Nissan Motor Acceptance Corp., the U.S. captive finance company for Nissan and Infiniti, has boosted its share of dealer business to 67 percent for the six months ended Sept. 30, up from 46 percent three years earlier.
Nissan Motor Acceptance President Mark Kaczynski insists that his company increased its share not by spending more on incentives, but by shifting its incentive spending so that more ended up with dealers.
Kaczynski has been Nissan Motor Acceptance president since December 2011. Before that, he was controller of sales and marketing for Nissan Americas. He spoke with Special Correspondent Jim Henry.
Your dealer penetration is way up.
We've increased our year-to-date penetration to about 67 percent right now. That's probably a benchmark for the industry. We've never run that high.
Have you climbed steadily?
We've continued to improve. In the last year and a half we've made significant progress. About four years ago we were in the 40s or so. Last year we reached the mid- to high-50s. This year is a significant step up. Year to date, we're up almost 10 points.
How are you doing that? Is it all about more incentive money?
A lot of it has to do with changes we've made with regard to funding. Our capacity has increased and our service centers have been improved. We've also made some changes to our advance structure. We've also gone to [offering] a 75-month term.
It's not necessarily more spend. It's just a different way to spend the money.
Kaczynski: "We've got traction in the market. The dealers understand the loyalty and customer satisfaction element that brings those customers back in their showrooms."
How have incentives changed?
It's more the structure of the incentives. Instead of an incentive in the form of a subvented APR, we have gone to a "captive cash" strategy, where there is incremental cash if you finance through the captive.
How is that better for dealers?
Captive cash can be used in conjunction with standard-rate APR, which is available for markup. A subvented rate is not eligible for markup.
So, for instance, if it's 0 percent, there's a flat fee instead of dealer reserve.
Right, or an extremely low number that's above zero.
Does the dealer or the customer get the "captive cash"?
With Infiniti it's really "captive dealer cash." The dealer is eligible for additional dealer cash if the deal is financed through the captive. With Nissan, we have captive cash available to the customer — if they finance through the captive.
So all these things are catching on?
We've got traction in the market. The dealers understand the loyalty and customer satisfaction element that brings those customers back in their showrooms.