Chase auto unit CEO is bullish on lending outlook
Marc Sheinbaum has been CEO of Chase Auto Finance since 2007. Though he will leave the finance company at the end of March, Sheinbaum remains bullish on the outlook for continued growth in auto lending this year.
In a recent survey with 200 of its dealers, Chase found that most respondents said they expect business to improve in 2013, and 35 percent said they expect to hire three to five full-time employees this year.
Chase Auto Finance, based in Garden City, N.Y., is a perennial heavyweight in auto lending. It's the preferred lender in the United States for Jaguar, Land Rover, Mazda and Subaru.
In 2009, Chase was No. 1 in the nation in auto loan originations. At the time, General Motors and Chrysler were going through bankruptcy and restructuring, and their preferred lenders, GMAC and Chrysler Financial, morphed too. Chrysler Financial is now TD Auto Finance. GMAC became Ally Financial, the preferred lender for both GM and Chrysler.
Ally Financial took the No. 1 spot in new-car financing in 2010 and won the No. 1 spot for new and used combined in 2011 and 2012.
But Chase hung in there as the competition rebounded. Chase's overall outstanding auto loan volume at the end of 2012 was $49.9 billion, up 5 percent from 2011. Its 2012 originations were $23.4 billion, up 11 percent. That's not far behind 2009, when Chase was No. 1 in originations with $23.7 billion. In overall volume, Chase is bigger than it was at the end of 2009, when it had $46 billion outstanding.
For all of 2012, Chase was among the top five U.S. auto lenders in both new- and used-vehicle originations, according to Experian Automotive.
Sheinbaum, 55, spoke with Special Correspondent Jim Henry during the National Automobile Dealers Association convention in Orlando in February.
Q: It's tougher for lenders, but it's good news for dealers to have a lot of lenders competing for their business, right?
A: If you're a dealer, there probably couldn't be a better time from a performance perspective. There's a lot of competition out there. Dealers have lots of choices. As a result, all of us need to be on our "A" game.
In 2009-2010 we got a lot of volume, probably because everybody else was pulling out.
Certainly some dealers remember that. We've been here in good cycles and we've been here through the debacles. We know the right thing to do.
How does it look for 2013?
The good news today is that the pie is getting bigger. In consumer lending, auto finance and student lending are the only two categories that have increased.
Consumers have fixed their balance sheets and paid down debt. There are a lot of old cars on the road.
They're more confident about jobs, and they're more confident about their indebtedness levels. And they need to replace their cars. All three of those things are coming together, according to our dealer survey.
What about dealers?
The dealers who are alive today know how to survive a 10 million-unit market. According to our survey, they are adding people -- not a lot of people.
Dealers are being prudent, but people are getting excited about auto sales. A lot of great products are coming out and people are excited about that. The table is set pretty nicely for a good year in 2013.
Is the survey you announced recently an ongoing thing?
We are having an ongoing dialog with our customers, and that's the dealers. That's a great thing for us to be doing.
You will see us do more of that. We're not partners only with the OEMs, we're partners with the dealers as well.
A year ago you wanted to make sure customers were more aware of the Chase brand and the "Chase Customer Experience." How's that going?
We have taken steps in the back office rather than the front. But the difference can be seen in things like whether you have a mortgage or a credit card or an auto loan, there's only one chase.com and whether you reach us that way or through our call center or from your smartphone, in any manner or form, you're still going to get that same Chase Experience. It's really resonating with our employees, the Chase Experience is going to be a differentiator with Chase.
What's the customer-facing part?
We're also adding more capabilities, like chase.com on mobile where today you can make a payment -- you'll be seeing some more things there.
Are you looking for more business with automakers?
We are quite proud of our business with the OEMs. We have great partnerships, and we get renewals, which are a good affirmation -- we renewed with Subaru last year [in 2011]. It speaks to the fact that we really do know what we're doing in automotive.
What about commercial lending to dealers?
That's been the fastest-growing part of our business. After many years of not too much growth, in the last two years there has been some dislocation among the captives.
We have a great product. We bring the whole bank, not just floorplanning. We have grown our share of floorplan with Mazda, Jaguar, Subaru, etc. It's been a concerted effort.
You're going to see a lot more of that in the coming year. It's competitive. There are so many choices out there.
You can reach Jim Henry at firstname.lastname@example.org.