LOS ANGELES — Mazda launched its new captive financing arm Wednesday, Mazda Financial Services, and immediately rolled out payment deferrals for consumers and dealers struggling with the sales downturn.
The captive is a partnership with Toyota Motor Credit Corp., one of the biggest auto financiers in the U.S. Mazda expects to reap the benefits of its new partner’s size and sole focus on lending and insurance products for car buyers and dealers. Mazda announced in August it was dropping JPMorgan Chase as its captive after a decade.
Given deteriorating conditions in the auto industry from the COVID-19 emergency, Mazda Financial Services is offering a payment-deferral program of up to 90 days for buyers of new and certified used vehicles through the end of April,Mazda said in a statement. It did not announce interest-rate deals as other auto companies have. Also, because the captive has no existing customers, it’s not offering deferrals for them, although Chase said it will under certain circumstances.
Mazda also announced support for retailers that includes lower rates. “MFS will assist dealers by temporarily reducing rates on all floorplan lines and the interest on those lines, as well as providing a principal payment-deferral option for real estate and working capital loans,” the company said.
The launch comes at a perilous time for Mazda and for the auto industry.
Mazda U.S. sales fell 42 percent to 15,664. CPO sales skidded 39 percent last month. Prior to the coronavirus outbreak that left many Americans sheltering in their homes, Mazda sales had shown some momentum. For example, sales for the quarter ending March 31 dropped just 4.5 percent.
“The past few weeks have been unprecedented and disruptive. For many, Mazda vehicles play critical roles in the well-being and safety of their loved ones,” said Jeff Guyton, president of Mazda North American Operations. “We’re pleased to announce the launch of MFS today and the new range of products MFS will provide to meet the immediate needs of our customers today and in the future.”
Toyota Motor Credit said Wednesday that the launch represents the first-ever client for its private-label financing business. Previously, the lender was limited to Toyota Financial Services and Lexus Financial Services.
Based at Toyota’s North American headquarters in Plano, Texas, Mazda Financial Services “offers a suite of automotive finance, lease, wholesale, dealer banking and insurance protection products and services to Mazda dealers and customers in the U.S.,” the Toyota unit said in a statement. The captive has about 100 employees nationwide.
Toyota Motor Credit has 3,200 employees nationwide and assets of more than $ 122 billion. It’s part of Toyota’s global financing business, Toyota Financial Services Corp.
Mazda and Toyota also have manufacturing partnerships in North America. They include a joint-venture assembly plant under construction in Huntsville, Ala. and an auto production deal at Mazda’s plant in Salamanca, Mexico, that builds Toyota’s Yaris sedan and hatchback on a Mazda small-car platform.
