Dealers serve as the sounding board to what plans, tactics, and strategies OEMs and captives implement, John Thacker, national director of sales for Kia Motors Finance, told Auto Finance Excellence.
“If [Kia] has a new plan or program and we want to pilot it, we run it by our dealer council because their feedback is essential,” Thacker said. “I don’t want to put something out there that [dealers] have no appetite for.”
Across all lender segments — luxury captive, mass market captive, and non-captive — lender relationship is the heaviest-weighted driver of satisfaction, according to the J.D. Power 2018 U.S. Dealer Financing Satisfaction Study, released last month.
To that end, AFE spoke with three top executives from Nissan Motor Acceptance Corp. (NMAC), Hyundai Captial Finance, and Kia Motor Finance to discover what these captives are doing to keep the communication line with their dealers open and efficient.
Have an Accessible Service Staff
The most noteworthy strategy captives can implement is having a readily available team of credit staff and sales reps that dealers can count on.
“If lenders can ensure credit staff is readily available and knowledgeable, they will see a boost in dealer satisfaction,” said Jim Houston, senior director of the automotive finance practice at J.D. Power. “Satisfaction declines by 163 points, on a 1,000-point scale, when dealers are not able to reach the credit staff. Additionally, if lenders can communicate the best contact for dealers to reach out to for non-traditional questions, the resolution time decreases, which will, in turn, increase dealer satisfaction.”
NMAC has a program that the captive calls “an alignment for success,” President Kevin Cullum told AFE. What the program does is assigns a service team to each dealer in the country. The team consists of local field reps, dedicated credit analysts, and funders.
“When dealers have an issue, they know whom to go to and whom to talk to,” Cullum said. “The team is a dedicated resource to help communicate with the dealer not only with portfolio performance and education programs but [the team] is also responsible for handling any service issues that the dealer may have in a prompt and timely manner.”
“It eliminates any confusion or delay in service for the dealer, and it gets them quick responses, so they know whom to ask,” he said.
Ranked No. 3 on J.D. Power’s list of top captive finance companies for dealer satisfaction, NMAC’s strategy seems to be working and aligning well with what dealers are looking for.
Make Sure OEMs, Captives, and Dealers are on the Same Page
For any captive, it’s obviously imperative to work with the OEM closely, Kia’s Thacker said.
“We make sure we are in lock step with the manufacturer,” he said. “We identify target dealers together and determine where we need increased sales volume or increased penetration through the captive.”
Once the OEMs and captives are on the same beat, the monthly national dealer council meeting serves as a time for collaboration and updates on business, competitive landscape, penetration, and performance.
Kia also ensures physical meetings where the brand has local councils in each of its five regions where a team in the field participates. “We spend a couple of days going through dealer concerns around profitability, servicing, and everything,” Thacker said. “We can’t finance a car until a dealer sells it.”
Also, Kia has quarterly physical meetings with dealers where they weigh into the OEM about issues they see. “They are the voice,” Thacker said.
Create a Dealer Culture
It’s vital to create a culture where the dealers know how critical their engagement is. For Hyundai, that means creating what the captive calls a “voice of the dealer” environment.
“It’s ingrained in how we do business,” Erick Gonzalez, national sales director for Hyundai Captial America, told AFE. The captive even has a dealer appreciation campaign that it markets internally to show testimonials from the captive to let the dealers know they have the captives support.
Coming in 2019, HCA created a dealer partner program where the captive is going to reward the dealers that are the most supportive with the captive. “We determine which dealers are the most engaged with our products,” Gonzalez said. “We’ll reward them through financial and servicing rewards, a bonus for dealers that are the most supportive.”