Francisco Enciso
CEO Automotive Division
Grupo Autofin México
View from the Top

Different Financing Alternatives for Different Market Conditions

Fri, 09/01/2017 - 11:11

Q: How attractive is self-financing in Mexico as an alternative to traditional financing?

A: Self-financing is an attractive option in developing economies and can coexist with traditional financing methods. It becomes a viable option for clients when interests grow and financing opportunities decrease. Regardless of the economic environment in the country, self-financing is also an alternative for demographics who do not have access to traditional financing options due to a lack of stable or verifiable income.

Q: What role does Grupo Autofin play in the car loan company Autofinanciamiento México?

A: We operate within a conglomerate of more than 60 companies participating in different industries. The holding company is Grupo Autofin México and one of our divisions is focused on the automotive sector. In almost 50 multibrand dealerships across the country we sell cars traditionally, offering financing alternatives through banks and OEM financial arms. The group also has a bank called Banco Autofin México and a third branch solely focused on self-financing services called Autofinanciamiento México. This broad portfolio allows us to cover different market needs and to prosper in any economic environment.

Q: What are Grupo Autofin’s growth expectations, building on its 10 percent self-financing market share?

A: We expect to remain at that same level in terms of self-financing. We are in the middle of renovating our brand and see self-financing as a good option not only for people without a steady income, but also for young clients acquiring their first financing product. Millennials and recent graduates often lack a financial history and this solution is an alternate starting point for them.

As part of Autofinanciamiento México, we are also betting on increasing market participation through traditional financing and new leasing services. Mexico is an emerging market in terms of leasing and other alternatives to ownership in which we see an opportunity to expand our operations. Leasing is still expensive in Mexico and monetary incentives are not as attractive as those offered in the US but benefits include flexibility. Younger demographics are also the perfect target for new mobility alternatives because they are not as rigidly set on ownership as older generations. Companies are made up of many generations and we must also flexibly cater to any client.

Q: How does Grupo Autofin manage its relationship with automakers and other dealerships?

A: The dealership part of Autofinanciamiento México works like any other multibrand player in the market. The Chevrolet dealer sells Chevrolet models, Mazda offers Mazda vehicles and so on. Some of our points of sale are even number one dealerships for many brands. One of our distributors is the top Mazda seller nationally and the second one globally.

We work with budgets rather than models in selffinancing. Clients establish the maximum amount they want to spend and based on that we offer them the models we have available. Automakers sometimes have extra vehicles in stock, allowing us to make a deal with OEMs for a large fleet of vehicles, giving clients direct access to a specific model. We manage most brands in the market through self-financing and we even manage some high-end brands like Jaguar and Land Rover, although these volumes are more limited. We must adhere to each brand’s specifications. Mazda, for example, does not allow us to market its products through self-financing but we can sell them through our traditional dealerships using Mazda’s own self-financing branch. Nissan allows us to sell their cars through self-financing as long as we do not exhibit them. For brands that we do not manage like Toyota, Autofinanciamiento México can negotiate with another dealership to offer clients the car they prefer.