vision 2014: making the trends actionable - automotive market expansion

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Making the trends actionable: Automotive market expansion

Jessica Dees Toyota Financial Services

Michael McGrath Toyota Financial Services

#vision2014

Melinda Zabritski Experian

2 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.

TFS monitors industry trends closely

► How are we performing vs. the industry?

► How are we performing vs. our competitors and peers?

Apples to apples comparison

► We prepare a high level trends report

► Side by side comparison of metrics

► Overall trends

► Links to our performance metrics and risk appetite

Shared with executives at multiple levels

► HQ – ERC and portfolio review meetings

► Field operations

Leveraging consumer credit trends from Experian


2013 Q4 snapshot: Industry market share

5.80% 5.16% 5.00%

4.61% 4.61% 4.59%

3.58% 3.54%

1.85% 1.72%

0%

1%

2%

3%

4%

5%

6%

7%

Toyota(TFS)

Ally WellsFargo

Honda Ford Chase NissanInfiniti

CapitalOne

HyundaiCapital

BMW

Share of total finance units (loan and lease) Data provided by Experian

5.8% 4.8% 4.6% 4.5% 4.1%

3.6% 3.4% 2.7%

1.7% 1.6%

0%

2%

4%

6%

8%

Top-10 – loan market share

14.2% 12.5%

11.6% 9.6% 9.1% 7.3% 6.8% 5.9%

5.3% 3.8%

0%

4%

8%

12%

16%

Top 10-lessors – share of new lease market

Source: Experian Automotive

Top-10 represent 40.5%

of total finance units


2013 Q4 snapshot: Industry loan market share

8.34% 8.18% 7.99%

6.38% 6.31% 5.85%

4.40% 4.04%

2.81% 2.52%

0%

2%

4%

6%

8%

10%

Toyota(TFS)

Ford Honda Chase NissanInfiniti

Ally Capital OneWells Fargo Chrysler Hyundai

Top lenders – new loan market share

6.83%

3.91% 3.81% 3.79%

2.24% 2.20% 1.64% 1.53% 1.37% 1.23%

0%

2%

4%

6%

8%

10%

Wells FargoCapital One Ally Chase Toyota(TFS)

Santander Carmax CreditAcceptance

Bank ofAmerica

5th 3rdBank

Top lenders – used loan market share

Source: Experian Automotive


New lease market share trends

0%

5%

10%

15%

20%

25%

30%

Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013

New lease market share (Experian data used for industry averages)

Industry TFS

0%

5%

10%

15%

20%

25%

30%

35%

40%

TFS lease market share trend

Source: TFS Risk Management and Experian Automotive


New lease credit distribution on originations Fourth quarter 2012 – 2013

1.9% 2.5%

9.5% 8.9%

18.5% 20.5%

18.8% 23.9%

51.3% 44.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY 2012 Q4 CY 2013 Q4

Industry Risk distribution of new lease

Deep subprime Subprime Nonprime Prime Super prime

Based on VantageScore® 3.0 *

0.5% 0.5%

4.5% 5.0%

15.0% 15.5%

25.0% 26.0%

55.0% 53.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY 2012 Q4 CY 2013 Q4

TFS Risk distribution of new lease


Based on FICO scores *

-2.9%

+6.7%

Score ranges: Deep Subprime <550; Subprime 550-619; Nonprime 620-679; Prime 680-739; Super prime 740+

TFS amounts do not represent actual amounts. The data provided is for illustrative purposes only



Lease term distribution Fourth quarter 2013 and TFS trend



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

13 - 24 25 - 36 37 - 48 49 - 60

Q4 2013 lease term distribution (Experian data used for industry averages)

Industry TFS

0%

2%

4%

6%

8%

10%

12%

TFS lease term distribution trend Effective 24-month term (0–27)


New loan credit distribution on originations Fourth quarter 2012 – 2013

2.0% 3.0%

12.1% 10.8%

18.7% 20.3%

18.5% 21.6%

48.6% 44.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY 2012 Q4 CY 2013 Q4

Industry Risk distribution of new loans



0.5% 0.5% 2.5% 3.0%

12.0% 12.5%

20.0% 20.0%

65.0% 64.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY 2012 Q4 CY 2013 Q4

TFS Risk distribution of new loans



-1.9%

+3.9%





Used loan credit distribution on originations Fourth quarter 2012 – 2013

14.6% 17.6%

27.1% 21.9%

22.1% 23.2%

14.5% 17.7%

21.7% 19.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY 2012 Q4 CY 2013 Q4

Industry Risk distribution of used loans



1.5% 2.0%

6.5% 8.0%

22.0% 25.0%

30.0% 30.0%

40.0% 35.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY 2012 Q4 CY 2013 Q4

TFS Risk distribution of used loans



+2.8%

-1.6%





Comparison of average loan amount and term Fourth quarter 2012 – 2013

0

5,000

10,000

15,000

20,000

25,000

30,000

New Used

Average amount financed ($) (Experian data used for industry averages)

2012 (Industry) 2013 (Industry)

2012 (TFS) 2013 (TFS)

57

58

59

60

61

62

63

64

65

66

New Used

Average term (months) (Experian data used for Industry averages)

2012 (Industry) 2013 (Industry)

2012 (TFS) 2013 (TFS)




Term distribution comparison for new loans Fourth quarter 2012 – 2013

-5.5%

1.3%

-4.8% -3.9%

19.0%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

25-36 37-48 49-60 61-72 73-84

Industry % of new financing by term *

Industry YOY change in Distribution

0%

10%

-10%

5%

15%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

25-36 37-48 49-60 61-72 73-84

TFS % of new financing by term *

TFS YOY change in Distribution

* Excludes showing loan terms less than 25 months and greater than 84 months




Term distribution comparison for used loans Fourth quarter 2012 – 2013

-5.8% -7.0% -8.2%

3.9%

23.2%

-30%

-10%

10%

30%

50%

70%

90%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

25-36 37-48 49-60 61-72 73-84

Industry % of used financing by term *

Industry YOY change in Distribution

25%

-5%

-20%

5%

35%

-30%

-10%

10%

30%

50%

70%

90%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

25-36 37-48 49-60 61-72 73-84

TFS % of used financing by term *

TFS YOY change in Distribution

* Excludes showing loan terms less than 25 months and greater than 84 months




We also insert other relevant industry factors

Source: Experian-Oliver Wyman Intelligence Report

Total consumer debt (in $ billions)

Deb

t se

rvic

e ra

tio

Pe

rce

nta

ge c

han

ge, a

ye

ar

ag

o

2013 2007 2009 2010 2008 2011 2012

14%

12%

10%

8%

6%

4%

2%

0%

12%

10%

8%

6%

4%

2%

0%

-2%

-4%

-6%

-8%


Who is paying off their card balances?



When will card payment compete with auto payment?


Outstanding balances by VantageScore® (in $ billions)


What type of debts are being paid off first? Percent of balance 90+ days delinquent

Source: FRBNY Consumer Credit Panel/Equifax


Information provided on a regular basis

Can be used as an input to internal discussions

Experian account executives are available to help

Thank you

Providing value for TFS


For additional information, please contact:

[email protected]

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vision 2014: making the trends actionable - automotive market expansion

Automotive

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experian automotive

industry market share

new lease market share

industry loan market

new lease market source

loan market share source

lenders new loan market