Leasing Equipment Can Save 20 Percent in CostsBy Alejandro Enríquez | Thu, 08/27/2020 - 10:43
Q: What role does the automotive industry play within CHG Meridian’s operations?
A: Thirty percent of our client portfolio is in the automotive industry. We are a German company with more than 10 years in the Mexican market. There are important German automotive companies in the country and we support them with their investments in production lines, machines and other technologies. Large global players also trust us to meet their technology needs. At the same time, we support local companies by financing their industrial equipment and other technologies. The automotive sector plays a key role for CHG Meridian and our commitment to the industry is strong. Our outlook remains overall positive for the middle and long term.
Q: How do your ‘global standardized prices’ help companies to be more competitive?
A: We are a global company with a footprint in over 27 countries. Global companies are looking for a unique, yet standardized solution for all countries where they operate. Mexico is an important destination for the automotive sector and we can offer a global platform for companies working here and for companies that want to work here. We are working with customers that are looking for standardized solutions, which is an advantage for us.
Among our clients is one of the largest automotive producers in the world that has several manufacturing facilities in the country. Our business relationship goes back 10 years. We have a very good relationship with the company’s headquarters in Germany, while maintaining a local approach and close communication to adapt solutions to the local context.
Q: How do you help companies to adapt to the automotive industry’s dynamic context?
A: We believe that as a company we can maximize the productivity of our customers’ employees and processes thanks to the leasing schemes we provide to give them access to state-of-the-art machinery and technological. With attractive leasing schemes, companies have the opportunity to update their equipment regularly, which helps them to adapt quickly to new production requirements.
Q: How does technology leasing help companies to save costs?
A: There are several contributing elements. The first is the tax benefit. All rentals are 100 percent tax deductible. We also take into account our equipment’s residual value, so our customers are not amortizing 100 percent of their investment on machinery. We can also help our customers generate savings because they are able to access the latest technology. If you have the newest machinery you can produce more components, improve your productivity and generate savings. We believe that under a smart leasing scheme, companies have a great deal of room to reduce costs. It is different from company to company and it also depends on the nature of the activities, but savings usually average around 20 percent.
Our leasing schemes are flexible and accessible to meet our customers’ needs. At the end of the day, we do not directly supply any machinery, which assures our autonomy in supporting the technical decision our customers prefer. Based on the technical requirements, we can offer a financing solution while integrating several brands or distributors. If needed, we also take into account technology integrators and installation in the lease agreement.
Q: What potential do you see to grow in the Mexican market?
A: Mexico has been one of our fastest-growing markets over the last few years. The country plays a relevant role among our 25 locations and we see great potential considering the imminent enforcement of USMCA. With this new trade deal, Mexico will be more closely integrated into North America. Companies in the country will benefit from the close relationship with the US and this region will be stronger in the future and so will the Mexican economy. Our expectations remain high for Mexican companies.
Q: What are CHG Meridian’s strategies to assure good results by the end of 2020?
A: We are facing a global pandemic. History has shown us that crises are temporary, but the issue is that we do not know when this pandemic is going to end. My expectation is that companies will restart production in June at the latest. For us, some sectors will be more complicated than others, and some segments are outperforming others. We can compensate low sales in one segment with good sales in others. 2020 will be a solid year for us.
As for the automotive sector, 2Q20 will be complicated. However, in the middle and long term it will not be so bad. Society will change. People could reasonably choose cars over public transportation. In China, for instance, new car sales in April have jumped compared to last year as public transportation users are starting to buy cars. At the end of the day, we have a growing population in need of mobility solutions. The automotive sector will keep growing, although growth will be regional rather than global.
Q: What are some strategies the company has implemented to adapt to the COVID-19 crisis?
A: We continue to work using all the digital solutions we have at hand. We have already digitalized most of our processes and that allows us to keep track of our goals. Optimism is always important. Better times follow a crisis. Analyzing the market’s trends is really important. I keep in touch with other CEOs, as well as other country offices, to take advantage of emerging trends. Within our office, we support each other regularly while remaining open-minded about how we can satisfy the needs of the market.
CHG Meridian is a German leasing company with operations in 27 countries. The company specializes in tailor-made leasing schemes for technological equipment and machinery across different sectors