Chrysler will soon be back in the financial services business for the first time since its 2009 bankruptcy.
The maker will launch launch a new partnership with Santander Consumer USA Inc., of Dallas, this coming spring to offer “a full spectrum of auto financing services to Chrysler Group and FIAT customers and dealers under the name Chrysler Capital.”
The move, company officials hope, will make it easier to compete with the likes of Ford and Toyota which turn to their in-house financial services subsidiaries to help offer affordable credit to customers – and more competitive financing alternatives for dealers.
“We expect Chrysler Capital to help Chrysler Group continue its sales growth by offering consumers the most competitive and innovative retail purchase and lease financing available in the marketplace,” said Peter Grady, Vice President of Network Development and Fleet for Chrysler Group, following a meeting with retailers at the National Auto Dealers Association’s annual meeting in Orlando, Fla.
Santander Consumer USA, a financial services company based in Dallas, is majority-owned by global banking leader Banco Santander of Madrid, Spain. Banco Santander was named “Best Global Bank” in 2012 by Euromoney magazine and one of the “Top 10 Safest Banks” by Global Finance magazine. Banco Santander has over 40 agreements with more than 10 automobile manufacturers around the world.
“We found in Santander Consumer USA a nimble partner backed by the strength and experience of a worldwide banking leader,” said Grady. “We have been impressed with Santander Consumer USA’s capabilities, energy and attitude about selling Chrysler Group vehicles.”
Grady said the Chrysler Capital’s mission will be to provide Chrysler, Jeep, Dodge, Ram Truck, SRT and FIAT customers with competitive retail purchase and lease financing. It also will provide wholesale financing and related services to Chrysler Group and FIAT dealers. Chrysler Capital will be launched May 1, 2013.
Under the 10-year, private-label agreement, Santander Consumer USA will establish a separate business unit dedicated to providing financial services under the Chrysler Capital name. In addition to dealer new and used vehicle inventory, Chrysler Capital will provide financing for dealership construction, real estate, working capital and revolving lines of credit. Under the agreement, Santander Consumer USA will provide Chrysler Group with a nonrefundable upfront payment and a quarterly share of revenues.
“Santander Consumer USA is pleased that Chrysler Group has selected us to assist its dealer network in providing customers with competitive financing solutions,” said Thomas Dundon, Chief Executive Officer and President of Santander Consumer USA.
“Our top priority,” he added, “will be to provide best-in-class service to Chrysler’s dealer body and retail consumers. The goal is to leverage an improved information flow that shows us how, as a finance provider, we can work with Chrysler to improve our offers to dealers and customers, to capture incremental sales.”
As Chrysler Group and Santander Consumer USA prepare for the May 1, 2013, launch of Chrysler Capital, Chrysler Group and FIAT dealers will continue to do business as usual through an assortment of financial institutions that includes Ally Financial Inc. Ally was formerly known as GMAC, the one-time General Motors captive finance subsidiary. It has also been serving GM since that maker’s 2009 bankruptcy but GM also has been looking for ways to shift business to other lenders.
“Ally will continue to provide financial services to Chrysler Group and FIAT dealers and their customers at the very least through the end of Chrysler Group’s existing contract with Ally which will expire on April 30, 2013,” Grady said.
Up until Chrysler 2009 bankruptcy, Chrysler had operated its own financing unit, Chrysler Financial. Chrysler Financial lost out during the bankruptcy when the Obama administration auto task force redirected the company’s day-to-day financing business to Ally, which last fall sold its overseas business back to General Motors.