South African-based Super Group is a company intent on increasing its footprint in vehicle leasing in Australia. According to its latest annual report it is planning expansion in the market, and the company may be a candidate to pick up NAB's Custom Fleet business.Super Group's first step in Australia was in June 2004 when the financier, together with a private equity consortium, acquired Commonwealth Fleet Lease from the Commonwealth Bank for $63.1 million. CBA retained the wholesale financing side of operations and the renamed FleetAustralia kept the remainder. CBA exclusively points all its new lease enquiries to FleetAustralia.In April this year Super Group, again with a private equity consortium, bought novated lease specialist SMB Fleet Management. It is paying a maximum of $61.3 million, with a first instalment of $30.2 million.At present there are no plans to integrate the two companies.Super Group has largely left FleetAustralia alone. The management team: Les Moss, general manager of finance Ken Ridge and sales boss Andrew Brown all date from the CBA days.The two companies, both 70 per cent owned by Super Group, bring lease books of 30,000 (FleetAustralia) and 14,000 respectively. This gives FleetAustralia about a 12 per cent share of the local fleet market and SMB a 5.7 per cent share.FleetAustralia is lucrative for Super Group. In the last financial year its business grew by 25 per cent while the rest of the market was flat. According to the Australian Fleet Lessors Association Fleet Leasing Update the number of vehicles held increased by 3.75 per cent to 246,000 between December 2003 and June 2005. During that same period the total cost of vehicles rose by seven per cent to $7.9 billion. The Super Group annual report states that income from Australia was $36.7 million (177.8 million rand) while operating income was $8.8 million (R42.9 million).The report, published after the advent of the current petrol price increase, says that FleetAustralia benefited from strong new vehicle sales. It said the challenge for this business is to manage the risk of the residual values of what are mostly large cars in a weak market. For example, the value of a four-year-old Commodore has fallen by $3,000 to $12,000 in the past two years.For SMB, being in the novated lease market, the residual value risk is in the seat of the driver. This segment of the market is growing at 12 per cent a year.The group's Australian debt has little risk impact on the group company's balance sheet, being secured by the pledge of shares for local subsidiaries. SMB was financed by $7.7 million in cash generated from FleetAustralia