LAS VEGAS — Despite a push for newer and younger customers to its brand, Mitsubishi Motors Credit North America Inc. is focusing on loans — rather than leases — through its financing partnership with Ally Financial Inc., said Mitsubishi’s Chief Operating Officer Don Swearingen.
“I look at some of our competitors whose [lease penetrations] are at 50% or 60%, and we seem to give ownership a different tone,” Swearingen told AFN during a meeting at the National Automobile Dealers Association Expo. “Yeah, [consumers] like this lease price, but [they] want to own this car at the end. They don’t view lease as ownership because [the vehicle] is gone at the end of three years.”
A 2017 Edmunds study found that one third of millennial car sales were leased — more than for any other age group. Mitsubishi’s deemphasized lease book gives it a leg up on competitors contending with a flood of off-lease volume, Swearingen added.
“We’re not a huge leasing company, probably 15% of our vehicles are leased,” he said. “Our volume is controlled, we’re able to do some closed auctions, which helps control the residual values of the cars and also to make sure we’re not flooding the market.”
Ally is supporting Mitsubishi’s approach to both loan and lease products across the U.S., but there have been “challenges” to set up the right program that fits the OEM’s needs, Tim Russi, president of auto finance at Ally, told AFN.
“We’re really excited to have Mitsubishi on, I mean hell, they are one of the fastest growing OEMs,” he said. “One size doesn’t fit all in this industry — [Ally has] different strategies, different products, different consumers — and we’re trying to support [Mitsubishi] best we can, and that relationship gets better and better everyday.”
Mitsubishi is the fastest growing non-luxury brand with 2017 sales up 7.7% year over year and sales through the first three months of 2018 forecasted to be up 22% compared with the year prior, Swearingen said.
