PROFILE: JOHN COFFEY, MD, FORD FINANCIAL
BRITAIN
Brian Rogerson talks to John Coffey about the
importance of customer care
Go deeper with GlobalData
John Coffey is managing director of Ford Financial Britain. His
career to date has been significant and one from which he has
achieved a wide variety of management and executive skills. But
experience has led him as a lender to believe that one lesson is
more important than any other. That is the need to understand a
business’s customers, to treat each one on his own merits and to
provide a bespoke service that meets his specific needs.
Ford Financial Britain is part of FCE Bank plc, which, from its
headquarters in Brentwood, Essex, UK, has operations in some 19
European countries. As an indirect wholly-owned finance captive of
Ford Motor Company, Ford Financial Britain plays a crucial role in
supporting the sale of Ford, Jaguar, Land Rover, Mazda and Volvo
vehicles throughout the UK. During 2007, the UK operation
contributed some 24 per cent of FCE’s total European receivables.
The next largest was the German subsidiary with 22 per cent of the
total, followed by Spain with 13 per cent. With the sale of Jaguar
and Land Rover to Tata Motors, Ford Financial Britain will continue
to fund those vehicles at the point-of-sale (PoS) for a period of
up to 12 months.
Coffey has headed the UK lender since 2006 when he took over the
reins from the retiring Peter de Rousset-Hall. He brought to the
job a career background that is both classic and well-rounded:
classic because he started at the bottom and was involved with
financing a diverse range of assets – not only cars, and
well-rounded because he also cut his teeth on overseas
challenges.
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By GlobalData
Firm foundations
Born in Yorkshire, Coffey joined Ford Motor Credit (FMC), as it
then was, from an earlier position with Zurich Insurance. It was
1980 and, at the age of 20, Coffey was appointed to the company’s
Leeds branch. “At the time,” he recalls, “FMC had 17 branches
throughout the UK and I was employed as operations assistant to act
as a general backup at times of peak workflow. Some of this was
collections work which taught me much and stood me in very good
stead later when I was underwriting deals. It also taught me that
many defaults are usually unintentional which made me develop a
different perception of customers.”
Later, following promotion to trainee zone manager, he had the
good fortune to land as a customer the first non-supporting Ford
dealer in the Leeds branch territory for five years. The success
led to his appointment as zone manager in East Yorkshire where he
specialised in funding Ford cars, commercial vehicles and
agricultural equipment, learning, in the time-honoured way, the
skills of doing business with the farming community.
His next appointment was as resident finance and insurance
(F&I) business manager at TC Harrison, one of the UK’s largest
privately-owned Ford dealer groups. Based at the company’s
Rotherham dealership Coffey says that he found his biggest
challenge was “dealing with competing finance companies”. Few
positions in the finance sector are more demanding than that of a
dealership F&I manager, requiring, as it does, a complete
understanding of the customer and the vehicle sales process. The
full support of all sales staff is also a must.
In 1987 he moved to FMC’s Newcastle office as assistant branch
manager and two years later to head office in Brentwood as a
regional operations specialist supporting the branch network. His
first full branch as manager was Ipswich in 1991 where he had
responsibility for the East Anglian region, followed the next year
by a move back to Leeds as branch manager. “I was very pleased to
be back,” he says, “since Leeds was the second largest branch in
the network.”
Foreign challenges
Following another spell in Brentwood as marketing manager in
1994 he was appointed general manager in Greece tasked with setting
up a FMC operation from scratch. Up to then Ford’s representation
in Greece had been through six importer distribution companies and
Ford was now in the process of establishing a single national
distribution operation. Coffey’s challenge was to take advantage of
EU banking legislation which had allowed the manufacturer to form a
bank – FCE – in 1992 and to use that as the lynchpin for a finance
operation in Greece.
“It was truly a green field site,” he emphasises. “It involved
researching the market and how the Greek banking system worked.
Greece was very much an emerging market in those days with limited
experience or background of West European finance products.
Consumer retail business was just evolving, as were credit
reference bureaux, and a Greek version of Control of Hiring Orders
were in place. We developed our product range which included retail
motor loans secured by a pledge.
“We started recruiting staff early in 1995,” he says, “and we
opened the doors on 4 September 1995 – the very day my daughter was
born. By the time I left some three years later, we had all Greek
Ford dealers operating on wholesale funding and had retail support
from some 22 – compared to six when we started.”
He adds: “All market plans were achieved during the three years
– and I had probably never worked so hard or enjoyed myself so
much.”
He returned to the UK in 1997 to work in Ford Credit’s European
head office as manager, New Markets and Associations, and then
director, New Markets and Central European Sales Operations. Here
he oversaw the establishment of the finance company’s operations in
Russia and a joint venture in Saudi Arabia. The latter involved
forming a leasing company which operated under Sharia law.
In 2002 Coffey took over the leadership of the Global Operations
and Technology organisation in Europe with responsibilities which
included the management of two customer service centres in the UK
and Germany. It also meant the implementation of Six Sigma (“a good
tool set”), quality and process management as well as taking the
business lead for FCE’s technology infrastructure.
Bearing fruit
It was at this point that his interest in the Institute of
Customer Services (ICS) began to bear fruit. “Ford Credit had some
involvement in the institute since 1999,” he says, “but had not
really utilised it. I believed that it represented the opportunity
for a real win for our staff. It offered a programme that gave
staff a professional acclaim and which buoyed their esteem and job
satisfaction.”
Coffey became a Companion Member of the ICS and is committed to
enhancing Ford Credit’s service proposition to his entire customer
base. Upon his appointment to his present post in 2006 he began the
process of changing Ford Financial Britain’s approach to gaining
and retaining customers.
He explains: “The finance marketplace has changed significantly
since I joined some 28 years ago. Then PoS finance was much in
demand and extremely convenient compared to the other options
available.”
Now, the decline of finance at the PoS has meant the penetration
of new car finance has fallen from 70 per cent in 1997 to 46 per
cent in 2007, and that of used car finance from 25 per cent to 20
per cent over the same period. “In addition,” he notes, “the
consolidation of dealer groups, and the consequent scale of
potential new business from such dealer groups, has led independent
lenders to devise packages for both retail and wholesale funds –
and to tempt some groups away from where the captives had a
definite and traditional advantage.”
It begs the question: is a future role for manufacturers’
captive finance companies? Coffey is definite that there is – but
with a radical re-structure of the way in which they do business
and a fight-back at the PoS.
He is an ardent supporter of the Finance & Leasing
Association’s (FLA) Specialist Automotive Finance initiative where
some 3,400 individuals have passed the competence test since it was
launched in October 2007. Moreover, the numbers of registered users
now stand at over 4,820 with 12 of the UK’s top 20 dealer groups
taking part and around 380 dealerships fully involved.
Some radical views
Coffey also has radical views on relations with customers. He
believes that unless lenders genuinely understand the “language” of
their customers they will have little chance of delivering the
service standards that will attract them in the first place – and
retain them later. He sees his challenge at Ford Financial Britain
as being to reverse the general trend of recent years, where
diminishing sales volumes have become the norm, and in 2007
achieved a year-on-year increase in volume. Coffey attributes this
achievement to offering customers the products that they want –
rather than what lenders think they should have.
“Lenders have to provide customers with what they expect in
terms of car purchase. If not, they will simply move on and find
one that does,” he adds.
In the meantime, like the rest of the automotive finance
industry, Coffey is facing the likelihood of an economic downturn
and a period of illiquidity amongst lenders. He believes that,
although not immune to the turmoil in the industry, Ford Financial
Britain is well placed to counter it. FCE’s funding policy is to
optimise securitisation opportunities since they are at present
more cost-effective than unsecured funding, and allow access to a
broader investor base. Also, with most of the company’s contracts
having a life of three years or less, some of FCE’s funding for
2013 is already in place.
Nor is there a current problem with defaults. Coffey explained
that there is virtually no difference in 30, 60 and 90-days arrears
compared to 12 months ago. “The pay-off,” he says, “is that we have
not had to amend our underwriting approach in recent months –
unlike many of our competitors. We are going for growth and I
believe that with increased evidence of reticence among the direct
lenders PoS finance will become a better proposition than
ever.”
An active and lively man, Coffey is married with two children.
His interests include cycling, walking and rugby union where he
plays an active role in the day-to-day management of his son’s
local rugby club.
Motor Finance Issue: 44 – June 08
Published for the web: June 26 08 11:59
Last Updated: June 26 08 12:5
