Data suggests Australian car market is booming
\nNAB wants a piece of the action, taking a 5pc stake in ASX fintech, Plenti Group
\nStockhead reached out to Plenti\u2019s CEO, Daniel Foggo<\/p>\n
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The Australian new-car market has posted record sales for the fifth month running, with a yearly record now in sight.<\/p>\n
Total new vehicle sales for October came in at 106,809 units, 22% higher compared to the same time a year ago.<\/p>\n
According to data from the Australasian Fleet Management Association (AFMA)<\/strong>, this was the highest October sales result since 2017. It was also \u00a0the first time the annual one-million milestone has been achieved in the month October, with two months to spare for the year.<\/p>\n As the market booms, the battle to win customers has now spilled out to the lending sector with big banks fighting each other to get a slice of the action.<\/p>\n In September, Commonwealth Bank (ASX:CBA)<\/a> signed a deal to become a preferred finance provider for Tesla Australia. As part of the agreement, CBA\u2019s customers will now be able to access the bank\u2019s financing directly from the Tesla website.<\/p>\n Westpac (ASX:WBC)<\/a>, after exiting the auto loans business in 2021, has relaunched a new product for customers buying a new or used hybrid or electric vehicle.<\/p>\n National Australia Bank (ASX:NAB)<\/a> also got into the action last week, taking a 15% stake in the rapidly growing fintech company, Plenti Group (ASX:PLT)<\/a><\/strong>.<\/p>\n The strategic partnership will see the launch of a \u201cNAB powered by Plenti\u201d<\/strong> <\/a>car and electric vehicle (EV) loan product, bringing together one of Australia\u2019s largest and most trusted financial institutions and Plenti\u2019s award-winning tech platform.<\/p>\n Under the deal, Plenti\u2019s household renewable energy finance solutions will also be made available to NAB\u2019s customers, which aims to help Australian households save on energy bills and reduce carbon emissions.<\/p>\n \u201cThis is a recognition that fintechs like Plenti have a lot of capabilities that can be really appealing to a bank like NAB,\u201d said Plenti\u2019s CEO, Daniel Foggo<\/strong>.<\/p>\n \u201cThis strategic partnership is expected to have a meaningfully positive impact on Plenti\u2019s growth and profitability in future years.\u201d<\/p>\n \u00a0<\/p>\n Over the past three years, Plenti has significantly grown its auto loan book from pretty much a standing start to over $1 billion.<\/p>\n \u00a0<\/p>\n Source: Plenti Group<\/strong><\/em><\/p>\n \u00a0<\/p>\n Foggo said the company\u2019s success is down its superior technology platform, which allows it to integrate with partners really effectively.<\/p>\n \u201cTesla is a good example where we\u2019ve got a deep technology integration, where we can really help customers get finance through a seamless, fast experience, and I think that\u2019s our key differentiation,\u201d he told Stockhead<\/em>.<\/p>\n \u201cThat also means that we can operate really efficiently, which in turn allows us to grow revenue fast.\u201d<\/p>\n Despite the rapid growth, Plenti estimates that it currently only has a 4% penetration in the massive $35 billion auto loans market.<\/p>\n Foggo however believes that could soon change when the \u201cNAB powered by Plenti\u201d product is launched in the first half of 2024.<\/p>\n \u201cI think the partnership with NAB will certainly help open doors for additional opportunities to help our business grow.<\/p>\n \u201cWe expect it to be cash generative from from the day we launch the product. So yes, it will be material in terms of both scale and profitability for us over time,\u201d said Foggo.<\/p>\n Under the agreement, the loans will be funded by NAB as product issuer and held on NAB\u2019s balance sheet, with credit risk borne by NAB.<\/p>\n \u201cThis means that we don\u2019t have to fund the loan ourselves, which is quite good. And, as it\u2019s on NAB\u2019s balance sheet, they\u2019re also responsible for the credit losses,\u201d Foggo said.<\/p>\n Plenti\u2019s overall loan book now sits at just over $2 billion, and Foggo says the NAB partnership could just be the deal it needs to propel it to $3 billion.<\/p>\n \u201cThe NAB partnership will certainly help us grow our loans under management.<\/p>\n \u201cAnd we operate in really big markets, so we do see a really long runway in terms of us continuing to build market share,\u201d Foggo said.<\/p>\n \u00a0<\/p>\n MoneyMe (ASX:MME)<\/a><\/strong><\/p>\n MoneyMe offers car loans up to $50,000.<\/p>\n The company\u2019s Autopay platform allows\u00a0car dealerships and brokers to approve and settle vehicle finance within 60 minutes, 7 days a\u00a0week.<\/p>\n MoneyMe achieved B Corp certification in the last quarter, marking a significant milestone in its commitment to ESG values.<\/p>\n In FY23, MoneyMe recorded a statutory profit of $12 million, despite rising interest rates, heightened inflation, and geopolitical uncertainties.<\/p>\n In terms of the outlook for FY24, MoneyMe said it expects to deliver positive statutory and cash NPAT results for the first half and full year FY24.<\/p>\n \u00a0<\/p>\n Harmoney (ASX:HMY)\u00a0<\/a><\/strong><\/p>\n Harmoney provides both secured and unsecured car loan finance.<\/p>\n FY23 was another impressive year for Harmoney, with the company reaching the important milestone of Cash NPAT profitability.<\/p>\n The company has set further targets to generate an ROE of 20% in the medium term, a target the company says is unique among its peer group.<\/p>\n Looking ahead to FY24, the focus in the half so far has been on the Stellare 2.0 rollout, and closure of the company\u2019s retail peer-to-peer platform.<\/p>\n The first half is expected to deliver a Cash NPAT of approximately $0.5million.<\/p>\n \u00a0<\/p>\n \ufeff<\/span><\/span>\u00a0 The post NAB takes 15pc stake in ASX fintech Plenti\u2026 and a piece of the hottest auto market since 2017<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"NAB deal to propel Plenti\u2019s loan book<\/h2>\n
Other non-bank automotive lenders on the ASX<\/h2>\n
Share prices today:<\/h2>\n\n
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