LAS VEGAS — Market competition and a potential economic downturn are spurring expectations of slowing originations in 2020, four senior executives from the nation’s largest lenders said during the Auto Finance Summit 2019.
Senior executives from Consumer Portfolio Services, GM Financial, Huntington Auto Finance and Westlake Financial — whose books of business range from $2.5 billion to $98 billion — expect origination growth next year. However, more than 50% of the audience anticipated flat or declining originations, according to live poll results revealed during the Summit.
“We’re still waiting for a recession,” said panelist Charles Bradley, CPS president and chief executive. “Winter is coming — there is going to be a recession, probably not next year, but maybe in 2021 — that influences the pessimism that’s going on.”
Yet, some panelists are experiencing origination growth at levels unseen before. Third-quarter originations grew 29% year over year for Westlake Financial, mostly in the near-prime segment, said Group President Ian Anderson. Westlake’s portfolio totaled $7 billion as of Sept. 30.
Increased market competition will also pressure growth next year. “There is increased competition in every segment of our business,” said GM Financial Chief Operating Officer Kyle Birch, noting that the captive is going into 2020 with a focus on growing market share of auto loans versus leases. “It’s easy to look at overall sales and think ‘[originations] are going to be down,’” he added.
Huntington Auto Finance balked at the audience’s sentiment, especially if used-car values remain stable, said President Rich Porrello. “I’ve been wrong about used-car values falling for years — that’s been great,” he said. “Used-car values more than likely will come down in 2020, but I want to be wrong.”