Informed attended the Auto Finance Summit October 7-9 in Las Vegas, where leading auto finance companies congregated to compare notes and discuss trends.
In one particularly insightful interview, Shannon Mohkiber, Head of Ford Credit North America, shared how Ford is approaching the challenges and opportunities facing the auto finance sector as we look ahead to 2025.
Industry Dynamics and Affordability Challenges
Mohkiber acknowledged that affordability remains a key issue for the auto industry, especially as consumers return to pre-pandemic spending patterns. However, she emphasized that the impact varies depending on each lender’s customer profile and business mix. For Ford Credit, which focuses primarily on new vehicle financing, the goal is to work closely with Ford Marketing to leverage incentives and help customers afford vehicles.
Adapting Finance Products
To address affordability challenges, Ford Credit is exploring ways to adjust its product mix, such as increasing its focus on used vehicle financing and offering flexible terms like Ford Options. This product, which Ford Credit has been growing over the past two years, allows lower payments in the first three years, giving customers the flexibility to either continue payments or trade in the vehicle after that initial term.
Credit Risk Management and Loss Mitigation
Looking ahead to loss mitigation strategies for 2025, The company is launching a new platform to better understand each customer’s preferences and optimize contact strategies. This will allow teams to focus on solving more complex customer issues while leveraging automation for routine tasks – all with the ultimate goal of keeping customers in their vehicles.
Organizational Realignment
Mohkiber also discussed a recent restructuring at Ford Credit which consolidated the EVP of Operations and EVP of Sales & Marketing roles. This change has enabled faster decision-making and tighter integration between dealer-facing teams and operations. Over the next year, key success metrics will include strong dealer and customer satisfaction scores, employee engagement, portfolio performance, and market share growth.
Navigating Policy and Economic Factors
Regarding potential policy impacts, Mohkiber expressed confidence in Ford’s ability to work effectively with any administration to navigate challenges like overseas competition. On the macroeconomic front, Ford Credit is closely monitoring used vehicle prices and residual values, taking a balanced approach to lease residuals amid an evolving electric vehicle market.
Keys to Success: People and Innovation
Throughout the discussion, Mohkiber consistently emphasized the importance of people – both employees and customers – to company success. She also highlighted the exciting potential of AI and technology to enhance the business in the coming years.
Thanks to Shannon Mokhiber for sharing these important industry insights, and to the Auto Finance Summit for once again showing that it is a must-attend event.
