Recently, Liugong stated that the company plans to invest in a new wholly-owned financial leasing company in Liuzhou, Guangxi, with a registered capital of 1 billion yuan. The first capital injection will be 500 million yuan in 2021 and an additional investment of 500 million yuan in 2022. At this time, Liugong has 3 Liugong-based leasing companies, including Hertz Equipment Leasing, Zhongheng Leasing and Beibu Gulf Golden Leasing.
Liugong is not the first nor the only one regarding the layout of financial leasing for construction machinery manufacturers. In the domestic construction machinery industry, Zoomlion and Xugong Group started their financial leasing business earlier, both of which were carried out independently; while my country’s first financial leasing company in the construction machinery industry was managed by Caterpillar. Le established.
In 2004, Caterpillar established Caterpillar (China) Financial Leasing Co., Ltd.;
In 2007, XCMG established Jiangsu XCMG Guanglian Machinery Leasing Co., Ltd.;
In 2009, Zoomlion established Zoomlion Financial Leasing (China) Co., Ltd...
Why do construction machinery manufacturers prefer financial leasing so much? How much profit can financial leasing bring? Perhaps one or two can be glimpsed from the 2020 annual reports published by various companies.
Construction machinery financing lease income accounts for a considerable proportion
According to Zoomlion’s 2020 annual report, the company’s existing sales models include general credit sales, financial leases and mortgages. Customers can choose from the company’s own platform financial leasing and third-party leasing to carry out financial leasing business. During the reporting period, the sales amount of the construction machinery segment through the financing lease model was 20.671 billion yuan, accounting for 33.68% of the revenue of the construction machinery segment.
According to XCMG's 2020 annual report, the company's main product sales models include full payment, mortgage loans, financial leases and installment payments. During the reporting period, the company's sales amount through the financing lease model was 16.729 billion yuan, accounting for 22.62% of the company's 2020 operating income.
The annual report data released by Liugong shows that in 2020, Liugong's revenue is 23 billion yuan, of which the sales amount of the financial leasing model is 12.7 billion yuan, accounting for up to 55% of the total revenue.
For these manufacturers, their financial leasing companies are mainly to promote the sales of construction machinery and equipment, and their business itself brings a small amount of income.
Construction machinery financial leasing has become the industry's competition for "cake"
The proportion of income from 20% to 50%, financial leasing seems to have attracted the attention of the industry. It can be said that financial leasing is gradually becoming the next "cake" for enterprises in the industry to compete for.
Due to the high value of construction machinery and equipment, the purchase of equipment by construction companies requires a large amount of capital, but the payback period of investment takes a long time. Therefore, it is not necessary to pay a huge amount of money in the payment method to obtain the right to use large-scale equipment. This method is favored by more and more SMEs;
From the perspective of property rights, the ownership of machinery and equipment in a financial lease still belongs to the leasing company. Therefore, when the lessee is unable to pay the rent according to the contract, the lessor can immediately recover the leased equipment and lease it to other lessees, except for the current rental income. Apart from the losses, there were almost no other losses.
At the same time, manufacturer-based financial leasing companies are also a good marketing tool for lessees. The biggest advantage of manufacturer-based financial leasing is that it can provide additional equipment services for the lessee’s financial leasing. For example, as a leasing company with a manufacturer background, Zoomlion Financial Leasing not only saves customers the time and cost of obtaining equipment in financing, but also its parent company, Zoomlion, is a professional large-scale construction machinery and equipment manufacturer , When customers choose equipment, they can provide professional guidance to help customers choose the equipment that best meets their production requirements. It can also tailor the repayment plan for the customer according to the time characteristics of the customer's production, so that it can adapt to the expected future cash flow, which plays a role in asset management to a certain extent. Moreover, through financial leasing companies, manufacturers can form closer relationships with their core customers.
From the current point of view, the financial leasing model seems to be "profitable and harmless" for both manufacturers and users.
In recent years, with the increase in domestic infrastructure construction, the demand for construction machinery has gradually increased, thereby promoting the development of the construction machinery rental market. Although my country's construction machinery leasing market is large and the industry prospects are optimistic, there are still many problems in the industry as a whole, including the irregular development of the industry and serious disorderly competition among enterprises. So, in the face of more and more manufacturers-based financial leasing companies in the market, what changes will the construction machinery leasing industry have?
