MORE than 500 private vehicle leasing deals have been concluded by the long-term joint venture between listed transport and mobility group Imperial Holdings and furniture retail company JD Group since its launch in January.
Half of these transactions were originated in the past four months, David Smith, the managing director of Ariva, the trading name of the joint venture, said last week.
Smith said the majority of these vehicles had been rented to customers whose applications for finance had been declined by the traditional banks.
Through Ariva, these customers were able to drive a new vehicle of their choice while also providing the supplying dealers with incremental vehicle sales, he said.
An additional 100 new dealers were accredited to offer customers this affordable motoring solution, boosting the total number of Ariva accredited dealers to 250 countrywide, Smith said.
“The month-on-month growth in the number of vehicles being rented through Ariva is encouraging. While a small number of these vehicles have had to be repossessed, Ariva has been able to re-rent a significant number of them to new clients,” he said.
Smith said Ariva was closely tracking its three-year business plan but the lack of awareness of vehicle owners fully appreciating the true cost of vehicle ownership continued to be the largest barrier to the growth of private leasing.
Manny de Canha, the chief executive of Imperial subsidiary Associated Motor Holdings and an executive director of Imperial, said in May this year that the target was to get to 100 vehicle leasing deals a month in the short term and 2 000 deals a month within three years.
Smith said the monthly finance instalment continued to be perceived by consumers as the benchmark for the cost of vehicle ownership, with many people ignoring the ongoing monthly costs of insurance, maintenance, tyres and vehicle tracking subscriptions.
Ariva aims to provide an affordable motoring solution to consumers through a fixed monthly rental, which includes a full warranty, service plan, comprehensive insurance, roadside assistance, accident management and a tracking device.
Smith said the all-inclusive offering from Ariva provided significant benefits over traditional instalment sales financing while the fixed instalment allowed clients to accurately budget their monthly expenses.
The success of Ariva in the past six months had led to the accreditation of the 100 additional dealers, who represented brands such as General Motors, Ford, Mazda, Volkswagen, Nissan and Toyota, he added.
When Ariva was launched, its private leasing option was only available on select models from Renault, Proton, Daihatsu, Chery, Kia, Tata and Hyundai. Since then it has expanded the initial brand offering to include more high-end models.
“These additions to our dealer base and product offering are proof of the value the local motoring industry sees in our business model. We are excited to have more brands on board as we are committed to expanding and enhancing the selection of brands and models for our customers to choose from,” he said.
JD Group stock advanced 0.79 percent to close at R47.27 on Friday while Imperial Holdings declined 0.22 percent to close at R188.59.