GM Financial Leases Take Off in the First Quarter

canstockphoto0156575 (1)General Motors Financial Co.’s auto lease originations hit $6.8 billion in the first quarter of 2016, a 127% increase compared to the same period last year.

Overall, the captive’s loan and lease originations reached $10.9 billion in 1Q16, up from $7.1 billion last year, the company announced this morning. 

“Overall lease portfolio continues to perform well at GMF,” Chuck Stevens, chief financial officer at General Motors Co., said during the company’s earnings call today. “Used car pricing has been at all-time highs, and from the planning perspective we expect moderation in prices. No material risk or exposure on the lease portfolio, as we’ve anticipated decline in the used car pricing.”

The subprime portion of GMF’s portfolio has been flat for the “past number of years,” Stevens said. “We are running 80% of our originations as prime and near prime, very stable,” he said. “Our delinquencies and credit losses in subprime have been stable too, but we are not growing that portfolio.”

The captive’s regional penetration also saw a significant increase, Mary Barra, parent company General Motor’s chief executive, said during the earnings call. “GM Financial presence grew in all regions,” she said. “In North America, penetration increased to 37% from 21% a year ago.”

The company also emphasized its focus on developing mobility services and autonomous technology, as the OEM preps to complete the acquisition of Cruise Automation — an tech company focused on autonomous vehicles —  in 2Q16. “There is a lot of technological capability within GM, and the expertise and work by Cruise is something that will helps us accelerate and lead in the autonomous industry,” CEO Barra said. “As an OEM looking at the autonomous experience, we want to make sure we control the key areas, and within that there are strong partnerships across industries.”

Those partnerships, Barra said, allow for cross-marketing of a range of products. “[With the investment in Lyft] we see many opportunities to expand both of our businesses,” she said.

GM also launched Express Drive, a rental program for Lyft drivers, last month, to give them access to GM cars at affordable rates. Originally launched in Chicago, the demand for Express Drive is already increasing the OEM’s supply, Barra said.

Active Lyft drivers who meet a certain ride count each week, there’ll be no weekly rental cost through the program, according to a Lyft blog post. “In short: The more you drive, the less you pay.”

Learn more about the tech and disruption in the industry at Auto Finance Innovation 2016, May 11 in Fort Worth, Texas. Visit www.autofinanceinnovation.com and to learn more about the Auto Finance Risk & Compliance Summit, visit www.afrcs.com.

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