Over the last few
months, employees of the nation’s car lenders have been working
harder than elves in an arctic toy factory to give UK consumers –
and regulators – the magical gift of CCD compliance.
Although the CCD story is by no means
over (see Funders differ in CCD
approach), the implementation of the directive
was the last hurdle in a year that saw the motor finance industry
bounce back from an altogether forgettable 2009.
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Bad debt got better, dealer finance
penetration rose in the absence of competition from other sources
of lending, and the new government managed to avoid alienating the
consumer finance sector.
Captive finance got a little bigger
and bolder as manufacturer pockets grew deeper, the bank-owned
players held up well, and some independent funders reaped great
returns.
No one left the point of sale game
that wasn’t already on the way out (but then no one made a
significant entrance either!), used car finance saw a revival from
many quarters, and contract hire started to turn some heads as an
industry to invest in.
Now, as everyone heads home to a week
or two of well-earned rest, what does the motor finance industry
hope that Santa will bring it this Christmas?
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By GlobalDataSome businesses, it seems, have
already been downstairs to have a feel of the presents.
For a start, Leasedrive Velo knows it
will find around 30,000 vehicles in its stocking, courtesy of
Investec Capital Markets (see Masterlease deal will see Leasedrive Velo triple
fleet).
Hitachi Capital Vehicle Solutions will
have plenty of vans to play with too, after announcing the purchase
of Newton Vehicle Rentals’ business and assets as this letter was
being written.
Someone else might be in line for a fleet windfall
too, with the news that Leaseway Vehicle Rental is looking for a
buyer in the immediate future.
In the point of sale world, Carlyle
Finance may have a happy new year in the offing as its parent bank
FirstRand sizes up the potential to sell bonds backed by its paper
(see page 5).
Meanwhile in the world of the
manufacturers, General Motors has enjoyed a respectable return to
the stock market, and in the UK is putting a lot of energy into
reinvigorating the Vauxhall brand.
Supporting it will be a recently
energised GMAC, the pseudo-captive funder that GM only has a
minority stake in. GMAC – or Ally Financial, as it is called in the
States – may have turned like an oil tanker through a year of
divestments and changes, but looks at last to be facing straight
towards the right place (see GMAC shrugs off identity crisis).
It has rebranded as Vauxhall Finance
to consumers in the UK after a record year of sign-ups, and must
have some capital to spare after the sell-off of non-motor
operations.
One wonders if, in time, it will look
for other brands to take under its wing? After all, reading between
the lines, there seems to be no reason for it to support GM
exclusively for ever. After all, GMAC has funded Saab vehicles for
some time despite the brand having been sold to Spyker in the
Netherlands.
One gift the industry as a whole may
receive, and which would be a boon for all manufacturers, is the
beginning of a new boom in awareness of PCP products from
consumers.
There are plenty of people out there
who can’t put off replacing their old vehicles much longer, and
would usually look to picking up a cheap used vehicle. However, new
car supply has been constricted for so long that the nation’s used
car parc is starting to look thin around the edges.
With used cars getting scarcer and
holding their prices better, the price jump buyers need to make to
acquire a new vehicle is getting smaller and smaller. If people can
start thinking of new cars in terms of a monthly cost of motoring
rather than as a multi-thousand-pound outlay, that jump could
vanish altogether.
Factor in the vast number of former
company car drivers on the market – all of whom are used to
thinking in terms of regular payments – and the scene is set for
the long awaited PCP revolution.
Enjoy the festive season, and have a
very good start to 2011, whatever it may bring.
Fred
Crawley
fred.crawley@vrlfinancialnews.com
