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Kawasaki Matches Captive Competitors With ‘Aggressive’ Rates

  • Natalie Mattila
  • December 13, 2016
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Photo by William Hoffman / Royal Media Group

Kawasaki Motors Corp. USA will take an “aggressive” approach to finance incentives in 2017, to ensure its dealers’ success, and to remain competitive against other OEMs — particularly those with retail finance captives, Senior Vice President of Sales Operations Bill Jenkins told Powersports Finance at the New York Progressive International Motorcycle Show.

The biggest challenge that Kawasaki hears from its dealers all the time is “they want us to buy deeper, go lower in the Fico scores, and take on more risk,” Jenkins said. “That’s a challenge for us to do with our lenders because they absorb the risk — we don’t.”

The opportunity for Kawasaki, and for some of the other OEMs, is for the lenders to buy deeper, Jenkins said, but there are many risks associated with that decision. “The one main factor that we don’t have now is risk,” because Kawasaki does not have a retail captive, he said. Which is why the OEM instead focuses on providing dealers with “very strong” promotional rates, Jenkins said, such as 0% financing and low rates, combined with long payment terms for customers, he said.

While forming a retail captive is “under consideration” for Kawasaki, the OEM is “not in a position right now to move forward with one,” Jenkins added. “There’s a lot of moving parts, with three to four active lenders, to consolidate all of that and switch over,” and the startup cost and infrastructure needed is a big investment, he said.

For now, the company’s main priority is to make sure dealers are successful retailing Kawasaki vehicles on their showroom floor, Jenkins said. “The tools behind successful retailing are creative and competitive retail sales promotions, including retail financing, marketing support, demo support, salesperson training, in-house demos for the dealers, salesperson incentives, consumer call-to-action promotions — these are just a few of the retail support items we concentrate on to make sure that we accomplish our retail objectives.”

Foothill Ranch, Calif.-based Kawasaki Motors Corp. works with Synchrony Financial, Sheffield Financial, Westlake Financial Services, and Capital One Financial Corp. — until that partnership terminates on Jan. 31. The OEM has 1,050 dealers in its network currently.

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