SEE MORE COVERAGE OF CADA SUMMIT 2016
The automotive finance industry is keeping a close eye on some key economic and consumer trends, says Michael McGhee, Senior Vice-President & Business Head of TD Auto Finance, in his remarks at the 4th annual CADA Summit.
“We have heard 2015 was a record year, but what we are really focused on today is what the future holds,” says McGhee, who represented TD Auto Finance, the event’s exclusive sponsor. “I think there are things to be worried about,” says McGhee. “We expect the economy to be soft.”
There is no reason to believe that oil prices will recover quickly, and a slowdown in Alberta means a slowdown in vehicle financing across the country. Bankers are also seeing a rise in loan delinquency rates due to the slowing economy. “It’s safe to assume we are going to be a little more cautious,” says McGhee.
McGhee also focused his comments on three trends TD is following closely: the rise in dealer consolidation, negative equity and the regulatory environment.
As dealership groups grow and get more sophisticated, so too will their lending and credit needs. Banks are also taking a closer look at negative equity, concerned over the impact of some long-term financing offers.
The most unknown factor though, says McGhee, is the uncertain regulatory environment. “Regulators are making a full court press and protecting consumers,” says McGhee, adding that’s particularly true in the automotive retail sector.
As lenders and dealers work through the economy and these emerging trends, he says dealers and lenders will have to work more closely than ever. Just as dealers need to adapt to better meet the needs of consumers, so must the banks, he says. “Lenders will need to stay focused on providing a better experience for dealers,” says McGhee.
In introducing McGhee to the stage, Rick Gauthier, President and CEO, of the Canadian Automobile Dealers Association (CADA) praised TD Auto Finance for their ongoing support for the event, as the exclusive sponsor since its inception.
“CADA Summit 2016 marks Michael’s third participation in the event,” says Gauthier, adding that he now viewed McGhee as a “car guy.”
Gauthier also revealed that the 2017 CADA Summit would be held February 15, 2017. It’s never too early to book the date, as the CADA Summit has sold out every year.
