Chase is committed to lending; share, leasing not priorities
Chase Auto Finance is as committed as ever to auto lending, but it won't hunt market share, CEO Marc Sheinbaum says.
It also won't chase leasing, he says.
Chase was the nation's No. 1 lender for new and used vehicles in 2009 and early 2010.
Since then, though, the domestic captive finance companies bounced back from the credit freeze, the recession and bankruptcy filings for General Motors and Chrysler. Ally Financial regained the top lender spot in 2010 and stayed there.
In a growing U.S. auto market, Chase's auto originations were off about 9 percent in 2011 to $21 billion, following a 3 percent decline in 2010.
Chase continues to provide private-label loans and leases for Jaguar Land Rover, Mazda and Subaru. It also has a relatively new deal with Chrysler Group to provide subvented loans.
Sheinbaum spoke with Special Correspondent Jim Henry at the National Automobile Dealers Association convention last month in Las Vegas.
Q: You exited leasing in 2008, except for your private-label brands. Would you get back into it?
A: That's not in the plan. We like leasing as a product for those specific brands, but I don't think banks should be in the position of betting on residual values. That's for the manufacturers to do.
Is getting share back a priority?
We will always be focused on making sure we generate the necessary return for shareholders, even as our volumes ebb and flow.
We are not going to respond to every single competitor. There will be times when our competitors are going to buy the rate down to zero, and you can't beat zero, right?
Are we disappointed our market share has dropped? Absolutely. Will we work to improve it? Absolutely. Does it drive our business? No.
What's on your agenda for 2012?
There's a new focus on commercial [lending for dealers].
There has been a lot of growth on the commercial side, probably the most I've seen in the five years I've been in this job. The market is very open to change.
There's a flight to quality. While the times are getting to be good, dealers are more conscious now about where they want to be when there's a credit crisis. Secondly, their inventories need replenishing.
Your strategy on the consumer side?
We're putting a lot of emphasis on giving customers a "Chase" experience, and what that means.
A lot of customers don't seem to know that their car loan is from Chase. A good Chase-branded experience is how you get treated when you call us. It's a lot of things.
We are seeing some dramatic improvements in customer satisfaction surveys.
We are working on the root causes of complaints. For instance, title release. Dealers and customers tell us six or seven days, which is how long it usually takes in the industry to get a title, is a problem.
We are working to get it down to one or two days.
Are you looking to sign up more automakers for relationships like you have with Subaru?
We have had a deal with Chrysler and Fiat. That's since August 2011.
Isn't that a "side by side," where Chrysler is obliged to offer Ally the same deal it offers you?
Will dealer participation in loans go away in favor of flat fees?
I would never say that. I think we'll see changes; that's for sure. The FTC and the Consumer Financial Protection Bureau are showing a lot of interest.
You can reach Jim Henry at firstname.lastname@example.org.