In 2024, strong asset finance demand is expected across several sectors. Chris stated, "There's a couple of areas in particular where we see large amounts of opportunity for growth. One is agriculture. Talking to a lot of customers, they've held onto assets for an extended period of time and there's an opportunity to refresh those, particularly given some of the new technologies that we're seeing come out."
Ian agreed, "In the agri market, you're seeing quite a step change in the impact of digital and technology on agri equipment and the broader sector is clearly upgrading."
Recently, a raft of government grants has been launched to boost investment in Australia's manufacturing capability – and CommBank has plans to educate brokers and their clients on how they can take advantage.
"There's a very, very pronounced opportunity for the brokers who specialise in the manufacturing sector of the market in the next year," Ian said.
Chris also highlighted the green lending opportunity: "We're seeing a significant number of customers make the transition into green and electric assets. If I look at the market research, two thirds of customers are telling us that they are looking to transition to electric vehicles and just under2 half are considering solar for their energy consumption. Some of the technologies that have come into that space, particularly in solar energy, are good ways for customers to reduce some of their ongoing costs."
"CommBank is staying ahead of the curve in funding new assets and technology – such as biofuel and hydrogen – and we're looking for ways that we can support you. So, if your clients talk to you about any of these assets, reach out to the team. We're really keen to help customers make that transition," Chris said.
For the transport sector in particular, CommBank is seeing a renewal of stock as asset owners upgrade to cleaner vehicles. The transport sector is expected to remain very robust into 2024.
"From an economic perspective, the cost of energy is becoming prohibitively high and having a material impact on business margins. Business owners as a result are looking for a way to do things in a more cost-effective manner and are becoming much more receptive to looking at alternative fuel sources and energy sources," Ian explained.
Vehicle supply delays are easing as assets come to market faster.
"For cars, I'm still seeing improvements in turnaround times," Chris said. From a peak average supply time of about 180 days, 2023 saw average supply times ease to 88 days. Then prior to Christmas, they dropped to around 60 days.3
"We're also seeing some strong momentum in business vehicle registrations. Overall vehicle registrations last year were at around the 1.2 million mark and 50 per cent of December registrations were from business, government and rentals compared to 43 percent in December 2022," Chris observed.4