After a comprehensive review, Mazda Motor of America Inc. is switching to Toyota Financial Services as its partner for consumer auto loans and leasing, Mazda has confirmed to Automotive News.
For the last decade, Mazda has used JPMorgan Chase as its financial arm under the Mazda Capital Services name. Starting April 1, Mazda will switch to TFS.
Jeff Guyton, president of Mazda North American Operations, said Wednesday in an interview via email that Toyota's financial arm offers deep experience in the auto sector that will bolster Mazda's financing services to dealers and customers.
"The intent of this partnership is to provide enhanced financing and protection options for customers and dealers," Guyton said. "Chase has been a great partner for Mazda for the last 10 years, and after a thoughtful review of many options, it was clear TFS can best meet Mazda’s business needs moving forward. Their deep knowledge of financing within the auto industry will be a good fit for our dealers and customers."
The shift to TFS further tightens Mazda's ties with Toyota, which is a partner with Mazda on several projects, including an assembly plant under construction in Alabama and a production agreement at a factory in Mexico that provides subcompact cars sold in the U.S. under the Toyota Yaris nameplate.
Guyton said that partnering with TFS was a logical extension of the current partnerships between the two Japanese automakers.
"Mazda and Toyota are collaborating in carefully selected areas of our business where there are benefits for both partners, such as development of electric vehicle architecture in Japan, or our joint manufacturing project in Alabama," he said. "Sales finance operations in the US presented another opportunity for synergy."
In a Wednesday filing with the Securities and Exchange Commission, Toyota Motor Credit Corp. said it would start providing services to outside auto and mobility companies.
"Toyota Motor Credit Corporation ... has commenced preparations to launch private label finance services for third-party automotive and mobility companies," the filing said. "In furtherance of this new business initiative, on August 28, 2019, the company entered into a financial services agreement ... with Mazda Motor of America, Inc."
Toyota said its finance arm and certain affiliates "will offer exclusive private label automotive finance, lease, and wholesale dealer financing products and services, and vehicle protection products and services, to Mazda customers and dealers in the United States, launching at various times through fiscal year 2021," the filing said.
Toyota said its obligations under the agreement include "the provision of services in the areas of customer service, field sales, customer collections" and payment processing for a five-year period with automatic one-year renewals, the filing said. Toyota said it expects to make technology investments to support the Mazda program but will not be acquiring any existing Mazda assets under the services agreement.