“You don’t go into this business lightly… our success has and will continue to be seeking opportunities others may not see.”
In an interview with Canadian auto dealer, TD Auto Finance’s new president and chief executive officer, Paul Clark talked about his background in the industry and TD’s new strategy in the auto financing sector, specifically as it relates to dealers.
“I’ve been around the industry for 25 years,” says Clark, “starting out as a teller and later moving to retail and commercial banking, as well as securities. However, growing up in a family where my dad worked at a dealership and my mother at Ford Credit, the concept of combining both was of special interest to me and I’m really excited to be part of TD Auto Finance.”
The bank has made a number of changes to its auto lending division, something that Clark sees will provide great benefit to dealer customers moving forward.
A DEEP COMMITMENT
“You don’t go into this business lightly,” he says and “our success has and will continue to be seeking opportunities others may not see.” He cites one as the ability and willingness to lend going into an economic downturn instead of pulling back. “Dealers are shrewd business people,” he says “and understand the market at both the micro and macro economic level. As a result, by making the commitment when times are hard, you, as a lender are then in a better position to built a strong, solid and lasting relationship. Some of the greatest success stories in the car business, are those that began when things were tough.” He also says that dealers are often pillars of the communities they serve. “Many are part of the local chambers of commerce and take an active role in their communities. They are in tune with the needs of not only their businesses but the local economy as well. That’s why it’s important for us, as a lender to ensure that we can provide the right kind of products and services and that we are are there with solid support at the local level.”
Clark says that with the acquisition of Chrysler Financial (the intent to purchase beginning in 2010 and the deal closed in April 2011), TD’s auto lending arm has undergone significant changes, to help better serve its customers on both sides of the border. “When we bought the Chrysler business it also allowed us to really establish ourselves in the U.S. where we’ve seen excellent growth,” says Clark.
Despite the size of TD, the new focus on the auto lending business has also allowed changes to be instigated relatively quickly. “This really is a big organization,” says Clark “and usually size means it can take time for things to happen. However, the engagement of our board has been tremendous, they’ve really committed to this, so it has enabled us to really respond to the needs of our dealer customers.”
NON-TRADITIONAL APPROACH
He says that TD Auto Finance has invested heavily in building the tools required to service the dealer business as effectively as possible. Furthermore, it has also taken a somewhat non-traditional approach to grow the business. “We’ve leveraged our non-prime business to grow the prime space,” says Clark, “which is not normally how you do it. However, we have a strong belief in our product and solid market share.” That confidence stems in part from the access and expertise through [the Chrysler Financial] acquisition, which has also served to expand TD Auto Finance’s offerings into the wholesale space or what Clark terms as the “third pillar.”
Wholesale is seen as a significant component to the future of the business and it’s something dealers have been clamouring for.
Recently, TD Auto Finance, asked 400 dealers across Canada what they expected from their lenders and where big improvements could be made. “Besides providing wholesale lending, what they told us, was that we needed to look at the credit process and simplify it. They also want transparency, to understand up front what we will and won’t do when it comes to lending and what to expect from us in terms of documentation and relationship management.”
He says that today, dealers expect more from their lenders and in a competitive market it’s important to stand out and go the extra mile. “It requires a holistic approach,” Clark says, “you simply cannot take a product-centric view. Dealers expect excellent service on the financing side and so do their retail customers. It’s important that they get it.”
