General Motors and captive GM Financial dropped the other shoe today, announcing that GM would drop Ally Financial Inc. from subvented loans, following a move earlier this year to take lease incentives away from Ally.
“Effective November 3, GM Financial will expand its role in GM loan subvention programs with the removal of Ally from the channel,” GM Financial said today in a conference call for analysts, shareholders and media.
Ally’s dependence on GM has been shrinking. Total GM consumer originations, including both subvented and standard-rate contracts, accounted for 45% of Ally consumer originations in the second quarter, down from 63% in the second quarter of 2014. In the second quarter, Ally posted originations of $10.8 billion, including about $700 million in GM subvented retail business.
“Ally has a strong and diversified auto finance business and has been adapting to the reduction in lease and subvented business for some time now,” Ally spokeswoman Gina Proia told Auto Finance News today in an email. She said dealers were informed of the coming change last month.
In the third quarter, originations were way up for GM Financial’s North American operations, especially leases for GM.
Lease originations were $6.2 billion in North America for GM Financial, more than double $1.7 billion in the third quarter of 2014, GM Financial reported today. Auto loan originations also showed a big increase, to $3.2 billion in the third quarter, up 61% from a year ago.
Earlier this year, GM announced it would redirect all its lease incentives to GM Financial, instead of distributing them among GM Financial, Ally Financial Inc., and to a smaller extent U.S. Bank.
International originations were down for GM Financial, despite an increase in a very small volume of leases. In the third quarter, international originations were $1.6 billion, down 25% from a year ago. Worldwide originations, including the big increases in North America, were up 87% to $10.9 billion.
Over the last three years, Ally sold most of its international auto finance operations to GM Financial.