LatAm Autos rolls out auto-finance product
31 Oct 2016
LatAm Autos (ASX: LAA), the Latin American auto classified platform operating in Argentina, Bolivia, Ecuador, Mexico, Panama and Peru, expects to generate revenue still this quarter with MotorCredit, its new, auto-finance product, the company said last week.
The product is already in place in Brazil, where most auto classified players are owned by banks (such as WebMotors and ICarros, which belong to Santander and Itau respectively), and already offer auto-finance options. LatAm Autos expects to roll its product out through its Ecuadorean PatioTuerca.com operation soon, in conjunction with Banco Pichincha, the country’s largest financial institution.
LatAm Autos said the new finance product will contribute “material revenue in 2017.”
No timeline was given, but the company said it will also implement the product in Mexico together with a local bank Credito Real. In Ecuador, LatAm Autos will be remunerated for origination and transaction-execution services through its software platform.
“MotorCredit is expected to provide LatAm Autos immediate access to between 100 and 200 used-auto finance deals per month with Banco Pichincha alone, with an average loan size of approximately $14,000 U.S.,” the company estimated.
The move is expected to help LatAm Autos grab a piece of the auto-purchase process.
The ASX-listed company said MotorCredit is a fully integrated mobile and desktop product. It will use a streamlined credit application process, powered by “sophisticated credit algorithms.”
“Customers of LatAm Autos will receive financing pre-approval within minutes, and will complete their purchases within an integrated LatAm Autos platform,” a company news release said.
“Lower interest rates and rising incomes across the Latin American region mean that access to auto finance is a huge growth opportunity. Until now, our websites act primarily as marketplaces, and the addition of MotorCredit is the first step by LatAm Autos to participate in the actual auto-purchasing transaction. Motorcredit will generate revenue by year-end, and will accelerate our path to profitability,” said Tim Handley, the company’s executive chairman.
As for the alliance with the Ecuadorian bank, LatAm Autos noted the successful launch of MotorCredit in Ecuador will enable LatAm Autos to rapidly expand MotorCredit into other key markets in the short term.
“The release of MotorCredit with Banco Pichincha is the first step in a long-term strategic alliance, with preparations underway for the roll-out of MotorCredit into other Latin American markets in the near future,” complimented Jorge Mejia Ribadeneira, CEO at LatAm Autos.