Santander Consumer USA’s share of Fiat Chrysler business dropped to 28% in the second quarter, from 30% on March 31, a change to be expected unless Chrysler ups its incentive spending, said Chief Executive Jason Kulas in a conference call.
However, Fiat Chrysler sales are doing just fine as-is. The automaker today announced its best U.S. sales for the month of July since 2005, at 167,667 units, an increase of 6% from a year ago.A Fiat Chrysler spokesman said today the company had no comment on SCUSA’s recent statement.
“As subvention dollars increase, we expect upside to our Chrysler penetration,” Kulas said in the July 30 conference call. There is “normal tension” between SCUSA and Chrysler, but both sides are OK with the relationship, Kulas said.
“At the end of the day, the goal is the same,” he said. “They want to sell more cars, and we want to finance more cars.”
Doing business as Chrysler Capital, SCUSA started to provide retail loans, leases, and dealer lending for Fiat Chrysler Automobiles, in May 2013. But Chrysler Capital is short of its target share of Chrysler volume.
According to Securities and Exchange Commission filings, Chrysler Capital hit its 31% target in the first year of the 10-year agreement. But Chrysler Capital fell short of the 44% target in year No. 2, finishing 2014 at 27%.
The target increases in steps, reaching 65% in year No. 5. Kulas was appointed CEO on July 2 after Thomas Dundon, co-founder, chairman and CEO, resigned and sold his stake in the company. Dundon remains on SCUSA’s board.
