Work-from-home, e-commerce trends to continue through ’22, executives say

Shifts in the auto finance industry brought on by the pandemic, such as working from home and the rise of e-commerce, are likely to continue through 2021 and 2022, according to the top executives of some of the nation’s largest auto lenders at the 2021 AFSA Vehicle Finance Conference yesterday. Leaders from Ally Financial , Ford Credit , GM Financial and Santander Consumer USA all agree that employee productivity and engagement have remained high despite the sudden shift to a work-from-home structure nearly a year ago. “A lot of things hit us in 2020 that we weren’t expecting,” Dan Berce, chief executive of GM Financial, said during the CEO fireside chat at the conference. “Our employees have been working in a home environment for almost a year, and I would say our productivity has been just as high.” GM Financial plans to get some of its workforce back into the office in late 2021, Berce said, noting that it would be a “flexible” arrangement that would allow employees to work partly in the office, partly from home. Ford Credit, too, has seen similar productivity and engagement from its employees since pivoting to a remote structure, Chief Executive Marion Harris said. “I would also say the biggest change that we saw this past year was the shift toward e-commerce. It accelerated greatly last year, and I think its only going to continue to accelerate further,” Harris said. Surging dealer profits realized in the last few months should also continue in the near term as inventory remains squeezed, Ally Financial President of Auto Finance Doug Timmerman said. Inventory shortages, however, are pushing down Ally’s floorplan outstandings as dealers keep fewer vehicles on the lot, Timmerman explained. “Generally speaking, I think commercial assets for our business might be a little bit lighter, but we’re very bullish on the consumer side,” he said. “As we think about both aspects of the business, the increase in our consumer assets will probably offset any downward pressure relative to commercial assets,” Timmerman said. At Santander Consumer USA, employee motivation and moral has remained high amid a work-from-home structure, Chief Executive Mahesh Aditya said. Consumers’ payment hierarchy, too, has shifted to be more in favor of auto, he added. “We’ve seen a very high payment rate in our portfolio, very high pay-down rate. And from a credit standpoint, that’s obviously very good news,” Aditya said. “Those are trends we are going to be watching extremely carefully in the next year once the stimulus runs out,” Aditya said. Auto Finance Innovation Summit, the premier event for technology in auto finance, returns March 16-17, 2021, as a virtual experience. The virtual experience will offer the quality networking and education of past events, all through an online platform. To learn more about the 2021 event and register, visit www.AutoFinanceInnovation.com .

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Inventory remains a headwind

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AFSA 2021: Dems on the Hill prioritize federal all-in interest rate cap

Five questions with … Chase Auto Chief Executive Peter Muriungi

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