In his new role as Volkswagen Credit Inc. CEO, effective Jan.1, Horst Meima says he will draw from what he’s learned during his 22 years at the automaker.
His plans for the captive finance arm include more meetings with VW, Audi and Ducati dealers to better understand their needs, improving consumers’ financing experience to bolster brand loyalty and developing strategies that adapt to today’s stricter regulatory environment.
Meima, 47, will oversee all functions of VW Credit from Volkswagen’s U.S. headquarters in Herndon, Va.
He has climbed the ranks at VW Credit from commercial loan officer to his current post as CFO. His roles at the captive have included vice president of sales and marketing and CEO of VW Credit Canada Inc. He was also CEO of Volkswagen Bank USA, which closed in 2007.
Meima spoke this week with Staff Reporter Hannah Lutz.
How will your previous roles at VW Credit inform your new position as CEO?
Reflecting on my time in Canada, the role of leading the captive finance arm is similar. Although the market is different in the United States, the mission is the same: providing a premium level of service to the dealers and supporting the brands by acquiring and retaining more customers.
I was vice president of sales and marketing at VW Credit during the financial crisis. You learn from things that worked and didn’t work. In 2008, for the better part of 18 to 24 months, we were in the midst of a mess from a financial services standpoint, like most other banks and captives.
We did some things well, such as staying the course with leasing. But we became a little bit too restrictive on floorplanning. You learn from those past experiences.
What are your goals for 2016?
First and foremost, I want to ensure we are on top of the primary dealer issues or concerns. I already have a pretty aggressive travel schedule during the first quarter to meet dealers around the country.
I want to learn dealers’ primary pressure points and what we can do as a captive to better service their needs in lending.
We plan to work closely with dealers to improve levels of service. There’s room for improvement -- not that we’re bad, but we’re not where we need to be as an organization.
We are looking to improve the overall consumer financing experience, all in the effort of improving brand loyalty. Right now we know the likelihood that customers will stay with the VW, Audi and Ducati] brands is higher when they finance with the captive than when they finance with a bank. We’re trying to put together a digitalization strategy to enhance the customer financing experience. We want to make it easier and more seamless when they walk into a dealership.
Currently I would consider myself to be in a back-office position, not dealer facing at all. There’s nothing better than feedback straight from dealers. Anytime you get dealers around the table, you can walk away with at least two to three ideas to work on.
What challenges do you expect to face in 2016?
I’m not sure “challenge” is the right word. Given the current regulatory environment, it’s “adapting.” There’s a fair amount of focus as it relates to fair lending and consumer complaints. We want to make sure we are more than prepared to address these fair lending topics as they come up. With the Consumer Financial Protection Bureau, the regulatory environment continues to evolve. We are trying to work with what we have and make sure that any potential fair lending concerns are more than adequately addressed.
How will the VW emissions scandal affect VW Credit’s business?
Volkswagen and Audi have done a very good job of putting dealership programs in place to see dealers through this window. Working closely with the brands, we are providing some financial support and working closely with one another to see that we all pull through this together.
How has the emissions scandal affected your loan and lease volume?
Given the really robust financing programs and offers, our volume and penetration levels have not gone off at all. Our retail and lease penetration is actually higher than last year. It’s a testament of Volkswagen’s and Audi’s programs in the marketplace, all in an effort to help the dealers’ business.
From a planning standpoint, loan and lease penetration should be consistent in 2016 when you compare to 2015 volumes.
Where does VW Credit stand on electronic contracting?
It’s not where we’d like it to be yet. We’ll finish off the year in the high 20 percent range. We really need to have the full service solution in place, and I think there might be a few enhancements to make to increase the overall utilization rate. It’s a function of working with DMS providers. We would like our e-contracting volume to be more than double what it is today next year.