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Q&A with John Fawcett, CEO of Close Brothers Asset Finance’s Transport division

What sort of areas within HGV leasing does your company specialise in?

Close Brothers Asset Finance’s Transport team’s areas of specialism are tailored HP and Finance Lease solutions for all types of commercial vehicles including specialist assets.

Are you anticipating a rise or decrease in HGV leasing over the next 12 months?

It's difficult to predict, but we are anticipating that demand will remain consistent. The reason we're bullish is that despite the uncertain economic forecasts, there a number of issues that make us relatively positive about the coming 12 months.

With the introduction of regulation such as the ULEZ in London and fuel duty rises in France, how does this affect HGV leasing?

It’s too early to tell how these issues will affect HGV leasing, but what we’re finding is that affordability is being impacted and margins eroded by the higher cost of ULEZ-compliant vehicles. We are working hard to come up with really flexible solutions that will help maintain our customers’ cashflow given how higher costs are impacting margins. 

Has there been any move toward funding electric vehicles in this sector, or is the technology at too early a stage?

It’s at an interesting stage – in common with many other sectors, we’re seeing areas of development led by smaller operators in niche areas, e.g. waste collection, but the big manufacturers – understandably – aren’t quite there yet. 

How consistent have residual values been in this sector?

They’ve been consistently low, particularly non-Euro 6 products - even early Euro 6 is proving challenging. 

Which areas have seen growth, either geographically or industry sector?

We’ve seen most growth in businesses providing vehicles to niche and specialist areas, but it’s remained steady in the scaled tractor unit market with not much growth in this area.  

Does adapting to differing regulation across nations affect HGV leasing? Would Britain’s departure from the EU contribute to this?

We’re predominantly UK-based; however, we will continue to provide the same level of service to our Irish and German customers regardless of the economic, political or regulatory situation that we find ourselves in. 

Has the HGV sector seen any market share taken by LCV sector, due to regulation or difficulty in finding licensed drivers for HGVs?

Yes, some has been lost to LCV sector. This is, in part, being driven by changing consumer shopping habits with the large increase of home deliveries. 

How has digitisation and the offering of finance through online portals changed HGV leasing? Have there been any further technological developments which have changed this?

Possibly in the future but not yet.