Ford Motor Credit Co. is off to a “good start to the year,” according to executives on the company’s first quarter earnings call Thursday.
Ford Credit’s managed receivables were at $113 billion in the first quarter, up $7 billion from the same time a year prior, according to the captive’s earnings released last week. Contract placement volume for new and used retail loans was at 323,000 for the North American segment, up from 308,000 the same period last year.
The company also ended the first quarter with $483 million in pre-tax results, down from $499 million at the same time a year ago, which the company attributed to “lower portfolio pricing in all geographic segments.”
Over-60 day delinquencies dropped to.13% in the first quarter, down from 1Q14’s 0.16%, and the company’s repossession rate was 1.00%, down from 1.12% at the same time a year ago. This quarter’s repo rate was the company’s “lowest first quarter result on record,” according to Michael Seneski, chief financial officer.
Competition in regards to subprime is rising in the industry as a whole, Seneski said during the call, while the company’s high risk volume has remained “consistent.”
“It’s getting more intense as we see banks and other players try their hand in this area. I’ll also say we’ve seen that in the past and it tends to play out the way it plays out,” he said. “We look at our portfolio in terms of what we deem as higher risk, and we have consistently said that about 5% to 6 % of our portfolio is higher risk. If you look at our ABS transactions, it’s been really consistent over time, it shows that the percent under 650 Fico has been remarkably consistent around 17% to 19% for years.”
Despite the rise in competition, through, Seneski added that he doesn’t believe there is “much of a story in subprime,” he said. “If you look at the subprime industry, it’s actually flat year over year for the new business, and it’s actually down year over year for the used business.”
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