Expanding into the Used Car Market
We have decided to focus on the much larger used car market, where leasing is not as prevalent, stated the CEO.
Choosing Bonds over Stocks
We opted for bonds instead of stocks as we need debt to expand our operations, and the bond market is a good place to raise additional capital for an innovative company like ELG. This comment was made by Asen Asenov, CEO of ELG leasing company, on the “Business Start” show on Bloomberg TV Bulgaria.
Interest in the bond issuance exceeded the proposed number of bonds.
Market Confidence in ELG
Asenov commented on the market’s trust in our company and strategy, stating that a good performance could lead to further offerings, including shares. He reminded that ELG successfully placed all the offered bonds during the second initial public offering (IPO) of debt securities on the growth market beam of the Bulgarian Stock Exchange last week. “The company offered 5,000 common corporate bonds with a face value of 1,000 euros each, with a maturity of 60 months,” the manager reported.
Investment in Three Companies from the Group
An investment of 5 million BGN has been raised from both funds and individual investors, with interest also coming from international investors. According to the spokesperson, the funds will be distributed among three companies within the group, supporting their development over the next few months.
Challenges in the Leasing Industry
Our previous leasing company for new cars had been facing difficulties in sourcing low-cost resources and competing with the banking leasing companies that have consolidated in our market in recent years. This transition has…
The Shift Towards Used Cars in the Automotive Industry
Manager explains the reason behind ELG’s decision to realign its business towards used cars, stating that the demand for them was a natural progression.
Asen Asenov points out that leasing activities in Bulgaria are directly linked to the number of cars sold, with the current ratio of new/used cars being 1 to 5, compared to the previous 1 to 8 or 9. He highlights the significantly larger market for used cars, with approximately 120,000 cars sold in the same period compared to around 26,000 new cars. This shift allows ELG to tap into a much larger market.
Leasing penetration in the automotive market
The manager explained that the penetration of leasing is not as high as one might think. For new cars, around 50%-60% are leased, while for used cars, the penetration is around 15%-20%. He also added that the growth in sales of used cars for the first half of this year, compared to the same period in 2023, is 18%, while for new cars it is 36%.
The impact of EU goals on the used car segment
According to the CEO of ELG, the EU’s goals for more electric vehicles will shrink the segment for used cars, but he expects this process to continue for years. He also reminded that the company is developing a business strategy to adapt to the changing market trends.
Why ELG’s business in North Macedonia is shifting towards used cars
ELG, a leasing company in North Macedonia, is planning to shift its focus from new cars to used cars. The company sees potential in the market for used cars, especially those aged between 3-5 years. This move is driven by the demand for affordable and reliable vehicles in the region.
Is ELG planning to re-enter the Romanian market?
While ELG is currently focused on the used car market in North Macedonia, there are no immediate plans to re-enter the Romanian market. The company is prioritizing its expansion and growth within the current market before considering any new ventures.
What are the prices of used cars?
The prices of used cars vary depending on the make, model, and condition of the vehicle. ELG offers competitive pricing for their used cars, making them an attractive option for customers looking for quality vehicles at affordable prices.
Challenges facing leasing companies and the impact of Bulgaria’s entry into the eurozone
Leasing companies face various challenges, such as economic fluctuations, changing consumer preferences, and regulatory changes. The entry of Bulgaria into the eurozone is expected to bring both opportunities and challenges for leasing companies operating in the region. It is crucial for companies like ELG to adapt to these changes and stay competitive in the market.
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