Jim Drotman, executive vice president for Ford Motor Credit Co.’s U.S. and Canadian operations, knows that Ford Credit is a significant profit generator for the automaker. He doesn’t see that changing in the new decade. He told Staff Reporter Jackie Charniga about the captive’s performance tailwinds, focus on customer experience and driving value for dealer partners. Here are edited excerpts.
Q: Is there a lot of pressure from Ford to perform at the high levels we saw last year?
A: In 2019, we had a really good year. We had almost $ 3 billion in profit. A couple of things to keep in mind. One, we had a little bit of good news on residuals. We thought used-vehicle prices were going to be down more than they were last year. They were down just a couple percent.
Then also, from an interest-rate perspective, we saw rates come down when everybody was really anticipating rates moving the other direction.
And then from a sustainability standpoint, Ford Credit has generated about $ 43 billion in profit over the past 20 years, and returned about $ 28 billion to Ford in dividends. We see that as a consistent performance and we’re going to continue to operate at those levels as we move forward.
How is your lease-end website performing? How do dealers feel about that?
We continue to test making our renewal process as effortless as possible, and making it a great consumer experience. We’ve learned a few things along the way. We’ve made some changes and we’re continuing to iterate on that process.
But we definitely know that more digital, more opportunity for the consumers to choose how they want to work through that renewal process, is important. So we’ll continue to make changes over the next several quarters to get it right.
We work closely with the dealers in everything we do. It’s a process where we’d like to give the customer the opportunity to decide how they’d like to renew, turn in that vehicle, terminate the vehicle.
To what do you credit dealer satisfaction with Ford’s partnership with fintech platform AutoFi?
Under our new CEO Marion Harris we’re spending a lot of time on the consumer experience as well as the dealer experience. We recognize that consumers want to be able to interact in multiple ways before they purchase. AutoFi has been a great partner for us to go out and create a more seamless process from beginning to end. Customers have a little more control to start the process and then ultimately take delivery from the dealer of the vehicle. We’re also working with Lincoln on a process with AutoFi.
In the fourth quarter, Ford Credit said auction values were forecast as a potential headwind. How significant is that?
We thought auction values were going to be down about 5 percent; they ended up down about 2 percent. This year we’re anticipating auction values down about 5 percent again. So nothing different than what our modeling told us last year. We’ll wait to see how the auction values play out. … We work closely with Ford on ways we can support the used vehicle for dealers and ultimately the customers.
