Chrysler and Banco Santander are close to striking an agreement to set the Chrysler Capital in-house financing arm.
According to the Wall Street Journal report, a deal between Chrysler and Spain’s Banco Santander could be finalized in the following weeks. Both companies denied commenting on the issue. In December, Reuters reported that the two companies were close to finalizing the deal and that Santander Consumer, which is Santander’s U.S. car financing subsidiary, would also be included in the agreement if signed.
If the agreement is signed Banco Santander would replace the US auto lender Ally Financial, which is majority owned by the government. The deal between Chrysler and Banco Santander would be similar with the one between Fiat and French bank Credit Agricole.
In November, Chrysler and Santander have begun a 30-day negotiation period to make the Spanish bank its main partner for financing with customers and dealers. Chrysler’s CEO Sergio Marchionne said that Santander Holdings USA and JPMorgan Chase & Co. are possible financing partners for the US automaker and that Chrysler will let the agreement with Ally Financial expire in April 2013.
“You need to know that your lender of choice is going to be available and willing to make the loans necessary to move product,” said analyst Alec Gutierrez. “The question will be, is this lender still going to be willing to carry over a lot of the aggressive programs that Ally was running?”