“Where is the value on financing in the agency contract? »

Auto Infos: What is your analysis of the French market over the first five months of the year?

Christopher Michaeli: For me, the point of alert lies in the unprecedented impact of the current economic and ecological crisis on access to daily mobility for households. I am completely in tune with Marc Bruschet (Mobilians) on his analysis and the reasons why demand is falling, households can no longer follow the movement financially. We are going to fall to a NV market of 1.4 million, which will have consequences beyond the NV market, for used vehicles in particular. At the level of short-term rental companies, for example, we are in the process of drying up used cars through this channel. I don’t know how this will all evolve. However, the distribution networks have the capacity to absorb such a market for some time.

We haven’t yet invented the product that finances unsold cars ! »

Auto Info. : Does car financing follow the crisis in the same way?

Christophe Michaeli : No, and it’s remarkable. This illustrates the need for household financing to buy cars. It is for this reason that we see this good resistance of our activity despite the market. Given the inflation of car prices, no one has the cash to buy. Finally, there are fundamentals that are still solid. We are positive compared to last year. All the cycles that have been set up like the LOA are working well. We have not yet invented the product that allows us to finance unsold cars! It’s a shame (smile).

Auto Infos: Covid, shortage of semiconductors and war in Ukraine, are the distribution groups you work with affected by these crises?

Christopher Michaeli: Sure. These crises occur one after the other in a limited time whereas for fifty years nothing happened. Everything happens at the same time. I think every distributor asks themselves the question of their future. This question could be: should I continue and grow? Or stop and sell?

Auto Info: Many concentration operations are in progress. Is it correct ?

Christopher Michaeli: Yes, there are very nice operations that are in the making. Everyone agrees that the size effect is still major. Let us remember the quarrels about multi-branding and the dogmatic positions of certain manufacturers at this level. It might make us smile today. Multi-branding has saved manufacturers and distributors. What matters is having the right strategy in terms of brand portfolios while having geographical consistency.

We are seeing a spike in the refinance rate while the attrition rate has not budged »

Auto Infos: In its time, you questioned the business model of financing which was not tenable in your opinion?

Christopher Michaeli: Unfortunately history proved me right! It was in 2019 before the crisis, I said that the “trees do not climb to the sky on the part of the value and the remuneration”. It is dangerous to think that this level of remuneration is acquired and immutable. I was just saying to be careful. And that to share value, you have to create it first. The system is fragile and remains all the more fragile on traditional credit. I was talking at the time of the wear rate. The subject is even more topical since this rate has continued to fall. Today, we are in a very tense situation where we have a surge in the refinancing rate while the wear rate has not changed. It will probably go up, but it will take a long time to do so, much longer than our refinancing costs. So credit margins no longer exist.

Read the full interview in issue 1421 ofAuto Info of the month of July.

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