Car sales market has been hitting its new record highs. In 2016, the growth rate stood at +16,6% y/y (passenger and commercial vehicles), and in January 2017 alone this dynamics was even higher. Bus market saw a similar development (+14% y/y) and was followed, though to a lesser extent, by the truck market. And what is more, the increase goes not only for imports but also for almost every segment of our domestic production.
For years now, the financial market, in sync with the car sales market, has been evolving towards development of programmes where a financial institution gets access to vehicle buyers (who naturally need credit or lease transactions) as a type of bonus for financing dealer’s stock of ready-to-sell vehicles. In numerous cases, the programmes for the entire dealership network are taken over by the car manufacturers themselves, who acting through their own banks or financial institutions, have developed their own financial „industry”.
This offer is, say, supported by programmes developed by banks for individual car dealers who need financing, for both vehicles on display in their showrooms and demo cars. When a dealer provides access to his clients, he gets highly attractive pricing. An additional benefit is bank’s option to secure on the financed vehicles without the requirement to encumber company’s fixed assets. This requires from the bank an operational efficiency, a good system and adequately attractive offer for the car buyers. In this case, reverse factoring comes as an ideal tool.
And in turn, classic factoring (most frequently without recourse) is a financing instrument for the automotive parts manufacturers and their suppliers. This market is also highly attractive for factoring institutions, because it is so strongly represented in Poland. After a violent “testing” period and frequent change of suppliers, for years now, car manufacturers have been favouring stable, long-term relationships that offer stability for all the stakeholders in the production process.
Due to the huge seasonality and high distribution of the points of sales, the financing market for auto tyre purchases is very characteristic. Also here, there are factoring programmes that successfully support this extremely tough market segment.