GM Financial is looking to be more competitive industry-wide with lease penetration. (Photo Credit: CC BY-SA/John Manoogian III/Flickr)
More retail lease offers from GM Financial may be headed to a dealer near you, reports Automotive News. After a third quarter that was less than satisfactory for lease penetration, General Motors has committed itself to making leasing an auto a more attractive option for consumers.
Returning to optimal levels
GM Financial CEO Dan Berce, who recognizes that the lender’s automotive leasing activity last quarter was less than optimal, plans to work closely with General Motors to create “more attractive lease offerings to generate sustainably higher lease volumes.”
GM Financial’s third-quarter performance included the origination of $188.7 million in leases for GM, which was a definite improvement over no leases issued at that time the previous year.
While the third-quarter performance was a 9.2 percent improvement over the second quarter, the vast majority were in Canada. According to GM Financial vice president of investor relations Caitlin DeYoung, only $32 million of the originated leases were in the U.S.
Not far off the mark
While GM Financial considers the third-quarter lease performance to be less than satisfactory, it wasn’t far off the mark, notes GM spokesman Jim Cain. With the assistance of Ally Financial and U.S. Bank as lease sources, GM Financial was able to reach a lease penetration percentage of 13.6 percent, which fell just below the 15 percent target that had been set.
Compared with the industry average of 20 percent penetration in October, however, GM Financial’s performance was less than stellar. The reason the company’s target was lower is that GM sells a high number of light trucks, which are traditionally leased less often, said Cain.
DeYoung is hopeful that GM Financial will turn the numbers around.
“We would like to see higher volumes so that we can build scale in our lease portfolio over time,” she said.
Future plans for expansion
GM Financial, which was formerly known as AmeriCredit Corp. before GM bought it out, is not currently a full-service captive finance company, but GM is currently working to change that. More prime-risk and near-prime loans will be written, and commercial lending for dealers and extended-service contracts will be offered by April 2012.