Siemens Financial: Rising Customer Demand for Financing
DEC 3, 2014 - 7:09 am
According to a study from Siemens Financial Services, manufacturing firms worldwide are increasingly deploying asset finance to facilitate equipment acquisition and technology upgrades.
The recent study, conducted among the global top 40 industrial machinery and equipment manufacturers, including the U.S., reveals that 76% of respondents have seen increased customer demand for asset finance when acquiring manufacturing equipment over the last two years.
The study also shows that usage of financing in the last 24 months varies in different regions of the world. In the U.S., the proportion of manufacturing equipment sales enabled through asset finance has risen over 2% per year, compared to over 15% per year in Asia. The great difference in growth rates must be viewed in light of the fact that asset finance is still in a relatively early stage of its development in Asia, compared with the mature economies of the West. In Europe, the use of asset finance remained static among manufacturing firms, attributable to the slow business investment environment.
Looking at the next two years, 93% of respondents expect global interest in asset finance to increase still further from their manufacturing customer base. In the U.S., uptake of asset finance by manufacturing firms is expected to grow by over 3% per year.
In Europe and Asia, use of asset finance is predicted to grow annually by over 5% and over 14%, respectively. Strong demand for manufacturing equipment finance is expected to come, above all, from China, Poland/Industrial Eastern Europe and Southeast Asia. The growing popularity of asset finance is likely to be fueled by budget pressures, with 72% of respondents reporting a “squeeze” on their customers’ capital equipment budget in the last two years.
“The competitiveness of a manufacturing company is hugely underpinned by the use of sophisticated technology,” commented Gary Amos, head of Commercial Finance Americas, Siemens Financial Services. “With the help of asset finance, manufacturers can gain access to up-to-date equipment to improve efficiency, productivity and cost-control in a financially sustainable way.”
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