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Hello everyone, and welcome to the roadmap for model finance news since 1996 the nation's leading newsletter on automotive lending, leasing. It is Monday, May 4, and I'm Johnnie Martinez. Last week we took a look at first quarter orange results for more regional auto lenders as well as captive lenders and auto dealers. The macroeconomic environment is still pretty uncertain.
The Fed held rates steady, but what stood out is the growing divide among policymakers where things go next, that uncertainty is starting to show up across the automotive sector at the same time, geopolitical tensions, especially side of the Iran war, are weighing on the industry. Toyota, for example, saw sales dip in March, partly due to softer demand and broader global pressures.
Additionally, on the OEM side, the results were mixed when it came to earnings, solantis was a bright spot, returning to profitability with revenue and shipments both up year over year. North America really drove that growth, and their finance arm expanded significantly, including a new 1.8 billion lease, ABS, deal. But at the dealer level, affordability is still the main issue, sales are down. SAR is off about five or 6% year over year, and dealers are leaning more on financing, longer loan terms, payment focused structuring, instead of traditional incentives to keep deals moving. Well, that covers some of the activity from last week. I'll turn it over to our editor, Amanda, for more information on lenders earnings and additional capital markets coverage. Amanda,
great. Thank you, Johnnie, yes, just some highlights from last week. Penn Fed's auto originations jumped about 88% year over year through q1 to about $595 million as the Credit Union offers competitive interest rates as low as 3.99% for credits finance and lease penetration also improved in q1 as credit performance slightly weakened in line with seasonal trends that we're seeing industry wide. GM financials originations declined 15.8% year over year, and this was in part due to a pull ahead in car purchases during the same time frame last year and when the tariffs were announced. So we're seeing that drag down some of these year over year comparisons in q1 carvana's originations Rose 59% year over year in q1 to $4.3 billion as retail sales climbed 40% year over year and auto nation finance originations were flat year over year in q1 to $460 million while sales decline in finance and insurance revenue ticked down and just quickly. On the capital market side, issuance is still dragging last year's levels. We're definitely seeing that play out. Credit unions are a little bit active right now coming to market. In last couple of weeks, we're still seeing banks come to market as well, and there are some regulation changes potentially on the horizon. So stay tuned for more coverage on the capital markets and funding dynamics in our industry, and I'll turn it back to you, Johnnie.
Fantastic for more on auto dealer earnings in the first quarter, including captive lenders results outside of AutoNation finance. I'll turn it over to our Senior Associate Editor, Aidan,
thank you so much, Johnnie. So the past week, we saw many auto retailers report q1 earnings, and I think the trend really here was that F and I revenue was mixed, and new vehicle sales declined year over year for most retailers. So Asbury automotive, group one, Penske automotive and lithium motors all reported year over year declines in F and I revenue, as you heard earlier from Amanda automation, Finance also had a decrease in F and I revenue. The one sort of bright spot here was Sonic automotive, who reported a little over 6% year over year increase to $202 million in F and I revenue in q1 new vehicle sales also dropped year over year across those retailers who reported last week. So that's all of them, Asbury, Penske, Lithia, group one, Sonic automotive. The theme across those respective earning calls was, as Amanda mentioned, that pull ahead demand from tariffs. Some dealerships as well, like Asbury reported that snow related dealership closures in early 2026 led to some additional losses. So in that same example, Asbury reported there was around $3.7 million in weather related losses from the beginning of the year. Used vehicle sales, on the other hand, were a bit more mixed and maybe a bit more optimistic. So group one, Penske and Asbury reported year over year declines in sales, while Lithia and Sonic automotive saw year over year increases. Lithia and its captive arm driveway finance are actively focusing on used and certified pre owned vehicles to offset slow new vehicle demand, according to Lithia CEO, who also noted that the company will benefit from that increase of off lease vehicles returning to market that we're expecting to see this year. Driveway finance reported year over year increases in its auto originations and penetration rate, which executives attributed to lithia's Focus on used cars on the company's earnings call, driveway also reported just for the numbers, there a little bit over 34% jump year over year in originations to 840 million, and its penetration rate rose to 18% up from 15% in previous quarters, and a little shy of their goal of 20%. beyond the auto retailers, EV maker, rivian automotive also reported q1 earnings. So just to go through that real quickly. Here it saw a 20% year over year increase in deliveries and an almost 30% year over year drop in production that comes as production of its new r2 model began last week, according to CEO, I guess, two weeks ago, and the company is planning on ratcheting up its production to two shifts at its Illinois plant by year end 2026 with the goal of eventually delivering 4000 vehicles per week, while rivians automotive revenue dropped a little over 1% year over year to 908 million. It sell a nearly 49% year over year jump in software and services revenue, and that is in large part from its joint RV tech venture with Volkswagen Group, which will be used in some upcoming Volkswagen vehicles. That is all for me, so I will turn it back over to Johnnie for some powersport highlights.
Thank you. Aidan, on the power sports front, Polaris reported a 10.5% year over year increase in North American sales in q1 driven by higher shipments and improved pricing, while deal inventory remained healthy and aligned with demand, however, income from financial services fell 27.1% year over year, reflecting weaker performance and its lending operations to spread the overall sales growth over the last two weeks. Marine Max and one model marine reported revenue declines in the fiscal second quarter as weaker boat demand weighed on sales, with marine racks revenue down 16.5% year over year, and one water down 8.5% higher margin finance and insurance products and improve sales makes help support profitability or not enough to fully offset softer demand. Lastly, octane expanded its financing partnerships with Indian Motorcycle and Suzuki over the past month, offering full spectrum lending to support both prime and non Prime customers as credit conditions tighten. And we spoke with John Vestal, executive vice president and general manager of recreational lending at Octane, about those partnerships for story that came out last week. Meanwhile, OEMs are increasing incentives to sustain demand with BRP boosting rebates across multiple units amid tariff pressures. This week, we will have further updates on the trends that matter most to auto and power sports dealers and lenders, as well as continued earnings coverage for the first quarter results including upstart bagaya and Harley Davidson as a reminder, our inaugural auto finance capital summit takes place May 11 through 12th in Nashville. Auto Finance Summit East also takes place May 11 through 13th in Nashville. Be sure to register for our spring events as always. Thank you for joining us on the roadmap, and be sure to follow us on x and LinkedIn. We will see you online at auto finance news.net, and here next time you.