Graham Wheeler, Volkswagen
Financial Services
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I wonder
how many of us are still sticking to our new years resolutions?
I, for one, will admit that my
desire to live a healthier lifestyle is at the top of my list… once
I have done my duty and cleared the backlog of Christmas
chocolates, ‘for the good of the household’, that is.
However, New Year’s resolutions
when it comes to business are, quite rightly, a little harder to
break. When we look to the captive finance market in 2011, the
honest truth is that working closely with our brands and supporting
our retailers are going to be the key factors in determining
success over the next 12 months.
In October last year, the Society
for Motor Manufacturers and Traders (SMMT) forecast suggested that
the new car market will continue to suffer something of a
post-scrappage hangover, with registration volumes in the first
half of 2011 substantially below 2010 levels, and an estimated
1.928m registrations in 2011 overall.
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By GlobalDataThis will inevitably affect volumes
of finance sold. Motor captive companies who are aiming to grow
their market share will need to work more closely than ever with
their brands and networks to improve penetration.
In time, the direct lenders which
have withdrawn from the market, or which have increased prices and
toughened underwriting conditions, will return.
Captive finance companies must use
this opportunity to a large extent to demonstrate their benefits,
developing ongoing relationships with retailers and the end
customer.
As such, after-sales will be a key
growth area for dealer networks, brands and captive finance
companies looking to increase customer retention. Service plans
will be a major factor, as will increased focus on the used car
market.
The dealer networks will also need
to raise awareness of finance early in the customers’ buying
process. It is the captive finance company’s responsibility to make
this change in thinking possible, with the online arena being a key
consideration.
For all this to work, the
relationship with the retailer is therefore critical. Captive
finance companies need to be proactive in the field making a real
difference to networks, improving efficiency and showing them where
extra sales can be found.
2011 represents an opportunity for
captive finance to strengthen its position in the market both now
and in the future, by creating a “virtuous circle” of improved
customer retention.
In the time I have taken to pen
this update, I am happy to confirm that the backlog of chocolate
has been cleared from the house and I am now looking at a healthier
lifestyle.
Needless to say, the New Year’s
resolutions for our business have suffered no such delays.
Graham Wheeler is managing
director of Volkswagen Financial Services
