General Motors Financial Co Inc, the internal auto-financing unit of the largest US automaker – General Motors – has announced its first quarter revenue has jumped 23 percent.
The automaker has been hard at work to buoy its own lending operations, being currently in the process of taking the business to GM Financial instead of outside auto lenders, such as Ally Financial. The moves have been benefiting the GM Financial arm, as the revenue jump clearly shows. General Motors announced earlier this year that its lending arm would take over from Ally Financial Inc as the only financial partner for Buick, GMC and Cadillac vehicles, starting with February and March. On the other hand, GM Financial, also a specialist in subprime auto lending, has warned that North American loan delinquencies are slowly rising – the latest increase was from 6.8 percent to 7.2 percent. GM itself has been supporting the financing business by making new acquisitions and becoming an active promoter for the lender in the US dealership relation.
GM Financial announced that operating leases for the company’s vehicles have nearly quadrupled to a total of $3 billion for the first quarter of the year, compared to the period of January to March 2014. Texas-based GM Financial’s net profit was also up by 3.4 percent to $150 million and total revenue grew from $1.1 billion to $1.4 billion. The lender has also increased its profit thanks to GM’s sales growth, with the automaker escaping largely intact in terms of brand image from last year’s massive recall tally and ignition switch safety crisis.