Ally Financial, the lender once known as GMAC has said it is “committed” to supporting the auto industry, signaling an independent stance should former owner General Motors might get back into vehicle lending.
Chief executive Michael Carpenter said in a statement that Ally’s bank holding company status allows the lender to “cost-effectively provide financing” to auto dealers and consumers.
Dow Jones said Ally’s statement followed by a day reports its former parent, GM, was mulling a return to auto financing.
The automaker is weighing an attempt to buy back its old auto lending arm or start a new finance company in a bid to become more competitive and bolster the company’s appeal ahead of an initial public stock offering, The Wall Street Journal (WSJ) reported earlier this week.
But Ally’s statement didn’t directly address the report that GM was weighing a return to auto financing.
GM sold majority control of GMAC in 2006, leaving the car company at what many see as a competitive disadvantage to rival automakers that have in-house lenders.
GMAC changed its corporate name to Ally Financial on Monday and still provides financing for GM and Chrysler Group dealerships and customers. Ally financed 87.7% of new vehicles on lots of GM dealers in the US in the first quarter, Dow Jones said.
According to the WSJ, GM would primarily be interested in acquiring Ally’s auto finance business and not its troubled mortgage lending unit. Other options reportedly under consideration by GM: starting a new finance company or partnering with other lenders.
The report said a new, in-house lender could give GM another way to drive sales but GM, largely cut off from access to capital amid its bankruptcy and restructuring last year, would need to come up with funding for the move and, likely, finance partners. A new auto lending arm controlled by GM would provide competition to Ally.