NMAC to Offer Subscription Service if Demand Persists, President Says

Nissan Motor Acceptance Corp. has plans in the works to offer consumers a subscription service if that’s where the market continues to shift, company President Kevin Cullum told Auto Finance News.

The captive is looking into several options to support the market demands toward the subscription space.

Although he said the subscription model is more of a “niche” need for specific markets — dense urban areas in particular — the captive is “looking at several options to support the opportunity,” Cullum said.

He did not provide specifics on the vehicles offered, the perks included in the subscription, or pricing.

While Cullum doesn’t believe subscriptions will have a substantial impact for another “20 to 25 years,” NMAC will join other OEM subscription services exploring the field, including BMW USA, Ford Motor Co., Hyundai Motor Co., and Volvo Cars.

In the near term, the captive’s main focus is more on risks that could impact the industry, specifically, rising interest rates.

“Dealers have operated at a low-interest rate environment for almost a decade, and as rates continue to increase it’s putting pressure on their operations and profitability,” Cullum said.

In a rising interest rate environment, it can be difficult for dealers to manage inventory to support subprime customers, who are more severely impacted by rising rates. “As a captive, we’ll continue to support the dealers to adjust their business models as we get back into a stable interest rate environment.”

Cullum was tapped as president in August 2017, replacing Mark Kaczynski who is now vice president of administration and finance for the company’s luxury brand Infiniti Motor Co.