Andrés de la Parra
Vice President of Corporate Planning and Financing Products
NR Finance
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View from the Top

Nissan Financing Arm Ready for Greater Growth

Thu, 09/01/2016 - 10:36

Q: What strategies has NR Finance established to become the country’s strongest captive company?

A: NR Finance is dynamic and craves innovation. The new regulations regarding the No Drive Day program in the first half of 2016, for example, led us to launch specific programs to boost hybrid and electric models from the Renault-Nissan Alliance. Mexico still needs to consolidate its electric vehicle market and financing will play a pivotal role in the process.

NR Finance has always supported the SME market since financing options for these enterprises are limited. We have dedicated solutions for smaller companies and even for start-ups. The company also has developed its fleet applications to offer proper invoicing platforms and stronger management solutions.

Being Nissan, Infiniti and Renault’s financing arm involves an important commitment and responsibility to help all three companies grow in the market. The offering these encompass is so complete we participate across all premium and volume market segments. Nissan, Infiniti and Renault are equally important for our strategy and we employ the same approach with clients of all three brands.

Q: What options do you have to support Nissan, while boosting the presence of Renault and Infiniti?

A: We must maintain healthy liquidity rates to sustain our operations. Our client base has grown immensely but we must ensure its stability with a low overdue portfolio. We are convinced there are no bad customers and that we need to be understanding of our clients’ situation. To this end, we are pioneers in improving the versatility of financing products. NR Finance was the first company to offer 72-month plans, though it was not a popular option at the time. We realized this type of contract could provide certainty to the client when acquiring a new vehicle, although loans are often paid off before the contract expires.

The market presence of our brands also led us to strengthen our relationship with the parent companies and different insurers. Our infrastructure allows distributors to approve credit within minutes, which means a customer can leave with a vehicle the same day. At a Renault event, customers could apply for financing and take the car immediately, which resulted in eight transactions. Six used vehicles and two new cars were purchased.

Q: To what extent has the acceptance of leasing grown among NR Finance’s customers?

A: Leasing is now a popular option for Infiniti clients. Over 69 percent of our contracts involve these types of solutions. We believe in our products and we do not shy away from contracts that could potentially lead to the return of a vehicle after the contract’s completion. In those cases, we gladly take back the car and commercialize it once again.

Most of our Nissan leasing contracts are held by corporate clients. It is uncommon for the customer to return the vehicle in those cases, since the driver usually pays the residual value and keeps it. Our participation is limited to date but we are keen on increasing our presence in this market.

Q: What are the company’s goals as more Mexicans turn to financing?

A: We have enjoyed steady growth over the past few years but we have had to adapt our strategy to market changes. Previously we could predict our end-of-year figures but the Mexican equivalent of Black Friday, the day after US Thanksgiving and the traditional start of the Christmas holiday shopping season, has altered our perception as sales on that weekend in November are less predictable.

We are convinced the market will continue its tremendous growth with rates of 10-12 percent and we are preparing for that with suitable programs for both the new and used vehicle segment. Our used car strategy has been redefined and Nissan has been well accepted by the market. We offer the same warranties clients would find in the new vehicle market, giving the customer quality assurance.

We have a strong team in place such that even with only 13 years’ experience here, NR Finance has sufficient infrastructure to address the needs of the Mexican market. We have more than 500,000 active clients, which is the largest portfolio focused purely on automotive financing. Additionally, we have a contact center dedicated to improving the level of service within NR Finance.

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Q: What is NR Finance’s biggest challenge given all the new entrants to the market?

A: There will always be new companies and competitors so we must consistently strengthen our foundations with innovation. We can no longer categorize our clients by demographics, since we need to take age and domestic market trends into consideration. Digitalization has become widespread in our target market, signaling the need to switch our strategies so we can appeal to younger generations. Car sharing and private driver solutions have also grown leading us to create specific programs for Uber, Cabify and CityDrive cars. We have a program solely for students and another for female drivers in August.

We must be on top of market trends to adapt accordingly and stay abreast of our clients’ evolving requirements. Last year we launched the Súbete program specifically directed to people who do not have a steady income registry. This program was developed to support entrepreneurial customers and it has now become a brand standard with more than 1,000 transactions every month.

We are now developing a similar plan for Renault named Llévatelo and it has shown similar success. Sin Fronteras is another initiative that offers financing alternatives to people in the US, so their families can have a car in Mexico. This generates wealth in the country and boosts the domestic automotive business. We also have a collaboration with a large insurance broker that will allow us to offer more transparency, efficiency and ultimately a better service to our clients.

 

Q: How successful is your strategy for electric vehicles such as the Renault Twizy?

A: The Twizy is a unique product that has found its niche among consumers but we still need to be patient while the market for electric vehicle technology consolidates. Building a strategy for a megalopolis with short driving distances differs greatly from that for openly distributed urban areas wherein commutes might be longer. Our strategy is equally strong for this vehicle in financing and leasing.