Seriously one of the most bloated organizations from the ground up. Shortages in chips, and overall inventory at dealers probably won’t see any kind of real recovery until mid 2023 (and that’s only if we avoid a recession and prolonged inflation). Dial it back. Sell it off. Put us out of our misery (I’m twiddling my thumbs looking for something to do on a Monday because we have no volume). 🤷🏻
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What was Direct Auto was run into the ground three separate times. It is back in the Dealer space because we earn more money that way. We also finance the dealers in every way. We make a profit on the dealer buying and selling the cars.
If auto lending is profitable, why can’t we do it in branches? Anyone know?
Auto is a good bread and butter business. It's secured loans that turnover the portfolio every two to three years. Not a ton of risk, reasonable margin. They add interest earning assets to the WF balance sheet. Everyone needs a car and many need car loans. Even if a recession people still need cars.
The loan spread is great. If auto prices drop, Auto will continue to be one of the most profitable LOB`s. This economy is doing more for the Auto side of the house, just like the downturns in the past. Auto only operates out of the Dealer side and no longer directly to the consumer, overall.
The only reason Auto is "succeeding" is due to the temporarily hiked vehicle prices.
It's not due to efforts to increase portfolio volume.
When semiconductors are no longer in short supply, Auto will go back to being stagnant.
Auto is making crazy high profits. You folks need to look at our numbers and not repeat bad data. Folks are in need of cars and snatching them at a premium. Yes we are giving out larger loans, but we are making more.
Interest rates and fuel prices are crushing subprime buyers.