HSBC’s decision to close its consumer lending business in the U.S. does not affect the powersports industry, a bank representative tells Dealernews. A separate HSBC business underwrites the revolving and installment programs of Kawasaki, as well as the revolving programs of Polaris and Yamaha.
That separate business, Illinois-based HSBC Card and Retail Services, is a descendent of Household International Inc., bought by HSBC in 2003. At the time Household had been issuing consumer loans in the powersports industry for more than 25 years.
HSBC Card and Retail Services also issues loans via private-label credit cards for consumer electronics, furniture and department store purchases. Powersports vehicles comprise less than 30 percent of its receivables.
The business that is closing — with the reported loss of 6,100 U.S. jobs — is the direct-to-consumer lending business, another descendent of Household. Many months ago HSBC discontinued its dealer-direct program for powersports dealers, Rev Charger XL, though dealers say the program had been ineffective for much longer.
According to a Reuters report, HSBC’s decrease in profits in 2008 was largely the result of a goodwill impairment charge tied to its purchase of Household.
“With the benefit of hindsight, this is an acquisition we wish we had not undertaken,” chairman Stephen Green reportedly said in a statement.
Early this year Yamaha announced that it had signed a new contract with HSBC that extends their relationship through 2015. Polaris’ contract ends in summer 2010. Kawasaki’s contract is year by year, but the OEM has done business with Household/HSBC continuously since 1988.