Gaining operational efficiencies through artificial intelligence, navigating a challenging EV market and embracing the return of leasing were top themes at Auto Finance Summit East 2024 last week in Nashville.
GM Financial, for one, is leaning on automated decisioning and other technology to decrease funding time for dealers and to improve efficiencies across asset and document management.
Meanwhile, infrastructure, improved residual value forecasting and societal adaptations are crucial to the industry’s shift to EVs.
Electric vehicles continue to be part of Chase Auto’s private-label strategy, which makes up about 50% of JPMorgan Chase’s auto finance business. Chase has private-label relationships with EV makers Fisker and Rivian Automotive.
Leasing, too, was a topic of discussion as manufacturers promote lease deals and consumers look for lower monthly payments. Hyundai Capital in March and April saw leasing volume match pre-pandemic levels, Chief Executive Marcelo Brutti said during a fireside chat at the summit.
In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editor Ash Savage discuss top takeaways from Auto Finance Summit East 2024 for the week ended May 3.
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Transcript:
Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain.
Amanda Harris 0:23
Hello everyone and welcome to the roadmap from auto Finance News.
Since 1996, the nations leading news on automotive lending and leasing, it is Monday, May 6 and May. I’m Amanda Harris joined by our new associate editor, Ashley Savage. This is our weekly wrap on what happened in auto finance for the week ending May 3rd, 2024 and economic news. Non farm payrolls increased by 175,000 last month, posting the smallest gain in six months, while the unemployment rate ticked up to 3.9% and wage gains slowed. This falls in news last week that the Federal Reserve opted to keep interest rates steady for a sixth straight meeting, and Automotive News Vista Equity Partners backed Automotive data and software services provider Solera Global Corp last week confidently filed for confidentially Excuse me, filed for an initial public offering. The Westlake, Texas based companies IPO could launch as soon as July and raise more than $1 billion. Solera is a software as a service provider of fleet management and vehicle life cycle services, including helping insurers address vehicle claims and repairs. The company serves more than 300,000 customers. Salinas also reported Q1 earnings and saw a 20% year of year decline in North America vehicle sales to about 389,000 units, while shipments fell 20% year over year to 470,000 units. Production volume was lower during the quarter and the manufacturers focusing on smaller, less expensive vehicles and auto finance curve honor reported better than expected earnings for the first quarter as originations rose 29% year over year to 1.8 billion and retail sales picked up 16% year over year to just under 92,000 units. Other gross profit, which includes finance and insurance profits, also was up 22% year over year to $2492.00. The companies liquidity was also strong at 3.3 billion also last week. We were all in Nashville where we hosted auto finance summit E 2024. The event was filled with news and insights on technology investments, risk management, dealer and customer relations, sales and marketing efforts, and EV Dopson to name just a couple. We hosted 2 firesides Hyundai Capital chief executive Marcelo Brutti shared that leasing is back to pre pandemic levels lease in recent months at the captive and that the captive is emphasizing E funding and other technology improvements kind of a theme throughout the show. Lesie Wims Morris, president of private label, captive finance at Chase Auto, also sat in a fireside chat that largely focused on the bank’s private label, relationships of which he said makes up 50% of chase out of the business. She addressed Fisker Financial Services, which the bank formed in 2022, making it clear electric vehicles remain part of the auto lenders. Private label strategy chases also has a private label partnership with EV Maker Rivian Automotive. Private label has also served chase well and offering deals to consumers and the bank leverages those channels to drive auto business. So there is more to come on that. Stay tuned this week. Also, during the show, lenders such as GM Financial, Ally Financial, Carvana, Arvis Bank and Lendbuzz again to name just a couple more of the show, highlighted the importance of AI and technology in today’s financial services landscape. GM Financial, for one, is leaning on automated decisioning and other technology to decrease funding time for dealers and to improve efficiencies across asset and document management. I really enjoyed this show your show some of the highlights for me, including our EV debate. It was an actual debate and it was very, very fun.
For all included, we also really great demo show. Lots of great startups showed their technology and we had a really fun charity focus luncheon with a great message. And of course, the receptions, as always, were a blast. So I really enjoyed it.
Ashley, you were also intendants this year as you want to share some of the key takeaways you saw at AFS East. So take away Ashley.
Ashley Savage 4:15 Yeah, just to bounce off.
What you covered, you know, we saw similar themes, sorry across the stage at auto finance E last week, which was just an incredible turn out as you mentioned the you know the EV debate was probably one of my great, most enjoyable sessions just because it was so insightful, but also entertaining at the same time, that format was just really awesome. Several of our speakers pointed out during these sessions that these investments in technology, you know, are really allowing for a large emphasis on improving the customer experience while also supporting efficiency across the board. Some of our speakers pointed to these investments in technology with a large emphasis on improving the customer experience overall, which was just really cool to see with GM Financial. As you mentioned, we’re seeing those efforts to decrease funding time for dealers and then over at Arvest Bank, you see the same thing. They’re using tech to merge some of their preexisting processes, which also works to improve customer experience while also supporting that efficiency on an internal level, which is an interesting thought as to how they’re working to balance both of those things where it supports people on both ends. Umm in other ways we’re also seeing some market patterns start to normalize and even in some cases outperform pre pandemic levels. Which has allowed companies to give added attention to new tech as they work to elevate their processes and systems. I was so I was so excited to be at AFS E with my team to meet them because, you know, we work virtually for the most part. So being in person and being able to have these discussions, what what’s so are you?
Amanda Harris 5:49
Yeah.
Ashley Savage 5:53
What did you say, Amanda?
Amanda Harris 5:54
Oh, I just said, yeah, I was agreeing. It was great to see everyone in person. We do work remotely, so as I’m sure a lot of people listening can relate to.
Ashley Savage 6:02
Yeah, so being fully virtual, it was really nice to just be in a room with everybody and get to talk about these things and watch the sessions like the EV debate, the the demo challenge. Like you said, we got to see, you know, certain people breakdown.
This conversations on subprime lending and and consumers and that, you know, underrepresented market and what that looks like. And so I just think the conversations overall and the way that tech is being used to address so many problem specific areas was really just cool to see and and really interesting to hear about. And overall, I I was just so thrilled to meet one my team and kind of get face to face with the people that you work with every day, but also just further those conversations that we had with people that you know are interested in solving these problems and bettering every aspect from the lender to the dealer to the consumer that that was just a really fun process. And I was happy to be there.
Amanda Harris 6:52 Absolutely. Definitely some some key themes. There are very, very tech forward this show so, and of course we’ll see everyone back in the fall for auto Finance summit, so make sure you check that out the days already up as well. So you can check that out and already start registering for the Fall Show which will be in Vegas and early October. So took it out alright, well, that will do it for today’s episode, say, tuned for live show coverage. Continuing on our site, so I guess it’s a live but after show coverage continuing on our site on all kinds of topics and thank you for joining us on the roadmap. And be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net and here next time.
