Six months in to his role as managing director at Experian Automotive, Alistair Scullion tells Fred Crawley and Richard Brown dealers are now retailing cars, not selling them.
Experian is best known as a credit checker. The company estimates two-thirds of all credit applications in this country go through its analysts.
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It operates across Europe, North and South America and East Asia in banking, automotive, telecommunications, utilities and government. In March it produced a poverty index of 326 local authorities in England.
As well as the credit checking facilities for finance providers guarding against bad lending or consumers with borrowing fears, Experian also provides fraud and authentication scores and affordability assessment to go beyond an individuals credit profile.
It also has a series of integrated marketing services that can track and assess when and what websites a consumer visits or provide a provenance check of a vehicle.
And new MD Alistair Scullion believes Experian Automotives products and indexes, beyond just credit checking, offer the motor finance industry the ability to address the issues of indebtedness and affordability in a more practical way than regulation alone.
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By GlobalDataFor Scullion, businesses hinge on knowing how a small change in a customers fortunes affects their risk position and, beyond that, how "economic factors might tip certain groups of customer into a position where they find it difficult to service debt.
"Look at the consumer trend in the market around uncertainty of employment, around reduced disposable income and, until very recently, inflation going up," he says.
"Consumers are seeking out value in vehicle purchase and finance package. Motor finance companies are equally looking for that, equally looking to put forward offers appropriate to the customer."
The point of understanding
One area in which Scullion is seeing particular interest from car finance customers is the gap between prime and sub-prime, for which Experian is providing credit-risk profiles and insight to help adapt credit strategies.
Scullion stops short of calling such provision consultancy work, emphasising instead Experian offer insight to aid customers own decisions and "which customer groups they want to target, how to acquire them and manage them once they get on board."
For those companies wanting to widen the scope of who they lend to, Scullion says customer profiling again comes back to "the basic principle of understanding your customer.
"We are seeing a huge increase in the number of consumers who are doing their searching, both for the vehicle and the finance, online before they actually have a conversation with the finance company or a dealership.
"Previously a dealership would have a catchment area of 20 or 30 miles. Because customers are searching online you might have a consumer who will travel 150 miles to get the vehicle they want
"So the question from motor financers is: How do we understand who those potential customers are and how do you reach them from a market in perspective so that they will travel to this dealer and will take the vehicle and will take the finance?"
Scullion agrees that although acquiring and retaining new custom rests with finance companies Experians services such as HitWise provide the segmentation and online tracking to do so.
"We actually start to give dealers, and motor finance companies, a view of potential customers activity across the internet. More of our customers are coming and asking us for that.
"Dealers are saying we are more than selling cars, we are retailing them. That is the mindset and motor finance companies move hand-in-hand with that because there is such interdependence between captive finance and the dealership, or even independents and the dealership."
Core investment
Both captive and independent, Scullion is pleased with Experians potential to read the market. The company already has the largest three motor auction houses, 60 of the AM 100 dealerships and roughly half of the top 250 taking its provenance data, risk analysis and / or application software, and has increased its penetration of the independent market in the last year.
Scullion attributes the increased scope to a partnership with Trader Media Group including the embedding of Experians Autocheck service on the Autotrader website for the past 12 months and a deal to distribute drive-away insurance packages from Aviva, which Experian will sell, to the independent market.
"In motor finance we have most of the independent sector and a large majority of the captive finance organisations," says Scullion. Including the auctioneers, "those are traditional, core markets in the automotive sector and we are investing a lot of money in them at the moment.
"Over the last 12 months, we have doubled the strength of our relationship management team primarily to serve the dealership and motor finance markets. We want to get closer. By doing that, using all our data and analytics, we can provide better insight; thats where the real value of what we offer comes to bare."
fred.crawley@timetric.com and richard.brown@timetric.com
