F&I Conference 2014 Keynote speaker – Andy Gruber, Director, Alphera UK

March 2014

F&I Conference 2014 Keynote speaker – Andy Gruber, Director, Alphera UK

ALPHERAFinancial ServicesMarch 2014

About ALPHERA Financial Services UK

• ALPHERA Financial Services UK is based in Hook, Hampshire. • Alphera operates across the F&I sector and provides retail

and commercial finance for franchised dealers, independents and brokers.

• Worldwide, Alphera provides innovative vehicle finance solutions in more than 25 countries, including the USA, South Africa, Australia and Germany.

• Alphera had a record year in 2013 with the highest volume, lowest RV risk and lowest credit risk costs in its history.

• For more information, visit our website: www.alphera.co.uk

http://www.alphera.co.uk/


“F&I Through the Looking Glass” Building Firm Foundations for Sustainable Growth


Economic Overview of the UKCurrent state of the UK economy

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

2013

2014

2015

Inflation

-6,0%

-5,0%

-4,0%

-3,0%

-2,0%

-1,0%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%20

1320

1420

15

GDP

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

10,0%

2013

2014

2015

Unemployment

0,4

0,6

0,8

1

1,2

1,4

1,6 3M LIBOR

1Y GBP SWAP

3Y GBP SWAP

Interest Rate Development

35

50

65

Feb-13 Jun-13 Oct-13

EXPANDINGAbove 50

CONTRACTINGBelow 50

PMI

Red line stands for central bank target.Dark grey lines stand for 15y-averages with max/min-values.


Economic Overview of the UKOfficial Growth Forecasts


Economic Overview of the UKCar industry confidence

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Total UK New Car Market Industry Volume 2003-2013million units


Economic Overview of the UKCar industry confidence

Market Volume – New and Used (million units)


Average age of used car market

Economic OverviewAge of the current UK car parc


Looking back at 2013.Development in the Automotive Market.

Suzuki 33,088 32.9%Skoda 66,081 23.3%Fiat 60,198 20.6%Mazda 31,228 19.3%Mercedes Benz 109,456 19.2%Seat 45,312 16.8%Audi 142,040 14.9%Jaguar 16,210 14.9%Renault 46,173 13.3%Land Rover 54,699 12.5%

Vauxhall 259,444 11.7%Nissan 117,967 11.5%Ford 310,865 10.3%Kia 72,090 8.2%Citroen 78,358 6.4%BMW 135,583 6.3%Volkswagen 194,085 6.0%Peugeot 105,435 6.0%Toyota 88,648 4.8%Hyundai 76,918 3.5%Honda 55,660 2.7%

GGGG

G

F

F

F

P

PP

P

P

V

V

V

V

A

A

A

A

Overall: +10.77%


CAP Gold Book.A new RV setting methodology.

Plate 36/30 average movement

36/60 average movement

09 19% 18%

10 18% 16%

11 17% 15%

12 14% 10%

13 8% 7%


Great forecasts, great results.All rosy for the F&I Industry?


Change in consumer behaviour.Driven by PCP offers and Hyper Competition.

12

Total private car sales by funding type

2008 2009 2010e 2011 2012 2013e20%

30%

40%

50%

60%

70%

80%

Consumer (including personal loans)DealerSource:

Glass’s

ALPHERAFinancial ServicesMarch 2014 Hyper Competition deals has started to

adversely impacted nearly-new RVs, but not yet 3yr values.

13

Jan-07

Jun-07

Nov-07

Apr-08Se

p-08Feb

-09 Jul-09Dec-

09

May-10

Oct-10Mar-

11Aug

-11Jan

-12Jun

-12Nov-

12Apr-

13Se

p-13Feb

-14 Jul-14Dec-

14

May-15

Oct-15

0.80 0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20

RV 36m index RV 36m index (f'cast)RV 12m index RV 12m index (f'cast)

ASCI and AMCI trend (moving basket)

Source: Glass’s, Jan 2007 = 1.00 (RV £/£)


The Challenge of ChangeUpcoming FCA regulations

FCA


Looking AheadWhat will the market look like in 2016/2017?


ConclusionWhat does this mean for motor retailers?

Know your customers and your market:• Targeted campaigns• Targeted customer retention processes• Target the right people for your dealership• Target the right lenders

March 2014

F&I Conference 2014Thank you for joining us.

F&I Conference 2014 Keynote speaker – Andy Gruber, Director, Alphera UK

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