John Hughes, managing director of Mann Island Finance, discusses the challenges faced by the company and the wider industry since the start of the Covid-19 pandemic.
It is encouraging to see the UK progress on the various road maps to re-opening across the UK. After a year of unprecedented challenge, we can countdown to the milestones that will see us all return to freedoms we had previously taken for granted, hopefully for good.
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It has also been a year when Mann Island Finance doubled its market share and, in recent days, saw us hit a significant milestone of our own.
In early May, Mann Island Finance’s total lending passed the £1bn barrier. I’m very proud to say that as a dedicated motor finance business, we have very firmly come of age. Having been founded as a motor finance brokerage in 1991, today under the ownership of Investec Bank, Mann Island has evolved into a highly credible motor finance company.
Today, 85% of our activity is as a lender. Still, while only 15% of our business is as a broker, helping dealers close complex consumer and notably business transactions, our broker DNA continues to serve us well. This has been particularly evident during the pandemic.
We may be the ‘new kid on the block’ as a lender, but the team, across the UK in the field and at our Liverpool headquarters, has an enviable level of experience working with dealers. Empathy with the plight of our dealers and the many customers seeking forbearance support has been all-important.
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By GlobalData“I have no doubt that the wheel of our industry has turned faster and further than at any time in my long career and that it will neither go back nor its trajectory slow.”
Personal service has been married to an innovative digital capability. The result has been fintech capability combined with an understanding of the retail motor industry and its operating model to provide digital and personal service capabilities.
In an unprecedented year, Mann Island stood side-by-side with our dealers and their customers. We may have been home-based from Day 1, but we kept lending throughout. There was no change in risk appetite, but there was plenty of agility in meeting the challenges and changes required as they rolled in.
I know we were not the only lender to adopt such a stance, but it was not a universal position. The strategy we adopted consciously was centred upon three factors:
- Our primary customers (dealers) needed support, as did their customers;
- Mann Island has always been a ‘can do’ business and we were not going to change now;
- Because we could; Mann Island is well backed by Investec and they are committed to our growth.
Our lockdown road map was clear:
From Day 1 – the business moved to homeworking seamlessly; there was no break in service.
Also, from Day 1:
- To help dealers and provide consistency in what were ‘choppy waters’, no credit restrictions were introduced;
- All customers seeking forbearance help were offered deferrals, no questions asked;
- Throughout, nobody was furloughed; in fact, we recruited 28 new starters during lockdown;
- New technology was developed and deployed to help dealers both online and offline to enable customers to buy and finance their car or van;
- The business increased communication to dealers and customers to keep them informed of support measures to help them.
We have cemented friendships with dealers, welcomed new dealers and doubled our market share. At the same time, we have established Mann Island Finance as a credible challenger finance business upon which dealers can rely.
“Service and reputation will become significantly more critical for today’s empowered car buyers in the years ahead.”
Reflecting upon the last year, I saw, as I have in other challenging times, the resilience and agility of the motor retail community. The pandemic, new market disruptors and significant regulatory change courtesy of the Financial Conduct Authority have been faced head-on. I have no doubt that the wheel of our industry has turned faster and further than at any time in my long career and that it will neither go back nor its trajectory slow noticeably.
We are emerging into the often referenced ‘new normal’. Many customers are happy to buy a new or used car online, but not all; customers are better informed and protected than ever before; the move to alternative fuelled vehicles will gain momentum and the car distribution model has and will continue to see new players.
I am sure that as the industry adapted during the pandemic it will continue to do so. In terms of used vehicles, dealers can and must continue to provide an omnichannel choice for buyers. Finance providers like Mann Island must help dealers meet this change.
One final factor that we must all look to keep building is service. In every customer’s decision-making, a value model exists. The decision is rarely made on price alone.
As we look to the strategies of some of the would-be disruptors seeking to gain a foothold, service through the buying experience is very prominent in their marketing. The advantage for dealers is that they can provide service offline and online.
I have no doubt service and reputation will become significantly more critical for today’s empowered car buyers in the year ahead. Service to our dealers and their customers is at the core of our model; it has helped our reputation grow and provided a differentiator that many of our dealers value.
We will continue to roll up our sleeves and help our dealers, living up to our mantra of working harder to make more deals happen.
