Kevin Cullum, President of Nissan Motor Acceptance Corp.
Nissan Motor Acceptance Corp. has plans in the works to offer consumers a subscription service by its fiscal yearend in March 2019, company President Kevin Cullum told Auto Finance News.
“Our biggest opportunity is with subscription services,” Cullum said.
Although he said the subscription space is more of a “niche” need for specific markets — dense urban areas in particular — the captive is “looking at several options to support the opportunity,” Cullum said.
He did not provide specifics on the vehicles offered, the perks included in the subscription, or pricing.
While Cullum doesn’t believe subscriptions will have a substantial impact for another “20 to 25 years,” NMAC will join other OEM subscription services exploring the field, including BMW USA, Ford Motor Co., Hyundai Motor Co., and Volvo Cars.
In the near term, the captive’s main focus is more on risks that could impact the industry, specifically, rising interest rates.
“Dealers have operated at a low-interest rate environment for almost a decade, and as rates continue to increase it’s putting pressure on their operations and profitability,” Cullum said.
In a rising interest rate environment, it can be difficult for dealers to manage inventory to support subprime customers, who are more severely impacted by rising rates. “As a captive, we’ll continue to support the dealers to adjust their business models as we get back into a normal interest rate environment.”
Cullum was tapped as president in August 2017, replacing Mark Kaczynski who is now vice president of administration and finance for the company’s luxury brand Infiniti Motor Co.