Since Henry Ford invented the assembly line and mass automotive production began, the primary objective of all manufacturers and dealers has been to move new vehicle inventory off the lot year after year. But nowadays finding the right automotive customer can be a challenging task. Where do they live? How old are they? How much do they make? By leveraging data to answer these questions, manufacturers can market to the appropriate audience and manage inventory accordingly. In fact, a recent Experian analysis of the automotive market found that the top 10 states accounted for nearly 60 percent of all new vehicle registrations during the second quarter of 2015, led by California at 12.6 percent. The remainder of the top 10 included Texas (9.9 percent), Florida (7.9 percent), New York 5.7 percent), Pennsylvania (4.4 percent) Ohio (3.9 percent), Illinois (3.8 percent), Michigan (3.7 percent), New Jersey (3.5 percent) and Georgia (2.8 percent). Diving a bit deeper, the analysis also showed that through May 2015, nearly 50 percent of all new vehicle buyers fell within the 40-69 age range. Furthermore, 17.9 percent were between the ages of 50-59. The analysis also found that individuals with incomes from $50,000-$100,000 were the most active new car shoppers during the same time period, equating to nearly 36 percent of the market. Other findings include: Los Angeles and New York were the two DMAs with the highest market share for new vehicle registrations at 6.8 percent and 6.7 percent, respectively Toyota (13.5 percent), Ford (11.6 percent) and Chevrolet (10.8 percent) were the top 3 brands with highest new vehicle market share among retail buyers through Q2 2015 Entry-level CUVs accounted for the highest percentage of new vehicle registrations at 14.6 percent, followed by the small economy car (11.0 percent) and full-sized pickup trucks (10.7 percent) Leveraging data and analytics gives manufacturers and dealers a competitive advantage by enabling them to better understand the entire automotive market, specifically new vehicle trends. With these actionable insights, automotive companies will be positioned to make more confident inventory decisions and target specific consumers. And by better understanding whom they are targeting, manufacturers and dealers will be able to check their primary objective off the list.

A recent Experian study found student loans have increased by 84% since the recession (from 2008 to 2014), surpassing credit card debt, home-equity loans and lines of credit, and automotive debt.

Driver of success: Mitigate auto lending risk A culture of learning is a key driver of success. Does your risk culture continue to adapt? There are many issues within auto lending that are unique to other financial services ecosystems: the direct versus indirect relationship, insights of the asset influencing the risk insights, new versus used vehicle transactions influencing risk and terms, and more. However, there is one universal standard common to all financial services cultures — change.. Change is constant, and an institution’s marketing and risk organizations need to be constantly learning to stay abreast of dealer, consumer, competitor and regulatory issues. No one has said it better than Jack Welch: “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.” This statement was quickly followed by a command: “Change before you have to.” So the challenge for the portfolio manager is to ensure there are the system features, data sources, management reporting structures, data access features, analytic skills, broad management team skill sets, and employee feedback and incentive plans to drive the organization to a constant state of renewal. The challenge for many smaller and midsize lenders is to determine what systems and skills need to be in-house and what tasks are better left for a third party to handle. For consumer-level data, vehicle history and valuation data, and fraud alert flags, it seems reasonable to leverage solutions from established third parties: credit reporting agencies. After that, the solutions to the many other needs may be more specific to the lender legacy skill set and other support relationships: Are there strong in-house data-management and analytic skills? There is a significant difference between management information and data analysis driving policy and portfolio performance forecasts. Does the internal team have both? Is the current operating platform(s) feature-rich and able to be managed and enhanced by internal resources within tight time frames? Is the management team broadly experienced and constantly updating best-practice insights? Is the in-house team frequently engaged with the regulatory community to stay abreast of new mandates and initiatives? There is a solution. Experian® offers the data, software, solutions, management information, analytic solutions and consulting services to tie everything together for a lender-specific best configuration. We look forward to hearing from you to discuss how we can help.