Evaluation of a Car Leasing-Offer
Nowadays, car leasing is a common practice as already more than every second newly registered vehicle is financed by a leasing.
Hüsler Marc & Krummenacher Marco, 2020
Bachelor Thesis, VZ VersicherungsPool AG
Betreuende Dozierende: Silke Waterstraat
Keywords: Leasing, USP, Profitability
The low-interest environment is even amplifying this trend. This in turn impedes the banks’ operating business as the margins come under pressure and interest payments to central banks due to high cash balances might become an issue. To tackle these circumstances, the authors evaluated for a Swiss financial institution if the excess cash could be used to enter the car leasing business. Therefore, the goals of this bachelor thesis are to analyze if the Swiss car leasing market is attractive to join and if the entrance can lead to profitability.
For this purpose, the Swiss car leasing market is evaluated using Porter’s Five Forces framework based on the data gathered through literature. Moreover, the competitors and their products are analyzed and compared. Combining these findings with the economic costs of a leasing offer lead to a cost-volume-profit analysis. Based on this model, a breakeven evaluation will be carried out and a five-year business outlook will be presented. Also, the authors aimed to detect potential synergies inside the client’s organization and opportunities for establishing USPs.
After the analyses, the authors can conclude that the Swiss leasing market is influenced by strong competition especially as brand-tied leasing providers have advantages in pricing and distribution channels. However, other factors of the market such as the suppliers’ power or the rather low threat of new entrants provide attractivity. Hence, if a successful way of distribution can be found, the entrance based on the market situation seems reasonable. The CVP analysis built on internal and external data to represents a result as accurate as possible led to the needed contract volume to break even. Further evaluation of the established customer base of the client led to a quantity construct that is in coherence with the calculated break-even figures. Furthermore, the five-year plan indicates that a leasing offering can reach profitability in a timely manner, no matter which scenario is chosen.
The authors recommend to pursue the project further and clarify crucial aspects such as the concrete product design aligned with the risk management, the distribution channels, and the marketing strategy to ensure a successful product launch.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance