Advertisement
UK markets close in 18 minutes
  • FTSE 100

    8,059.77
    +19.39 (+0.24%)
     
  • FTSE 250

    19,584.74
    -134.63 (-0.68%)
     
  • AIM

    752.81
    -1.88 (-0.25%)
     
  • GBP/EUR

    1.1655
    +0.0010 (+0.09%)
     
  • GBP/USD

    1.2485
    +0.0023 (+0.18%)
     
  • Bitcoin GBP

    50,761.66
    -1,403.57 (-2.69%)
     
  • CMC Crypto 200

    1,369.43
    -13.14 (-0.95%)
     
  • S&P 500

    5,007.93
    -63.70 (-1.26%)
     
  • DOW

    37,820.40
    -640.52 (-1.67%)
     
  • CRUDE OIL

    82.17
    -0.64 (-0.77%)
     
  • GOLD FUTURES

    2,345.20
    +6.80 (+0.29%)
     
  • NIKKEI 225

    37,628.48
    -831.60 (-2.16%)
     
  • HANG SENG

    17,284.54
    +83.27 (+0.48%)
     
  • DAX

    17,881.60
    -207.10 (-1.14%)
     
  • CAC 40

    8,007.51
    -84.35 (-1.04%)
     

After losing GM business, Ally looks to other automakers to grow

Traders work at the Post that trades Ally Financial Inc. following the IPO on the floor of the New York Stock Exchange April 10, 2014. REUTERS/Brendan McDermid

NEW YORK (Reuters) - Ally Financial Inc (ALLY.N) will overcome General Motors Co's (GM.N) decision to stop using the lender for discounted leases on new cars by expanding business with dealers for other automakers, a spokeswoman said late Monday.

General Motors told Buick and GMC dealers on Jan. 9 that it planned to replace Ally with its in-house financing arm, GM Financial, for subsidized leases on its automobiles beginning in February. The news was previously reported by Automotive News.

"GM Financial's expansion in leasing is consistent with their parent's stated objective to grow," Ally spokeswoman Gina Proia said in an email. "As [GM Financial] has grown, Ally has continued to thrive and broaden its business, while still supporting the GM dealer network."

Over the past two years, Ally lost exclusive agreements to offer loans on new GM and Chrysler cars that the automakers subsidized. It responded by working to increase its market share among other brands, and in the third quarter the bank increased its new car lending on non-GM and non-Chrysler vehicles by 54 percent from the same period in 2013.

ADVERTISEMENT

Nevertheless, leases for new General Motors vehicles accounted for nearly one-quarter of Ally's automotive finance business in the third quarter.

"This is a negative development for Ally," Jefferies analyst John Hecht said in a research report, though he added that he was not changing his earnings estimates for the company since he thought the bank could offset the loss through other carmakers.

Proia declined to comment on why Ally did not disclose the loss of GM's subsidized leasing business to investors.

(Reporting by Peter Rudegeair; Editing by Marguerita Choy)