Results for Ally Financial, parent of finance
provider GMAC UK, show a first-quarter profit increase from
international car finance while North American car finance has
stuttered.
Pre-tax profit from International Automotive
Finance operations stood at $45m (28m) from January to March 2012,
more than double the $21m recorded in the fourth quarter of 2011,
and up 45% year-on-year.
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The company attributed performance outside
North America to increased assets, higher income earned from Ally’s
non-consolidated joint venture in China and lower noninterest
expense.
Although a much larger part of Ally’s make up,
profit from North American Automotive Finance has fallen to $442m
in Q1 2012, down 7.5% from the previous quarter and 14.7%,
year-on-year.
Overall pre-tax profit for the Detroit-based
financial services provider, including its insurance and mortgage
operations, was $474m ($310m net profit) for the first quarter of
2012, compared to $20m (net loss of $206m) in the previous three
months and $425m ($146m) for Q1 2011.
UK bigger share of core
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By GlobalDataNet revenue from Ally’s international auto
financing (operating in 15 countries, including five core markets
of the UK, Germany, Brazil, Mexico and China) was steady at $164m
for the quarter, compared to $157m in the final quarter of 2011 and
$166m for the same period a year ago.
Citing the cautious economic outlook in Europe
and Latin America in its Q1 2012 earnings presentation, however,
Ally increased provision for loan losses in international car
finance to $47m (from $21m in Q4 2011, $31m in Q1 2011).
The total international volume of lending to
consumers to buy cars was down to $2.3bn from a recent peak of
$2.6bn in both Q3 and Q4 of 2011, but up from $1.9bn in Q1
2011.
The UK market is now contributing a bigger
proportion of that total, back to the approximate level of Q3 2011,
and 155% up on the proportion contributed a year ago on the back of
successful incentive programmes. Germany was also up by 22%,
year-on year, and Brazil up 10%.
Shifting portfolio
As well as its incentive programmes, GMAC UK
has had a busy time with a variety of deals highlighted in the
earnings presentation.
While it added both
growing Korean brand SsangYong and MG Motors to its portfolio,
first in retail and
then wholesale finance, in the past six months, GMAC UK
lost Vauxhall’s leading car finance programme to Santander in
March.
Internationally, Ally announced in April last
year its Auto Finance Operating Agreement with Fiat Chrysler will
end on 30 April 2013 although the manufacturing group is in
negotiation with Ally and others for a new deal.
An interview with Paul Williams, CEO of
SsangYong UK, appears in
April’s issue of
Motor Finance
magazine.
richard.brown@vrlfinancialnews.com
