It doesn't look as if General Motors will seek to establish its own in-house financing unit after all. The Detroit-based automaker is instead negotiating with major banks to broaden the availability of auto loans to consumers, The Wall Street Journal reported Wednesday.
The strategy for now pushes off any plans for the company to acquire its own lending arm -- including buying back a piece of GMAC, the Journal said, citing unnamed sources.
GM views easier consumer access to credit as key to winning back U.S. market share. Greater dominance in the domestic market would bolster its efforts to raise investor interest in an initial public offering of stock, which some analysts see as possible as early as September or October.
GM once owned GMAC, but sold its stake in the finance arm for $7.4 billion three years ago to raise cash. GMAC, now known as Ally Financial, still supplies loans to GM, as well as Chrysler Group. But most auto companies, including main rivals Ford Motor (F) and Toyota Motor (TM), control their own financing units.
GM executives believe that entering into deals with other lenders won't provide the same boost GM would have received with its own finance company, the Journal reported sources as saying. But they see it as a step toward eliminating the disadvantage.
Further, the sources said, Ally wasn't interested in selling its auto-finance business to GM.
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