Japanese lender Hitachi Capital’s consumer
finance division has made the decision to commit to entry into the
UK motor finance market, after a nine month trial involving a small
panel of brokers and a car supermarket.
Hitachi Capital Consumer Finance (HCCF), which
already provides non-motor finance for around 650,000 consumers in
the UK, will conclude its retail motor finance trial in August, at
which point it will decide which route to market it will use.
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HCCF is understood to have paid out £2 million
worth of finance agreements in the month of May to date, with £3
million expected by month end, according to sources familiar with
the new business unit.
In a statement made exclusively to Motor
Finance, the company said that in addition to its current
introducer mix, it was discussing relationships with select
franchised dealer groups.
“We will thoroughly test all areas of the
market as part of our entry strategy, from small privately owned
car dealerships to multi-franchised dealerships to used car
supermarkets to vendor programmes.”
Until August, however, the business will not
be taking partnership proposals from new introducers.
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By GlobalData£1bn key markets
If the trial period is concluded to the
satisfaction of the group, the Japanese-backed lender is rumoured
to have an ambition to create a £300m-per-year presence in the
motor finance market by the 2014-2015 financial year.
This figure does not seem unrealistic, given
that HCCF as a whole intends to lend over £1billion in the current
financial year across all its key markets.
While Hitachi could not confirm the £300m
figure, the statement offered the following in response to the
suggestion that this was the target for a market presence:
“It is part of our overall business plan to
continue to grow and develop within this market – it is all about
learning and developing at this stage to understand the market
potential, in order for us to really drive our presence in it.
Unlike many banks and other financial institutions we have no
credit constraints and as such have significant ambitions for this
market.”
In preparation for the increase in scale
likely to come after August, HCCF has signed up with systems
provider Frontline Solutions to enable an XML feed of proposals to
be received through Frontline’s Rosetta system.
Gerald Grimes, managing director, Hitachi
Capital Consumer Finance: said “Utilising our strong financial
position, history, expertise, experience and lending knowledge of
the motor industry ensures we have a really strong base to enter
the motor finance market. This is a natural progression for us as a
business and we are very excited about entering the sector and look
forward to developing this over the coming months and years.”
An extended version of the article
containing further details of theHitachi market entry – including
views on manufacturer programmes and direct-to-consumer car lending
– will appear in
June’s issue of
Motor Finance
magazine.
