Lenders see aggressive OEM offers
Expect another selling season of aggressive retail lending offers. That’s the message from some of the industry’s largest retail lenders, who largely say OEMs will continue to be aggressive with consumer credit offers this summer.
“I think it’s about the same as it was last year,” Jeff Karls, GE Money’s vice president of marketing, said of the aggressiveness of the lending offers. GE Money provides retail lending for Yamaha, Kawasaki, Suzuki, Polaris and KTM.
Last year’s aggressive lending deals were little surprise as OEMs tried to spur consumer interest in a challenging economy. How, or if, that would change this summer was uncertain as Motorcycle Industry Council retail sales reports showed improved results in the last quarter of the year. On-road motorcycle retail sales, for example, were down less than 2 percent in December after declining at a double-digit percentage the rest of 2010.
“We’re seeing some very aggressive rates out there,” Karls said of consumer finance offers. “For example, rates as low as 1.99 percent over a 60-month term. Several manufacturers are offering rates of 3.99 percent, which is pretty darn aggressive as well.”
Jack Snow, CEO of Sheffield Financial, a retail lending partner to Kawasaki, Suzuki, BRP, Arctic Cat and Polaris, said he sees little change in the consumer finance environment.
“I think the OEMs are being as aggressive this year as they were last,” he said. “I think they’re asking us, Sheffield and people like us, to do more on our part to be more aggressive and to help share the expense of some of those (offers).”
Snow noted Sheffield is doing just that, both in powersports and its other retail industries.
“We’re all in this together and that’s the sort of relationship that works anyway,” he said. “We want to be a partner and not just a vendor, so we’re doing it with all of our lines of businesses.”
Not all OEMs, however, are following that course. Tom Collins, executive vice president of FreedomRoad Financial, notes Triumph and Ducati are taking a different tact.
“Ducati and Triumph both have retail finance offers,” he said. “They have some finance promotions out there, but they’re not broad-based and they’re focused on a few specific models.
“They’re really more focused on the value of the product, the value of the brand and getting away from the discounting, and we fully support those efforts.”
Copyright 2011 Powersports Business