General Motors Financial Co.’s lease originations hit a record high in the September quarter, according to Executive Vice President and Chief Financial Officer Chris Choate, who spoke at the Bank of America Merrill Lynch 2014 Leveraged Finance Conference last week. Lease originations for the captive were at $5.8 billion at the end of the quarter, and accounted for about one-third of all GM leased vehicles during that time.
“Strategically, we are looking to do more and more leasing for GM, really across 2014 and even moving into 2015,” Choate told conference attendees. “With our contribution to leasing, GM’s market penetration has moved up to close to what industry averages are.”
For GMF, leasing is predominantly a prime product, despite offering it across the credit spectrum. Although the company will reach down into what is considered near-prime, or mid-prime, performance in the lease portfolio is currently “very pristine,” Choate said. Previously, Chief Executive Dan Berce indicated that GMF will add a lease program for municipal fleets next year, according to an industry report.
Last month, GMF expanded its prime lending product to all GM dealers in the U.S., a program that was announced in June. The company originated $162 million of prime loans in the September quarter. “We haven’t done a lot of [prime loan] volume yet, but we’re looking to see that volume number pick up quite a bit in 2015,” Choate said. Going forward, GMF aims to transition from a niche player for parent General Motors to a company that maintains sizeable market penetration in all product channels, according to its presentation.
