Q: What opportunities is BNP Paribas pursuing in the vehicle financing market?
A: Over the last two years, vehicle sales through financial services have gone from 52% to 56%, which is a trend that we expect to continue. All of our markers indicate that we are heading for record-breaking sales in 2015. Two years ago, BNP began operations with only 0.8% market share, but despite that initial low penetration, we have since been experiencing internal growth of 70% every year. This resulted in a 3% market share in 2015, which we anticipate to increase to 5% next year. Given that 40 new KIA dealerships were opened recently, we expect this OEM to constitute 35% of our total sales volume in 2016.
Q: What strategies are you using to promote your financial services for the used vehicle market?
A: Our main tool is called Crédito Click, which gives both dealers and clients a prompt resolution regarding the approval or denial of a loan. We also provide broad insurance availability within the same platform, giving clients the ability to make an informed decision after carrying out a complete analysis. Our product is extremely competitive, but the main issue in terms of the secondary market revolves around our distribution channels. For the most part, we distribute our credit products through official car dealerships, where efforts and interests are directed towards selling new vehicles. In 2015, we are launching an extended guarantee program that will be marketed alongside our finance product, which is intended to tackle the concern that clients tend to feel when purchasing used cars.
Q: What are the most prominent differences between BNP’s Mexican and international operations?
A: In other countries, we have implemented a more multiproduct approach, offering a range of products such as automotive financing, credit cards, and personal loans, to name a few. In contrast, our Mexican operations are solely dedicated to mid-term automotive financing. Mexico has been a benchmark for foreign operations, as evidenced by our Crédito Click tool; this flagship project was established here and subsequently implemented in France and Spain. In Mexico, car insurance is not mandatory but as a finance company we require our clients to have some sort of car insurance. Our premium coverage offerings are extremely competitive within the market. As an accessible finance company, BNP asks its clients for the minimum that is expected from a legal standpoint. To cater for customer needs, we have a range of agreements with AXA, ABA, GNP, Mapfre, and Qualitas. In terms of credit, life, and unemployment insurance, we work with our sister company BNP Paribas Cardif.
Q: How attractive have alternative purchasing options such as fleet services and leasing been in Mexico?
A: We currently focus on retail financing, but we have minimal participation in the fleet market. At the moment we do not have a leasing product, but if we do develop one for the Mexican market, it will be directed toward SMEs rather than big fleets, which is an extremely competitive market. At the moment, we are finalizing our leasing study in order to make an informed decision about whether or not we implement our leasing product by the beginning of 2016. If the service gains traction in Mexico, we would expect to have 10% product penetration within our portfolio over the next two years.
Q: What level of growth does BNP Paribas expect over the next few years?
A: A major part of our growth is attributed to our distribution network. We currently have relationships with Ford, Mazda, Volvo, KIA, and Peugeot, and our future growth is contingent to the relationships that we develop with the country’s remaining companies. Our strategy is focused on expanding our distribution network, as it constitutes our biggest asset. These distributors are aware of the exact financial benefits that we offer, which are then communicated effectively to the client. Our main target is to complete financial agreements for cars without having to search for non-paying clients, and for this reason we set out clear guidelines in terms of permitted indebtedness, which are established in our Crédito Responsable program. Our priority for 2015 is to consolidate the recent alliances that we have created with KIA, Peugeot, and Volvo, as well as creating new partnerships with dealer associations, while simultaneously catering to the anticipated intensification of sales in Q4 of 2015. These strategies will be maintained as we move forward into 2016