Reborn Chrysler Financial Plans Big NADA Push
Chrysler Financial, under new ownership, will be looking to sign up dealers at the National Automobile Dealers Association convention in San Francisco in February to propel its new-vehicle financing business from next to nothing today to a goal of $1 billion per month by 2013.
To do that, Chrysler Financial will need about 5,000 dealers in the United States and Canada, the company said, implying it will look beyond Chrysler-brand dealers.
Chrysler Group has about 2,300 dealers in the United States. Because of holiday vacations, Chrysler couldn't immediately provide a count for Canada, reported Automotive News.
Last week, Toronto's TD Bank Group said it will buy the former captive finance company from Cerberus Capital Management for about $6.3 billion in cash.
Tom Gilman, 59, Chrysler Financial CEO, said the company wants to hit the ground running after largely sitting on the sidelines since April 30, 2009, when Chrysler Group filed for Chapter 11 reorganization.
As part of its bankruptcy restructuring, Chrysler switched its captive financing relationship to Ally Bank, the former GMAC.
Chrysler Financial never totally quit making loans, but wasn't competitive in the absence of incentive money from Chrysler. The Chrysler Financial portfolio of existing loans and leases shrank rapidly, because old loans were paid off much faster than new loans were made.
TD Bank said last week that Chrysler Financial had a remaining portfolio of about $7.5 billion in loans and leases. About 10 percent of the total was originated in Canada. Gilman said that in the past, Chrysler Financial's portfolio was as much as 10 times that large.
The bank said it expects Chrysler Financial's loan portfolio to rise to more than $20 billion in three to four years. "This is a franchise that once had $75 billion in assets, so it's got room to grow," Gilman said.
Gilman said Chrysler Financial won't have to start completely from scratch, because it has about 2,300 dealers already signed up for near-prime and subprime loans. He said about a quarter of those are Chrysler Group dealers.
Chrysler Financial, of suburban Detroit, has about 1,850 employees, even after cutting its head count by around half in the last two years. The lender also has servicing centers in Dallas and Jacksonville, Fla. Its Canadian operations are based in Mississauga, Ontario.
Gilman said Chrysler Financial plans to pitch its former dealer clients with Chrysler Group brands. "Dealers have long memories. They remember how we managed them before, how we related with them before," he said. "Those relationships remain."
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