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'We truly feel like a captive': GM Financial Canada

Published November 2013

Howard Cobham

From time to time GM Financial republishes news and articles that have featured our products or the perspective of our leadership team. The following story is an excerpt from the October issue of Canadian Auto World.*

It's been a busy two years for the team at GM Financial Canada. National rollouts of many products have meant expansion and development in an increasingly crowded market.

Howard Cobham, senior V-P of dealer services, recently caught up with Canadian Auto World to review where the captive has been and where it is headed.

Canadian Auto World: GM Financial Canada acquired FinanciaLinx in April 2011 and since then has introduced a national leasing program, a retail non-prime option and full-scale commercial lending this past March. How is business?

Howard Cobham: It's been a crazy two years. All three of those are significant initiatives, especially when you are taking them out to a national dealer network like General Motors. But I think the culmination of the three products have helped position us as a true captive in Canada for General Motors.

When GMF Canada started, dealers recognized us as FinanciaLinx. Now dealers proudly view us as GM Financial.

And you can add to that the new remarketing program.

GMF Canada in April assumed the remarketing responsibilities for GM Canada's daily rental and company vehicles. This responsibility was previously held by Ally through Smart Auction. Coupled with our end-of-lease remarketing initiatives, GM Financial will be working closely with GM Canada and the Canadian dealer network to facilitate the purchase of the majority of used GM product in Canada.

Early in 2014, we will be introducing GMF DealerSource, which will give GM dealers a one-stop shop for the purchase of the majority of used GM product in Canada.

GMF Canada's push into commercial lending came at a time when the market started heating up.

We launched in March of this year. Later in the spring we saw the sale of Ally to The Royal Bank of Canada. As part of that sale, there was an opportunity for GMF to work with a subset of Ally's stores. We were successful in securing 30 stores that helped get us off to a really good start in the commercial lending space and to initiate our flooring in Canada.

How do you ensure your offerings stand out in a crowded market?

We're only focused on GM dealers, though we will support GM dealers who have non-GM franchises.

The key is to be competitive and offer all the other suites like inventory finance insurance, image program capital and other forms of financial facilities dealers need. When you look at it as a full package, the dealer can know GMF Canada will intimately know its business.

How is the lease portfolio shaping up?

We are probably just below 10 per cent lease share currently. We have a desire to see that number range closer to the 15 to 20 per cent mark. GMF Canada feels that is a good average for the market as some players sit at much higher rates while others are far lower.

We are encouraged because GM is building phenomenal cars that are earning major awards like the ATS and Impala (2013 Cadillac ATS was named North American Car of the Year while the 2014 Chevrolet Impala took top honours for sedans, according to Consumer Reports) that are helping drive up residual values to levels that GM has never really seen naturally in its portfolio. By building some of the best cars in the world, it is starting to work well with respective to supporting lease.

GM Canada was absent from the lease market for roughly five years. How does GMF work to kick start that business again?

We recently hired a national trainer, Todd Steffen, who brings over 15 years of auto finance training to GMF Canada.

He will be working with our dealer network to further position leasing in their stores and carry a major focus on our non-prime initiative. There is a significant opportunity in Canada to support the credit-challenged customer base and we know dealers need a lot of training and support to understand how to best go after that market space.

We also have nonprime training for GM dealers nationwide. Dealers can view a webinar on the GM learning management system. In-store training for sales consultants will be available in late August through September

You talk about supporting your dealers; can you give examples?

We have listened to our dealers about how to provide better service and support. We opened a Vancouver office in January that gives us extended hours of support and affords us better market focus on western Canadian business, which has been getting stronger month over month.

We also just hired two remote credit underwriters that will live in Quebec and help further the Quebec marketplace.

On top of that, we recently launched the Canadian version of our website with a French version. I think it is very robust and presents the organization very well.

*Reprinted with permission from Canadian Auto World. Please visit Canadian Auto World to read the story in full.