While a looming economic downturn has prompted auto financiers to find strategies to protect profit margins, Consumer Portfolio Services Chief Financial Officer Jeff Fritz said lenders should be thinking about how the personal transportation model is transforming.
“Don’t be so occupied stamping out the ants that you miss the elephants coming over the wall,” Fritz warned the audience at the Auto Finance Risk Summit last month. “It’s something we need to be aware of and think about, more than the impending recession,” he said.
Fritz referred to rideshare and ride-hail companies, such as Uber, Lyft, and Zipcar, and also pointed to automakers like Tesla, which promised to deliver increased connectivity and “robot taxi fleets,” as the Wall Street Journal reported in April. Fritz also called attention to the fact that more young people are passing on driver’s licenses. That sharp decline may threaten the number of personally owned vehicles, he added.
“Do you get the feeling the ground is shifting underneath your feet a little bit and that the personal transportation model in this country is undergoing significant changes?” he said. “These companies — these alternatives — none of these existed 10 years ago. And yet today, they’re here to stay.”