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Automotive Sales and Finance Business to go in combination?

Combining the vehicle sales process with the sale of additional products and services, including financing, leasing, extended warranties, accessories, factory delivery and performance driving technique training, etc. is a profitable and customer experience enhancing endeavor. By integrating these processes into a single point or desk makes life easier and more efficient for both the customer and the salesperson.  Customer don’t need to see several banks searching for the best loan or leasing contract and they can select the most desirable and appropriate services or accessories to create an enjoyable ownership experience, all at the same time and place with expert counsel.

Is this all just about comfort for the customer?

Combining vehicle sales and financing is both efficient and profitable.  Most OEMs have founded their own captive finance organizations to support the sale of their vehicle brands.  This combination of classical banking optimizes the sale of vehicles while creating profit for the Brand and Retailer and efficiency and value for the customer. 

But this combination of services is not only profitable for the vehicle brand and its retailers; Importers, National Sales Companies and Vehicle Distributors can also improve sales and profitability with integrated finance and service offering management.  Investment goods sales such as construction and agriculture equipment and commercial vehicles, often characterized as “fleet” sales are also prime opportunities to leverage a combined finance and service offering sales point.  Increasing the number and profitability of sales is realized by the integration of finance and service offerings at the point of sale.

But, it is more than just a simple combination – a seamless integration is necessary.

During the vehicle sales process the salesperson can easily compare various financing and leasing options and offers from numerous sources and provide the best finance proposal for the customer, in many cases exceeding what the customer can find on their own.  This in turn can optimize the opportunity sell additional products and service that the customer will see as valuable.  Additionally, special finance plans for certain vehicles, customer and dealer incentives can all be presented at this single point not only providing customer value but also helping to reduce slow moving inventory.

Access to emerging markets requires investment on all levels – new sales and service facilities, vehicle inventory, personnel and training and processes especially in finance.  Efficient and effective finance, combined with value added accessories and services enhance profit for the manufacturer and retailer while improving customer convenience and the value of the ownership experience.

What is required?

Vehicle financing requires a detailed and complete monitoring and administration of all obligations.  Multi-Brand light vehicle retailers and retailers selling commercial vehicles, agriculture and construction equipment with an integrated process must manage multiple obligations and receivables with an ever increasing number of creditors.  The transparency and accurate accounting of finance and inventory of all deal detail is demanded.  A clear and accurate view of income and cost is crucial at month end.  This is necessary not only to insure the financial position of the retailer but also to compensate sales associates and even to negotiate better rates based on business volume or utilization of finance services.

Some numbers on this evolving business:

Today approximately over 80% of global new vehicle sales were supported by finance and leasing contracts.   In the US over 50% of the 500 Billion USD vehicle finance market was covered by the captive finance groups.  BMW’s captive finance subsidiary had more than 13 billion in revenue in 2007, a 25% increase from 2006 and other captives in Europe such as Volkswagen Financial Services are also recording significant gains in revenue.


Despite the fact that privacy laws for personal data protection in both the North American market (Graham, Leach, Bliley) and those of the BER pose significant challenges to integrating vehicle sales and financing, the potential benefits of an integrated solution for both the manufacturer, retailer and fiance arm are very attractive, both in terms of new business opportunity, transparency and cost of ownership. 

We would like to discuss the integration of both vehicle sales and vehicle finance processes with you, reviewing the process from various perspectives; what is the potential for the brand manufacturer and retailer, the vehicle buyer/owner, importers and international retailers, the fleet buyer?  Are legal restrictions so stringent that any integration is outside the law?  What is the role of Graham Leach Bliley, BER and Basel II?  What is the trend in your region and industry and are the trends similar for construction equipment and commercial vehicles?  Is there a potential IT saving or ability to optimize IT investments? 

 What are your experiences?

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  • Hello Ute,

    I agree that there is a lot of potential in that subject. Maybe our units (Automotive, Banking) should have an exchange of ideas… I know that we have a leasing solution available that we might be able to integrate with Automotive.

    Kind regards, Joerg Wegener

    • Joerg,
      for sure, we run already inhouse discussions… But we also see the need to discuss this w/ externals as there are quite a lot of aspects to consider for the definition of a “standard” solution/approach for best practices etc that we probably don’t have in mind, or may have some gaps in understanding the (real) complete picture? To prove.


  • Another area for integration is suggested by initiatives I led as a PM with the UK Sales arm of a Japanese manufacturer.

    Here we built interfaces into the supply chain for wholesale and retail finance, supplied by  in-house and 3rd party finance organisations.  The finance covered central stocks from point of delivery from the manufacturing subsidiaries, and also dealer stock from transfer of ownership to registration (end-user sales).

    • Yes, there is lot of potential and we have to find the time to draft a basic process flow.

      It would be very helpful to receive a real customer requirement as a discussion base.

      Then – just do it!
      Best Regards!
      Dirk Schuhej