Santander Consumer USA is set to begin a 10-year agreement to run in-house finance in the US for Chrysler Group.
The deal will see the creation of a joint venture between Banco Santander and Chrysler called Chrysler Capital.
Go deeper with GlobalData
The operation would begin from 1 May, the day after Chrysler’s Auto Financing Operating Agreement with Ally Financial expires.
Bond credit rating agency Moody’s upgraded Chrysler’s rating to B1 on 1 February, on a par with Standard & Poor’s rating of B+, four levels below investment grade.
Automatic decision
Peter Grady, vice president of dealer network development and fleet operations at Chrysler Group, said the decision was sealed by Santander’s use of automated underwriting, allowing for online customer approvals and the reduction of processing times.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataSantander Consumer USA already uses automated application decisions, evaluating loan applications with data modelling, in subprime lending for US car consumers, which it has been providing for Chrysler vehicles since 2010.
The move appears to mark a change for the Spanish bank in the US, having considered selling its US car loan operation in November 2012 and scrapped plans to buy DriveTime Automotive Group’s $700m (£451m) book of finance receivables in December.
Changing fortunes
With Chrysler, part of Fiat Group Automobiles (FGA), facing bankruptcy post-credit crisis, Ally, trading as GMAC in the UK, replaced Chrysler Financial as the brand’s captive provider in 2009.
Ally has had its own troubles since then and recently sold many of its international car finance operations back to General Motors, which will run them through GM Financial, the latest iteration of its own captive provider.
Meanwhile, Chrysler, reporting as a separate entity to FGA, posted 18% year-on-year growth for Q3 2012 as the brand turned around following its bailout by the US government.
In the UK, Chrysler finance is handled by FGA Capital, the joint venture between the Group and Crédit Agricole.
richard.brown@timetric.com
