Synchrony Financial plans to boost its investment in the industry, in response to an increasingly competitive landscape, said Keith Mait, Synchrony’s vice president of powersports.
“Synchrony is actively investing in powersports through two primary channels,” Mait said. “The first is strengthening our partnerships with our existing OEM customers and their dealer networks,” and the second “is through selective growth within our powersports portfolio,” he added.
Synchrony seeks to align with manufacturers with “an exciting product portfolio, a strong consumer culture, and a desire to work with a partner that can help them accelerate their growth,” he said. “We regularly engage in dialogue with manufacturers that fit that profile and hope to add them to our powersports team when the opportunity presents itself.”
Synchrony renewed its partnership with Polaris Industries Inc. in January, and extended its partnership with Yamaha Motor Corp. in March 2015. The company also partnered with Kymco in February 2015, which distributes scooters, ATVs, and side-by-sides through more than 600 dealer locations across the U.S.
Powersports Finance spoke with Mait about Synchrony’s continued growth into powersports, its priorities moving forward, and the biggest challenges facing the industry. Following are edited excerpts from the interview:
Powersports Finance: What will be the biggest challenge in powersports this year?
Keith Mait: Powersports OEMs have more competition today than ever before, and consumers have even more choices as a result. Educating consumers about their options on new unit purchases, and the various financing options for those purchases, starts earlier in the decision process as well. Recognizing that consumers conduct extensive research into the units they are considering and payment options, Synchrony Financial is focused on providing information, marketing materials, and other tools and resources through various channels to help these consumers become well-educated in their options through a variety of resources as they research their upcoming purchase.
PF: How is the competitive landscape changing?
KM: Broadly speaking, the economy is slowly picking up speed, and powersports purchases are growing at slightly more than 2% based on the fourth-quarter 2015 Motorcycle Industry Council data. Weighing down that growth is the continued competition for the discretionary dollars — typically reserved for powersports purchases — which continue to be directed to consumer staples or expenditures, such as family and home expenses.
The competition and influence from smaller foreign-based powersports manufacturers is also gaining traction quickly with dealers who are attracted to the innovative design and attractive price points being introduced.
And finally, the powersports financing industry is slowly starting to adapt to the staged exit of a major capital provider in Capital One. Synchrony is well positioned to help dealers solve for the large hole left by Capital One, but its exit raises more questions than answers regarding the viability of revolving financing in the powersports industry in the future.
PF: Do you see a strong demand for pre-owned vehicle financing in powersports?
KM: Our view is that used unit financing is critical to the flow of new unit financing at dealerships. If we can help the dealer build business, and know that the used trade-in can find its way back on the street via financing approved for consumers, we want to be that partner. We generally finance used units 5 years old or newer, across a large spectrum of manufacturers. Additionally, we offer special incentives to dealers who finance used units with Synchrony.
PF: What does Synchrony seek to get from its dealer relationships, and what makes those partnerships successful?
KM: Our goal is to build loyalty and repeat usage with dealers. We want to make both the customer and dealer’s experience as positive as possible. One of the resources we provide for dealers is Business Center — our proprietary application decision engine that streamlines the closing process and provides immediate funding. It’s also important that dealers communicate with their customers about available financing options through all their channels early in the sales process.
PF: What are Synchrony’s top three priorities for the remainder of 2016?
KM: First, continuing to have a strong presence in the powersports community and reinforcing the depth of our industry expertise and how we can leverage our experience and intelligence to help OEMs and dealers sell more units. In addition to financing, we enjoy the fact that we can bring more to their business, offering them insights and research on retail trends that can help them grow.
Second, introducing initiatives to drive further engagement with dealers as they evaluate their financing alternatives. And third, continuing to refine our application and funding process to make doing business with Synchrony a seamless, best-in-class experience among powersports lenders.
This story originally appeared in the second quarterly Powersports Finance magazine. For access to this issue, subscribe here.