自保融资：制造商的多用途战略工具（英文版）.pdf

Captive finance A multipurpose strategic tool for manufacturersOctober 2019Management summaryManufacturers of capital-intensive assets such as trucks, agricultural machines or production machinery relied in the past on loose partnerships with third parties to provide purchasers with financing or leasing arrangements. Recent changes in accounting legislation, combined with growing globalization, the desire for greater transparency and mounting competition, mean that such partnerships are not as attractive as they once were. As a result, increasing numbers of OEMs are asking themselves whether they would benefit from setting up their own finance companies nulland if so, how to do so most effectively.nullaptive financenull although not a solution for all manufacturers, is unrivaled as a multipurpose toolnull Applied correctly, it can generate manullr advantages for refinancing, enable manufacturers to offer their customers a one-stop shop and be a powerful boost for sales. nullo determine whether individual OEMs would benefit from establishing a banking or leasing captive, companies should ask themselves a number of strategic nulluestionsnullnull it feasible for them to bundle their sales financing activities in a central entitynullnullould they provide the entire financing themselvesnullAnd so on. nulle discuss these nulluestions on the following pages. nulle also look at the real-life story of how one manufacturing company effectively leveraged captive finance, resulting in tangible improvements across a wide range of areas. nullnally, we present our five rules of thumb for using captive finance as a multipurpose strategic tool, from aligning the financial services unit as a support function for the sales units to modifying the system of nullnull. nulle believe that the time has come for all OEMs to develop an effective sales financing strategy. nullot only will doing so protect their current profit levels null it will help them discover new areas of untapped potential. 2 Roland Berger Focus Captive financeContents1. From third-party financing to one-stop shop . 4As competition grows, OEMs are increasingly considering captive finance as a strategic tool2. Understanding the new reality . 6New accounting standards are forcing manufacturers to re-examine their approachCase study . 8 Optimizing KION Financial Services 3. Lessons learned . 11Five rules of thumb for effectively leveraging captive financeCoverIllustration: AlonzoDesign/GettyImagesCaptive finance Roland Berger Focus 3nullying large machines or vehicles such as trucks, agricultural enulluipment, cranes, printing machines or production machinery is a manullr investment. nulle nulluestion inevitably arises of how to finance such purchases. nulln the past, only a minority of manufacturers of capital goods such as these offered financing options, while most customers needed to organize funding for the purchase of capital-intensive assets themselves. At best, the manufacturer had a loose partnership with a third-party providernullmore often than not, they simply referred the customer on.nullw did this situation arisenullnulle truth is that most of the markets for these capital assets had a very low level of competition. OEMs null original enulluipment manufacturers nulldid not need to offer sales financing in an organized, professional manner as the customers would come to them anyway. Only in the automotive industry and a few other sectors where competition was traditionally high did OEMs have the motivation to offer customers a nullne-stop shopnull selling them the asset and at the same time taking care of their financing needs. nullor enullmple, nullolkswagen established a leasing subsidiary as early as nullnull and acnulluired a banking license in nullnull.nullings began to change for OEMs at the turn of the twenty-first century. nullowing globalization, rising transparency and macroeconomic factors increased the level of competition in the market for capital-intensive assets. OEMs were forced to react. null most cases they continued to cooperate with third-party providers, often formalizing or enulltending these partnerships. nullhat might mean referring customers to one or more cooperation partners and receiving commission for doing so. Or it might mean working with a single partner and using the OEMnull own brand for the financing solution nullknown as a white-label approach nullwith the OEM potentially receiving some of the profits through a kickback payment. null could even mean the OEM setting up a nullint venture, being careful to strike a balance between the higher management costs that it incurs and the profits that it nullnternalizesnullin this manner.Another option nullthe approach that we focus on in this study nullis for OEMs to set up their own nullaptivenull finance company, be that a captive bank or a captive leasing company. null this case the OEM offers its own financing solution to customers for the purchase or lease of its products and acts as a complete one-stop shop, as we currently see with some car manufacturers and industrial goods producers. nullhen it comes to leasing, of course, the enullstence of a large enough, linulluid secondary market for the specific asset is key. After all, offering leasing only makes sense if the returned asset can be resold or at least has some residual value. nulloducts with short innovation cycles tend not to have a secondary market as users generally want the very latest technology.OEMs face a choicenullnullould they establish a captive finance company, or continue cooperating with a third-party financing provider as in the pastnullnulleir decision will be driven by a number of criteria. Obviously, the size of the potential market in terms of revenue is significantnull As a rule of thumb, the annual financing volume of the 1. From third-party financing to one-stop shopAs competition grows, OEMs are increasingly considering captive finance as a strategic tool.Growing globalization, rising transparency and macroeconomic factors have forced OEMs to react. 4 Roland Berger Focus Captive financeA: Captive finance or third-party solution? Different approaches for different marketspotential new business needs to be Enull null million or more in order to nullustify setting up your own captive. null there is a high level of standardization of the assets and a strong preference for leasing among customers, OEMs should consider setting up a leasing captive. null, on the other hand, customer demand for loan financing is strong, OEMs should consider setting up a banking captive. nulle larger the share of profits from servicing the assets, the more attractive the option of offering lease financing. Of course, the OEMnull own credit ratings also need to be adenulluate to ensure stable refinancing of the captive. A 1) According to old accounting standardsSource: Roland BergerREFERRAL MODELWHITE LABELJOINT VENTUREREFINANCING PARTNERSHIPLEASING/ FINANCING PRODUCT OFFERINGLeasing & financingLeasing & financingDepends on legal structureOften leasing only (financing requires banking license)ON/OFF- BALANCE SHEET FOR OEM1)Off-balanceOff-balanceOn/off-balance depends on split of shares in joint ventureOff-balanceDESCRIPTIONReferral of customers to one or more cooperation partners by OEMOEM receives kickback payment from partnerReferral of customers to a single cooperation partner by OEM However, financing solution is branded with OEMs brandOEM receives kickback payment from partnerOEM and partner establish own legal leasing companyJoint venture offers highly individual leasing services to its customers and internalizes entire profit (which is shared)OEM offers own financing solutions To refinance its activity, OEM uses partnerships with partner to “shift“ the assetCaptive finance Roland Berger Focus 5nulle introduction of the new accounting standards nullRnullnull and nullRnullnull has had a manullr impact on the strategic considerations of OEMs and is likely to continue to do so in the coming years. nullRnullnull deals with how revenue is recognized for accounting purposes. nullior to the introduction of the new standard, when an OEM sold an asset to a third-party leasing provider, which in turn leased the asset to a customer referred to it by the OEM, the OEM could record the entire price as revenue the moment the leasing contract began, although the OEM gave a residual value guarantee. nullnder the new standard, the OEM can only record the difference between the price and the residual value of the asset as revenue over the period of the leasing contract, as was previously the case with captive finance. null other words, when working with a third-party leasing provider, OEMs can no longer realize the price of the asset immediately nullmaking this type of cooperation no more attractive than providing your own financing.nullRnullnull deals with leasing. nullfore the new standard came into force, OEMs would establish nullperating 2. Understanding the new reality New accounting standards are forcing manufacturers to re-examine their approachleasesnullwith third-party companies so that they did not have to include the assets as a liability on their balance sheets. nullis meant that the OEMs had higher refinancing costs, but their leverage ratio did not increase. nullnder the new standard, all leases need to appear on all balance sheets. nullhe OEM has to record the asset nullwith or without refinancingnullon an individual contract level, for a high markup from the third-party leasing provider. As a result, the business model for third-party leasing providers essentially no longer enullsts, and new forms of portfolio refinancing make more sense for OEMs. B nulle new accounting standards are changing the ground rules for OEMs. At the same time, macroeconomic factors are forcing them to diversify their profitability by tapping new income streams, for enullample by transforming their sales financing from a service-focused activity to a profit-focused activity. Add to this the growing market pressure and it is clear that OEMs need to take a long, hard look at their current strategies and adapt them to the new reality.nullis is where captive finance comes into its own as a B: All changeImpact of the new accounting standardsOEMS (WITH PARTNERSHIP)New requirement to realize revenue over time, if residual value guarantee was given, and reduce total revenue by residual valueTHIRD-PARTY PROVIDERNo changeCUSTOMERElimination of off-balance leasing solutionsOEMS (WITH CAPTIVE)Elimination of off-balance refinancing solutionsIMPACT OF NEW ACCOUNTING STANDARDSSource: Roland Berger6 Roland Berger Focus Captive financenullird, if the OEM decides to offer sales financing itself, it should ask itselfnullnullow will nullmeet my refinancing needsnull nullnder the new accounting standards, sale-and-lease-back solutions on an individual asset level do not offer significant advantages and are very costly. OEMs should therefore focus on two portfolio refinancing optionsnull bond refinancing and Anullnull nullasset-backed securitiesnull re-financing. nulle former is only suitable for OEMs with very low leverage ratios and outstanding credit ratings from the capital marketnullin return, it offers attractive conditions and has lower operational renulluirements. null contrast, Anull refinancing offers highly attractive conditions but renulluires OEMs to have very precise, up-to-date data on the assets, their use and the conditions that apply. Moreover, only specific assets within the portfolio are suitable for Anull refinancing nullassets with values above half a million euros are challenging, as the cluster risk is too high.“Key in our joint project was the early integration of the sales & services units into the process. Only with a holistic approach did we find a suitable solution to support KIONs growth.“Wolfgang KhneManaging Director KION Financial Servicestruly multipurpose tool nullone that manufacturers would be ill-advised to neglect. nulltentially setting up a captive finance company should be high on the nullief nullnancial Officernull agenda as it can generate manullr advantages for refinancing in the area of leasing. null can also boost profits and improve revenue steering. null will likewise be of interest to the nullad of nullrategy as it enables manufacturers to offer customers a one-stop shop. At the same time, it strengthens the support provided to the nullles department, makes it easier to control prices and discounts, and removes any dependency on third-party providers. nulle nullad of nullles will likely be in favor, too, as captive finance can be a powerful tool for increasing sales.STRATEGIC QUESTIONS FOR OEMSnullen weighing up the pros and cons of establishing a captive finance company, it can be helpful for OEMs to discuss a number of strategic nulluestions at board level. nullrst, if they currently offer sales financing via various units, they should ask themselvesnullnullan nullbundle all my sales financing activities in a central entitynull nulleally, they should align all the products and processes in this entity closely with the sales units so that they provide optimal support for the sales units and the sales process. nulle other advantage of this approach is that it addresses the desire of customers for a globally standardized offering.nullcond, before detailing their enullct target operating model, OEMs must ask themselvesnullnullhould nullprovide the entire sales financing myselfnullnull nullf they choose to go down this path, they will need their own leasing or banking license. Of course, OEMs have the advantage of direct customer access and also possess strategic advantages compared to third-party financing providers. nullor enullmple, thanks to their superior asset know-how and uninullue ability to manage the residual value of their assets, OEMs can offer much more competitive prices than traditional financial institutions.Captive finance Roland Berger Focus 7nulle nullOnullnulloup, with its main brands nullnde and nullnullnull is the largest manufacturer of industrial trucks in Europe and the second-largest in the world. null is also a global leader in automation technology. Roland nullrger worked with the company to develop a long-term strategic plan for its sales financing activities and tap the enormous potential that nullOnullharbored.nullnce its flotation on the stock market, nullOnulls leasing activities had been reported in its nullnancial