Holden executive director of sales Peter Keley

HOLDEN is rolling out a new finance platform for its dealers under a new arrangement brokered with St George Bank.

Called Holden Financial Services (HFS), it will be the first time Holden dealers will have a branded finance company since GMAC closed in Australia in late 2009.

In an exclusive interview with GoAutoNews Premium this week, Holden executive director of sales Peter Keley said that, since the demise of GMAC, the Holden dealer network has been “left to its own devices to establish wholesale and retail finance arrangements with whoever the players in the game have been since then” including Esanda, St George, Capital and captives including Nissan Finance and Toyota Finance.

The move means Holden dealers will now have a branded Holden finance suite to sell to Holden buyers. Holden already has its own Holden-branded insurance underwritten by Allianz which will be sold as a companion product to Holden finance.

“The relationship with St George includes a full suite of dealer finance products including floor plan, wholesale and other loans to the dealership and retail finance products,” Mr Keley said.

Asked if all Holden dealers will be expected to finance through HFS, he said: “All of our dealers have existing relationships with finance companies, certainly on a wholesale basis and 50 per cent of our retail network is already with St George so they will transition across to HFS.

“Basically all of our dealers will be accredited to HFS products and in some cases that will be the main product they will be selling but all dealers will be able to offer it. It is not mandatory but we will be putting in programs promoting HFS because at the end of the day we want to have a seamless brand experience through the network.

“We will be approaching all dealers who are not part of HFS because our aim is to ensure that HFS is spread evenly across all dealers as we move forward. But we recognise that is a process that will take time.”

Mr Keley said the recent purchase of Esanda by Macquarie was not a factor in the move.

“We have been assessing our options over quite a reasonable period and we crystallised our thoughts about 12 months ago which was before the Esanda-Macquarie deal took place,” he said.

Mr Keley said that while the Esanda sale to Macquarie did not precipitate the move to HFS, it was certainly timely for HFS in that Esanda dealers will be considering their options “and we are giving them a real option”. He said about 25 per cent of Holden dealers were using Esanda as of August 2015.

Mr Keley said an important aspect of the arrangement was the trust and peace of mind both the Holden and St George brands bring to the table. He said HFS brought funding alternatives at a time when customers were increasingly questioning the traditional model of buying a car outright and were wanting to only pay for the life of the car they really use. This included balloon payments as well as leasing.

“So there are more options available to customers nowadays that give them more flexibility,” he said.

Mr Keley said that St George had agreed to key performance indicators that would allow HFS to offer a “best-in-market” loan approvals process and active loan management with customers over the life of their loans. He said the conditions were more stringent than St George had been offering.

He said that having these car finance products under the one roof at HFS would enable Holden to work with St George to develop consistent “quick-to-market” special finance programs across the entire network and get more loan programs in place for dealers than was the case when dealers were with a whole raft of different finance companies.

“Previously if we wanted to put a finance offer in the marketplace we would have to negotiate with three or four banks in order to have coverage,” he said. “So being able to focus on one will give us the ability to be much more market responsive and also to work through new initiatives to get into the market quickly.”

Mr Keley said that 87 per cent of all private vehicles were financed and that dealers shared an average of 35 per cent of the total market. He said he expected the advent of the trusted brand and the HFS suite of products would mean Holden dealers would get greater finance penetration than the 35 per cent but said he was not prepared to put a number on it.

Asked about the threat to dealer commissions by current ASIC deliberations on flex commissions and whether the advent of HFS would give dealers some strength in negotiating suitable alternative commissions should flex commissions go, Mr Keley said: “I am not really able to comment because Holden is not the bank. We are in a partnership situation with St George which is providing the actual funds.

“Having said that, we are confident that ASIC will come up with a recommendation that will certainly ensure that all customers have a great experience and Holden through HFS will be operating within that framework.

“But at the end of the day we have an interest in the viability of the dealer network and we are confident that the viability of the dealer network will remain strong irrespective of whatever changes ASIC determine to make,” he said.

By John Mellor