CGI Finance, a major player in boat financing in France and Europe, a subsidiary of Société Générale and head of SGB, the Bénéteau Group's captive finance company, has carried out a major survey of boat dealers on their level of satisfaction with the financing offer. To coincide with the publication of this barometer, we spoke to Jacques Bondu, Boat Market Manager, about the results, and more generally about financing in the boating industry.
Can you summarize CGI Finance's role in financing in a few figures?
CGI Finance, the financing arm of the Société Générale Group, is active in 3 markets: automotive, marine and credit repurchasing. We were founded in 1951. In 2022, production was 4 billion euros, with 520,000 active customers and 164,000 financings in the year.
In the boat sector, we have two brands, CGI Finance and SGB, which is the financing captive created with the Bénéteau Group. We were launched in 1976 and are now number 1 in Europe. In 2022, we had 2,530 files and 343 million euros in production. This is a major market, where we operate in 7 countries: France, the UK, Germany, Italy, Spain, Portugal and the Netherlands. A back-office in Nantes houses our teams, including dedicated international staff. We have 600 professional partners, mainly dealers.
What are the results of your boat market financing barometer?
We were used to having such a barometer on the automotive market with a specialist magazine, which was a good tool. We were inspired to carry out the study with an independent institute, Becoming, among European dealers. Out of 500 dealers, we had a good response from 200 professionals. We were delighted to be ranked number one among finance companies, with consistent responses across all countries, and our main strengths being sales relations, back-office efficiency and telephone reception.
How do you see the financing market evolving?
With the end of the VAT rebate on boats, we have to reinvent ourselves and support the network. We used to have between 5 and 6,000 cases a year. This has dropped by 50%, but only by 15% in value. In fact, the average shopping basket has exploded, and now stands at around 150,000 euros. For years, people could buy boats for cash, but we showed them that they could pay less by looking at the total cost of acquisition on a LOA. With the end of the VAT rebate and the increase in VAT rates, these arguments need to be revised. For boats costing between 100 and 150,000euros, the number of applications has fallen by almost 90%, but at the top end of the market, the price increase is not a real problem for these customers. What's more, where we used to put in 50% to optimize the rest, today we put in 15-30%. All these reasons, coupled with a 30% price rise, explain the explosion in the average basket.
What new products and topics are you working on to support these changes?
There are different aspects. There's a move towards budgeting and overall cost visibility, as the automotive industry began to do after the 2008 crisis. Today, 86% of new cars are leased by the month, or even by the day, as seen in the latest Dacia ads. We already have Locassurance, which includes insurance in the price. We're working on leasing with a trade-in commitment. We find that the depreciation of boats is much lower, which enables us to increase the buy-back value from 15% to 30%, and consequently lower the budgeted rents.
On the digital side, we are working on personalized banners linked to the boats on display, and on direct promotion on dealer websites. The purchasing process necessarily has a physical aspect, but is now most often initiated digitally.
Finally, there's also the subject of second-hand boats, which have been important in recent years. For us, the ratio is around 20% used boats to 80% new. With the lower depreciation, we have been able to increase the maximum financing threshold from 25 years for the age of the boat plus the financing period, to 35 years today.As was the case in the automotive sector, the pre-owned situation is upsetting the pattern between dealers and private individuals. To deal with pre-owned boats, dealers need to be structured, but they also need our help to obtain cash flow and outstandings.
