Photograph of Fred CrawleySome
or none of you may be keen to know how my recent trip to the US
played out. The answer is, very pleasantly, save for my habit of
unnerving my wife’s family by insisting that no one change channel
or mute the TV when a car commercial was on.

Conveniently just before I visited the
States, the Wynn Hotel in Las Vegas played host to the 2011 Auto
Finance Summit, an industry conference presented by Motor
Finance’s
Stateside equivalent, Auto Finance
News
.

Speaking about the event with Marcie
Belles, my equivalent number at AFN, I was interested to hear that
the sentiment over there rather matched the nervous optimism and
trepidation that characterised our own FLA motor finance
convention, held in the decidedly more serene environment of
Leamington Spa.

Interesting I say because, at least
this time last year, I remember hearing from a number of sources
that the US motor finance business was – to use a suitably
transatlantic idiom – coming on like gangbusters.

Now, Marcie reports, “the industry
that a year ago was on a solid growth trajectory appears to have
lost some of its momentum. Though optimism abounds — credit
performance is improved, new-vehicle sales are up, and access to
funds has eased — lenders are still keenly focused on the
challenges that lie ahead in the year to come”.

While British dealers know the new
vehicle situation has not been as clement in the UK, and we have
not seen anything like the same resurgence of volume funding the
Americans have seen, there are definitely some parallel sentiments
to be found.

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Take regulation, for instance.

“We don’t know what to expect,” said
Peter Kidd, senior vice-president of consumer auto for Fifth Third
Bank, on stage at the AFN conference.

“The important thing to think about as
the [new regulator] Consumer Financial Protection Bureau develops
and shapes the auto industry is to provide dealers with good
service and good options.”

Picture of an American flagWe
may raise an eyebrow at some of the things lenders can do within
the letter of the law in the US – inventing fictional government
acts in order to create a sense of urgency in direct marketing, for
example. But the fact remains that there, too, is an industry
treading uncertainly into the territory of a new and more vigilant
regulatory regime.

To take another example, many of
America’s largest players are expecting much stiffer competition
next year, with Wells Fargo Dealer Services executive
vice-president Bill Katafias worrying this might “drive some naïve
lending”.

Perhaps this isn’t our biggest worry
in the UK market, which remains much more underpopulated than the
US’s in comparison with 2007 levels, but it is a concern I have
heard from some credible leaders when looking ahead to competition
with personal loans providers and ambitious POS players in
2012.

Some familiar positive statements came
out of the Auto Finance Summit as well.

“We have seen very solid performance,
surprisingly, considering we are still running 9% unemployment,”
reported Steven Lambert, president of Nissan Motor Acceptance Corp,
on the subject of credit performance.

Meanwhile Katafias concluded
“manufacturers will find a way to get customers to the lot”,
whether through subvention or other incentives.

I won’t steal all of Marcie’s
reporting – the point to take home is that, despite the maturity of
the market in the States and the cultural differences to be found
there, the problems and opportunities lenders and dealers face
every day bear many similarities to our own.

As such, it may be well in our
interests to keep a close eye on what tactics US motor finance
providers are employing to tackle these issues. After all, they
have had a lot of time and market space in which to develop them,
and while some may only work within the business climate of the
States, some may be fundamental enough to import.

The purpose of this month’s round
table discussion, which featured contributions from Alex Cooke
(mentioned in this letter last month), was to start exploring some
of the techniques used in the American dealership, and to evaluate
what might profitably be employed over here. It is something I am
keen to look at further in future.

More importantly than all this,
however, I’d like to take the opportunity to thank all
MF’s readers for their support, engagement and
contributions in 2011. Have a fantastic Christmas, and if we
haven’t spoken with you in a while, please give us a call to let us
know what you are up to in the New Year.

All the very best.

Fred Crawley

fred.crawley@vrlfinancialnews.com