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Chrysler Financials Seeks New Partnerships

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On: Thu, Dec 30, 2010 at 4:36PM | By: Sherry Christiansen


Chrysler Financials Seeks New Partnerships

Before any car owners can drive off the lot with their brand new model they will have to contend with three separate entities who want nothing more than to see that car sold. Those entities are the automaker, the automobile dealership, and the auto loan financial company. None of those three auto businesses could exist without the other. And when one link in that chain breaks down, everyone takes the hit. This is what happened when the Chrysler Group filed for Chapter 11 bankruptcy protection last year.

For some, this bankruptcy was an excuse to make a mad dash to divest themselves of anything that had to do with Chrysler. Those who stuck by the auto company are now slowly being rewarded with a revitalized and refurbished company looking to go from zero to hero. To do that, Chrysler Financial is going to need the help of the National Automobile Dealers Association (NADA)..

At the upcoming NADA convention in San Francisco this February, Chrysler Financial is going to be putting on the full court press to increase its number of participating dealerships to 5,000 (up from the current 2,300). If that can pull that off, they might actually make their goal of $1 billion per month in generated loans by the year 2013. Those would be impressive numbers in anyone’s book.

In recent weeks, Chrysler Financial has been bought up by Toronto’s TD Bank Group. This infusion of new management has given Chrysler Financial a new lease on life. Tom Gilman, 59, Chrysler Financial CEO, said, “We want to hit the ground running after largely sitting on the sidelines since April 30, 2009, when Chrysler Group filed for Chapter 11 reorganization.”

For those keeping score of the financial records during the bankruptcy restructuring, Chrysler switched its captive financing relationship to Ally Bank, the former GMAC. While this was all going on, Chrysler Financial never stopped making loans; they just weren’t being as competitive as they could. By the time TD Bank stepped up to the plate to take over the company, there was a remaining portfolio of 7.5 billion in various loans and leases. Back in the heyday of Chrysler the amount of loans generated was around ten times as much.

Gilman elaborated on this by saying, “This is a franchise that once had $75 billion in assets, so it's got room to grow.” Gilman also stated that Chrysler Financial won't have to start completely from scratch, because it has about 2,300 dealers already signed up for near-prime and subprime loans. He said about a quarter of those are Chrysler Group dealers.




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