Both are small scale, but indicate a readiness in the industry to be more adventurous.
Redline, from Toyota Financial Services (TFS), should generate conquest business from funding other brands’ new cars.
Alphera, from BMW Financial Services, is intended to win finance business from used car dealers specializing in premium cars.
With Redline, Toyota also wants to counter the threat from direct lenders and independents selling used cars. Only the Toyota and Lexus network offers Redline, created to meet a growing demand from dealers for a way to fund sales of cars made by other manufacturers.
Redline’s, and not Toyota Financial Services’ logo, will be on the agreements.
Brian Munday, TFS’s general manager of marketing, expects only slow growth from the initiative, but it will “take opportunities where they arise”. Redline accounts for 150 contracts per month, and most are HP.
“A number of our dealers said they wanted us to take on some of their used non-Toyota/Lexus branded cars. About 50 also holding other franchises perceived a problem with selling someone else’s new car with a TFS contract.”
Munday can see the opportunity provided by Redline, which provides an indirect route to other franchises run by Toyota and Lexus retailer groups. “It is mutually beneficial and is about generating incremental business and profit,” he says. “We are not about keen rock bottom rates and will not buy business for the sake of conquest.”
BMW Financial Services is using the brand name Alphera for a small but potentially significant pilot scheme.
Pauline Hayes, Alphera’s UK manager, is based at BMW UK’s headquarters at Bracknell. She is liaising with colleagues running parallel programmes in Germany, South Africa and Australia. A BMW Financial Services spokeswoman says: “Alphera is anonymously branded but will operate to BMW standards. It is not actively targeting franchised new car dealers.”
She says Alphera’s remit would extend to offering finance for sales between private owners, and advertisements would feature in at least one Sunday newspaper.
“This is a toe in the water operation to see if it is viable and will attract support from retailers and private car buyers alike,” she adds.