Tag Archive | "Ally Financial"

Ally Financial Adopts ‘Ally’ Brand for Auto Finance Business

DETROIT — Ally Financial Inc. has announced that it will rebrand its GMAC consumer and dealer-related auto finance operations in the United States, Canada and Mexico and begin using the Ally name.

This follows the transition of the corporate entity to Ally Financial Inc. in May. The rebranding of the auto finance operations in these markets will take effect in August.

The Ally brand will be used for auto financing activities in the three North American markets, including activities to support the following manufacturers: General Motors, Chrysler, Saab, Thor Industries and FIAT Mexico.

“The move to the Ally name allows us to invest in a brand that we own and can build upon for the long term,” said Ally President Bill Muir. “An ally is someone you rely on to support you, and our new brand embodies our 90-year heritage as a trusted finance source for the automotive industry.”

In connection with the rebranding, Ally will be making a series of enhancements to the customer experience beginning with:

Simplifying and streamlining consumer materials and online services to offer a more straightforward approach to auto financing

Investing in enhancements to the customer service process

Offering financial tools to simplify the payment calculation process

Providing opportunities to co-brand and customize certain consumer materials with information from the manufacturer and the dealer

“While our name has changed, our primary focus and core business continues to be automotive financial services,” said Muir. “Our dealer customers and auto partners can count on our ongoing commitment to their success.”

As one of the largest automotive finance companies in the world, Ally extended more than $16 billion of credit to retail customers in the first half of 2010 in the U.S., Canada and Mexico, which represents an increase in originations of more than 120 percent from the first half of 2009. For the first six months of 2010, the company extended an average of approximately $2 billion of credit per month to consumers in the U.S.

Chris Liddell, chief financial officer of General Motors, said: “As we enter an exciting new chapter in GM’s history, Ally remains an important partner and auto financing provider for GM customers. We look forward to continuing that relationship.”

Richard Palmer, CFO of Chrysler Group LLC, added: “In taking over the financing of so many Chrysler dealers in such a short time Ally has shown itself to be a strong partner for Chrysler and our dealership network. Ally has proven to be a trusted and reliable source of financing with an in-depth knowledge of the auto industry.”

The company’s U.S.-based auto finance products and services will transition from GMAC to Ally Financial on Aug. 23. The auto finance operations in Mexico and Canada will adopt the name Ally Credit on Aug. 16 and Aug. 23, respectively. There will be no change to current customer accounts or billing cycles. Ally’s auto financing operations outside of North America will continue to operate under the GMAC brand as options for further use of the brand are evaluated.

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GM Wants to Sell to More Subprime Buyers

DETROIT – If your credit isn’t good, General Motors Co. still wants to sell you a car.

The problem is, it can’t. At least not in big numbers. That’s why the automaker wants more control over its lending again, the Associated Press reported.

GM’s top North American executive Mark Reuss, under pressure to quickly sell more cars and boost GM’s value as it gets ready to sell stock to the public, said a shortage of subprime lending is holding back sales in the U.S.

But the automaker’s main lender, Ally Financial Inc., has little appetite for risky loans, having spent the last few years cleaning up its own financial mess caused mainly by its failing mortgage lending business. Both companies are majority-owned by the U.S. government.

For decades, GM owned Ally, writing its own loans through the so-called captive finance arm. Nearly every automaker makes loans in such a fashion. But a cash-starved GM sold most of Ally — formerly known as GMAC — in 2006.

GM and Ally now have a loose partnership that gives Ally control over who gets a car loan. If GM returned to auto lending — either through buying Ally’s auto business or starting its own in-house lending unit — it could set lending standards itself. That could benefit the automaker by allowing it to extend loans to people with weaker credit and to more lease customers.

“There’s a real sense of urgency on GM’s part to maximize its sales” as it gets closer to the stock offering, said Kirk Ludtke, senior vice president of CRT Capital Group in Stamford, Conn.

Subprime buyers make up a significant portion of the car buying market. About 16 percent of all new-vehicle loans written in the fourth quarter of 2009 were to customers with below prime credit, according to credit agency Experian. That means they went to customers with credit scores below 620 on a 300-to-850-point scale.

Reuss, president of GM North America, would not say outright if the automaker was looking to set up its own financing operation. But he said last week that one need only to look at auto loan data to find plenty of good reasons for GM to have control of its own financing.

For example, Honda Motor Co. gets 20 percent of its sales and leases from subprime buyers, he said. GM, on the other hand, gets only 1 percent because it can’t access the money to loan to those customers.

“They’re able to finance their cars at a much lower level than we are,” Reuss said. “I’m not sure what the answer is. But it would sure help my sales, the company’s sales in North America, if we were able to get access.”

During the recession, lending to subprime customers tumbled as the credit markets froze and delinquencies spiked. Leasing also ground to a halt as the resale values of cars plunged.

Ally has been less than eager to resume lending to risky customers. After GM sold a majority stake in Ally, the lender became heavily involved in the subprime mortgage boom, a move that nearly bankrupted the company when the housing market collapsed. Ultimately, the federal government has spent $16.3 billion to bail out the lender, leaving taxpayers with a 56 percent stake in the former GMAC.

Ally has spent the last year trying to clean up its mess, diversifying its customer base beyond just GM buyers, launching a highly profitable online banking service and working to sell what remains of its mortgage lending business. Earlier in May, the company posted its first quarterly profit in more than a year and rebranded itself as Ally.

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