When General Motors acquired AmeriCredit Corp. in 2010, it had one goal: to progressively turn the subprime lending specialist into GM Financial, a captive finance arm that offers prime and subprime loans and leases as well as commercial loans to dealers. That plan is now one step closer to completion, as the captive finance arm more than tripled its share of GM’s U.S. lease originations in the fourth quarter of 2014.
Despite the healthy growth, there’s even more room to grow, as GM Financial becomes the exclusive source of leases for Buick-GMC, Cadillac, Chevrolet brands. During the first week of February, GM made GM Financial the sole source of Buick-GMC lease incentives. Cadillac is up next in March, and Chevy is expected later on in the year.
“Our business is increasingly becoming GM-centric,” GM Financial CEO Dan Berce said during a conference call with investors and analysts on February 4th.
Berce said that GM Financial generated 47 percent of GM U.S. retail leases in the fourth quarter, which is worth $1.8 billion. That’s a significant jump from the 15.2 percent, or $383 million, it originated a year ago. When combining loans and leases, GM accounted for 67 percent of GM Financial originations for Q4 2014 compared to 45 percent in Q4 2013.
GM has yet to confirm that GM Financial will become the exclusive lease provider. That’s likely because GM wants to ensure that GM Financial is ready for the higher volume that the Chevrolet brand will bring. Is it ready for the influx? Berce believes so:
“We believe from a service level standpoint we’re completely ready for lease exclusivity in 2015,” he said. “And this gradual ramp in 2014 of our penetration was certainly indicative of our readiness.”