Annual conference addresses issues In the retail automotive channel

Approximately 60 executives representing the leadership of the American Financial Services Association’s (AFSA) Vehicle Finance Division and the National Automobile Dealer Association’s (NADA) dealers and staff met this week in Washington, DC, to discuss ideas, issues and concerns for the U.S. automotive retail channel.

Also joining the discussion were representatives of the National Association of Minority Dealers (NAMAD); the American International Automobile Association (AIADA) and the Arizona Automobile Association.

On a survey of concerns among AFSA’s auto finance lenders, some of the biggest issues today are cybersecurity; fraud; handling of voluntary protection products; hiring, training and retaining employees; and strength of dealer relationships/dealer satisfaction.

Larry Hund, AFSA Vehicle Finance Division Chair and President of Harley-Davidson Financial Services, Inc., noted that lenders are working hard to build reputations with their dealer customers.

“We need to use Artificial Intelligence (AI) and Machine Learning as ways for lenders to drive more efficiency into their operations by helping employees reach better decisions on underwriting, loss mitigation and collections,” Hund said.

Other issues echoed by AFSA members for their particular companies ranged from the opportunity presented by block chain and AI, to state regulators and attorney generals filling the void created by a change in leadership at the Bureau of Consumer Financial Protection, to rising interest rates.

“Lenders and dealers are feeling the impact of rising rates on floor plan financing,” said Dale Jones, Executive Vice President Americas & Global Operations, Ford Credit. “But consumers need affordable financing.”

Ross Williams, President & CEO of Hyundai Capital America, said there is opportunity for companies to align technology in the value chain of manufacturing, dealers and lenders to enable efficiencies that will help better serve customers.

“Great employees in the future will be those who are knowledgeable and helpful to others to enable the use of technology across the entire enterprise,” he said.

NADA presented a recent study it commissioned with Luntz Global which shows that consumers’ demand for owning vehicles remains strong across all demographics.

The study responded to recent reports saying that the emergence of ride-hailing services like Uber and Lyft, combined with the prospect of electric and autonomous vehicles will dramatically reduce the number of personally owned vehicles in the future.

One of the key findings from the study shows that 89% of the respondents said they would rather continue owning a car versus 11% who said they would prefer using ride-hailing services as their primary source of personal transportation.

Chris Stinebert, President & CEO of AFSA, noted that the first annual AFSA/NADA Executive Forum meeting was held in 2009 as the industry was gripped in a credit crunch and a global recession. The result led to the bankruptcies of General Motors and Chrysler and a shake-up of the auto finance industry.

“Today we have a set of different issues to discuss, so it is important to keep this important dialogue going and to continue this important partnership,” he said.