 ricardo.munoz@thealtagrouplar.com
Carla Young Harrington Susan Carol Associates Public Relations (540) 903-2618 carla@scapr.com
