Bonjour, and thank you, Mr. Chairman.
On behalf of the over 6,500 employees who work for the dealerships that make up the Tricor Auto Group, I want to thank you and the committee for your efforts in addressing the gaps currently in the credit markets that are imperilling our industry.
My name is Joe Campbell, and I am president of the Tricor Automotive Group. I am joined today by Mr. Brian Rodd, who is president and CEO of Securcor Financial Group.
Let me begin with some background on Tricor and who we are.
Tricor represents over 100 franchised automobile dealerships from coast to coast in Canada, with annual sales of over $4 billion. Most of you will have a Tricor dealership in your riding. Tricor is your local dealership, from which many of you would have purchased or leased your new or used car over the last number of years. Tricor represents all the major automotive brands, both domestic and imported.
Tricor's business plan was and is based upon a unique model of individual accountability and risk management. It is this model of accountability that has resulted in an industry-leading track record that includes the successful operation of a reinsurance company for over 20 years and the successful operation of an auto management company, Tricor Automotive Group,
Otherwise known as TAG, for the last 10 years, the successful operation of our own finance company, Tricor Lease and Finance Corporation, or TLFC, has generated over $250 million in loans over the last eight years while maintaining a delinquency rate well below industry norms. This accomplishment has been achieved despite these difficult economic times.
Securcor is a Canadian-owned and managed financial services company that provides complete compliance verification between private securitization funders and the originators. In addition to serving in this compliance capacity for TLFC since its inception, Securcor has overseen and managed the origination of over $2.5 billion in auto and equipment leasing financing.
The questions before the committee today are, how did we get to where we are, and how can we help the committee solve the credit availability problem? The current credit crisis has permanently changed the playing field for dealers when looking to help their consumers finance their transportation needs. Captive finance companies and other private funders are no longer operating efficiently, and chartered banks have been unable to fill the void created.
Despite the fact that the Bank of Canada has significantly lowered the prime lending rate, its actions have not resulted in lower borrowing costs at the consumer level. Tricor is presently in the process of applying to become a chartered bank or financial institution. We believe this strategy is part of a longer-term plan to fill this gap in automotive financing in Canada. To fill the gap in the short term, however, we are working with the Department of Finance and the Business Development Bank to find solutions. The best and quickest solution would be for Tricor to make use of the credit facility that the federal government recently made available. In order to be able to make use of the facility, we need the flexibility and an understanding on the part of BDC to understand how the fundamentals of the automotive lending sector work. This understanding primarily involves recognition that with the dealerships accountable, and therefore everyone who is involved in the transaction having their interests properly aligned, risk can be mitigated and the operation can achieve and maintain success over the long run.
Essentially, what we have described and what we are asking the BDC to do is it to copy the key components of the only private model that is still successfully operating, albeit with constricted volumes, in today's credit environment. Please recognize that we are not trying to replace the bank and the critical role they play in automotive lending, but are simply trying to fill the lending void left by the reduced capacity in the market.
Our proposal, we believe, offers the best public policy solution to what is taking place in the market, not only in the short term but in the long term as well. Tricor understands how credit markets, automotive consumers, and car manufacturers interact and what the best conditions are for keeping the marketplace liquid and functional. Tricor has a vested interest in making good-quality loans, the way the marketplace should always work. We are taking risk with every loan and we understand how to mitigate that risk.
The federal government wants to jump-start the automotive sector in Canada, and Tricor, due to its efficient cost structure, with access to the credit facility, will be able to offer a less expensive source for automotive financing and leasing for the Canadian consumer immediately.
Mr. Chairman and members of the committee, thank you and merci beaucoup.
Mr. Rodd and I are looking forward to your questions.