Investment crisis in Germany: The future of the leasing industry at risk?

The investment crisis in Germany, which was already noticeable in 2024, is continuing in the current year. According to a report by the German Economic Institute (IW), the volume of real gross fixed capital formation fell by 2.7 percent in 2024. This means that the investment level is 6.3 percent below the values ​​of the pre-Corona year 2019. Geopolitical upheavals have led to foreign demand for German capital goods being dampened, which is further affecting Germany's international competitiveness.

Uncertainties in the energy policy transformation course cause additional uncertainty, while infrastructure deficits make a sustainable investment offensive more difficult. The leasing industry remains dominated by equipment leasing, which accounts for 86 percent of business. However, the investment volume in equipment leasing fell by 4.3 percent. In contrast, real estate leasing increased by 8.5 percent but still has a small market share. In addition, the rental purchase volume fell by 5.3 percent.

Leasing market is changing

The leasing rate for mobile capital goods fell slightly from 26.2 to 26.1 percent. What is particularly noteworthy is that leasing of cars and station wagons continues to play an important role, despite a decline of 2.0 percent. However, positive developments were observed in the area of ​​buses, trucks, trailers and vans, which increased by 1.2 percent. Agricultural capital goods and medical technology also show positive trends, but are only represented with a small market share.

An alarming result is the decline in leasing volumes in the areas of air, rail and water vehicles, which were reduced by 53.2 percent. The leasing industry is also recording an increase in newly registered purely electric cars (BEVs), which increased by 0.3 percent to 215,500 vehicles. The leasing share of BEVs in new registrations increased to 56 percent in 2024, compared to 41 percent in 2023. The IW association survey indicates further investment weakness for the coming year. A majority of associations look to the future with negative investment prospects and emphasize the need to develop clear perspectives for public infrastructure in order to stimulate private sector investment activity.

For detailed information about the leasing market report 2024, further information can be found in Report from the German Economic Institute as well as in Leasing Association to find.